Case Details: Omkara Asset Reconstruction (P.) Ltd. vs. Amit Vijay Karia - [2025] 181 taxmann.com 173 (NCLAT-New Delhi)[01-12-2025]

Judiciary and Counsel Details

• N. Seshasayee, Judicial Member & Arun Baroka, Technical Member
• Abhijeet Sinha, Sr. Adv., Ms Kiran Sharma, Ms Niharika Sharma, Somdutta Bhattacharya, Saikat Sarkar & Ms Heena Kochar, Advs. for the Appellant.
• Alam Khan for the Respondent.

Facts of the Case

In the instant case, the Adjudicating Authority passed an order for liquidation of the corporate debtor and appointed second respondent as liquidator, who was neither Resolution Professional (RP) appointed during the CIRP, nor was candidate of CoC’s choice.

The appellant, who had about 98% voting share in the CoC, preferred an instant appeal asserting that right to appoint liquidator rests with the CoC.

NCLAT Held

The NCLAT held that only the CoC has the authority to select candidate for replacing RP for purposes of section 34(4)(c) of the IBC, even though authority to formally appoint such RP as selected by procedure contemplated in section 27 rests with the Adjudicating Authority.

The NCLAT held that once the CoC names a liquidator and IBBI confirms it, the Adjudicating Authority is required to appoint liquidator named by the CoC. Therefore, order of the Adjudicating Authority appointing liquidator was to be set aside and once the IBBI confirms liquidator named by the CoC, the Adjudicating Authority is required to appoint it as liquidator.

List of Cases Reviewed

• Order of National Company Law Tribunal, Indore Bench I.A.(LIQ) No.1/MP/2025 in C.P. (IB) No.53/MP/2023 and I.A.(LIQ) No.3/MP/2024 in C.P. (IB) No.54/MP/2023, dated 11-06-2025 (para 15) reversed

List of Cases Referred to

• Manish Jaju v. Committee of Creditors [C.A.(AT)(Ins.) 1165 of 2025, dated 1-8-2025] (para 3)
• Moore v. Dempsey 261 US 86 (1923) (para 13)
• Y. Balaji v. Karthik Desari [2023] 150 taxmann.com 329/179 SCL 49 (SC) (para 13).

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Case Details: State of Karnataka vs. Taghar Vasudeva Ambrish - [2025] 181 taxmann.com 199 (SC)

Judiciary and Counsel Details

• J..B. Pardiwala & K.V. Viswanathan, JJ.

Facts of the Case

The assessee, a co-owner of a residential building, leased the property to a company, which sublet rooms as hostels for long-term stays of 3 to 12 months to students and working professionals. The Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR) denied the exemption under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate), on the ground that the company did not itself reside in the property. It was contended that the property continued to qualify as a residential dwelling since the sub-lessees’ use satisfied the ‘use as residence’ condition, and that the amendment to the notification, which excluded registered persons from the exemption, was prospective and could not be applied retrospectively. The matter was accordingly placed before the Supreme Court.

Supreme Court Held

The Supreme Court held that the property qualified as a residential dwelling since the accommodation was for long-term stays and municipal records confirmed its residential character. It was observed that the condition of ‘use as residence’ under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate) was satisfied through the sub-lessees, making the exemption activity-specific rather than person-specific. The Court further held that retrospective denial of exemption under the amended notification was impermissible, and that all conditions for exemption during 2019-2022 were met. Accordingly, the appeals filed by the Department of Revenue were dismissed in favour of the assessee.

List of Cases Reviewed

• Union of India v. Wood Papers Ltd. 1991 taxmann.com 77 (SC)/(1990) 4 SCC 256 (para 55) followed
• Order of High Court of Karnataka in Writ Petition No. 14891 of 2020 judgment and order dated 07.02.2022 (para 69) affirmed

List of Cases Referred to

• Bandu Ravji Nikam v. Acharyaratna Deshbushan Shikshan Prasark Mandal [W.P. No.4194 of 1989, dated 12-9-2002] (para 11)
• Kishore Chandra Singh Deo v. Babu Ganesh Prasad Bhagat AIR 1954 SC 316 (para 11)
• Mohinder Singh v. State of Haryana AIR 1989 SC 1367 (para 12)
• CCE v. Allied Air-Conditioning Corpn. 2006 taxmann.com 753 (SC) (para 12)
• Government of Kerala v. Mother Superior Adoration Convent [2021] 126 taxmann.com 68 (SC) (para 22)
• V.L. Kashyap v. R.P. Puri (1976) 12 DLT 369 (para 41)
• Uratemp Ventures Limited v. Collins (2001) 3 WLR 806 (para 42)
• Union of India v. Wood Papers Ltd. 1991 taxmann.com 77 (SC) (para 55)
• CCE v. Parle Exports (P) Ltd. 1991 taxmann.com 77 (SC) (para 57)
• Shailesh Dhairyavan v. Mohan Balkrihna Lulla (2016) 3 SCC 619 (para 60).

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Case Details: Ceasefire Industries Ltd. vs. Anuj Kumar Poddar - [2025] 181 taxmann.com 114 (HC-Jharkhand)

Judiciary and Counsel Details

• Deepak Roshan, J.
• Mrs Shilpi Sandil Gadodia & Anish Lall, Advs. for the Petitioner.
• Gautam Rakesh, Adv for the Respondent.

Facts of the Case

In the instant case, the petitioner company engaged in manufacturing and sale of fire extinguishers had employed respondent No. 1 as Sales Executive. The company recorded deteriorating performance, failure to achieve sales targets, and complaints of misbehaviour, and issued warnings.

On 11.02.2016, it issued a letter discharging him from service stating reasons and indicating full and final settlement upon handing over. The Respondent No. 1 completed handover and company computed full and final settlement and paid one month’s basic salary and other admissible dues.

The Respondent No. 1 filed a petition under Section 26(2) of the Bihar Shops & Establishments Act alleging victimisation and termination on charges of misconduct without any disciplinary enquiry and sought reinstatement with full back wages.

The Labour Court set aside the termination and directed reinstatement with half back wages. Thereafter, an appeal was made before the High Court.

High Court Held

The High Court held that since Respondent No. 1 accepted order of termination from service and further requested for and accepted payment of full and final settlement amount in his favour, especially in absence of any protest letter on record on behalf of Respondent No. 1, the Labour Court was not justified in setting aside termination of services of Respondent No. 1 and directing the management to reinstate Respondent No. 1 in service with half backwages.

List of Cases Reviewed

• Order of Labour Court, Ranchi Bihar Shops & Establishment Case No.09/2016, dated 28.06.2019 (para 51) set aside
• Nar Singh Lal v. Union of India (2000) 3 SCC 588 (para 49) distinguished

List of Cases Referred to

• Nar Singh Lal v. Union of India (2000) 3 SCC 588 (para 16).

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Press Release: 2025-2026/1626, Dated: 04.12.2025

1. Regulatory Background

The Reserve Bank of India (RBI) has issued Amendment Directions to modify the Credit Information Reporting Directions, 2025, following an examination of feedback received on the earlier draft framework. The revised norms aim to strengthen reporting discipline and improve the accuracy and timeliness of credit information shared by regulated entities with Credit Information Companies (CICs).

2. Shift to Weekly Incremental Reporting

A key change introduced under the amended Directions is the shift from periodic bulk reporting to weekly incremental submissions, ensuring that any new credit activity or change in borrower information is captured in near real time.

2.1 Expected Outcomes

• Faster reflection of loan sanctions, repayments, restructuring, defaults, and delinquency status
• Better quality of credit underwriting and monitoring
• Reduction in data lags that may otherwise impair credit assessment or risk scoring
• Stronger market-wide transparency and early detection of financial stress

3. Enhanced Data Submission and Error Rectification

The amendments introduce new measures to:

• Accelerate data submission timelines by reporting institutions
• Improve rectification mechanisms for errors or mismatches identified by CICs, borrowers, or institutions
• Ensure system-driven transparency, traceability, and accountability for any correction requests

The framework supports faster turnaround in correcting inaccurate or incomplete records, which enhances borrower experience and safeguards credit integrity.

4. Entities Covered

RBI has issued ten Amendment Directions, each applicable to different segments of regulated credit institutions, including:

• Banks
• Financial institutions
• Non-Banking Financial Companies (NBFCs)
• Asset Reconstruction Companies (ARCs)
• Credit Information Companies (CICs)

The harmonised changes ensure consistent, frequent, and high-quality reporting across the full credit ecosystem.

5. Regulatory Intent

The amended Directions seek to:

• Improve the accuracy, freshness and completeness of credit information databases
• Enhance risk assessment, credit decisioning and early-warning analytics
• Protect consumer interests by reducing disputes caused by outdated or inaccurate credit bureau records
• Align credit information reporting with data-driven supervision and systemic risk visibility

These measures support a more predictive, responsive, and resilient lending environment, particularly as credit growth broadens across banks, NBFCs and fintech platforms.

6. Compliance Considerations for Institutions

Entities covered under the framework should:

• Upgrade internal MIS, reporting infrastructure and system interfaces
• Ensure strong coordination between credit operations, IT systems, and CIC integration
• Establish robust workflows for data validation, submission, and correction
• Monitor weekly reporting discipline to avoid regulatory slippages
• Build automated flags for error notifications, dispute resolution, and back-end rectifications

Failure to comply with revised timelines or quality requirements may invite supervisory scrutiny, penalties, or reporting restrictions.

Click Here To Read The Full Press Release

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SEBI Report; Dated: 05.12.2025

1. Background

The Securities and Exchange Board of India (SEBI) has released a draft updated and simplified Master Circular for Foreign Portfolio Investors (FPIs) and Designated Depository Participants (DDPs). The document is now open for public consultation, reflecting SEBI’s ongoing effort to modernise and harmonise the regulatory framework governing foreign portfolio flows and custodial oversight.

2. Purpose of the Draft Circular

The existing Master Circular for FPIs and DDPs contains several amendments, clarifications, and transitional provisions issued over time. SEBI’s draft proposal seeks to:

• Consolidate circulars issued since May 2024
• Eliminate duplication and overlapping provisions
• Simplify regulatory language
• Remove transitional clauses or temporary instructions that are no longer relevant
• Offer a cleaner, practitioner-friendly format for compliance and interpretation

This initiative aligns with SEBI’s wider agenda of regulatory rationalisation and ease of doing business for foreign investors.

3. Scope of the Update

The draft Master Circular:

• Integrates all relevant circulars and clarifications issued post-May 2024
• Reorganises content to improve logical sequencing, readability, and internal consistency
• Retains the substantive regulatory conditions applicable to FPIs and DDPs while clarifying terminology and structure
• Aims to ensure that custodians, intermediaries, compliance teams, and investors have access to a single authoritative reference document

4. Consultation Window

Stakeholders—including FPIs, market intermediaries, industry associations, and compliance professionals—may provide feedback on the proposed framework.

Last date for submission of comments – December 26, 2025

Comments are expected to help SEBI further refine the document for clarity, practical usability, and regulatory alignment.

5. Expected Outcomes

Once finalised, the updated Master Circular is likely to:

• Reduce interpretational ambiguities
• Provide a streamlined and consolidated regulatory resource
• Improve operational compliance for onboarding, reporting, KYC, investment conditions, and custodial functions
• Enhance transparency and reduce administrative effort for intermediaries and foreign investors

Click Here To Read The Full Update

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Notification F. No. SEBI/LAD-NRO/GN/2025/282, Dated: 03.12.2025

1. Overview

The Securities and Exchange Board of India (SEBI) has notified amendments to the SEBI (Merchant Bankers) Regulations, 1992, introducing changes to the definition of a principal officer and revising the categorisation framework for registration of merchant bankers.

2. Revised Definition of Principal Officer

The amended regulations now prescribe a higher professional benchmark and responsibility framework for principal officers of merchant banking entities.

2.1 Key Changes

• A principal officer must have a minimum of five years’ experience in the securities market or financial sector.
• The officer must be responsible for core decision-making relating to the merchant banker’s activities, compliance obligations, and business operations.

2.2 Regulatory Significance

The revision aims to:

• Strengthen the governance and accountability structure within merchant banking organisations
• Ensure that key regulatory, due diligence, valuation, and disclosure responsibilities are handled by professionals with adequate experience and decision-making authority
• Enhance investor protection and market integrity through experienced leadership

3. Replacement of Regulation 3 – Revised Categories for Registration

SEBI has replaced the existing Regulation 3, which deals with the categories under which merchant bankers may seek registration.

3.1 New Registration Categories

Merchant bankers can now apply for registration under only two categories:

Category I

• Can carry out all activities permitted under the merchant banking regulations
• Includes managing public issues on the main board, underwriting, advisory services, portfolio management, and other approved functions

Category II

• Can carry out all permitted activities except managing public issues on the main board
• May still undertake issue management for SME platforms, advisory mandates, due diligence, underwriting, valuations, and other permissible roles

3.2 Implications

• The earlier multi-tier or differentiated framework has now been streamlined
• Merchant bankers must clearly align their business scope with either full-scope (Category I) or restricted-scope (Category II) operations
• The change simplifies regulatory classification and ensures consistency in market supervision

4. Regulatory Intent

The amendments aim to:

• Improve standardisation, governance, and quality of merchant banking practices
• Ensure experienced stewardship over key public market activities
• Reduce ambiguity between business categories and strengthen risk and responsibility mapping
• Enhance accountability and compliance discipline in capital markets

Click Here To Read The Full Notification

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PR No. 80/2025; Dated: 05.12.2025

1. Appointment Overview

Shri Sandip Pradhan has officially taken charge as a Whole-Time Member (WTM) of the Securities and Exchange Board of India (SEBI). His appointment strengthens SEBI’s senior leadership bench, which plays a critical role in regulatory policy, market supervision, and investor protection.

2. Departmental Responsibilities

In his new role, Shri Pradhan will oversee a diverse portfolio of departments that are central to securities market regulation and capacity building. His functional charge includes the following SEBI divisions:

• Market Intermediaries Regulation and Supervision Department (MIRSD) – Responsible for policy formulation, registration, and ongoing supervision of regulated intermediaries such as brokers, registrars, debenture trustees, research analysts, investment advisers, and custodians.
• Alternative Investment Funds (AIF) and Foreign Portfolio Investors (FPI) Department – Handles oversight of AIFs, FPIs, venture capital funds, hedge funds, private equity vehicles, and global portfolio investment flows.
• Information Technology Department – Manages SEBI’s technology platforms, market data infrastructure, cyber-governance frameworks, and digital regulatory systems.
• Office of Investor Assistance and Education (OIAE) – Focuses on investor grievance redressal, financial literacy initiatives, and dispute closure mechanisms.

• National Institute of Securities Markets (NISM) – SEBI’s capacity-building and certification institution, responsible for training, academic programmes, and policy research in securities markets.

3. Prior Professional Experience

Before taking charge at SEBI, Shri Pradhan served as the Director General of Income Tax (Investigation), Pune, where he managed high-stakes tax enforcement, intelligence, and investigative operations. His long-standing experience in tax administration brings strong regulatory, compliance, and supervisory capabilities to SEBI.

4. Strategic Significance

With financial markets witnessing rapid institutionalisation, higher foreign investment participation, and growing digital intermediation, Shri Pradhan’s cross-sector enforcement background is expected to:

• Strengthen intermediary supervision and compliance discipline
• Enhance governance systems for AIFs and FPIs
• Improve investor grievance redressal and education frameworks
• Support technology-led market oversight and cyber resilience

His appointment contributes to SEBI’s continued effort to bolster market integrity, investor protection, and regulatory predictability.

Click Here To Read The Full Press Release

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Notification No. RBI/DOR/2025-26/135DOR.RAUG.AUT.REC.No.342/24.01.041/2025-26, Dated: 05.12.2025

1. Regulatory Background

The Reserve Bank of India (RBI) has issued the 2025 Directions to amend the earlier Commercial Banks – Undertaking of Financial Services Directions notified on November 28, 2025. These amendments fine-tune the supervisory expectations for commercial banks and their group structures, particularly in relation to non-banking business entities.

2. Applicability

The amended Directions now extend regulatory coverage to all NBFCs, including:

• Non-Banking Financial Companies (NBFCs)
• Housing Finance Companies (HFCs)
• Other group entities of commercial banks operating in India

This ensures a uniform prudential discipline across financial groups where banks have ownership, control, or strategic exposure.

3. Effective Date

The amended Directions are effective from December 05, 2025.

Commercial banks and their financial group structures must align their internal compliance framework, reporting standards, capital exposure rules, and governance norms with the revised regulatory expectations from this date.

4. Regulatory Intent and Significance

The amendments aim to:

• Enhance group-level prudential supervision
• Create a harmonised regulatory perimeter for entities under a banking group
• Reduce risks arising from non-core or non-bank financial activities undertaken within the group
• Strengthen governance, ring-fencing, and capital protection mechanisms

The RBI’s updated framework reflects a consolidated supervisory approach, ensuring that financial groups led by banks do not create regulatory blind spots through subsidiaries, associates, or non-banking entities.

5. Compliance Considerations

Commercial banks should:

• Review ownership and exposure structures relating to NBFCs and HFCs within the group
• Ensure clear segregation between banking operations and risk-bearing non-core financial activities
• Update internal risk management, monitoring, and governance systems
• Align group-wide reporting and disclosures with revised RBI standards

Failure to comply may invite group-level corrective actions, tighter supervisory scrutiny, or restrictions on business expansion.

Click Here To Read The Full Notification

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Notification no. F. No. SEBI/LAD-NRO/GN/2025/283; Dated: 03.12.2025

1. Regulatory Background

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025, updating the valuation and compliance framework applicable to takeover transactions, including open offers. The amendments enhance transparency in pricing, improve investor confidence, and ensure independent valuation where acquisition consideration or traded volume creates pricing ambiguity.

2. Independent Valuation of Infrequently Traded Shares

Under the amended norms, SEBI may require a valuation of infrequently traded shares if:

• The shares being acquired or transferred do not meet liquidity benchmarks, and
• Market prices may not accurately reflect fair value due to limited or sporadic trading activity

Key Provision

• SEBI may direct valuation at the expense of the acquirer
• The valuation must be carried out by an independent registered valuer

This mechanism protects minority shareholders and ensures that offer prices are fair, transparent, and not distorted by low trading volumes.

3. Valuation of Listed Securities Offered as Consideration

Where the acquirer offers listed securities instead of cash as consideration for the acquisition or open offer:

• The value of such securities must be certified by an independent registered valuer
• Certification ensures that the market price reflects genuine fair value, free from anomalies caused by manipulation, temporary volatility, or low float

This provision ensures equitable pricing regardless of the form of consideration.

4. Definition of Valuer Introduced Under Regulation 2

To standardise qualification, accountability, and independence criteria, SEBI has inserted a definition of “valuer” under Regulation 2.

Regulatory Significance

• Confirms that valuations required under the Takeover Regulations must be undertaken by an independent registered valuer
• Reinforces credibility, transparency, and governance standards in pricing methodologies used in takeover transactions

5. Regulatory Intent

The amendments strengthen:

• Price discovery and fairness for minority shareholders
• Disclosure discipline and valuation integrity
• Investor protection in complex or non-cash acquisition structures
• Governance expectations for acquirers structuring open offers, mergers, strategic stake purchases, or indirect acquisitions

They also align the Takeover Regulations with evolving corporate valuation norms and the registered valuer framework under Indian law.

Click Here To Read The Full Notification

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Notification No. RBI/DOR/202526/138DOR.RAUG.AUT.REC.No.343/24.01.041/2025-26; dated: 05.12.2025

1. Regulatory Background

The Reserve Bank of India (RBI) has released the 2025 Directions on “NBFCs – Undertaking of Financial Services”, replacing the earlier RBI (NBFC–Undertaking of Financial Services) Master Directions, 2025, which were issued on November 28, 2025. The revised framework is part of RBI’s broader harmonisation exercise aimed at strengthening prudential supervision, governance, and group-level risk management.

2. Effective Date

The new Directions will come into force from December 5, 2025. All entities falling within the scope of this framework must comply with updated norms from this date onward.

3. Applicability

The 2025 Directions shall apply to:

• Non-Banking Financial Companies (NBFCs)
• Housing Finance Companies (HFCs) governed under RBI supervision
• Any NBFC that is a group entity of a Scheduled Commercial Bank

Such NBFCs must ensure compliance with all relevant prudential, operational, and governance provisions prescribed under the updated Directions, without exception.

4. Key Regulatory Focus

The revised Directions aim to:

• Strengthen group-level supervision and risk containment
• Ensure that NBFCs owned or controlled by Scheduled Commercial Banks do not undertake unregulated or non-core financial service activities without adequate oversight
• Improve capital discipline, exposure management, and governance clarity across financial conglomerates
• Provide a uniform regulatory perimeter for entities operating within banking-led financial groups

5. Compliance Considerations

NBFCs falling under a banking group must:

• Review their business models, structures, and exposures to ensure alignment with the new Directions
• Strengthen internal risk management frameworks, governance standards, and reporting systems
• Ensure clear operational segregation between core bank activities and NBFC-related business
• Align group-wide compliance manuals, SOPs, exposure policies, and disclosures with updated requirements

Non-compliance may attract enhanced supervisory scrutiny, restrictions on business operations, or corrective regulatory measures.

Click Here To Read The Full Notification

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