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Insolvency Proceedings and Time Barred Debt

InNeelkanth Township & Construction Private Limited v. Urban Infrastructure Trustees Limited [2017] 140 CLA, an appeal was filed by a corporate debtor (Neelkanth Township & Construction Pvt. Ltd.) against the order of the National Company Law Tribunal (“NCLT”) allowing commencement of insolvency proceedings on the action of the financial creditor (Urban Infrastructure Trustees Ltd.). in National Company Law Appellate Tribunal (“NCLAT”). The financial creditor had subscribed to optionally convertible debentures (“OCDs”) issued by the corporate debtor. OCDs carried nil or 1% p.a. interest rate and matured in years 2011, 2012 and 2013. Ă˜One of the issues for consideration before the NCLAT was whether the application under Section 7 of the Insolvency & Bankruptcy Code (“Code”) is time barred, as the debt claim related to the years 2011, 2012 and 2013. Section 3 of the Limitation Act, 1963 governs the time period within which unless a ‘civil suit’ must be filed in respect of reco…
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Doing Business of Cyrptocurrency w.r.t. Indian Legal Perspective

Cryptocurrency has been called as the greatest technological breakthroughs since the Internet.  However, a parallel warning from the Reserve Bank of India as a caution against bitcoin and other cryptocurrency, with no guidelines or order to prohibit cryptocurrency may puzzled you to ponder over –Is it legal to do business of cryptocurrency in India?  There may be several questions which you may encounter w.r.t. applicable laws of India, as there are no specific guidelines issued by any Government Authority including Reserve Bank of India or Ministry of Finance. The main stream adoption of cryptocurrency is becoming a reality despite sceptics who compare the boom to the 1636 tulip mania. The issue is not whether cryptocurrency will survive, but rather how it will evolve. The article aims to clarify certain major aspects which may be encountered for- “Doing Business of Cryptocurrency w.r.t. Indian Legal Perspective” under the evolving legal structure. There are growing number of business …

GST- Impact on Ecommerce Business/ Online Marketplace

With the rapid growth of e-commerce business & ever evolving regulatory landscape in India had posed a very significant question on the twilight prior to the enforceability of Goods & Service Tax (“GST”) which is to be effective from July 01, 2017- What will be the impact of GST on e-commerce? Unlike, brick & mortar business models, where e-commerce business are working on various different business models, will the impact be same or differ for e-commerce business- a question which is yet struggling to find answer and keep many of the players hinged on the pivot. Growth of any business is good news for the economy and it’s been expected that to keep the same path of growth, there has to be clarity on taxation matters and ease of doing business. Of lately, there are several apprehensions in business world- Whether GST be a more hurdle rather than a catalyst for growth? Present issues under VAT & Service Tax faced by Ecommerce business: 1.Firstly, e-commerce sector dealing …

Convertible Note- Ease of Raising Funds By Startup

Today, we are in the golden age of startups, where people are ready to take risks for their dreams and passion. It takes more than just a great idea to run a successful business. Entrepreneurs and existing business owners need capital to pursue their dreams. New business ventures often have difficulty obtaining capital (whether for starting up, or for expanding operations). Today during economic downturns where standards for commercial investment are becoming water tight, a number of investors often seek non-traditional investment opportunities to enhance their portfolios. A convertible note (“Note”) provides such an opportunity to serve the needs of both the startup business needing capital and the investor seeking an opportunity. With the latest RBI Notification dated Nov.07, 2017, FDI is also permissible by means of Convertible Note ‘Convertible Note’ is an instrument issued by a startup company evidencing receipt of money initially as debt, which is repayable at the option of the ho…

SEBI VS PACL: Trouble in Paradise

In its biggest-ever crackdown on a large-scale money pooling scheme estimated at nearly Rs. 50,000 crore (twice the amount to be recover from SAHARA group), regulator SEBI has ordered  Pearls Agrotech Corporation Limited (“PACL”) to refund investors within three months and wind up operations. SEBI had found PACL violating Collective Investment Scheme Regulations by mobilizing the money without being registered with the regulator, SEBI. Besides, closure of PACL operations, SEBI  is initiating further proceedings against PACL and its nine promoters and directors for fraudulent and unfair trade practices, as also for violation of SEBI's CIS Regulations, among others, as per a direction from the Supreme Court. At present, it is being estimated that PACL has more than 58.5 million customers, more than twice the 22 million demat accounts in the entire country and has paid commission of
Rs 7,893.8 crore up to March 2012  to more than its 8 lakh agents who works as network of chain system fo…

REITs- A new KICK for Real Estate

On August 10, 2014, real estate sector received a KICK to boost up the cash strapped industry a new route to tap capital with the approval of setting up of Real Estate Investment Trusts(REITs) by SEBI, market regulator. What is REIT? RE- Real Estate To construct homes, offices, townships I- Investment All investors are welcome T-Trust Operated by professional managers (similar to mutual fund managers)
REIT is an investment pool, which finds alternative means of financing real estate through an initial public offering (IPO), which is then used to buy, develop, manage and sell assets in real estate. This pool of real estate generates income through renting, leasing and selling of property and distributes it directly to the REIT holder on a regular basis. REITs can be viewed as mutual funds that invest in real estate properties and/or mortgages instead of securities such as bonds and shares. REITs are financial intermediaries specializing in real estate investments and channel funds fro…