Situs of the Mortgaged Property is not determinative of Territorial Jurisdiction of the DRT: Bombay HC | Live Law

Mumbai High Court  hold that the DRT whilst deciding whether it has territorial jurisdiction to entertain a Securitisation Application filed under section 17 of the SARFAESI Act would be guided by the principles enshrined in section 19(1) of the RDDB Act and not by section 16 of the Code of Civil Procedure, 1908, the Court said. 

Read more at: http://www.livelaw.in/situs-of-the-mortgaged-property-is-not-determinative-of-the-territorial-jurisdiction-of-the-drt-bombay-hc/







Situs of the Mortgaged Property is not determinative of Territorial Jurisdiction of the DRT: Bombay HC | Live Law

How banks will be impacted in the new lending rate regime

RBI has asked banks to price all new loans sanctioned or renewed from April 2016 based on the Marginal Cost of Funds-based Lending Rate (MCLR). This move sweetens the one proposed in the draft prospectus where the entire loan book of banks was expected to shift to the new mechanism.

What the guidelines mean for a common man is that the change in interest rates made by the central bank will now be based on a scientific method rather than leaving the judgement to the bank management.

How banks will be impacted in the new lending rate regime | Business Standard News

RBI is bound to disclose information under the RTI Act: Supreme Court

“RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks.

Read more at: http://www.livelaw.in/breaking-no-fiduciary-relationship-between-rbi-rbi-is-bound-to-disclose-information-under-the-rti-act-supreme-court/











RBI is bound to disclose information under the RTI Act: SC | Live Law

Decoding the Indian financial code 2.0 | Business Standard News

Emerging Regulatory Framework for Indian Financial Sector with the emergence of Indian Financial Code.







Decoding the Indian financial code 2.0 | Business Standard News

NI Act Ordinance 2015 Retrospective; Dashrath Rathod's Jt have no effect in view of Amendment; SC | Live Law

A Two Judge Bench of the Supreme Court comprising of Justices J.S.Khehar and R.Banumati has held that, in view of the Amended Section 142(2) of Negotiable Instruments (Amendment) Second Ordinance 2015, the place where a cheque is delivered for collection i.e., the branch of the bank of the payee or holder in due course, where the drawee maintains an account, would be the determinative of the place of territorial jurisdiction for filing Complaint under the NI Act. The Bench was hearing an Appeal from an order dated 5.5. 2011 of Madhya Pradesh High Court in which it is held that the Jurisdiction to file a Complaint under NI Act lay only before the Court where-in the original drawee bank was located. The High Court relied on the Three Judge Bench Judgment of the Supreme Court in Dashrath Rupsingh Rathod vs. State of Maharashtra.





“The words “…as if that sub-section had been in force at all material times…” used with reference to Section 142(2), in Section 142A(1) gives retrospectivity to the provision”. The Bench said











NI Act Ordinance 2015 Retrospective; Dashrath Rathod's Jt have no effect in view of Amendment; SC | Live Law

RBI clears way for 'vulture' funds

VULTURE FUND is an enabling provision for funds scouting for distressed debt. 

Globally, there are lots of vulture funds and hedge funds always on the lookout for companies facing a temporary liquidity problem but can honour their obligations after some years, when back in health.

With RBI Green Signal Vulture Funds are back in India.







RBI clears way for 'vulture' funds | Business Standard News

Non-Banking Finance Companies- India

1.0  Introduction NBFCs are companies that are registered under the Indian Companies Act, 1956, and doing function akin to that of Banks, with a few differences. It is necessary that every NBFC should be registered under Sec 45-1A of Reserve Bank of India Act, 1934. The RBI Act, as amended in 1997, provided a comprehensive regulatory frame work for NBFCs, particularly Chapter 3-B, 3-C and 5 of the Act with primary objective of putting in place a comprehensive regulatory and supervisory frame work, aimed at protecting the interest of depositors as well as ensuring the sound functioning of NBFCs (Working Group on the issues & concerns in the NBFC sector ---Report & recommendations –RBI August 2011). The Regulatory Frame work includes:- 1) To issue directions to companies and its auditors. 2) Prohibit deposit acceptance and alienation of assets by companies. 3) Initiate action for Winding-Up of companies. 4) Compulsory registration with RBI for commencement of business. 5) Minimum entry point norms. 6) Maintenance of a portion of deposits in liquid assets. 7) Creation of reserve fund and transfer of 20% of profit after tax but before divided annually to the fund. 8)Directions as to:- a) acceptance of public deposits , b) Prudential norms like capital adequacy , income recognition, asset classification , provisioning for bad and doubtful assets, exposure norms and other measures, c) directions to statutory auditors / BODs/ Shareholders. 2.0 NBFC Definition & Classification  NBFC is defined u/s 45-I (f) r/w Sec 45-I (c) of the RBI Act, 1934. The classifications are based on activity, size and Liability. Liability based classification: - A Category – NBFC s having public deposits (NBFCs-D) and B-Category NBFCs not having public deposits (NBFCs –ND). Activity based classification: - Investment Company (IC); Loan Company (LC), Asset Finance Company (AFC), Infrastructure Finance Companies (IFC). Size based classification:-Systematically Important Core Investment Companies (CIC-ND-SI)-with assets of Rs 100 Cr. and above. The other categories of NBFC are:-Mutual Benefit Financial Company ( eg:- Nidi Company), Mutual Benefit Company ( MBC), Miscellaneous Non-Banking Co. ( MNBC)( eg:-Chit Fund Co. ), NBFC-Micro Finance Institution ( NBFC-MFI).  3.0 Source of Funds for NBFCs  As per RBI Working Group Report August 2011, own funds constitute 25.9% of funds; Debentures constitute 22.2%, Bank borrowings 21%, Commercial papers 4%, Inter-corporate borrowings 3.1%, Public Deposits 0.5%, and Others 23.4%. Debentures & Bonds:-In India, the terms ‘Corporate Bonds’ and ‘Debentures ‘are interchangeably used. Though different countries have different interpretations of both the terms, “Corporate Bonds’ and Debentures’ in Companies Act, 1956, Se. 2(12), identifies both as same. Secured Debentures are debt instruments and are regulated by SEBI, and do not come under the definition of ‘Public Deposit’ in terms of NBFC Acceptance of Public Deposits( Reserve Bank) Directions, 1988. 4.0 Types of NBFCs Multiple NBFCs:  There are many Corporate which have multiple NBFCs within the group, for eg:- M/s Shriram Group. As such each of these NBFCs served different purposes; and the reason behind the same are operational efficiencies, dynastic reason, tax planning e.t.c. The Regulators are, however, of the opinion that, the multiple NBFCs should not be viewed on a stand-alone basis, but should be viewed in aggregate. Captive NBFCs: - A captive NBFC is one where a major portion of its portfolio in receivables is generated by the sales of products and services of the parent or the group. It functions as an extension of a corporate marketing activity. In most cases, captives operate as a core but separate subsidiary of the parent and in some cases as distinct operating Division. Regulators are of the opinion that a higher cushion of capital than for normal NBFCs may be warranted for captives. Government NBFCs: - There are a number of Governmental NBFCs, which fall within the ambit of RBI Regulations. The Government Department or the Ministry or the Bureau of Public Enterprises to which such companies are attached, are expected to prescribe the norm for their operation on healthy lines and monitor their financial health. Being government companies, they are of no supervisory concern to RBI. 5.0 Supervisory Framework under RBI  The supervisory framework for NBFC in India was created in 1997 with the object of protecting the interest of the depositors. The existing framework for supervision of NBFCs consists of:- a) Off-site supervision involving scrutiny of periodical returns and statements containing financial and prudentially important data submitted by the NBFCs. b) On –site supervision of the books of accounts and other records of the NBFCs. This is done on the basis of assessment and evaluation of CAMELS (Capital, Assets, Management, Earning, Liquidity, and System & Procedures). 6.0 NBFC Prudential Norms  The RBI has issued detailed direction as to prudential norms; vide NBFC Prudential Norms (Reserve Bank) Directions, 1988. Asset Classification: - Standard Asset / Sub Standard Asset / Doubtful Asset / Loss Asset. Provisioning Norms( Loans & Advances):- Standard Asset –No provision ; Sub-Standard Asset -10% of the outstanding balance Doubtful Asset –on unsecured portion 100% and on secured portion 20 / 30 and 50% depending on the age of the doubtful assets. Los Asset – 100% of the outstanding. Provisioning Norms (Equipment Lease & HP):- Non-Performing Asset (NPA) for 12 months -10% is provisioning; 24-36 months NPA – 40% provisioning; 36-48 months NPA 70% provisioning; and 48 months plus NPA- – 100% provisioning. In terms of Directions, the NBFCs accepting / holding public deposits have to ensure maintenance of minimum prescribed capital to risk-weighted assets ratio ( CRAR)at all times. 7.0 Liquidity Requirement for NBFCs  The RBI stipulates a statutory liquidity requirements ( SLR) at 15% of aggregate deposits on a daily basis to NBFC. Also, ALM – Asset Liability Management –guidelines have been made applicable to NBFC –Ds with deposits of Rs 20 crore and above. The ALM guidelines have been made applicable to NBFC-Ds with deposits of Rs 20 Cr. and above. 8.0 Acceptance of Deposits by NBFCs NBFCs can accept deposits for a minimum period of 12 months and maximum up to 60 months, for RNBCs the maximum period is up to 84 months, and for MNBCs (Chit Funds), minimum period is 6 months and maximum period is 36 months. Ceiling on Deposit Rate:-NBFC s / MNBCs / Nidhis -----------11% per annum; RNBCs –4 to 6 %. 9.0 Regulatory Convergence:-between Banks & NBFCs-D- the emerging scenario. Regulation of NBFCs by RBI started from the year 1964, and as day passes, and to control Deposit accepting NBFCs, the regulators and supervisory framework of RBI is converging to that of Banks. Internationally regulations for deposit acceptance are similar for all entities accepting deposits, whether Banks or NBFCs. As such, the RBI working Group.

LEGAL FRAME WORK FOR BANKRUPTCY AND INSOLVENCY LAWS INDIA

The Bankruptcy Law Reforms Committee (BLRC), while submitting its report to the government earlier this month, had recommended the need for a single code to resolve insolvency for all companies, limited liability partnerships, partnership firms and individuals. "In order to ensure legal clarity, the Committee recommends that provisions in all existing law that deals with insolvency of registered entities be removed and replaced by this Code," the committee said in its report.









Fixing bankruptcy, insolvency laws | Business Standard Column

Putting arbitration on fast track

FAST TRACK ARBITRATION - AWARD WITHIN 6 MONTHS IS GOING TO BE GAME CHANGER IN INDIAN ARBITRATION





Putting arbitration on fast track | Business Standard Column

Alternative Remedy : Arbitration clause cannot ipso facto render a writ petition “not maintainable” - Legal Aspiration

Alternative Remedy : Arbitration clause cannot ipso facto render a writ petition “not maintainable” - Legal Aspiration



ARBITRATION CLAUSE V/S WRIT MAINTAINABILITY UNDER ARBITRATION AND CONCILIATION ACT, 1996.

Micro lenders turn the page with banking licences

RBI is favoring Micro Lenders over NBFC for banking licenses - and for making the full convergence to banking system....







Micro lenders turn the page with banking licences | Business Standard News

Whether security cheque covered under S.138 of NI Act ?

A cheque issued as security in respect of a contingent liability would not be maintainable u/s 138 of NI Act ; and at the same time , the issue remains for examination is -each case to be examined case-by-case , and on date of presentation of the cheque debt or liability crystallized or not is the crucial question of law. 2015 (151) DRJ 147.







Whether security cheque covered under S.138 of NI Act ? - Legal Aspiration

Small finance banks: MFIs to scout for domestic equity | Business Standard News

SMALL FINANCE BANKS IN INDIA - MFIs dominate in securing licences....









Small finance banks: MFIs to scout for domestic equity | Business Standard News

SLAPP- Strategic Lawsuit Against Public Participation

SLAPP- Strategic Lawsuit Against Public Participation 

SLAPP - Strategic Lawsuit Against Public Participation aims to intimidate and silence critics by compelling them to join a legal battle and restrain them from expressing a view similar to the one that initiated by SLAPP.

SLAPP is coined by University of Devner Professors Penelope Canan and George W Pring , and the same is detailed in their book The Slapps: Getting sued for speaking out ( 1996).

This was dealt in Khusboo v. Kanniammal 2010 (67), by Supreme Court of India , and the Court expressed that " the notion of social morality are inherently subjective and the criminal law cannot be used as a means to unduly interfere with the domain of personal autonomy.

ONE PERSON COMPANY IN INDIA- ISSN:2348-8212: Volume 2 Issue 4

International Journal of Law and Legal Jurisprudence Studies :ISSN:2348-8212: Volume 2 Issue 4

ONE PERSON COMPANY IN INDIA

by

Adv. Neha Yati, LLM Student, Dr.Kailasanat College, Ratlam, M.P.

&

Adv. Krusch. P A, Head-Legal, SFL, Coimbatore, TN.

ABSTRACT

One Person Company (OPC) is a hybrid of sole proprietor and company form of business; and the Limited liability being the precious legal invention in the legal history, the introduction of OPC in the Indian legal system is considered as the appropriate legislation to unleash the entrepreneurial talent of the emerging Indian businessmen, especially to the start-up ventures.

The article proposed dig into the emergence and development of the OPC world over as well as in India, and examines the concept of OPC which is set to organise the unorganised sector of proprietorship firms and other entities which will be convenient to regulate and manage with the emerging concept of OPC.

The article further intends to explore what is an OPC, the salient features of OPC, the privileges of OPC, who and how can an OPC get incorporated in India.

The pros and cons of OPC and its impact in Indian entrepreneurship along with a comparative analysis with sole proprietorship and private companies being analysed.

The last portion of the article examines the OPC from a critical analysis with its shortcomings and ambiguities.

Finally the article concludes with a balanced view, and end with a positive note as OPC is expected to be a big boon for small and medium entrepreneurs in India.

Industrial Disputes: How to be settled?

Industrial Disputes: How to be settled? - Deepak Miglani



Industrial Dispute Act , and the provisions for Negotiation / Conciliation / Arbitration and Mediation are being discussed in this Article...

Launch The Hague Institute for Global Justice, June 10 2011

Consumer protection in Indian finance: Going from ...

Ajay Shah's blog: Consumer protection in Indian finance: Going from ...: by Renuka Sane and Ajay Shah. Financial regulation in India, at present, is oriented towards product regulation. While protecting the in...

Conflict Resolution in 6 Simple Easy Steps

Mortgage or Loan against Property in India

The expression “Mortgage” is a combination of two French words “Mort” and “Gage” which has got a meaning of pledge. It is a transfer of interest in an immovable property for securing the payment of money advanced as a loan; and the same is defined under the section 58(a) of the Transfer of Property Act, 1882, in India.

Mortgagor is the transferor of interest in the immovable property; and Mortgagee is the transferee.

Every Owner of a property, with possession and statutory rights, can mortgage his property, and a co-owner can mortgage his share of property. In case of joint-share holders, they have to do jointly, and the liability will be jointly and severally.

In case of Joint Hindu Families, a Kartha can bind other coparceners for the Hindu Undivided Family properties for family business.

Different types of Mortgages are:-

1. Simple / Registered Mortgage-- As per Section 58 (b) of the T.P Act, the mortgagor undertakes (binds himself personally) expressly or impliedly to pay the advance (Mortgage money), and the Mortgagor does not deliver the possession of mortgaged property (non-possessory mortgage). The property can be sold only with the court intervention / permission. The registration should be done within 4 months from the date of execution of the document (Sec 23 of Indian Registration Act), if  the value of the property involved is more than Rs. 100 ;and the registration is mandatory (Section 59 of Transfer of Property Act).

2. Mortgage by conditional sale-- As per Section 58 (c) of the T.P Act, where the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgage money on a certain date the sale shall become absolute. The possession of the mortgaged property is not transferred to mortgagee. It is an ostensible sale (and not a real sale). In the case of non-payment of mortgage money, the ostensible sale becomes a real/absolute sale (i.e. the property is deemed as sold).

3. Usufructuary Mortgage—Usufructuary Mortgage is defined u/s 58(d) of the T.P Act.  The mortgagee has the right to receive profits and rents accruing from the property. The mortgagor does not bind himself personally for repayment of the mortgage money. The mortgagee (lender) therefore cannot sue the mortgagor for repayment of the mortgage debt. He cannot file suit for sale or foreclosure of the mortgaged property. The mortgagee is left with only one remedy i.e. he can appropriate the rents/profits towards liquidation of mortgage money and interest thereon.

4. English Mortgage—English Mortgage is defined under Sec 58(e) of the T.P Act. The mortgaged property is transferred absolutely to the mortgagee. That is, all interests and rights in the property are conveyed. It is different from simple mortgage. Thus the English mortgage is entitled to immediate possession of mortgaged property. The mortgagor binds himself personally to repay the mortgage money.

5. Mortgage by Deposit of Title Deeds (MDTD)—MDTD is defined u/s 58(f) of the T.P. Act, and it is also called as Equitable Mortgage. Equitable mortgage (as per English law), the mortgagor [owner or his authorised (only constituted) attorney] in any of the notified towns delivers to the creditor (or his agent), documents of title to immovable property (title deeds) with intent to create a security thereon. The immovable property proposed to be equitably mortgaged (and/or the financing branch) may be located/situated anywhere in India but the title deeds should be delivered at the notified centre only. It is a sine qua non (an indispensable requisite) for equitable mortgage. A deposit made outside the notified centres creates neither a mortgage nor a charge. The debt may be existing or future. It is common for Banks to advance loans or allow over-draft account against deposit of title deeds and it might involve both existing and future advances, and such transactions fall within the scope of the MDTD (United Bank v/s Ms. Lekharam , AIR 1965 SC 1591).

6. Anomalous Mortgage—Anomalous Mortgage is defined u/s 58(f) of the T.P. Act. A mortgage which does not belong to any of the five types is called anomalous mortgage. It possesses a mixed character of any two or more types of mortgages.

Further Mortgage can be created within the same parties and is supplemental to the original deed of Mortgage.

Second Mortgage can be created with a new mortgagee by entering into a separate Deed of Second Mortgage, narrating the existence of First Mortgage.

Sub-Mortgage or Derivative Mortgage can be created by the mortgagee by assigning / depositing the title deed to a new purchaser (mortgagee). The sub-mortgagee can be good only to the extent of the amount due on the mortgage and on payment of the mortgage debt, the sub-mortgagee.

Assignment of Mortgage is a written document which serves as a proof of transfer of a loan obligation from the original borrower to a third party. Similarly, a lender can assign the mortgage to the other lenders –which are also called as Sub-Mortgage.

Modified draft Indian Financial Code likely by mid-2015

Modified draft Indian Financial Code likely by mid-2015

The recommendations of the FSLRC are divided into legislative and non-legislative aspects.

It has recommended a seven-agency structure for the financial sector -- the Reserve Bank of India (RBI),Unified Financial Agency (UFA), Financial Sector Appellate Tribunal (FSAT), Resolution Corporation (RC), Financial Redressal Agency (FRA), Financial Stability and Development Council (FSDC) and Public Debt Management Agency (PDMA).