News & Insights

Efficacy of Contempt Proceedings in Civil Disputes

Corporate Disputes

Typically, when disputes arise, parties often seek the court’s intervention to compel the other side to arrive at a settlement. In such cases, a party often obtains an intermediate relief in the proceedings and seeks to enforce compliance with the order. However, enforcing court orders, especially in civil disputes, can be full of challenges as parties may attempt to by-pass judicial directives. In India, one of the mechanisms for enforcing compliance with court orders and preserving judicial authority is through the invocation of contempt jurisdiction. This article seeks to delve into the efficacy of invoking the contempt jurisdiction of the relevant court in civil disputes within the Indian legal framework.

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VC Series | Part VIII – Balancing Expectations under the SSA

General Corporate, M&A and VC/PE

In Part VII of this series, we explored the nuances of negotiating the executive employment agreement (EEA). In this part, we revisit the share subscription agreement (SSA) but with a sharper focus on specific negotiation points and practical strategies for founders to align expectations with investors. These often-overlooked pointers are critical for ensuring a balanced relationship, safeguarding both the startup’s operational needs and investor interests.

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Interventions in winding up: Not all interventions further the cause of justice

Corporate Disputes

In legal proceedings, ensuring justice is served fairly and promptly is crucial, especially in winding-up proceedings under the Companies Act, 2013 (Act), where the future of a company, its creditors, and employees are at stake. The Act outlines various grounds for winding up a company, including situations deemed ‘just and equitable’ by the court. While the winding-up process follows clear procedures and timelines, delays often arise due to third-party intervention applications (Interventions), where objections are raised before the statutory time for them to be heard. While third-party Interventions may be necessary in some cases, a ‘blanket / one size fits all’ kind of approach is not always appropriate.

This article explores the winding-up process under the Act, focusing on cases initiated by a contributory (generally a shareholder) before the Hon’ble National Company Law Tribunal (NCLT). It will also explore why Interventions should be disallowed in these specific proceedings, particularly before the advertisement of the petition is published, and how piecemeal Interventions can hinder the progress of the case.

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CIRP is not a Remedy for Recovery of Unpaid Welfare Benefits

Corporate Disputes

The corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) is a powerful tool designed to resolve corporate insolvency. However, it is important to understand that CIRP is not the remedy if your welfare benefits are due, such as leave travel concession (LTC) or leave encashment. These unpaid benefits are classified as welfare claims, not operational debts, and therefore, cannot be used to initiate CIRP. The case of Kishore K. Lonkar v. Hindustan Antibiotics Limited provides critical clarity on this issue.

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VC Series | Part VII – Negotiating the EEA!

General Corporate, M&A and VC/PE

In Part VI of this series, we discussed the intricacies of negotiating the SHA in the context of VC funding. In this part, we deal with negotiating the executive employment agreement (EEA). The EEA outlines the terms of employment for founders – including their roles, responsibilities, compensation, benefits and termination provisions. Founders must carefully negotiate their EEAs to ensure they are in harmony with their startup’s growth trajectory while also meeting the VC fund’s expectations.

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Thresholds in insolvency resolution: Rationale for different yardsticks for financial and operational creditors

Corporate Disputes

The Insolvency and Bankruptcy Code (IBC) is a crucial part of India’s economic and financial changes. It helps resolve situations where a corporate entity cannot pay its debts. The IBC sets rules to make sure this process is balanced, fair and effective. In order to avoid misuse, the IBC has laid down certain ‘thresholds’ for a proceeding to be initiated before the National Company Law Tribunal. Such a threshold helps focus on more important cases which are of economic importance. This way, it stops the system from getting too busy with a multitude of cases involving smaller issues and defaults. In this article, we will discuss a significant difference between the process for operational creditors, compared to financial creditors, for initiating proceedings despite having a common threshold limit under the IBC.

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Vicarious Copyright Infringement: Could Employers be Caught Unaware?

Corporate Disputes

Copyright infringement occurs when individuals utilize someone else’s work without permission. While it might seem complex, it can occur inadvertently in commercial organizations. Even though it is quite common, only a few sensational instances may come to light for infringement. In this article, we will look at variations of copyright infringement under Indian law. Additionally, we will examine how employers could be held accountable for copyright violations committed by their employees, an aspect often neglected during the hiring process and subsequently.

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VC Series | Part VI – Negotiating the SHA!

General Corporate, M&A and VC/PE

In Part V of this series, we discussed the intricacies of negotiating the SSA in the context of VC funding. Next would be to focus on another crucial document in the investment process – the shareholder agreement (SHA). The SHA governs the post investment inter-se relationship between the shareholders of the startup, including the VC fund. In this article, we will explore important negotiation points in relation to the SHA and how founders can navigate this agreement while safeguarding their interests and minimizing potential liabilities.

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Ajay’s recognition as an ‘A-List Member’ by the India Business Law Journal 2022-2023

General

We are pleased to share that Ajay Joseph, Partner at Veyrah Law, has been recognised as an ‘A-List Member’ by the India Business Law Journal 2022-2023.

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VC Series | Part V – Negotiating the SSA!

General Corporate, M&A and VC/PE

In Part IV of this series, we discussed that the SSA records the terms and conditions of issue of shares to the VC fund, and the obligations of each of the parties to facilitate the conclusion of the investment. When negotiating the SSA, it is crucial for founders to understand the obligations they take upon themselves and their startup. It is common for founders to agree to overtly onerous obligations in the SSA in the interest of quickly closing the investment round. We have discussed below some of the important heads that are usually covered in an SSA and the nuances that founders should keep in mind.

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