Article

Supreme Court upholds 2014 amendment of Pension Scheme with certain caveats

By Sudish Sharma and Ayushi Agrawal

The first article in this issue of Corporate Amicus analyses a recent decision of the Supreme Court in the case of Employees’ Provident Fund Organisation & Another v. Sunil Kumar B. and Others. The Apex Court has upheld the constitutional validity of the certain amendments made to the Employees’ Pension Scheme by way of Employees' Pension (Amendment) Scheme, 2014. According to the Court, the categorization of employees made by the statutory authorities on the basis of monthly salary of the employees was correct. The Court however held that the imposition of cut-off date to a beneficial scheme such as EPS Scheme is not palatable. According to the authors, in the near future, amendments may be brought in the EPS to provide the option of higher pension to all existing EPS members…

Company Secretary whether liable for misleading financial information given by a company

By Manan Chhabra

The second article in this issue of the newsletter analyses a recent decision of the Securities Appellate Tribunal wherein the Tribunal has absolved a company secretary from the liability imposed by the SEBI for misleading financial statements and information given by the company. According to the Tribunal, there is a fiduciary responsibility on the Board of Directors of a company to check the veracity of financial documents before they are signed on behalf of the Board of Directors by a company secretary and that a company secretary is under no obligation to undertake utmost due diligence to check the veracity of the buyback offer. The author however points out that the Order passed by the SAT cannot be relied upon to streamline the role of a company secretary as just being ministerial in nature. Citing a NCLT decision, taking an alternative view, the author states that it will largely depend on the facts of a given case, and applicable provisions of law, to determine the role of a company secretary and his liability…

Notifications and Circulars

• SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 amended
• SEBI revises Operational Circular for issue and listing of NCS – Applicability of GST on fees remitted to SEBI
• SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 amended
• SEBI (Real Estate Investment Trusts) Regulations, 2014 amended
• Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 amended
• E-Waste (Management) Rules, 2022 notified
• Revised terms for classification of enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 notified
• Indian Telegraph (Amendment) Rules, 2022 notified
• Environment (Protection) Third Amendment Rules, 2022 notified

Ratio decidendi

• Arbitration under Section 11 of SARFAESI Act cannot be invoked in cases where Financial Institution is a ‘borrower’ – Delhi High Court
• ‘Trade usages’ under the ambit of Section 28 of the Arbitration and Conciliation Act, 1996 are not to be applied by the Arbitrator against the express understanding of the parties – Calcutta High Court

News Nuggets

• Provisions of MSMED Act will prevail over Arbitration Act – Presence of independent arbitration agreement is not material
• Past tax liabilities, not a part of the Resolution Plan, stand extinguished
• Standard with which case of pre-existing dispute under IBC is employed cannot be equated with the principle of preponderance of probability
• Adjudicating Authority cannot enquire into justness of rejection of resolution plan by Committee of Creditors
• Not being assets of the Corporate Debtor, Provident Fund dues are to be paid in full
• Once the Committee of Creditors has decided to proceed with liquidation, appeal against initiation of CIRP stands infructuous
• Court cannot set aside an award, whether in whole or in part, unless there is a patent illegality and without a finding as to its severability