NCLAT Admits Cyrus Mistry’s Appeal
The National Company Law Appellate Tribunal (“NCLAT”) on August 24, 2018 has admitted Cyrus Mistry’s appeal against his removal from the post of Chairman of Tata Sons Limited. The NCLAT further directed that Mistry cannot be forced to sell his shares in Tata while the appeal is pending as such a transfer would affect the outcome of the appeal.
Supreme Court on Sale of Property by Karta
The Supreme Court (“SC”), on August 20, 2018 in the case of Kehar Singh v. Nachittar Kaur has held that no co-coparcener has the right to challenge sale made by karta to meet legal necessity. The SC opined that “Once the factum of existence of legal necessity stood proved, then, in our view, no co-coparcener (son) has a right to challenge the sale made by the Karta of his family”.
Supreme Court on Appointment of Arbitrator
The SC, on August 21, 2018, in the case of United India Insurance Co. Ltd v. Hyundai Engineering and Construction Co., Ltd overturned the decision of the Madras High Court and held that in the event that there is a condition attached to an arbitration clause in an agreement, the condition under the arbitration clause should be satisfied in order to appoint an arbitrator and commence proceedings. The SC overturned the position incorporated by the 2015 Amendment to the Arbitration and Conciliation Act, 1996 whereby, under Section 11(6A) of the Arbitration & Conciliation Act, 1996, courts could merely look into the existence of an arbitration clause before appointing an arbitrator.
Committee on Review of Penal Provisions of Companies Act, 2013 Submits Report
The Committee on Review of Penal Provisions of Companies Act, 2013 (“Committee”), on August 27, 2018 submitted its final report to the Government of India. The Committee recommended the restructuring of corporate offences to relieve special courts from adjudicating routine offences, de-clogging the National Companies Law Tribunal (“NCLT”) by enlarging the jurisdiction of Regional Director with enhanced pecuniary limits for compounding offences, vesting the Central Government with the power to approve the alteration in the financial year of the company; and proposed recommendations related to corporate compliance which includes, but not limited to reducing the time-limit for filing documents, non-maintenance of registered offices to trigger de-registration process, and holding of directorships beyond permissible limits to trigger disqualification of directors.