BULLETIN: OCTOBER, 2022

Prepared by Prateek Singh, Esha Mehta and Atharva Chandra.

Table of Contents

I. Banking and Finance 3

i. RBI announces launch of India’s first pilot for retail digital rupee. 3
ii. RBI allows HDFC Bank and Canara Bank to open “Vostro account” for rupee trade with Russia 3
iii. RBI imposes penalty on 7 banks for non-compliance 4
iv. RBI revises Eligibility Criteria for offering Internet Banking Facility by Regional Rural Banks, 2022 5
II. Securities Market 5
i. SEBI extends SEBI Settlement Scheme, 2022 5
ii. The Committee on Strengthening Governance of Market Infrastructure Institutions, formed by SEBI, delivers its
report 6
III. General Corporate 7
i. CCI investigates Google for the third time for allegedly abusing its position in the Smart TV Space 7
ii. Government of India appoints Competition Commission to deal with Anti-Profiteering matters under Section 171(2)
7
iii. ITAT: Advance received from prospective buyer consequent to a Joint Development Agreement cannot be taxed as
Sec 2(47) is not attracted 8
iv. Delhi HC: Interim Moratorium U/S 96 of the IBC in respect of guarantors wouldn’t ipso facto apply against other
co-guarantors 8
v. Supreme Court of India judges that director of a company cannot be prosecuted vicariously for cheque bounce if
company is not arraigned as accused 9
IV. Miscellaneous 10
i. TATA Sons announce merger of Air India and Vistara 10
ii. US-based Perfect Day Inc. acquires Sterling Biotech Limited 10
iii. Reliance Projects and Property Management Servcies move National Company Law Tribunal of Mumbai to acquire
Reliance Infratel 11
iv. NCLT sets aside CCI order of penalties against tyre companies accused of cartelisation 11
v. Major Tech Companies re-orient business operations globally, including India 12
 I. BANKING AND FINANCE
ii. RBI announces launch of India’s first pilot for
retail digital rupee.
Reserve Bank of India [“RBI”] has announced the launch
of India’s first pilot for retail digital Rupee (e₹-R) on
December 01, 2022. The e₹-R would be in the form of a
digital token that represents legal tender. It would be
issued in the same denominations that paper currency and
coins are currently issued, and be distributed through
intermediaries, i.e., banks.
The pilot would cover select locations, where customers
and merchants will be able to use the digital rupee (e₹-
R), or e-rupee in closed user group [CUG] comprising
participating customers and merchants. Transactions
with e₹-R will be carried out  through a digital wallet
offered by the participating banks, which can be stored
on mobile phones / devices. Both Person to Person (P2P)
and Person to Merchant (P2M) transaction will be
covered. Payments to merchants can be made using QR
codes displayed at merchant locations. The e₹-R would
offer features of physical cash like trust, safety and
settlement finality. As in the case of cash, it will not earn
any interest and can be converted to other forms of
money, like deposits with banks.
Four banks will be involved in the controlled launch of
the digital currency in these four cities: State Bank of
India, ICICI Bank, Yes Bank, and IDFC First Bank.  Four
more banks, viz., Bank of Baroda, Union Bank of India,
HDFC Bank and Kotak Mahindra Bank will join this
pilot subsequently. The pilot would initially cover four
cities, viz., Mumbai, New Delhi, Bengaluru and
Bhubaneswar and later extend to Ahmedabad, Gangtok,
Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna
and Shimla.
The pilot will test the robustness of the entire process of
digital rupee creation, distribution and retail usage in real
time. Different features and applications of the e₹-
R token and architecture will be tested in future pilots,
based on the learnings from this pilot.
CLS Note:
What is CBDC?
According to The RBI : “CBDC is the legal tender
issued by a central bank in a digital form. It is the
same as a fiat currency and is exchangeable one-to-
one with the fiat currency. Only its form is
different”. RBI has classified into two broad
categories: general purpose (retail) and wholesale,
on the basis of the usage and the functions
performed by the digital rupee and considering the
different levels of accessibility. To settle secondary
market transactions in government securities, the
RBI introduced the digital rupee for the wholesale
sector on November 1.
Wholesale CBDC is made to only be accessed by a
select financial institutions. It has the ability to
improve operational costs, the usage of collateral,
and liquidity management by making the settlement
systems for financial transactions carried out by
banks in the government securities (G-Sec)
segment, the interbank market, and the capital
 
iii. RBI allows HDFC Bank and Canara Bank to
open “Vostro account” for rupee trade with
Russia
The Reserve Bank of India has permitted HDFC Bank
Ltd and Canara Bank Ltd to open a special "vostro
account" for trade in Rupees with Russia. Vostro
Accounts are accounts a bank holds on behalf of another,
often foreign bank, and this forms a key part of
correspondent banking. A vostro account is one in which
a foreign bank acts as an agent providing financial
services on behalf of a domestic bank. This move to
open the special vostro accounts clears the deck for
settlement of payments in Rupee for India-Russia trade,
enabling cross-border transactions in the Indian currency.
These banks have opened special vostro account in their
respective branches in Delhi. So far five Indian banks —
UCO Bank, Union Bank, and IndusInd Bank being the
other three — have received regulatory clearance for such
trade. This apart, two Russian banks — Sber Bank and
VTB — have the RBI’s approval. Both have branches in
India.
The circular said Indian importers plying their trade
through the rupee mechanism would pay in the Indian
currency, which has to be credited into the special Vostro
account of the correspondent bank of the partner country
against the invoices for the supply of goods or services
from the overseas seller/supplier. The RBI had said the
exchange rate was to be market-determined.
Importance of this decision: The Russia-Ukraine war that
broke out in late February, has created the need to
develop an alternative currency for trade, as Russia is
facing sanctions from European countries and the United
States as consequence of the conflict.
CLS Note:
Nostro and Vostro are terms used to describe the same
bank account, the terms are used when one bank has
another bank’s money on deposit. Both banks in the
venture must record the amount of money being stored
by one bank on behalf of the other bank. The terms
nostro and vostro are used to differentiate between the
two sets of accounting records kept by each bank. The
Nostro account is the record of the bank that has money
on deposit at another bank. A Nostro account is a
reference used by Bank A to refer to "our" account held
by Bank B. Nostro is a shorthand way of talking about
"our money that is on deposit at your bank." Vostro is
the term used by Bank B, where bank A's money is on
deposit. Vostro is a reference to "yours" and refers to
"your money that is on deposit at our bank." Like any
other account held by a bank, the account is a record of
money owed to or maintained by a third party, typically
another bank.
iv. RBI imposes penalty on 7 banks for non-
compliance
The Reserve Bank of India (RBI) has, imposed a
monetary penalty of ₹20.00 lakhs on Indian Mercantile
Co-operative Bank Ltd., Lucknow, Uttar Pradesh for
non-compliance with the directions issued by RBI on
‘Income Recognition, Asset Classification, Provisioning
and Other Related Matters’ (IRAC norms). This penalty
has been imposed in exercise of powers vested in RBI
conferred under section 47A(1)(c) read with sections
46(4)(i) and 56 of Banking Regulation Act, 1949. The
statutory inspection of the bank conducted by RBI
revealed, inter alia, that the bank did not classify certain
loan accounts as non-performing assets in accordance
with the IRAC norms.
Furthermore, monetary penalty of ₹50.00 lakh was
imposed on n Bharat Co-operative Bank (Mumbai)
Limited, Maharashtra for the same reason-, i.e non-
compliance with the directions issued by RBI on IRAC
norms.
RBI has also imposed a monetary penalty of ₹1.25 crore
on Zoroastrian Co-operative Bank Ltd., Bombay for non-
compliance with RBI directions on ‘Discounting of Bills
by UCBs – Restricted Letters of Credit (LC)’ and the
provisions of the Co-operative Banks (Period of
Preservation of Records) Rules, 1985 framed under
section 45Y read with section 56 of Banking Regulation
Act, 1949, as it discounted accommodation bills under
LCs without establishing the genuineness of underlying
transactions / documents and failed to preserve records in
good order for a period of eight years. This penalty has
been imposed in exercise of powers vested in RBI
conferred under section 47A(1)(c) read with sections
46(4)(i) and 56 of Banking Regulations Act.
The central bank also imposed monetary penalties of:
1. ₹1 lakh on The Tiruchirappalli District
Central Cooperative Bank Ltd.,
Tiruchirappalli, Tamil Nadu for non-
adherence/violation of directions issued
under Income Recognition, Asset
Classification, Provisioning and Other
Related Matters. 
2. ₹3 lakh on The Cumbum Co-operative
Town Bank Ltd., Cumbum, Prakasam
District, Andhra Pradesh (the bank) for
non-adherence / violation of directions
issued under Frauds - Classification and
 Reporting and Board of Directors -
UCBs.
3. ₹6 lakhs on The Chittoor Co-operative
Town Bank Limited, Chittoor, Andhra
Pradesh (the bank) for non-adherence /
violation of directions issued under
Establishment of Depositor Education
and Awareness Fund, Management of
Advances – UCBs, lncome Recognition,
Asset Classification, Provisioning and
Other Related Matters-UCBs and Know
Your Customer (KYC)/Anti-Money
Laundering (AML)/ Combating of
Financing of Terrorism (CFT)
Guidelines.
4. ₹2 lakh on The National Co-operative
Bank Limited, Bengaluru, Karnataka for
non-adherence / violation of directions
issued under Supervisory Action
Framework for Urban Co-operative
Banks (UCBs).
RBI, however, added that penalties are based on
deficiency in regulatory compliance and is not
intended to pronounce upon the validity of any
transaction or agreement entered into by the
banks with their customers
. f. No instance of default in maintenance of
CLS Note:
In a floating rate bond, the coupon payment is
variable, meaning that the interest rate changes
depending on the benchmark rate, which is reset
periodically. Simply said, a variable rate bond's
interest rate changes over the course of its life. The
benchmark can be the Federal Reserve Funds Rate,
LIBOR, RBI rates, or prime rate, depending on the
country. The benchmark for floating rate bonds in
India is the repo rate or reverse repo rate.
These bonds are typically issued by governments,
financial organisations, and businesses to borrow
money from the general public. Depending on the
bond terms, interest on these bonds may be paid every
quarter, every half-year, or every year. Additionally,
v. RBI revises Eligibility Criteria for offering
Internet Banking Facility by Regional Rural
Banks, 2022
In exercise of the powers conferred by Sections 35A of
the Banking Regulation Act, 1949, Reserve Bank of India
amended the instructions on ‘Internet Banking Facility
for Customers of Regional Rural Banks’. In light of the
need to promote the spread of digital banking for
customers in rural areas, the eligibility criteria applicable
to Regional Rural Banks for offering Internet Banking
with transactional facility to their customers have been
revised.
The revised eligibility criteria to seek approval for
providing Internet Banking with transactional facility by
RRBs to their customers are as under:
a. Full implementation of Core Banking
Solutions (CBS) and migration to IPv6.
b. Compliance with minimum prescribed
CRAR requirement as applicable from
time to time.
c. Net worth of ₹50 crore or more as on
March 31 of the previous financial year.
d. Net NPA of not more than 5% as on
March 31 of the previous financial year.
e. Net profit in the two immediately
preceding financial years.
CRR/SLR during the immediately
preceding financial year.
g. The bank shall have a satisfactory track
record of regulatory compliance and
there shall be no instances of monetary
penalty imposed for violation of RBI
directives/guidelines during the two
preceding financial years.
h. The bank shall have a sound internal
control system approved by a CISA
qualified independent auditor.
For extending internet banking services with
transactional facility, RRBs fulfilling the
above-mentioned criteria and other
 conditions prescribed in the circular dated
November 19, 2015 on ‘Internet Banking
Facility for Customers of Regional Rural
Banks’, shall submit an application to the
concerned Regional Office of RBI through
NABARD as prescribed in the
aforementioned circular.
VI. SECURITIES MARKET
i. SEBI extends SEBI Settlement Scheme,
2022
In accordance with Regulation 26 of the SEBI
(Settlement Proceedings) Regulations, 2018, the
Securities and Exchange Board of India [“SEBI”]
announced the Settlement Scheme, 2022 (the
"Scheme") in a public notice dated August 19, 2022.
The Scheme offers a one-time settlement opportunity
to entities that executed trade reversals in the stock
options segment of the BSE between April 1, 2014
and September 30, 2015 and against whom
adjudication proceedings have been initiated and are
currently pending before any SEBI adjudicating
authority. Beginning on August 22, 2022, this
settlement period was scheduled to finish on
November 21, 2022. It has been noted that many
entities have expressed interest in taking advantage of
the Scheme throughout the last few days of
November. Thus, on November 21st, 2022, the
competent authority extended the duration of the
Scheme until January 21st, 2023, considering the
interest of entities in taking advantage of the Scheme.
ii. The Committee on Strengthening Governance
of Market Infrastructure Institutions, formed
by SEBI, delivers its report
On November 2, 2022, the Committee on Strengthening
Governance of Market Infrastructure Institutions (MIIs)
delivered its report to SEBI. SEBI has requested feedback
from the public on the Report. In April 2022, SEBI
established a Committee, chaired by former Whole-Time
Member Shri G. Mahalingam, to examine the current
governance structure and give recommendations for
further enhancing governance standards at MIIs. The
Committee sought input from a range of parties,
including Public Interest Directors, Chief Regulatory
Officers, MII representatives, and other pertinent
individuals. The previous committee reports on the
governance of MIIs were also taken into account.
The Committee's report includes a number of
recommendations on actions to be taken to, namely to
strengthen the role played by the governing board and
committees of MIIs, to review the requirements related to
the appointment and role & responsibility of directors on
the board and key managerial persons (KMPs), to
develop effective metrics for monitoring various aspects
of the functioning of the MIIs and its KMPs, to increase
accountability and transparency; and to review the policy
on safe harbour for intellectual property.
The report is available at this link:
https://www.sebi.gov.in/reports-and-statistics/reports/nov
-2022/strengthening-governance-of-market-
infrastructure-institutions 64806.html.
i. SEBI introduces credit rating wise investment
limit for active debt fund
The most actively managed debt mutual fund schemes
now have a single issuer limit for investments based on
credit grade, per the Securities and Exchange Board of
India (Sebi) on November 29. In a circular, the market
regulator stated that a mutual fund scheme will not invest
more than 10% of its NAV (net asset value) in debt and
money market securities rated AAA by a single issuer for
schemes other than credit risk funds. Similarly, the cap is
8 percent for AA-rated companies and 6 percent for firms
with a rating of A or lower.
With the prior approval of the Board of Trustees and
Board of Directors of the AMC (asset management
companies), the investment limits may be extended by up
to 2 percent of the NAV of the scheme, subject to
compliance with the overall 12 percent limit specified in
clause 1 of Seventh Schedule of MF Regulation. A
mutual fund scheme is prohibited by Sebi MF
Regulations from investing more than 10% of its NAV in
debt instruments issued by a single issuer. By further
defining investment limitations in accordance with credit
profiles, this new rule reduces risks. For debt funds that
start from the date of the issuance of the circular, the
same takes shall take immediate effect. Existing schemes
will be exempt from these rules until the underlying debt
and money market securities mature.
VII. GENERAL CORPORATE
i. CCI investigates Google for the third time for
allegedly abusing its position in the Smart TV Space
The Competition Commission of India (CCI) may fine
the tech giant Google for the third time, this time for
allegedly abusing its market dominance in the smart TV
space, as it reportedly found prima facie evidence. The
probe looked into the so-called Android Compatibility
Commitments [ACC], which the report said prohibit
equipment manufacturers from producing, distributing, or
selling any other smart television that is not Android
based. Moreover, To use its operating software (OS),
television manufacturers need to enter into a licensing
agreement with Google, complainants have alleged that
the terms of these agreements are prohibitive for
equipment manufacturers. It has also been alleged that
Google Play Store usually comes pre-installed in TVs
that have been manufactured by companies after entering
into licensing agreements with Google. But, the Play
Store services are reportedly not available for televisions
manufactured by companies that have not signed any
agreements with the tech giant. The report said CCI had
ordered a probe against Google in this case in June last
year following a complaint about its smart
television operating system (OS), Android TV.
The Informant has alleged violations under section 3(4)
and section 4 of the Competition Act, 2002 (the Act)
based on Google’s conduct of imposing several
restrictions, upon smart TV and smart mobile device
Original Equipment Manufacturers (“OEMs”) by virtue
of its agreements entered with them.
The present investigation ordered is the THIRD Antitrust
investigation against Google in the previous two cases,
Google has already been fined for "abusing its market
dominant position" in connection with the Android
mobile device ecosystem. The Commission slapped a
total fine of over Rs 2,000 crore in the two cases.
In response to such allegations Google contended that:
1. Google’s Android Open-Source Project
(AOSP) license is available to any third
parties under an open-source license,
which does not oblige licensees to
preinstall any proprietary Google apps,
app store, or services.
2. Google licenses Android TV ‘launcher’
(i.e., Android TV’s user interface, which
allows users to navigate channels, apps,
and content) under an agreement
namely, Television App Distribution
Agreement (TADA), as well as license
of Google’s other proprietary apps.
TADA is a separate and optional
agreement that enables OEMs, on a
device-by-device basis, to provide users
with a set of preinstalled Google apps.
3. Neither Android TV nor Play is
dominant in any market, and there can
be no status quo bias in favour of Play
or other Google apps as OEMs can
decide whether to install Android TV
and the accompanying Google apps
(including Play) on some, all, or none of
their devices.
4. ACC facilitates competition between
Android TV and longer established
players in the connected TV sector to
the benefit of Indian consumers.
Google thus refutes the conditions imposed by it as anti-
competitive.
ii. Government of India appoints Competition
Commission to deal with Anti-Profiteering matters
under Section 171(2)
The Government has empowered the Competition
Commission of India, established under Section 7(1) of
the Competition Act, 2002 as an authority under Section
171(2) of the Central Goods and Services Tax Act 2017,
with effect from 1st December 2022.
Notably, Section 171(2) allows the Central Government
to constitute or empower, through notification, any
authority to examine whether input tax credit availed by
any registered person or the reduction in the tax rate has
actually resulted in a commensurate reduction in the price
of the goods or services supplied by him. Further, the
relevant rules under the Central Goods and Services Tax
Rules, 2017 have also been modified accordingly.
iii. ITAT: Advance received from prospective buyer
consequent to a Joint Development Agreement
cannot be taxed as Sec 2(47) is not attracted
Recently in the case of ACIT v Sri Mathikere Ramaiah
Seetharam Gokula house it was held by the Income Tax
Appellate tribunal [ITAT] that advance received from
prospective buyer consequent to a Joint Development
Agreement [JDA] cannot be taxed as Sec 2(47) is not
attracted. Assessee-individual entered into a JDA with the
developer. The property developed was being sold in
form of an apartment. Each apartment was sold to a
prospective customer with an agreement to sell. During
the year under consideration, the
assessee received an advance from the prospective buyers
however, no sales were registered. The Assessing Officer
(AO) held there AS-9 would be applicable, as there was
transfer of significant risks and rewards by way of
agreement to sell and agreement to construct to attract the
applicability of AS-9. Thus, advances received against
the sale of flats resulted in the transfer of flats and
income was to be recognized.AO further contended that
the builder was regularly accounting for the revenue
generated from development as per the percentage
completion method
under AS-7. Aggrieved by the order of AO, an appeal
was filed to CIT (A).
The Tribunal held that the provisions of deemed transfer
under section 2(47)(v) could not have been invoked even
if the assessee received the advances consequent to the
development
agreement, unless and until a debt is created in favour of
the assessee by somebody, it cannot be said that he has
acquired a right to receive the income or that income, as
accrued to him. In the present matter, the assessee didn’t
transfer the possession of the flat to prospective buyers.
Neither did the latter have a right to obstruct
development. The clauses in the agreements with
customers confirm that the owner shall retain legal
possession, domain, and control over the property till the
same is developed and sold either in whole or in parts to
prospective purchasers. Furthermore, agreement can be
terminated if the prospective purchases do not make the
payments.
In the instant case, the construction activity was
conducted by the developer and not the assessee, thus the
constructed area was not transferred by the assessee to
the prospective buyers.
The amount received from the buyers is advance and not
an amount received towards the absolute transfer of the
price of flats. The amount received by the assessee is the
revenue derived from the sale of an undivided share of
land. Further, the Tribunal relied upon the Guidance Note
on accounting for real estate transactions (Revised) 2012
stating that following the percentage completion method
would be incorrect as revenue should not be recognized
till the time the legal title is validly transferred to the
buyer. Therefore, the assessee has rightly offered the
income to tax in the year in which the flats were sold to
CLS Note:
Section 2(47) lays down the provision for deemed
transfer, allowing possession of the immovable property
to be taken or retained in part performance of the
contract as referred to in section 53A of the Transfer
Property Act.Section 53A is related to the transfer of
immovable property that emphasizes the “performance
or willingness to perform his part of the contract” by the
buyer (developer in this case) in consideration of the
transfer of immovable property. Therefore, section 2(47)
will not be applicable as possession is not transferred by
way of the development agreement and valid
consideration is not received by the assessee.
the ultimate buyers. Thus, the appeal of the AO stands
dismissed.
iv. Delhi HC: Interim Moratorium U/S 96 of the
IBC in respect of guarantors wouldn’t ipso facto
apply against other co-guarantors
In the recent case of Axis Trustee Services Ltd v Brij
Bhushan Singhal, the Delhi HC held that an Interim
Moratorium under Section 96 of the Insolvency and
Bankruptcy Code in respect of guarantors wouldn’t ipso
facto apply against other co-guarantors. In the present
case The repayment obligations of Bhushan Steel were
secured by way of a personal guarantee given jointly by
the guarantors, defendants no.1 and 2. A summary suit
was filed on behalf of Axis Trustee Services Limited
seeking recovery of a certain amount from defendants
no.1 and 2.Later, Corporate Insolvency Resolution
Process (CIRP) was initiated against Bhushan Steel
before the NCLT, wherein the Financial Creditors had
filed a claim for the outstanding amounts, admitted as
financial debt. Pursuant thereto, a Demand Notice was
issued to the defendants by the financial creditors. No
reply to the said notice was received, nor was the due
amount paid to the financial creditors.
Plaintiff believed that the defendants could not claim any
moratorium based on an application filed under Section
95 of the IBC before the NCLT, which has no jurisdiction
to entertain the same.
Section 60 only contemplates a situation where the CIRP
in respect of the corporate debtor is pending. Resultantly,
the benefit of Interim Moratorium shall not be available
to the defendants. Accordingly, the present suit was filed
seeking recovery.
Hon’ble High Court held that the Interim moratorium
kicks in as soon as an application is filed under of IBC
and effect of such interim moratorium is that all pending
legal proceedings are deemed to have been stayed. This
contrasts with the moratorium, whereby a moratorium
comes into effect only upon an order being passed by
NCLT declaring a moratorium. Subsequently, High Court
held that Effect of the interim moratorium is only in
respect of the debts of a particular debtor. By no stretch
of the imagination can it be said to include other
independent guarantors in respect of the same debt of a
corporate debtor. Merely because an interim moratorium
under section 96 is operable in respect of one of the co-
guarantors, the same would not apply to other co-
guarantor(s).
v. Supreme Court of India judges that director of a
company cannot be prosecuted vicariously for
cheque bounce if company is not arraigned as
accused
In Pawan Kumar Goel v State of UP the following
questions before the Supreme Court:
(1) Whether a director of a company would be liable for
prosecution under Section 138 of NI Act without the
company being arraigned as an accused?
(2) Whether a complaint under Section 138 of NI Act
would
be liable to be proceeded against the director of the
company without their being any averments in the
complaint that the director arrayed as an accused was in
charge of and responsible for the conduct and business of
the company?
Answering these questions, the apex court held that the
provisions of Section 141 of the Negotiable Instruments
Act impose vicarious liability by deeming fiction which
pre-supposes and requires the commission of the offence
by the company or firm. Therefore, unless the company
or firm has committed the offence as a principal accused,
the persons mentioned in sub-Section (1) and (2) of
section 141 would not be liable to be convicted on the
basis of the principles of vicarious liability. For
maintaining the prosecution under Section 141 of NI Act,
arraigning of the company as an accused is imperative
and non-impleadment of the company would be fatal for
the complaint. Arguments advanced by learned counsel
for the appellant that an additional accused can be
impleaded subsequent to the filing of the complaint
merits no consideration, once the limitation prescribed for
taking cognizance of the offence under Section 142 of NI
Act has expired.
Furthermore, the court held that, considering no effort
was made by the petitioner at any stage of the
proceedings to arraign the company as an accused,
neither were any such
circumstances or reason pointed out that would enable the
Court to exercise the power conferred by proviso to
Section 142, to condone the delay for not making the
complaint within the prescribed period of limitation.
The material requirements of section 141: Vicarious
liability of a person for being prosecuted for an offence
committed under the Act by a company arises if at the
material time he oversaw and was also responsible to the
company for the conduct of its business. Simply because
a person is a director of a company, it does not
necessarily mean that he fulfils both the above
requirements so as to make him liable. Conversely,
without being a director a person can be in charge of and
responsible to the company for the conduct of its
business.
Thus, Where the allegations in the complaint did not in
express words or with reference to the allegations
contained therein make out a case that at the time of
commission of the offence, the individual named in the
complaint as accused was in charge of and was
responsible to the company for the conduct of its
business, it was to be held that requirement of Section
141 was not met and the complaint against the accused
CLS Note:
Sub-section (1) to Section 141 of the NI Act states
that where a company commits an offence, every
person who at the time of the offence was committed
was in charge of and responsible to the company for
the conduct of the business, as well as the company
itself, shall be deemed to be guilty of the offence. The
penal provisions contained in Section 138 to 142 of
the Act have been enacted to ensure that obligations
undertaken by issuing cheques as a mode of deferred
payment are honoured. Section 138 of the Act
provides for requirements under which a case for
was to be quashed.
VIII. MISCELLANEOUS
i. TATA Sons announce merger of Air India and
Vistara
Singapore Airlines (SIA) and Tata Sons have announced
their agreement to combine Air India and Vistara. As part
of the deal, SIA will invest Rs 2,058.5 crore ($250
million) in Air India and receive a 25.1% share in the
combined company.
This 25.1% interest will be in an expanded Air India
group, which would include Air India, Vistara, AirAsia
India, and Air India Express. Subject to regulatory
permissions, the merger of all airlines is anticipated to be
completed by March 2024. Air India Express and AirAsia
India will soon be combined into one company that will
offer low-cost airline options. This process is already
underway. With its internal cash resources, which were
S$17.5 billion as of the 30th of September 2022, SIA
plans to completely fund this initiative. Additionally, SIA
and Tata have agreed to take part in future financial
infusions that may be necessary to finance the expansion
and operations of the larger Air India in FY2022/23 and
FY2023/24. SIA's portion of any extra capital infusion,
based on its 25.1% post-completion investment, could
reach Rs 5,020 crore ($615 million), payable only after
the merger is complete. The precise sum will rely on a
number of variables, such as how well the expanded Air
India's business strategy is going and how readily it can
obtain alternative sources of money.
ii. US-based Perfect Day Inc. acquires Sterling Biotech
Limited
On November 17, Sterling Biotech Limited was
purchased by Perfect Day, Inc. of the US through a
liquidation procedure, with the blessing of the National
Company Law Tribunal of Mumbai (NCLT).
In June 2018, Union Bank of India (formerly Andhra
Bank) submitted an application to start the corporate
insolvency resolution procedure (CIRP) of SBL under the
IBC. Despite receiving a few resolution plans, the
committee of creditors didn't approve any of them,
leading to the failure of the CIRP for SBL.
In May 2019, the NCLT appointed the liquidator after
ordering the liquidation of SBL on a going-concern basis
in accordance with the IBC. The National Company Law
Appellate Tribunal and the Supreme Court both
considered legal challenges to the order starting the
liquidation process before ultimately upholding it in
February 2021. The liquidator then started the liquidation
process and published the process document and public
notice in October 2021 to invite bids for the acquisition
of SBL as a whole on a going-concern basis. Perfect Day
was the top bidder and was deemed the winning bidder in
April after the liquidator requested bids via auction. The
National Company Law Appellate Tribunal and the
Supreme Court both considered legal challenges to the
order starting the liquidation process before ultimately
upholding it in February 2021. The liquidator then started
the liquidation process and published the process
document and public notice in October 2021 to invite
bids for the acquisition of SBL as a whole on a going-
concern basis. Perfect Day was the top bidder and was
deemed the winning bidder in April after the liquidator
requested bids via auction. Then, on May 28 of this year,
Perfect Day petitioned NCLT to approve the acquisition,
give certain reliefs, and treat the acquisition similarly to a
CIRP resolution procedure. Especially considering that
SBL was liquidated as a whole rather than as individual
assets were sold, i.e., on a going concern basis. On
November 11, the NCLT issued a precedent-setting
decision approving Perfect Day's acquisition of SBL in
accordance with its acquisition plan and granting reliefs
such as the cancellation and extinguishment of the
existing share capital and the acquisition of SBL on a
fresh start basis similar to a resolution process.
iii. Reliance Projects and Property Management
Servcies move National Company Law Tribunal of
Mumbai to acquire Reliance Infratel
Reliance Projects and Property Management Services, a
Reliance Jio entity that controls tower and fibre assets for
Reliance Communications, has filed a new appeal with
the National Company Law Tribunal in Mumbai to
finalise the acquisition of Reliance Infratel (RITL).
A copy of the petition, which was submitted last month,
states that the Jio subsidiary has requested to deposit
3,500 crores in an escrow account to be paid among
creditors when the inter-creditor disagreements regarding
the distribution of settlement monies have been resolved.
The corporation also stated in its petition that the assets'
value was declining as a result of the resolution plan's
implementation delay. Over 43,500 towers and 1.7 lakh
kilometres of fibre optic cable are among the assets.
In order to effectuate the resolution plan and provide the
applicant ownership and management of RITL according
to the resolution plan, it asked the tribunal for permission
to "deposit the complete resolution payment in an account
with SBI."
In addition, the business stated that "if immediate action
is not taken toward implementation, the value of the
assets of the Corporate Debtor (Reliance Infratel) will
degrade." In November 2019, Jio's subsidiary submitted
an offer of Rs. 4,000 crores to the company law tribunal,
where Reliance Infratel is currently undergoing
liquidation. After conducting a forensic assessment, the
State Bank of India, Union Bank of India, and Indian
Overseas Bank designated RITL as a "fraud account" in
November 2020. The committee of creditors authorised
the resolution plan for Reliance Jio's subsidiary in
December 2020, but SBI and a few other banks,
including Doha Bank, Standard Chartered Bank, and
Emirates Bank, are fighting in court about how the
money would be distributed. The Supreme Court is now
deliberating the case. The resolution professional's
characterization of the claims from RITL's indirect
creditors as financial creditors had been contested by
Doha Bank. The corporation had appealed to the National
Company Law Appellate Tribunal, but the body had
rejected its arguments.
All banks have been included as parties to the petition,
including China Development Bank, Export Import Bank
of China, Shubh Holdings Pte, and SC Lowy Asset
Management. Chinese businesses had written to India's
insolvency and bankruptcy board and finance minister
Nirmala Sitharaman earlier this year asking for their
assistance in accelerating RITL's resolution process.
iv. NCLAT sets aside CCI order of penalties against
tyre companies accused of cartelisation
The Competition Commission has been ordered by the
appellate court NCLAT to issue a new ruling in the case
of alleged cartelization by tyre businesses. The court
cited the necessity to revisit mathematical and
unintentional errors as well as the penalty in order to
protect the domestic tyre industry. The National
Company Law Appellate Tribunal (NCLAT) issued an
order on December 1 in response to a series of challenges
the tyre industry filed against the Competition
Commission of India (CCI) decision from back in August
2018. Over Rs 1,788 crore in fines had been levied
against the tyre makers by the CCI. The tribunal ordered
the regulator to issue a new order "after hearing the
parties" and remanded back all cases to CCI for review in
its 166-page order. The panel recommended that the
regulator "consider revising the penalty to save domestic
industry" because it is being heavily pressured by
international tyre manufacturing firms and has a lot of
untapped potential. The NCLAT stated that the CCI order
contained "inadvertent errors," but added that "because
cartel has been found for the year 2011–12 and the same
is surrounded by arithmetical errors may be leading to
erroneous inferences aside from other defects"
A two-person NCLAT panel made up of Justices Rakesh
Kumar and Ashok Kumar Mishra noted that the
calculations of the % rise in price had errors, and the
revised figures appear to exclude the existence of price
parallelism. The tribunal asserts that the CCI must
consider domestic industry promotion as well because the
Competition Act's goal calls
for consideration of the nation's economic development.
"If domestic industries commit violations, they should
unquestionably be punished and given the opportunity to
reformatory instead of virtually putting the organisation
on weak health," it added. The tribunal further noted that
Birla Tyre is already involved in the corporate
bankruptcy resolution process out of all the entities.
Leading tyre manufacturers like Ceat, Apollo Tyres, JK
Tyre, MRF, Birla Tyres, and the Automotive Tyre
Manufacturers Association (ATMA) appealed the CCI
judgement, which led to the NCLAT ruling. The fair-
trade regulator issued a ruling on August 31, 2018, fining
the tyre manufacturers. But the order was not delivered to
them until February 2022, following the Supreme Court's
final approval. An appeal was filed before the Madras
High Court shortly after the CCI issued the order in 2018,
and that appeal was rejected on January 6 of 2022. This
was further contested before the Supreme Court, which
on January 28, 2022, likewise rejected the plea. The CCI
then relayed the order to the tyre companies, which then
contacted the NCLAT, almost four years later. In its
decision, the NCLAT noted that Vice President of
Marketing for CEAT Nitish Bajaj, who "was not
employed with CEAT" in 2011, had received a fine from
the regulator. It stated that among other issues, "because
cartel has been found for the year 2011–12 and the same
is surrounded by arithmetical errors, may be leading to
erroneous conclusions." Based on a reference from the
corporate affairs ministry and a representation made by
the All-India Tyre Dealers Federation, CCI had opened
an investigation (AITDF). In order to raise the prices of
the cross ply/bias tyre types each of them marketed in the
replacement market and to restrict and regulate
manufacturing, the companies and the association
engaged in cartelization, according to the regulator. The
CCI fined Apollo Tyres Rs 425.53 crore, MRF Ltd Rs
622.09 crore, CEAT Ltd Rs 252.16 crore, JK Tyre Rs
309.95 crore, and Birla Tyres Rs 178.33 crore. Also
subject to a fine of Rs. 8.4 lakh was their association
ATMA.
ix. Major Tech Companies re-orient business
operations globally, including India
Amazon has announced that it is shutting down its
wholesale distribution Unit “Amazon Distribution” in India.
Amazon did not say why it was shutting down the wholesale
distribution offering, but the move follows the  closure of
Amazon’s Ed-tech and  food delivery business. as the
company decides to focus on core operations “amidst
tightening and rationalization across the global tech
Industry”. “We don’t take these decisions lightly. We are
discontinuing this programme in a phased manner to take
care of current customers and partners,” a company
spokesperson said in a statement. Amazon distribution is a
wholesale e-commerce website available to small
neighbourhood stores in Bengaluru, Mysore and Hubli, with
the aim of helping these stores secure inventory from the e-
commerce giant. 
Further, Amazon has announced job cuts, following Meta
and Twitter. Amazon’s layoffs come after other major tech
companies, such as Meta, Twitter, have already enforced job
cuts. Companies such as Apple have also announced a
slowdown in hiring. First reported by the New York Times,
Amazon will lay off “approximately 10,000 employees,
Meta(the parent company of Facebook) announced plans to
fire 11,000 employees, while Twitter-which was recently
acquired by Elon Musk-has also undertaken mass layoffs. 
The biggest technology companies are bracing for troubled
times ahead as the Covid-19 induced acceleration and
growth has not kept pace. With talks of global recession,
technology companies, typically seen as big spenders, are
now resorting to cost-cutting