| Franklin Templeton undertakes not to launch any new debt schemes till SAT appeal is decided. | |||||||
| The Supreme Court of India refused to interfere with the Security Appellate Tribunal’s (“SAT”) Order whereby SAT has granted a stay on the condition imposed upon Franklin Templeton Asset Management by Security and Exchange Board of India.
In its Order dated 7th June 2021, SEBI held that Franklin Templeton has violated certain provisions of SEBI (Mutual Funds) Regulations, 1996 and circulars issued by SEBI in relation to the management of six debt schemes which are now shut. By way of penalty, SEBI directed Franklin Templeton to deposit the penalty of INR 500 Crores and restrained Franklin Templeton from launching any new debt schemes for a period of two years. Aggrieved by the said Order, Franklin Templeton had filed an appeal before the SAT wherein SAT has granted the interim relief in favour of Franklin Templeton. By way of interim relief, SAT has directed Franklin Templeton to pay INR 250 crore against demand of 512 crores as directed by SEBI and deemed the amount to be excessive. The SAT also put a stay on the direction of SEBI restraining Franklin Templeton from launching any new debt schemes for a period of two years shall remain stayed during the pendency of the appeal. In the appeal filed before the Supreme Court of India by the SEBI against the SAT Order, the lawyers representing Franklin Templeton undertook not to launch any new debt schemes till SAT appeal is decided. On this note, Supreme Court of India dismissed the appeal and refused to interfere with the Security Appellate Tribunal. |
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| Two patents cannot be granted for one invention – one for genus and the other for species: Delhi High Court dismisses plea by AztraZeneca. | |||||||
| In a batch of nine pleas by AstraZeneca seeking an injunction against the sale of anti-diabetes drug ‘Dapagliflozin’ by generic Pharma companies- Torre etc. the Delhi High Court observed that patentee’s rights are statutory rights, and that 2 patents cannot be granted for a single invention. The Court held that the rights of a patentee are different from the rights of a proprietor in trademark in the sense that a proprietor’s rights are common law rights and a patentee’s rights are statutory rights covered under the Patents Act. It was also observed that the inventions (IN 147 and IN 625) are the same and that there is no new invention or advancement in the new products.
Further, the test of “person in the know” was laid down in which the inquiry has to be there to know whether the inventor, during the first patent, had information regarding the claimed invention in the successive patent. It was also noted by the Court that mere delays in obtaining approvals does not extend the patent life than provided in the statute. Lastly, an inventor not providing any product for commercial purposes cannot restrain others from researching in the same field for it would violate Article 51A of the Constitution. |
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| Lok Sabha passes Factoring Regulation (Amendment) Bill 2020. | |||||||
| The Factoring Regulation (Amendment) Bill, 2020 has been passed which will assist the MSMEs in resolving their issue of delayed payments.This Bill also increases the traction on the platform of TReDS (introduced by RBI) to unlock the working capital bound with unpaid invoices.
According to the Statement of Objects and Reasons, NBFC, other than NBFCs having factoring as principal business, will be permitted to discount invoices on TReDS so as broaden the scope of financiers under Section 3. In addition to this, TReDS to be permitted to act as a financier’s agents to deal with the Central Registry for filing registration of charges under Section 19(1A). The time line for registration is to be reduced in order to check the probability of dual financing under Section 19(1). |
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| Central Government tables Bill in Lok Sabha to amend Insolvency Law. | |||||||
| The Government of India has introduced the bill to amend Section 4, Section 11(a) and introduced Chapter IIIA to the insolvency law which provides a threshold of a default not exceeding Rs 1 crore for initiation of pre-packaged resolution process for stressed MSMEs.
A penalty for fraudulent or malicious initiation of pre-packaged insolvency resolution process and for fraudulent management of the corporate debtor during the process would be there under Section 65(3). For the offences related to pre-packaged insolvency, punishment would be given under Section 77A. |
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| Advocates have a right to practice before maintenance Tribunals: Delhi High Court. | |||||||
| The Delhi High Court declared Section 17 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 ultra vires, in so far as it barred lawyers from representing parties before the Maintenance Tribunals.
The Court found this provision to be in violation of Section 30 of the Advocates Act, 1961, under which advocates have a right to practice before all Courts, Tribunals and other allied forums. In doing so, the Bench further relied on Article 19 of the Constitution, which guarantees the freedom to practice any profession, thus permitting even advocates to appear before all Courts and Tribunals. |
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| Supreme Court issues guidelines for Compounding Offences under Section 24A of the SEBI Act. | |||||||
| The Supreme Court has laid down certain guidelines for the Securities Appellate Tribunals while adjudicating applications for compounding of offences under Section 24A of the Securities and Exchange Board of India Act, 1992.
The Bench has opined that although the consent of SEBI for compounding offences is not mandatory, its opinion must be given due regard. Further, the Tribunal must provide proper reasons to differ from SEBI’s opinion, only in cases where they have acted arbitrarily or in a mala fide manner. The Court has further held that the Tribunal should ensure that proceedings under Section 24A are not to be used as a mirror proceeding for quashing a criminal complaint under Section 482 of the Criminal Procedure Code 1973. Lastly, the Court held that the Tribunal ought to consider such an application in light of whether the same is private in nature, or public in character, affecting the society at large. |
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| IBBI amends Regulations, relaxing the eligibility criteria of Resolution Professionals. | |||||||
| The Insolvency and Bankruptcy Board of India has introduced the e Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021, thereby amending the extant Rules pertaining to the appointment and qualifications of Insolvency Resolution Professions.
Under this amendment, the number of years of experience for eligibility of the Resolution Professional have been reduced in a sense, permitting a combination of varying professional experience to be counted towards such eligibility criteria. The previous requirements were that any RP ought to have 10 years in the field of law after receiving the Law Degree OR 10 years in management after receiving a Master’s Degree OR 15 years in management after receiving a Bachelor’s Degree. Under the new regulations, a Resolution Professional can now club the years of experience under any of the aforementioned heads, while computing the total years of experience required. |
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