BULLETIN: OCTOBER, 2022

Prepared by Prateek Singh, Kavya Sreekumar and Atharva Chandra.

Table of Contents

I. Banking and Finance 2

i. RBI introduces Internal Ombudsman mechanism for Credit Information Companies 2
ii. RBI launches दक्ष DAKSH – Reserve Bank’s Advanced Supervisory Monitoring System 2
iii. RBI announces operationalisation of Central Bank Digital Currency-Wholesale (e₹-W) Pilot 2
iv. RBI announces rate of interest on Government of India Floating Rate Bond 2028 3
II. Securities Market 3
i. SEBI cautions public against unauthorized money mobilization by entities offering Portfolio Management
Services 3
ii. SEBI allows brokers to place bids on RFQ platform 4
III. General Corporate 4
i. Notification of the amendment of Legal Metrology (General) Rules, 2011 4
ii. Supreme Court decides that appeal for restoration of Co.’ s name can’t be maintained by a person whose status
as its director is disputed 4
iii. Esha Kedia v. Milan R. Parekh & Ors.: Delhi High Court decides that the member/s of a Joint Venture (“JV”)
cannot invoke Arbitration Clause in its individual capacity 5
iv. NCLAT decides that a personal guarantor to CD can’t escape from his liability even after obtaining citizenship
of a foreign country 5
IV. Miscellaneous 6
i. SEBI floats Consultation Paper on Cloud Framework version 1.0. 6
ii. CCI imposes a monetary penalty of Rs. 1337.76 crore on Google for anti-competitive practices 6
iii. CCI fines hotel bodies such as Oyo, MakeMyTrip and GoIbibo 6
 I. BANKING AND FINANCE

i. 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 CLS Note:
coins are currently issued, and be distributed through
intermediaries, i.e., banks. What is CBDC?
The pilot would cover select locations, where customers According to The RBI : “CBDC is the legal tender
and merchants will be able to use the digital rupee (e₹- issued by a central bank in a digital form. It is the
same as a fiat currency and is exchangeable one-to-
R), or e-rupee in closed user group [CUG] comprising
one with the fiat currency. Only its form is
participating customers and merchants. Transactions different”. RBI has classified into two broad
with e₹-R will be carried out  through a digital wallet categories: general purpose (retail) and wholesale,
offered by the participating banks, which can be stored on the basis of the usage and the functions
on mobile phones / devices. Both Person to Person (P2P) performed by the digital rupee and considering the
and Person to Merchant (P2M) transaction will be different levels of accessibility. To settle secondary
covered. Payments to merchants can be made using QR market transactions in government securities, the
codes displayed at merchant locations. The e₹-R would RBI introduced the digital rupee for the wholesale
offer features of physical cash like trust, safety and sector on November 1.
settlement finality. As in the case of cash, it will not earn Wholesale CBDC is made to only be accessed by a
select financial institutions. It has the ability to
any interest and can be converted to other forms of
improve operational costs, the usage of collateral,
money, like deposits with banks. and liquidity management by making the settlement
Four banks will be involved in the controlled launch of systems for financial transactions carried out by
the digital currency in these four cities: State Bank of banks in the government securities (G-Sec)
India, ICICI Bank, Yes Bank, and IDFC First Bank.  Four segment, the interbank market, and the capital
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 ii. RBI allows HDFC Bank and Canara Bank
Bhubaneswar and later extend to Ahmedabad, Gangtok, to open “Vostro account” for rupee trade
Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna with Russia
and Shimla.
The Reserve Bank of India has permitted HDFC Bank
The pilot will test the robustness of the entire process of
Ltd and Canara Bank Ltd to open a special "vostro
digital rupee creation, distribution and retail usage in real
account" for trade in Rupees with Russia. Vostro
time. Different features and applications of the e₹-
Accounts are accounts a bank holds on behalf of another,
R token and architecture will be tested in future pilots,
often foreign bank, and this forms a key part of
based on the learnings from this pilot.
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.
DAKSH is an application involving a web-based end-to-
end workflow via which RBI shall supervise compliance
requirements to further the culture of compliance in
“Supervised Entities” [“SEs”] like Banks, NBFCs, etc.
The application shall provide an anytime-anywhere
securely accessible forum which shall ensure seamless
communication, inspection planning and execution, cyber
incident reporting and analysis, provision of various MIS
reports and so on.
iii. 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.  Internet Banking Facility by Regional Rural
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
. shall be no instances of monetary penalty
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,
iv. RBI revises Eligibility Criteria for offering
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.
f. No instance of default in maintenance of
CRR/SLR during the immediately
preceding financial year.
g. The bank shall have a satisfactory track
record of regulatory compliance and there
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.

II. 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.
III. 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/n
ov-2022/strengthening-governance-of-market-
infrastructure-institutions 64806.html.
IV. 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.
V. 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 into 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 the ultimate buyers. Thus, the appeal of the AO
stands dismissed.
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.
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).
VI. 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 was to be quashed.
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
VII. MISCELLANEOUS
i. SEBI floats Consultation Paper on Cloud
Framework version 1.0.
SEBI has released Consultation Paper on Cloud
Framework version 1.0. The objective of the
framework is to highlight the key risks and control
measures which Regulated Entities (REs) need to
consider before adopting cloud-based solutions. Cloud
computing is a model for enabling ubiquitous,
convenient, on-demand network access to a shared
pool of configurable computing resources (e.g.,
networks, servers, storage, applications, and services).
hotels, which were availing the services of these
franchisors was anti-competitive," the CCI said in its
order.
The FHRAI had also alleged that Oyo and
MakeMyTrip were hurting competition by offering
deep discounts and charging "exorbitant" fees from
hotels. They had set up an average room price with
FabHotels, a hotel. Thus, their market performance
was not based on efficiency but on deep pockets. It
resulted in a situation of predatory pricing.

ii. CCI imposes a monetary penalty of Rs. 1337.76

crore on Google for anti-competitive practices

The CCI has imposed a monetary penalty of Rs.

1337.76 crores on Google for allegedly abusing its
dominant position in multiple markets in the Android
mobile device ecosystem and violating Section 4 of the
Competition Act. Google has been given 30 days to
provide the requisite financial details and supporting
documents. Further, CCI has also issued cease and
desist order against Google and directed it to modify
its conduct within a defined timeline.

iii. CCI fines hotel bodies such as Oyo, MakeMyTrip

and GoIbibo

The Competition Commission of India (CCI) has been

investigating the companies since 2019 following
allegations by a hotel body that MakeMyTrip gave
special treatment to SoftBank-backed Oyo on its
platform. The CCI has directed MakeMyTrip and
Goibibo (MMT-Go) to amend their market behaviour
after fining them about $27 million. Oyo was fined $20
million.
The Federation of Hotel and Restaurant Associations
of India (FHRAI) had alleged that agreements between
Oyo and Nasdaq-listed MakeMyTrip to give
preferential treatment to Oyo on its platform were
restricting market access to competitors such as Fab
Hotels and Treebo.
"The Commission is of the view that the commercial
arrangement between OYO and MMT-Go which led to
the delisting of FabHotels, Treebo and the independent