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The Supreme Court in Vedanta vs. Shenzen Shandong Nuclear Power Construction Co. Ltd, held that, “the rate of interest must be compensatory as it is a type of reparation conceded to the award holder; while on the other hand it must not be punitive, unconscionable or usurious in nature.”

Concurring the case, on May 2008, Vedanta Ltd. and the Shenzen Shandong Nuclear Power Construction Co. Ltd. (Chinese Corporation) went into Engineering Procurement and Construction Contracts (the EPC Contract) for development of a 210MW Co-Generation Power Plant. Each of the four contracts contained an Arbitration Clause.

As one of the parties was a foreign party, thus, the arbitration was deemed to be International Commercial Arbitration (ICA), having its seat in India and governed by Arbitration and Conciliation Act, 1996 (the Act).

The termination proviso in the Contract provided that, in case of termination, the Purchaser will compensate 105% of the expense brought about by the Supplier. The EPC contracts did not contain any clause or provision on instalment of Interest.

In International Contracts, there was no accord on rate of granting interest. Therefore, in the absence of an agreement between the parties on interest, the rate of interest granted would be administered by the Law of the Seat of Arbitration.

Therefore, according to Section 31(7)(a) of the Act which relates to the award of Interest for the preference and, pendente lite period, or, in other words, the agreement between the parties. The expression “unless otherwise agreed by the parties” is missing from this section. And, the statutory rate of Interest is 2% higher than the current rate of interest predominant on the date of the award.

Therefore, the Supreme Court observed that “The discretion of the arbitrator to award interest must be exercised reasonably. An arbitral tribunal while making an award for Interest must take into consideration a host of factors, such as: (i) the ‘loss of use’ of the principal sum; (ii) the types of sums to which the Interest must apply; (iii) the time period over which interest should be awarded; (iv) the internationally prevailing rates of interest; (v) whether simple or compound rate of interest is to be applied; (vi) whether the rate of interest awarded is commercially prudent from an economic standpoint; (vii) the rates of inflation, (viii) proportionality of the count awarded as Interest to the principal sums awarded. On the one hand, the rate of Interest must be compensatory as it is a form of reparation granted to the award holder; while on the other it must not be punitive, unconscionable or usurious in nature.”

Further, in this case, the Arbitral Tribunal adopted a dual rate of Interest in the Award. The Award relates to instalment of Interest @ 9% for 120 days post grant; if the sum granted isn’t paid inside 120 days, the rate of Interest is scaled up to 15% on the entire sum awarded.

The Supreme Court also observed that “The dual rate of interest awarded seems to be unjustified. The award of a much higher rate of interest after 120 days’ is arbitrary, since the Award-debtor is entitled to challenge the award within a maximum period of 120 days as provided by Section 34(3) of the said Act, 1996. If the Award Debtor is made liable to pay a higher rate of Interest after 120 days, it would foreclose or seriously affect his statutory right to challenge the Award by filing objections under Section 34 of the said Act. The imposition of a high rate of interest @ 15% post- 120 days is exorbitant, from an economic standpoint, and has no correlation with the prevailing contemporary international rates of interest. The Award Debtor cannot be subjected to a penal rate of interest, either during the period when he is entitled to exercise the statutory right to challenge the Award, before a Court of law, or later. Furthermore, the Arbitral Tribunal has not given any reason for imposing a 15% rate of Interest post 120 days.

The Chinese Corporation has, in fact been awarded 105% of the costs incurred under the EPC Contracts by the Arbitral Tribunal. The award of interest @ 9% on the Euro component of the Claim is unjustified and unwarranted.
Therefore, the Supreme Court said that, “The Award has conceded a uniform rate of 9% S.I. (Simple Interest) on both the INR and the EUR part. Be that as it may, when the parties don’t operate in a same currency, it is important to consider the intricacies caused by differential rates of interest. Rate of interest contrasts depending on the currency. It is vital for the Arbitral Tribunal to coordinate the choice of the currency along with the interest rates. A uniform rate of Interest for INR and EUR would thus not be supported. The rate of 9% Interest on the INR segment granted by the Arbitral Tribunal is undisputed. However, as for the EUR segment, the Award Debtor has liability to pay interest at the LIBOR rate (London Inter-Bank Offered Rate) + 3 rate points, prevailing on the date of the Award. Along these lines, there was modification by the Arbitral Court on the award dictated. The interest rate of 15% post 120 days allowed on the whole sum granted stands erased. A uniform rate of interest @ 9% will be relevant for the INR segment in total till the date of acknowledgment or realization”.

Satyam Singh Pal
The Indian Lawyer



The Supreme Court in a recent case of M.C. Mehta vs. Union of India and others 2018 has passed a judgment dated 24.10.2018 (Judgment) and held that no Bharat Stage IV (BS-IV) – compliant vehicles should be permitted to be sold in India after 31.03.2020 (Deadline).

The Judgment stated that all automobile manufacturers in India have to dispose of the vehicles which conform to BS-IV norms and have to adopt BS-VI norms, which provide improved and eco friendly technological changes, in manufacturing automobiles.

In this regard the automobile manufacturers had requested the Apex Court for extension of the Deadline as it may take longer period of time to sell the stocks of non- BS-VI compliant vehicles and to manufacture BS-VI compliant vehicles, as the BS-VI fuel would be available in India only with effect from 01.04.2020.

The Supreme Court made the following observations in the said Judgment:

According to the Report of the Parliamentary Standing Committee dated 07.08.2018, the problem of air and vehicular pollution has had a cascading effect on the health of people residing in various parts of the country including the National Capital Region (NCR) of Delhi.

Also, according to the World Health Organization (WHO), Indian cities of Gwalior, Allahabad, Raipur, Delhi, Ludhiana, Khanna, Varanasi and Patna are amongst the most polluted cities in the world.

Thus, there is an urgent need to ensure compliance of BS-VI norms with effect from 01.04.2020 by automobile manufacturers in India.

Further, the Union Government of India has spent approximately Rs. 30,000 Crores to make BS-VI fuel available in various parts of India. Moreover, BS-VI fuel has already been made available in the NCR of Delhi since 01.04.2018.

Thus, there is no need for extension of Deadline as there is availability of BS-VI fuel in India for manufacturing automobiles.

Moreover, manufacture of BS­VI compliant vehicles has already begun in India by a number of automobile companies including M/s. Hero MotoCorp, and is expected to be finished before the Deadline.

In view of the above, other automobile manufacturers can also put in efforts to comply with BS­VI norms before the Deadline.

Further, a number of automobile vehicle companies are today engaged in manufacturing hydrogen cell, fuel vehicles along with hybrid, electric and compressed natural gas vehicles, which are technologically far more advanced than BS­VI compliant vehicles.

So, there should not be any difficulty for other automobile manufacturers in adopting BS­VI norms in manufacturing automobiles before the Deadline.

Most importantly, every person has a right to a decent environment in India which has been held to be a fundamental right under Article 21 of the Constitution of India 1950 as amended thereof by the Supreme Court in Shantistar Builders v. Narayan Khimalal Totame 1990.

Therefore, in view of a larger public interest, i.e., the health of citizens of India, the Supreme Court herein has refused to give any extension of the Deadline to comply with BS­VI norms and prohibited companies from selling or registering BS-IV compliant vehicles after 01.04.2020.


Harini Daliparthy

Senior Legal Associate

The Indian Lawyer



The Supreme Court Bench of Justices AK Sikri and Ashok Bhushan had reserved its order on 28th August, 2018 in a petition calling for countrywide ban on bursting fire-crackers, citing the ill effects on environment and public health. The activists had petitioned the Supreme Court for a complete ban on fireworks in light of rising air pollution levels in New Delhi, ahead of Diwali.

The Supreme Court in its order dated 23rd October, 2018 refused to impose a nationwide blanket ban on sale of firecrackers. The verdict came in response to a plea seeking a ban on manufacturing and sale of firecrackers across the country to curb air pollution.

For informational purposes, the Supreme Court had, on 9th October, 2017, temporarily banned the sale of firecrackers ahead of Diwali last year.In wake of the temporary ban, the traders sought permission to sell crackers for at least a day or two before Diwali last year. In their contention, firecrackers manufacturers had argued that the use of firecrackers should not be completely banned, rather their use should be strictly regulated.

The Court observed that Article 21 (right to life) of the Constitution applies to both segments of people (firecracker manufacturers and general public) and it needs to maintain a balance while considering a countrywide ban on firecrackers. The Court said that it is important to take into account all aspects, including the fundamental right of livelihood of firecracker manufacturers and the right to health of over 1.3 billion people of the country.

The Order dated 23rd October, 2018 of the Supreme Court thus does not permit a complete ban on the use of firecrackers, but imposes the following conditions and restrictions:

Online sale of firecrackers is banned. The e-commerce websites would be in contempt of court if they are found selling fire-crackers.

Sale of firecrackers will happen only through licensed vendors. And only those firecrackers that are within noise pollution limits set in July 2005 verdict, In Re: Noise Pollution v. Unknown, are allowed.

Only “low polluting” green crackers which are within permitted decibel limits and emission norms will be allowed. On 8th August 2018, the Court observed that a spike in PM 2.5 levels in the air is a severe problem as the particulate matter remains in people’s lungs, leading to serious health implications.

Ladisor chain-firecrackers, which are very noisy, are banned.

Timing restrictions on burning firecrackers have been imposed, allowing people to burn crackers only between 8pm and 10 pm on Diwali, while between 11:45 pm to 12:15 am on New Year and Christmas.

All states have been directed to explore feasibility of community cracker bursting during festivals.

SHO’s will be held liable if banned firecrackers are sold in their area.

Surabhi Aggarwal

Senior Associate

The Indian Lawyer



The Supreme Court in a recent Judgement Suzuki Parasrampuria Suitings Pvt. Ltd. Vs. The Official Liquidator of Mahendra Petrochemicals Ltd. (In Liquidation) and Others decided on 08.10.2018 held that Suzuki Parasrampuria Suitings Pvt. Ltd. (hereinafter as the “said Company”) cannot file an application to seek any benefit under the SARFAESI Act, 2002 (“SARFAESI Act”) and Section 130 of the Transfer of Property Act, 1882, unless it is a bank or banking company or a financial institution or a securitisation company or reconstruction company. It further held that, the Company cannot take contradictory stands at its own convenience.

Here, the said Company was an assignee of debt by the Industrial Finance Corporation of India Ltd. (IFCI) for the outstanding of M/s. Mahendra Petrochemicals Ltd (MPL). A Company Petition was filed for winding up of M/s. MPL. The Company then was referred to rehabilitation to the Board for Industrial and Financial Reconstruction (BIFR). While this was pending, without informing the BIFR, an unregistered memorandum of understanding (MOU) was entered between M/s. MPL with M/s. Suzuki Parasrampuria Suitings Pvt. Ltd. to lease out the properties to the said Company for 20 years to repay its debts. The Company Court was unaware about this arrangement, until on 19.04.2010, when a winding up order was passed by the court.

The IFCI, Bank of Baroda and Punjab National Bank who were the secured creditors, filed an original application for recovery of debt against MPL before the Debt Recovery Tribunal under the SARFAESI Act. IFCI held first charge to M/s. MPL for outstanding of Rs.160 crores over the assets and the Bank of Baroda had second charge for Rs.4,68,00,000 approximately. On 28.07.2010 after the winding up Order, IFCI assigned its dues to the Company for a sum of Rs.85 Lakhs only and informed the official liquidator thereafter.

Thereafter Suzuki Parasrampuria Suitings Pvt. Ltd. filed, Company application for substitution of its name in the place of IFCI as secured creditor. The same was however rejected on the grounds that the Company was neither a bank or banking company or a financial institution or securitization company or reconstruction company and therefore could not be substituted in place of IFCI as a secured creditor for the purpose of the SARFAESI Act. In order to seek relief for substitution as a secured creditor under the SARFAESI Act, the Company Judge held that the Suzuki Parasrampuria Suitings Pvt. Ltd could not draw any benefit under Section 130 of the Transfer of Property Act,1882, which states that-

“Section 130, The Transfer of Property Act, 1882, –

Transfer of actionable claim. —

(1) The transfer of an actionable claim 1[whether with or without consideration] shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instruments, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not: Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.

(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor’s consent to such suit or proceeding and without making him a party thereto.

(Exception) —Nothing in this section applies to the transfer of a marine or fire policy of insurance 3[or affects the provisions of section 38 of the Insurance Act, 1938. Illustrations

(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid, and C cannot sue A for the debt.

(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in sub-section (1) of section 130 and to provisions of section 132.”

On the other hand, the respondents contended that the Company cannot take different stands in order get benefit according to their convenience.

When the matter went up to the Supreme Court, the Apex Court held-

though the litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands. The untenability of an inconsistent stand in the same case was considered in Amar Singh vs. Union of India, (2011) 7 SCC 69, observing as follows:

“This Court wants to make it clear that an action at law is not a game of chess. A litigant who comes to Court and invokes its writ jurisdiction must come with clean hands. He cannot prevaricate and take inconsistent positions.”

The same issue was adjudged in Joint Action Committee of Air Line Pilots’ Assn. of India vs. DG of Civil Aviation, (2011) 5 SCC 435, observing:

“The doctrine of election is based on the rule of estoppel-the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity….. Taking inconsistent pleas by a party makes its conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolong proceedings unnecessarily.”

Satyam Singh Pal




Recently, the Supreme Court of India in Public Interest Foundation v. Union of India 2018, has issued certain directions to deal with criminalization in politics in India.

It has been long observed that persons with extensive criminal backgrounds have been contesting national or state elections in India and in few cases, have become legislators as well. As per the National Commission to Review the Working of the Constitution (NCRWC) India, some of the electoral candidates even had charges of serious criminal offences against them including murder, attempt to murder, rape, crimes against women, etc.

The Supreme Court herein held that in order to ensure that there is free and fair democracy, the electoral candidates should possess high integrity and morality. Further, that allowing electoral candidates with criminal antecedents to contest elections, would mean interference with the purity and integrity of the electoral process and violation of a voter’s freedom to choose freely a candidate, thereby adversely affecting the democracy of the country.

According to the Supreme Court, A political party which does not respect democratic principles in its internal working cannot be expected to respect principles in the governance of the country.

According to the Representation of People Act, 1951 as amended thereof, political members are disqualified only after conviction. But the time consuming trials often delay the convictions, if any and as a result of which, it becomes difficult to prevent the growing criminalization in politics.

Therefore, the Supreme Court herein, has issued the following directions in a bid to strengthen the democratic set-up in India:

Each contesting candidate shall fill up the form as provided by the Election Commission and the form must contain all the particulars as required therein.

It shall state, in bold letters, with regard to the criminal cases pending against the candidate.

If a candidate is contesting an election on the ticket of a particular party, he/she is required to inform the party about the criminal cases pending against him/her.

The concerned political party shall be obligated to put up on its website the aforesaid information pertaining to candidates having criminal antecedents.

The candidate as well as the concerned political party shall issue a declaration in the widely circulated newspapers in the locality about the antecedents of the candidate and also give wide publicity in the electronic media. When we say wide publicity, we mean that the same shall be done at least thrice after filing of the nomination papers.

The Supreme Court has, further, suggested that the Parliament of India should soon enact a legislation to ensure that persons facing serious criminal charges do not enter into the political stream.

Daliparthy Harini

Senior Legal Associate

The Indian Lawyer


Arifa Khan

PG College of Law, Osmania University

Intern at The Indian Lawyer



Recently, there has been a huge uproar about sexual harassment of women at workplace including film and media industry, whereby a number of actors and journalists have raised their voice against the indecent or undesirable behavior or acts committed by other film actors and journalists against them.

This led to an announcement by the Minister for Women and Child Development in India, Mrs. Maneka Gandhi, to appoint committees that will look into the allegations of sexual harassment of women at workplace.

The committees may be constituted under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 as amended thereof (the Act). This Act is based on guidelines issued by the Supreme Court of India in Vishaka and others vs. State of Rajasthan and others 1997.

The Supreme Court in the said case of Vishaka and others vs. State of Rajasthan and others 1997, had laid down certain guidelines to be observed by all employers or other responsible persons at workplaces to ensure prevention of sexual harassment of women at workplaces and to preserve and enforce the right to gender equality of working women (Guidelines):

Duty of an employer to prevent or deter the commission of acts of sexual harassment and to also provide for procedures for resolution, settlement or prosecution of acts of sexual harassment.

Sexual harassment includes unwelcomed sexually determined behavior such as physical contact and advances, demand or request for sexual favors, making sexually colored remarks, showing pornography, any other unwelcome physical, verbal or non-verbal conduct of sexual nature (Sexual Harassment).

Immediate action to be taken by an employer against the offender and ensure that the victims or witnesses of Sexual Harassment incidents are not discriminated or mistreated and victimized.

Establishment of an appropriate complaint mechanism and complaints committee headed by a woman for redressal of complaints related to Sexual Harassment incidents at workplaces.

Such a complaint committee would have to prepare an annual report about the cases filed and disposed of pertaining to Sexual Harassment incidents at workplaces and submit the same to the concerned government department.

Awareness to be increased by employers regarding the rights of female employees and the Guidelines or law in that regard.

The Central/State Governments have to ensure that the Guidelines or law in that regard are followed by employers, etc.

The Act provides for protection against Sexual Harassment of women at workplace and for the prevention and redressal of complaints of Sexual Harassment, etc:

Workplace- Any Government establishment and/or private sector enterprise, non-governmental organisation, hospital, sports institute, any other place visited by employee during course of employment including transportation provided by employer, a house or dwelling place would come under the purview of a workplace (Workplace).

Prevention- Apart from prevention of Sexual Harassment, the Act also provides for prevention of acts of promise of preferential treatment, threat of detrimental treatment, creation of intimidating or hostile work environment, etc.

Committee- The Act provides for setting up of an internal complaints committee by an employer, local complaints committee by Government in every district, etc where an aggrieved woman can file her complaints of Sexual Harassment at Workplace within 3 months of the date of incident, which may be extended by the committee concerned if they are satisfied that circumstances were such which prevented the aggrieved woman from filing the complaint.

Settlement or inquiry- The committee concerned may settle the matter, failing which, it may conduct an inquiry into the matter and/or register a case with the police.

Daliparthy Harini

Senior Legal Associate

The Indian Lawyer




Clearing the confusion that came with the insertion of the amended provisions, namely, Sections 34(5) and (6) of the Arbitration and Conciliation Act, 1996, inserted by Amending Act 3 of 2016, the Supreme Court dealt with the nature of these amended provisions in the case of ‘The State of Bihar & Ors. Vs. Bihar Rajya Bhumi Vikas Bank Samiti’ (Civil Appeal No. 7314 of 2018).

The question before the Court was whether Section34 (5) is mandatory in nature or whether it is directory, i.e. whether non-issue of notice to the other party can lead to dismissal of the suit on this very ground.

Section 34, sub-sections (5) and (6) of the Arbitration and Conciliation Act, 1996 read as follows:

“34. Application for setting aside arbitral award.—


(5)    An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.

(6)    An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.”

The Court said that Section 34(5) is a procedural provision whose object is to dispose of applications under Section 34 expeditiously within one year, and not to scuttle the same. All rules of procedure are the handmaids of justice and if, in advancing the cause of justice, it is made clear that such provision should be construed as directory, then so be it, irrespective of the fact that the language used therein is mandatory in nature.

The Court referred to an instructive passage in Maxwell on Interpretation of Statutes, 10th Edition, which says that considerations of convenience and justice are uppermost, and if general inconvenience or injustice results, without promoting the real aim and object of the enactment, the provision must be declared to be directory.

The Court drew analogy to Section 80 of the Civil Procedure Code, 1908,to say that,“Section 80, though a procedural provision, has been held to be mandatory as it is conceived in public interest, the public purpose underlying it being the advancement of justice by giving the Government the opportunity to scrutinize and take immediate action to settle a just claim without driving the person who has issued the notice having to institute a suit involving considerable expenditure and delay. This is to be contrasted with Section 34(5), also a procedural provision, the infraction of which leads to no consequence. To construe such a provision as being mandatory would defeat the advancement of justice as it would provide the consequence of dismissing an application filed without adhering to the requirements of Section 34(5), thereby scuttling the process of justice by burying the element of fairness.”

The Court thus, held that the amended provisions are directory in nature despite the mandatory language used therein, largely because no consequence has been provided for the breach of the time limit specified.

Surabhi Aggarwal

Senior Associate

The Indian Lawyer





Amrapali Group of Companies (the Company) has been accused of delaying the construction of apartments and handing over their possession to home buyers in its projects in Noida and Greater Noida in Delhi national capital region. In August, 2018  the Supreme Court gave a warning that it would order the sale of “each and every property” of the Company to recover the cost of construction of pending real estate projects, The Company had earlier told the court in an affidavit that it was not in a position to complete the projects and give timely possession of flats to over 42,000 home buyers.

The Supreme Court on 12th September 2018 in the matter of Bikram Chatterji & Ors. Vs. Union of India, had ordered the Company to hand over all original account books of the Amrapali Group of Companies within 24 hours from the year 2008-2015 and 2015-2018 of the 46 Companies of the Amrapali Group.

The Company failed to comply with the Court’s Order and another Order was passed by the Court on 26th September 2018 directing the Company to hand over all the account books, original documents, the Court held that “all the account books, original documents etc. to be handed over to to the forensic auditors, not only by the Amrapali Group of Companies but also those which were in possession of the statutory auditors

Therefore, Shri Pawan Kumar Aggarwal and Shri Ravi Bhatia who were appointed as forensic auditors in this case said in the Court on Tuesday,  9th October 2018, that Amrapali Group of Companies did not comply with the last Order of this Court and further stated that “as per the emails, the documents have not been handed over and only skeletal documents of two companies have been handed over on 20.11.2018, namely of Amrapali Zodiac and Amrapali Princely Estates

The Bench comprising of Justice Arun Mishra and Justice U U Lalit held on 9th October 2018 directed that the Directors, Anil Kumar Sharma, Shiv Priya and Ajay Kumar, will remain in custody due to non-compliance of Orders passed by this Court on 12th and 26th September 2018.

The Bench further held that “We are constrained to observe that it is not only deliberate non-compliance of the order but effort is being made to fritter away the documents in utter violation of the order passed by this Court. No justification could be pointed out by the learned counsel appearing on behalf of the Amrapali Group of Companies for not complying with the orders passed by this Court……..considering the non-compliance evident on record, we find that there is no other way except to direct the Police to seize all the documents and to hand over the documents to the forensic auditors after seizing them from the possession of 46 Companies and their Director”.

In another matter pertaining to Unitech Ltd., Mr. Sanjay Chandra and Mr. Ajay Chandra Directors were also sent to jail in September 2017 in connection with a cheating case registered against them. With the Amprapali Directors also being sent to jail the Supreme Court has assured deceived home buyers that if they do not get the flat the said Companies will be liable to repay the sums invested.

Taruna Verma

Senior Associate



Ms. Chanda Kochhar, the first woman to head Industrial Credit and Investment Corporation of India (ICICI) Bank (the Bank), has stepped down as its Chief Executive Officer (CEO) on 04-10-2018.

As per newspaper reports, the Bank had sanctioned a loan of Rs. 3,250 Crore (Loan) to Videocon Group in 2012. Further, there were allegations that Videocon Group advanced the Loan amount to NuPower Renewables, thereby, causing a quid pro quo arrangement between the Videocon Group and the Bank on the following grounds:

Venugopal Dhoot, the Chairman of Videocon Group, was earlier a stakeholder and co-owner of NuPower Renewables.

Deepak Kochhar, husband of Ms. Chanda Kochhar, co-owned NuPower Renewables along with his father and Ms. Chanda Kochhar’s brother’s wife.

As per the Reserve Bank of India (RBI) Master Circular- Loans and Advances – Statutory and Other Restrictions dated 01-07-2015, it had laid down certain regulatory restrictions which state that loans and advances should not be granted to relatives of a bank’s chairman/managing director or other directors, etc without the prior approval of the board of directors of the bank.

As per the Securities and Exchange Board of India (SEBI), all directors and key managerial personnels of listed companies should disclose any conflict of interest in any transactions executed by the company. But Ms. Chanda Kochhar failed to disclose the conflict of interest, if any, with regard to transactions between Videocon Group and NuPower Renewables.

The Bank had initiated an inquiry, headed by former Supreme Court Judge B N Srikrishna, to probe various allegations against Ms. Chanda Kochhar. Also, the Central Bureau of Investigation (CBI) has initiated an inquiry against officials of the Bank. The reports of the inquiries are awaited.

Harini Daliparthy

Senior Associate at The Indian Lawyer


Suchit Patel

Sultan Ul-Uloom College of Law, Hyderabad

Intern at The Indian Lawyer



The Prime Minister of India, Mr. Narendra Modi and the President of the Russian Federation, Mr. Vladimir V. Putin met for the 19th edition of the Annual Bilateral Summit held on 04.10.2018 to 05.10.2018 in New Delhi.

In order to strengthen the partnership between India and Russia, there were discussions about cooperation between the two countries across various sectors including economy and infrastructure. Following are the highlights of the discussions in the Summit regarding economic and infrastructure aspects:

Appreciated the work done by Invest India, the national investment promotion and facilitation Agency, to facilitate Russian investors to make investments in India, and the planned launch of a Single Window Service by the Ministry of Economic Development of the Russian Federation to facilitate investments and operations of Indian companies in Russia.

Implementation of investment projects in sectors of mining, metallurgy, power, oil and gas, railways, pharmaceuticals, information technology, chemicals, infrastructure, automobile, aviation, space, etc.

Memorandum of Understanding executed between National Small Industries Corporation of India, set up by the Indian Government to promote the growth of micro, small and medium enterprises in India, and the Russian Small and Medium Business Corporation.

Indian Government invited Russian companies to participate in the development of industrial corridors and infrastructure in India including roadways and railways, smart cities, creation of a joint transportation logistics company, etc. Russia expressed interest in railway speed raising projects.

Proposal of trilateral meeting between India, Russia and Iran for development of transport corridors between India and Russia through Iran.

Facilitate interaction between importers and exporters from India and Russia during trade exhibitions and fairs, etc.

Simplification of customs operations during import and export of goods between India and Russia through proposed launch of Green Corridor Project.

Organize regional delegations in major events Saint Petersburg International Economic Forum, Eastern Economic Forum and Partnership/Investment Summits, India-Russia Interregional Forum, etc, in order to encourage direct cooperation between business, entrepreneurs and governmental bodies in India and Russia.

Joint projects for effective use of affordable environment friendly utilization of natural resources and renewable energy sources available in India and Russia to reduce the negative effects of climate change.

Eliminate trade barriers, cooperate for greater production and trade in agricultural products in India and Russia.

Joint collaboration in investments, production, etc of precious metals, minerals, natural resources and forest produce, etc.

Cooperation in the field of information technology, internet of things, electronics system design and manufacturing, software development, supercomputing, etc.

Both countries have welcomed this partnership for strengthening an open, transparent and non-discriminatory multilateral trade system between the two countries across a whole range of sectors.

Daliparthy Harini

Senior Legal Associate

The Indian Lawyer