Month: March 2020

The Union Minister for Finance and Corporate Affairs, Smt. Niramla Sitharaman announced several important relief measures in view of COVID-19 outbreak, especially on #statutoryandregulatorycompliance matters related to several sectors, on 24.03.2020. While addressing a press conference through video conferencing, Smt. Sitharaman announced the following #reliefmeasures in areas of Income Tax Act, 1961 (IT) and Goods and Services Tax
(GST) Act, 2017:

A. Income Tax

1- The last date for filing #ITReturns and #GSTReturns has been extended for FY 18-19 from 31.03.2020 to 30.06.2020.

2- The last date for linking Aadhaar or PAN card has also been extended from 31.03.2020 to 30.06.2020.

3- As per the ‘Vivaad se Vishwas’ Scheme, at the time of its launch, all the tax dispute settlements under the Scheme were to be allowed without payment of any interest or penalty only till 31.03.2020. A penalty of 10% of disputed tax amount had to be paid, if dispute was settled under the Scheme, after 31.03.2020 but before closure of Scheme on 30.06.2020. In this regard, the Finance Minister announced that the concerned tax payer need not pay the penalty amount of 10%, if payment is made by 30.06.2020.

4- All the due dates for  issuance  of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains under Income Tax Act, 1961, GST Act 2017, Wealth Tax Act 1957, Prohibition of Benami Property Transaction Act, 1988, Black Money Act, 2015, Securities Transaction Tax (STT), Capital Transfer Tax (CTT), Equalization Levy law, ‘Vivaad Se Vishwas’ Scheme, where the time limit is expiring between 20.03.2020 to 29.06.2020, would be extended to 30.06.2020.

5- For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20.03.2020 and 30.06.2020, the interest rate at 9% will be charged instead of 12 %/ or 18 % per annum ( i.e. 0.75% per month instead of 1/1.5 percent per month) for this period.  No late fee/penalty shall be charged for delay relating to this period.

B. Goods and Services Tax

1- The Finance Minister further made announcements with respect to #GST statutory and regulatory compliance matters whereby relaxations are rendered to those companies having aggregate annual turnover of less than Rs. 5 Crore. Such companies can now file GSTR-3B due in March, April and May 2020 by the last week of June 2020 and no interest, late fee, and penalty will be charged.

2- Others can file GST returns due in March, April and May 2020 by last week of June 2020  but the same would attract reduced rate of interest at 9% per annum from 15 days after due date (Current Interest Rate is  18 % per annum). No late fee and penalty would be charged, if they are complied with before 30.06.2020.

3- Also the date for opting for composition scheme is extended till the last week of June, 2020. Accordingly, the last date for making payments for the quarter ending 31.03.2020 and filing of returns under GST law for 2019-20 by the composition dealers is also will be extended till the last week of June, 2020.

4- Announcements further specify the payment date under ‘Sabka Vishwas’ Scheme shall be extended to 30.06.2020. No interest for this period shall be charged if paid by 30.06.2020.

The extension of time period has come after the country has gone into lockdown mode due to the increase in cases of those infected by the Coronavirus. Many chartered accountants and income tax officials had urged the Government for an extension. As a result, these announcements come as a relief for many individuals. Similarly, the necessary legal circulars and legislative amendments for giving effect to the aforesaid reliefs would be issued in due course. And necessary legal circulars and legislative amendments to give effect to the reliefs under the GST law would be followed with the approval of GST Council.

Lakshmi Vishwakarma

Associate

The Indian Lawyer

Edited By

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

The Coronavirus has caused a global turmoil putting the economies of several countries in a crisis. Desperate times call for desperate measures, compelling the Finance Minister to take measures protecting the economy as best as it can. One of the #quickmeasures taken by the #FinanceMinister is to curtail small and medium enterprises going under due to pandemic. The Finance Minister has, therefore, made changes in the Insolvency and Bankruptcy laws to #protectseveralbusinesses from going into #bankruptcy.

The following are the changes initiated by the Finance Ministry:

1- The Government has recently raised the #threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016 as amended thereof(IBC) for #invokinginsolvencyproceedings to Rs 1 Crore from the current Rs 1 Lakh limit, on 24.03.2020.

2- The Government is considering #suspendingtheprocessofinitiation of corporate insolvency resolution proceedings (CIRP) against corporate debtors, if the Corona Pandemic continues beyond 30.04.2020, under the following provisions of IBC, for a period of six months. This measure is probably being considered so as to stop companies at large from being forced into insolvency proceedings due to force majeure causes of default.

3- As part of the relief measures, the Finance Minister has also stated no additional fee will be charged for late filing during a moratorium period from 01.04.2020 to 30.09.2020. In respect of any documents to be filed in the Ministry of Corporate Affairs (MCA) Registry irrespective of its due date.

For the convenience of the readers, we have reproduced the Sections 7, 9, and 10 of IBC below:

Section 7- Initiation of corporate insolvency resolution process by financial creditor

(1) A financial creditor either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred.

Provided that for the financial creditors, referred to in clauses (a) and (b) of subsection (6A) of section 21, an application for initiation corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent of the total number of such creditors in the same class, whichever is less:

Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent of the total number of such allottees under the same real estate project, whichever is less:

Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first or second provisos and has not been admitted by the Adjudicating Authority before the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2020, such application shall be modified to comply with the requirements of the first or second provisos as the case may be within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission.

Explanation. – For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor.

(2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed.

(3) The financial creditor shall, along with the application furnish –

(a) record of the default recorded with the information utility or such other record or evidence of default as may be specified;

(b) the name of the resolution professional proposed to act as an interim resolution professional; and

(c) any other information as may be specified by the Board.

(4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3):

Provided that if the Adjudicating Authority has not ascertained the existence of default and passed an order under sub-section (5) within such time, it shall record its reasons in writing for the same.

(5) Where the Adjudicating Authority is satisfied that –

(a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or

(b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority.

(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5).

(7) The Adjudicating Authority shall communicate-

(a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor;

(b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be.

Section 9: Application for initiation of corporate insolvency resolution process by operational creditor

(1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under subsection (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.

(2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed.

(3) The operational creditor shall, along with the application furnish-

(a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor;

(b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt;

(c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available;

(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and

(e) any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed.

(4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional.

(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order–

(i) admit the application and communicate such decision to the operational creditor and the corporate debtor if, –

(a) the application made under sub-section (2) is complete;

(b) there is no payment of the unpaid operational debt;

(c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;

(d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and

(e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any.

(ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if –

(a) the application made under sub-section (2) is incomplete;

(b) there has been payment of the unpaid operational debt;

(c) the creditor has not delivered the invoice or notice for payment to the corporate debtor;

(d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or

(e) any disciplinary proceeding is pending against any proposed resolution professional:

Provided that Adjudicating Authority, shall before rejecting an application under subclause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority.

(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section.

Section 10: Initiation of corporate insolvency resolution process by corporate applicant

(1) Where a corporate debtor has committed a default, a corporate applicant thereof may file an application for initiating corporate insolvency resolution process with the Adjudicating Authority.

(2) The application under sub-section (1) shall be filed in such form, containing such particulars and in such manner and accompanied with such fee as may be prescribed.

(3) The corporate applicant shall, along with the application, furnish-

(a) the information relating to its books of account and such other documents for such period as may be specified;

(b) the information relating to the resolution proposed to be appointed as an interim resolution professional; and

(c) the special resolution passed by shareholders of the corporate debtor or the resolution passed by at least three-fourth of the total number of partners of the corporate debtor, as the case may be, approving filing of the application.

(4) The Adjudicating Authority shall, within a period of fourteen days of the receipt of the application, by an order-

(a) admit the application, if it is complete and no disciplinary proceeding is pending against the proposed resolution professional; or

(b) reject the application, if it is incomplete or any disciplinary proceeding is pending against the proposed resolution professional:

Provided that Adjudicating Authority shall, before rejecting an application, give a notice to the applicant to rectify the defects in his application within seven days from the date of receipt of such notice from the Adjudicating Authority.

(5) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (4) of this section.

Sushila Ram Varma

Chief Legal Consultant

The Indian Lawyer

A Bench of the #SupremeCourt of India comprising of Justices D.Y Chandrachud, and Ajay Rastogi has recently in the case of Punjab & Sind Bank and Others vs. Mrs Durgesh Kuwar, Civil Appeal No 1809 of 2020, arising out of SLP(C) No 11985 of 2019 upheld a Judgment of the Indore Bench of the #MadhyaPradeshHighCourt Judgment dated 18.03.2019 in a Writ Appeal arising out of an Order of the learned Single Judge dated 11.02.2019 wherein it quashed the transfer of a woman Bank employee, who had complained against an officer for #sexualharassment. In the said Complaint she had also reported irregularities and corruption at her branch.

The aforesaid case involves the intersection of service law with fundamental constitutional precepts about the #dignity of a #woman at her workplace.

In brief, the facts pertaining to the present Appeal involves the Respondent herein, who was appointed as a Probationary Officer of the Punjab and Sind Bank, and later promoted to the post of Chief Manager in Scale IV. As a result of which,in and around September 2016, she was transferred to the Indore Branch on promotion.On 11.12.2017, the Respondent was further transferred from the Branch Office at Indore to the Branch Office at Sarsawa in the district of Jabalpur. On 31.01.2018, the Respondent submitted a representation to the Zonal Manager, recording a reference to the circulars of the Bank governing the posting of women officers.She made a request for being retained at Indore. Following the earlier representation, she submitted a reminder on 15.02.2018 and a representation on 19.02.2018 to the Executive Director of the Bank.

The transfer order was challenged before the High Court of Madhya Pradesh under Article 226 of the Constitution of India in which the transfer was stayed by a learned Single Judge and transfer of the officer was quashed by the Judge vide its Judgment dated 11.02.2019.The learned Judge mentioned that the transfer of Respondent violates the circulars of the Bank as well as the guidelines issued by the Ministry of Finance in the Department of Financial Services.

Being aggrieved from the Judgment dated 11.02.2019 the Bank as well as its General Manager, Zonal Manager and Deputy General Manager filed an SLP before the Hon’ble Supreme Court of India.

Observation and Decision

The Hon’ble Supreme Court analyzed the rival submissions by adverting to the settled principle that transfer is an exigency of service. It said that an employee cannot have a choice of postings. The Bank administrative circulars and guidelines are indicators of the manner in which the transfer policy has to be implemented. However, any administrative circular may not in itself confer a vested right which can be enforceable by a writ of #mandamus. The main issue before the Court was whether the Order of the High Court quashing the Order of transfer can be sustained, having regard to the above principles of law.

The Hon’ble Supreme Court after considering all the vital documents on record and submissions of the Parties observed that “how the order of transfer was affected close on the heels of the allegations of corruption levelled by the respondent would indicate a clear case of malafides. It was urged that the respondent who was a Scale-IV officer, was posted to a Scale I level bank in the teeth of the Board Resolution dated 27 September 2017, approving the policy concerning the classification of branches”.

They added that “…this is symptomatic of a carrot and stick policy adopted to suborn the dignity of a woman who is aggrieved by unfair treatment at her workplace. The law cannot countenance this. The order of transfer was an act of unfair treatment and is vitiated by malafides”.

The Bench decided that the Respondent shall be re-posted at the branch office of Indore for a period of one year. Later, if any administrative exigency arises the competent authority of the Bank would be at the liberty to take any appropriate decision concerning her posting. The Hon’ble Court further observed sexual harassment at the workplace is an affront to the fundamental rights of a woman.The Court also allowed her costs of Rs 50,000.

Lakshmi Vishwakarma

Associate

The Indian Lawyer

Edited By

Sushila Ram Varma

Chief Legal Consultant

The Indian Lawyer

In the case of Bhagwan Singh versus State of Uttarakhand, by Order dated 18.03.2020, the Hon’ble Supreme Court of India decided on the issue of #celebratoryfiring that caused the death of two persons unintentionally. It held that the Appellant had committed #culpablehomicide as the Appellant had no intentions to kill the deceased while he shot celebratory fire from his #licensedgun.

Bhagwan Singh was convicted for murder of two people and for injuring three other people from his licensed revolver during celebratory fire, by the Trial Court and by the Hon’ble High Court of #Uttarakhand. Bhagwan Singh was sentenced for life imprisonment by the Hon’ble High Court. Aggrieved by the High Court Order, Bhagwan Singh filed an appeal before the Apex Court.

In the said Criminal Appeal it was observed by the Hon’ble Supreme Court that it was a case of celebratory firing which unfortunately caused unintentional death of two persons and injuries to three others.

Partly allowing the appeal the Hon’ble Justices S.A. Bobde, Surya Kant and BR Gavai disagreed with the Trial Court and the High Court findings that the firing from the gun which was pointed towards the roof, was done with malafide intention. The Bench further observed that the Appellant firing of the gun was not as bad as firing into a crowd of persons. It further observed that the Appellant did not know gun ­shot firing was so imminently dangerous that it would, in all probability, cause death or such bodily injury as was likely to cause death. The Hon’ble Supreme Court observed that:-

“The evidence on record contrarily shows that the appellant aimed the gun towards the roof and then fired.   It was an unfortunate case of mis­firing.   The appellant of course cannot absolve himself of the conclusion that he carried a loaded gun at a crowded place where his own guests had gathered to attend the marriage ceremony.  He did not take any reasonable safety measure like to fire the shot in the air or towards the sky, rather he invited full risk and aimed the gun towards the roof and fired the shot. He was expected to know that pellets could cause multiple gun­shot injuries to the nearby persons even if a single shot was fired. The appellant is, thus, guilty of an act, the likely consequences of which including causing fatal injuries to the persons being in a close circuit, are attributable to him. The offence committed by the appellant, thus, would amount to ‘culpable homicide’ within the meaning of Section 299, though punishable under Section 304 Part 2 of the IPC.”

The three Judges Bench therefore, convicted him under Section 304 Part 2 of Indian Penal Code 1860 and sentenced him to ten years rigorous imprisonment.

Hon’ble Chief Justice S.A. Bobde who headed the Bench observed that “Incidents of celebratory firing are regretfully rising, for they are seen as a status symbol. A gun licensed for self protection or safety and security of crops and cattle cannot be fired in celebratory events, it being a potential cause of fatal accidents. Such like misuse of fire arms convert a happy event to a pall of gloom.”

GOVIND GUPTA

ASSOCIATE

THE INDIAN LAWYER

Edited by SUSHILA RAM VARMA

CHIEF CONSULTANT

THE INDIAN LAWYER

The #SupremeCourt has recently passed a Judgment dated 17-02-2020 in Union of India and others vs Lt Cdr Annie Nagaraja & Ors., wherein the Apex Court held that the Union Government would have to grant permanent commission, i.e. a career in the Armed Forces till one retires (#PermanentCommission), to #ShortServiceCommission (#SSC) women officers in the #IndianNavy, as per their qualifications, professional experience, organizational requirement, etc.

In this case, six Writ Petitions were filed in the Delhi High Court by women officers who had joined the Logistics cadre, Air Traffic Controller (ATC) cadre and the Education Branch of the Indian Navy as SSC Officers. Herein, they have challenged the constitutional validity of the Policy Letter dated 26-09-2008 and the Implementation Guidelines dated 03-12-2008 issued by the Ministry of Defence, on the grounds that they granted Permanent Commissions to SSC officers only to certain categories of the #ArmedForces and that they operated prospectively for the benefit of future batches inducted as SSCs post January 2009. As a result of which, a number of officers in the Logistics cadre, ATC cadre and the Education Branch of the Indian Navy were released from service on completion of their tenure of SSC engagement.

In this regard, on an appeal to the Supreme Court, an Interim Order dated 20-11-2015 was passed, thereby directing the Government to permit the SSC Officers serving in the Navy as on 26-09-2008, to continue their service and also to permit those other SSC Officers serving in the Navy, who were released from service upon completion of their short tenure, to join back to service.

Further, in this case, the Apex Court made the following observations and held that:

1- The restrictions imposed on SSC Officers to the extent that they are made prospective and restricted to specified cadres under the Policy and the Guidelines have been set aside for causing serious prejudice to women SSC officers in the Navy.

2- The SSC officers in the said case except those in ATC cadres and those in the Education, Law and Logistics cadres who are presently in service shall be granted Permanent Commissions based on vacancies available.

3- Both male and women officers would be able to apply for grant of Permanent Commissions for the same period of service, for the same consequential benefits of pay, promotions, retiral benefits, etc, after they complete their respective short terms of service.

4- All those SSC officers who were inducted prior to the issue of the Policy Letter and who are not presently in service, and as a result could not be given Permanent Commissions, shall be given a one-time compensation.

Thus, the Supreme Court directed the Union Government to implement the aforesaid directions within three months of the date of the said Judgment dated 17-02-2020 and thereby, consider SSC women officers in service for Permanent Commissions irrespective of their tenure of service.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

The Bench of Hon’ble #Supreme Court of India comprising of Justices L. Nageswara Rao and Deepak Gupta, held in the case of Indian Social Action Forum v. Union of India, CA No.1510/2020 decided on 06.03.2020, that any #not-for profit organisation, which has no connection with party politics or active politics, but supports public causes having political interests, vide legitimate means of dissent like protests or strikes, etc., cannot be deprived of its legitimate right of receiving foreign funds under the Foreign Contribution (Regulation) Act, 2010 (#FCRA).

In this case, the Appellant filed a Writ Petition in the High Court of #Delhi for a declaration that Sections 5 (1) and 5 (4) of the FCRA and Rules 3 (i), 3 (v) and 3 (vi) of the Foreign Contribution (Regulation) Rules, 2011 (Rules), are violative of Articles 14, 19 (1) (a), 19 (1) (c) and 21 of the Constitution of India 1950 as amended thereof. But as the High Court dismissed the said Writ Petition, the Appellant filed an appeal in the Supreme Court.

The Hon’ble Supreme Court explained and held that the purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds. It further observed that it is clear from the provision itself that bandh, hartal, rasta roko etc., are treated as common methods of political action. Any voluntary organisation which habitually engages and/or supports the cause of a group of citizens agitating for their social, economic or cultural rights, etc., without a political goal or objective cannot be penalized by being declared as an organisation of a political nature and thus, they cannot be denied access to foreign contributions under FCRA. Therefore, only those organisations which have connection with active politics or take part in party politics, are covered by Rule 3 (vi) of the Rules and are thus, denied access to foreign contributions under FCRA.

The Apex Court further said that the Rules would, however, apply to organisations used by political parties for channeling foreign funds, provided there was concrete material to prove the same and that in such cases, the Central Government shall have to follow the procedure strictly in ensuring that such organisations are deprived of their right to receive foreign contributions.

Lakshmi Vishwakarma

Associate

The Indian Lawyer

In furtherance to the Guidelines issued by the Government of India in view of outbreak of Novel #Coronavirus Disease, which have been listed out at http://www.theindianlawyer.in/blog/2020/02/22/government-issues-guidelines-in-view-of-novel-coronavirus-outbreak-2020/, the Government of India has recently issued additional notifications and advisories with a view to prevent, manage and combat the outbreak of Coronavirus Disease, that first emerged in China in 2019 (#COVID-19).

The #preventive and pre-emptive measures taken by the Indian Government in public interest are with respect to travel restrictions, suspension of visas, self-quarantine measures, community surveillance, rapid response teams, universal screening of passengers at all ports and vessels at seaports, sufficient laboratory facilities and isolation wards, running of special flights including Indian Air Force to evacuate Indian citizens from COVID-19 affected countries such as Maldives, Myanmar, Bangladesh, China, US, Madagascar, Sri Lanka, Nepal, South Africa and Peru.

Upon conducting the screening of such persons, so far 81 confirmed cases have been identified, out of which one, #76-year-old man from Karnataka, has passed away due to Asthma and Hypertension and positive COVID-19. Further, a #68-year-old woman from West Delhi, who came in contact with a positive case, i.e. her son having a recent travel history to Switzerland and Italy and back to India, passed away after being tested positive for COVID-19 and having developed pneumonia, respiratory fluctuations etc.

Thus, the Government has issued certain notifications and #advisories in #public #interest to combat, prevent and contain the spread of #COVID-19 Disease:

1- Travel advisory

i) To carry a certificate of having tested negative for COVID-19 from the designated laboratories authorized by the health authorities, by passengers traveling from #Italy or #Republic of Korea and desirous of entering India, from 10-03-2020.

ii) Indian citizens are advised not to travel to #China, #Republic of Korea/South Korea, #Islamic Republic of Iran, #Italy, #Singapore and #Japan.

iii) Further, visas granted to nationals of China, Italy, Iran, South Korea, Japan, and to all foreign nationals who have traveled to those countries, who have not yet entered India, have been suspended.

iv) Although Diplomats, officials of United Nations and other international bodies, overseas citizens of India (#OCI) cardholders and aircrew from above countries are exempted from such suspensions and restrictions. But their medical screening is compulsory.

v) Persons coming from China, Republic of Korea, Islamic Republic of Iran, Italy and Japan to India, need to obtain special permission from Indian Embassy in those countries, observe proper personal hygiene, be quarantined in India, and report Airport Health Office or Immigration Office in case of illness or otherwise regarding their travel history.

vi) Mandatory medical screening and self-reporting at various ports of entry in India by all passengers (foreign and/or Indian nationals) arriving India from the aforesaid countries and #Hong Kong, #Macau, #Vietnam, #Malaysia, #Indonesia, #Nepal, #Thailand, and #Taiwan.

2- Mass gatherings

The Central and State Governments have advised people to refrain from attending and/or organizing mass gatherings and public events, till the COVID-19 Disease is contained.

3- Fake circulations

The Government has advised people to refrain from circulating fake messages and/or follow such fake circulations about COVID-19 Disease including the Clarification regarding declaration of holidays for the States dated 13-03-2020 that has been circulated by unknown miscreants across social media and WhatsApp, in the name of #Ministry of Health and Family Welfare, Government of India.

4- Helpline

The Government has advised people to contact their nearest health care centres and officers, or contact the concerned persons at the helpline number/email for COVID-19, i.e. +91-11-23978046, ncov2019@gmail.com, in case any advice, clarifications and help is required.

Thus, the Government of India has not only been taking the aforesaid measures at the domestic level to combat, prevent and contain the COVID-19 Disease, but has also sought for international cooperation with South Asian Association for Regional Cooperation (#SAARC) nations, via video conference, in order to formulate strategies to combat COVID-19 Disease and contribute to a healthier planet.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

The Supreme Court quashed an Order which was passed by the Reserve Bank of India (RBI) in April, 2018. In 2018 the RBI banned the financial services firms from trading in virtual currency or cryptocurrency.

On 04^th March, 2020 the Hon’ble Supreme Court made the decision after hearing several petitions challenging RBI’s April, 2018 Order imposing a ban on financial firms or individuals in India from trading in cryptocurrencies.

While the Order lifted the ban on illegal trade in cryptocurrency, it should be noted that the Government has already prepared a draft Bill that seeks to prohibit the country’s mining, keeping, sale, exchange, issuance, disposal or use of cryptocurrency.

The cryptocurrency investment has been legalised nearly two years after RBI banned trading in virtual/cryptocurrency.

The draft Bill was prepared by the Government Panel which also called for the launch of an official government-backed digital currency in India to be issued through the RBI similar to banknotes. It is worth mentioning that selling fraud cryptocurrency can be prosecuted under the Draft Bill with a fine or imprisonment of up to 10 years, or both in some cases.

It would be interesting to note that at the time when RBI had imposed a ban on cryptocurrency the ex-Finance Secretary Mr. Subhash Chandra Garg, who led the Government Commission proposed a fine of up to rupees 250 million ($3.63 million) and imprisonment for up to 10 years for anyone who mines, creates, owns, sells, transfers or issues cryptocurrency.

The Government of India has issued repeated warnings on the investment in digital currencies, saying these were like Ponzi Schemes that offer unusually high returns to early investors and subsequently makes them loose their hard earned money.

Only time will tell whether the legalization of cryptocurrency would be beneficial to the Indian economy.

GOVIND GUPTA

ASSOCIATE

THE INDIAN LAWYER

Justice Manoj Kumar Ohri of the High Court of Delhi, while dealing with the Petition that challenged the Order passed by the Family Court which rejected the maintenance Petition filed by the Petitioner under Section 125 Criminal Procedure Code 1973. The High Court held that, in absence of documentary evidence on record showing that the wife has been earning she is entitled to be maintained by the husband.

In the case of Anita vs Amit, (Crl. Rev. P. 515/2018), which was before the Delhi High Court, the Petitioner in this matter stated that the Family Court wrongly came to the conclusion that Petitioner’s testimony in absence of any documentary evidence was unreliable. It erred in not recording a finding with respect to the income of the Respondent-husband and the maintenance sought by the Petitioner. On the contrary, the Respondent submitted that the Petitioner had passed the Central Teacher Eligibility Test (CTET) exam and was capable of earning. Further, it stated that the Petitioner was more qualified than the Respondent and could maintain herself.

However, the Court relying upon the decision rendered in the case of Shalija v. Khobbana (2018) where the Hon’ble Supreme Court held that ‘capable of earning’ is not a sufficient reason to deny a wife her maintenance. Merely because the wife is capable of earning is not sufficient reason to deny the maintenance under Section 125 CrPC.

In the present case the Bench noted that the Petitioner had specifically averred that she had no source of income and was totally dependent on her father. It further noted that the Respondent-husband being employed had sufficient means to maintain her. Thus the expression “unable to maintain herself” does not mean that the wife must be absolutely destitute before she can apply for maintenance under Section 125 of CrPC.

The Court further stated that it is settled by judicial precedents that the provisions of Section 125 of CrPC are for the welfare of the neglected wives, children and parents and that provisions should be construed liberally. Therefore, in view of the above, the Delhi High Court held that impugned order of the Family Court was to be set aside and remanded the matter to the Family Court for fresh consideration.

Lakshmi Vishwakarma

Associate

The Indian Lawyer

Recently, the Supreme Court passed a Judgment dated 26-02-2020 in Anuj Jain v. Axis Bank Ltd and others, wherein the Apex Court held that lenders cannot initiate corporate insolvency resolution process as a financial creditor under the Insolvency and Bankruptcy Code 2016 as amended thereof (the Code) against a third party, which has only created a security interest or mortgage in its properties, on behalf of the principal borrower.

In this case,Mr. Anuj Jain was appointed as the Interim Resolution Professional (IRP) by National Company Law Tribunal (NCLT), Allahabad Bench, in the Corporate Insolvency Resolution Process (CIRP) of Jaypee Infratech Limited (the Corporate Debtor). The CIRP was initiated by various banks and financial institutions (the Lenders), which had certain properties of the Corporate Debtor mortgaged as collateral securities against loans and advances made to its Holding Company, namely, Jaiprakash Associates Limited (the Holding Company).

The NCLT, based on the submission of the IRP, refused to recognize such Lenders as financial creditors of the Corporate Debtor under the Code, on the following grounds, and further, directed the said Lenders to discharge the security interest in the said properties, and return the same to the Corporate Debtor, free of all encumbrances.:

i) As the Corporate Debtor carried out the said transaction of mortgage of properties to defraud its creditors, and/or for other fraudulent purpose.

ii) As the Lenders had lent money to its Holding Company and not to the Corporate Debtor itself, thus, the Lenders of the Holding Company could not be considered as the financial creditors of the subsidiary company, i.e. the Corporate Debtor.

But in appeal by the Lenders, the National Company Law Appellate Tribunal (NCLAT) set aside the said NCLT Order, thereby holding that the aggrieved Lenders are entitled to exercise their rights under the Code and that the said transactions of the Corporate Debtor cannot be termed as fraudulent or undervalued under the Code.

Thereafter, aggrieved by the said NCLAT Order, the IRP filed an appeal in the Supreme Court of India, wherein, the Apex Court made the following observations:

1- That the NCLT has dealt at length the nature of the transactions and further, held them to be preferential in nature. Thus, based on NCLT findings, the Apex Court approved that the said transactions were preferential in nature and thus, have to be avoided.

2- That although in general cases, where a borrower himself does not create a mortgage against the loan given by a lender, but a third party creates or promises to create a mortgage for the benefit of the principal borrower, the Court has accepted the same to be sufficient consideration to the surety for giving a guarantee under the Indian Contract Act 1872 as amended thereof.

But the Apex Court refused to consider the same principle in matters pertaining to mortgages created by a third party on behalf of the principal borrower in favour of lenders under the Code, on the following grounds:

a) The Code requires a financial creditor to have disbursed a financial debt against consideration for time value of money. But in this case, the significant element of disbursement of debt to the Holding Company against consideration for time value of money was missing, as the debt was given to the Holding Company but the security interest was created with respect to the Corporate Debtor’s properties. Thus, such Lenders would not be considered as ‘financial creditors’ of the Corporate Debtor under the Code.

b) Further, the mortgages made with the Lenders were neither towards any loan made to the Corporate Debtor nor towards protecting any security of the Corporate Debtor. Thus, such a debt cannot be termed as ‘financial debt’ under the Code.

Thus, the Apex Court upheld the NCLT Order on the aforesaid grounds and restored the NCLT directions to the said Lenders to discharge the security interest in the mortgaged properties, and return the same to the Corporate Debtor.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer