The Ministry of Corporate Affairs recently amended the Companies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules 2014, introducing a plethora of changes to the act's corporate social responsibility (CSR) provisions. The amended provisions will ensure that companies which fall under their purview spend the requisite amount on CSR activities rather than just explaining why they have not done so and avoiding any consequences.
In order to improve limited liability partnership (LLP) compliance and regulate the designated partners of LLPs, the Ministry of Corporate Affairs recently stated that it will extend certain sections of the Companies Act 2013 to the Limited Liability Partnership Act and therefore LLPs. It is surprising that the LLP structure, which was introduced by the government to relax and ease the process of setting up small businesses, is now pushing the same small enterprises towards a stricter compliance regime.
When the Companies Act 2013 entered into force, the concept of 'one-person companies' ('OPCs') was introduced. New amended rules recently entered into force and provide that natural persons who are Indian citizens, whether resident in India or not, can incorporate OPCs in India. This move has been highly welcomed by start-ups and innovators as it will boost the entrepreneurial capabilities of non-resident Indians and overseas citizens of India and help them to enter the Indian market.
In 2020 the central government issued an office memorandum which stated that the hindrances that have occurred within supply chains due to COVID-19 should fall within the purview of natural calamity and thus force majeure clauses may be invoked in situations where deemed appropriate. The crux of the issue is: when can force majeure be invoked due to breaches that have occurred in contracts between parties due to COVID-19?
The central government recently notified the Foreign Contribution (Regulation) Amendment Act. The amendment act aims to strengthen organisations' compliance mechanisms, enhance transparency and accountability in the use of foreign contributions and prevent the misuse of funds received from foreign contributions by certain organisations and instead promote the use of such funds by genuine non-governmental organisations which are working to improve the welfare of society.
The Bombay High Court was recently posed with an issue regarding the fate of proceedings under the Prevention of Money Laundering Act 2002 in the event of compromise or compounding in a predicate offence. This judgment is significant as it ensures that perpetrators of serious economic offences cannot use actions such as compromise or settlement to undermine the object of a statute of public importance.
The Supreme Court recently dealt with the question of whether a consumer complaint filed and registered under an earlier piece of legislation which was then repealed must be entertained under the provisions of newer legislation. This judgment is significant as it reiterates the law governing the saving provisions and fate of proceedings initiated and pending under repealed enactments.
The Code of Criminal Procedure 1973 bars the courts from taking cognisance of offences directed against the administration of justice for the purpose of preventing baseless or vindictive prosecutions by private litigants, parties or third parties. There seems to be a clear distinction between the cases which may or may not fall within the restrictions imposed under the code. Therefore, it is incumbent on the courts to delineate between such cases based on a consideration of the facts and law specific to each case.
In a recent case, the Supreme Court decided on the limitation period for filing an application under Section 11 of the Arbitration and Conciliation Act 1996 and whether the court can refuse to refer a dispute to arbitration under Section 11 where the claims are ex facie time barred. The court observed that the issue of limitation, in essence, speaks to the maintainability or admissibility of the claim, which is to be decided by the arbitral tribunal.
The judiciary has frequently acknowledged the ill effects of lingering litigation. Accordingly, several mechanisms have been introduced to provide some respite to clogged judicial instruments. At the same time, the courts have professed the effective application of existing devices to reduce vexatious and frivolous claims. The awarding of actual realistic costs is one step towards better employment of the legal provisions to tame the ever-growing expanse of false, frivolous and vindictive claims.