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Legally Speaking





Insolvency and bankruptcy laws are integral to any capitalist system. They serve as the foundation for the orderly dissolution or restructuring of a variety of company structures, including sole proprietorships, partnerships, and limited liability corporations. As a result, bankruptcy rules make it easier to re-allocate cash that has been locked up in a failing enterprise.

It is the state or condition of having more debts (liabilities) than total assets which might be available to pay them, even if assets were mortgaged or sold.

Bankruptcy is not exactly the same as insolvency. Technically, bankruptcy takes place when a court has determined insolvency, and given legal directions for it to be resolved. Bankruptcy is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.

Constitutional framework Under the Constitution of India ‘Bankruptcy & Insolvency’ is Entry 9 in List III Concurrent List, (Article 246 –Seventh Schedule to the Constitution) i.e., both Centre and State Governments can make laws relating to this subject.


Regulatory Framework

Under the Reserve Bank of India Act, 1934:

The Reserve Bank of India (“RBI”) is entrusted with the responsibility of regulating and supervising Non-Banking Financial Companies (“NBFCs”) by virtue of the powers vested in it pursuant to Chapter III B of the Reserve Bank of India Act, 1934 (“RBI Act”). The regulatory and supervisory objective of RBI is (i) to maintain the continued viability of NBFCs by ensuring that they function on healthy lines; (ii) develop an appropriate prudential framework for the NBFC sector; (iii) protect the interest of the depositors by comprehensive regulation of deposit taking NBFCs; (iv) curb un-authorized and fraudulent deposit acceptance by NBFCs; and (v) ensure protection to consumers of NBFC services by laying down of fair practices code.

In terms of Section 45-IE, if in the opinion of the RBI the affairs of an NBFC are being conducted in a manner detrimental to the interest of the depositors or creditors, the RBI may for securing the proper management of such company or for financial stability, supersede the board of directors of such NBFC. On supersession of the board of directors of the NBFC, an administrator shall be appointed who shall be bound to follow such directions as prescribed by RBI. Once the board of the NBFC is superseded the chairman, managing director and other directors shall from the date of such supersession vacate their offices and all the powers, functions and duties of the board shall, until the board of directors of such company is reconstituted, be exercised and discharged by the administrator. The RBI shall also constitute a committee consisting of three or more members who have experience in law, finance, banking, administration or accountancy to assist the administrator in discharge of his duties. Further, the employees of such NBFC, whose board is suspended shall assist the administrator by providing all information and details as may be required by the administrator to carry out his duties.

Insolvency and bankruptcy code:2016

The Insolvency and Bankruptcy Code was suggested in 2014 by the Bankruptcy Legislative Reforms Committee, chaired by T. K. Viswanathan (IBC). The IBC was created with the intention of consolidating and amending the laws governing reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner in order to maximise the value of such persons’ assets, promote entrepreneurship, increase credit availability, and balance the interests of all stakeholders, including changing the priority of government dues payment. In May 2016, the IBC, 2016 was eventually adopted and published in the Indian Gazette. The legislation strives for insolvency resolution by insolvency experts in a time-bound way (originally 180 days, extendable by further 90 days under specific conditions, but currently extended to 330 days). The statute assures that the judicial and business parts of the settlement process are separated, rectifying previous legislative errors. Furthermore, the National Company Law Tribunal (NCLT), not the DRTs, would be the adjudicating authority under the IBC. As of now, the IBC is the only law that governs insolvency, bankruptcy, and the reconstruction of failing businesses, reducing the role of prior laws. A major legislative gap in the settlement of NPAs was closed with the passage of the IBC. The RBI replaced the existing CDR rules with a standardised and simplified general framework for the resolution of stressed assets under IBC in a circular dated February 12, 2018. Despite the Supreme Court’s ruling on 2 April 2019 that the RBI’s 12 February circular mandating lenders to commence loan settlement or restructuring even if the default was only for a single day was invalid, this circular undoubtedly represents the first step towards protecting the integrity of debt contracts.

The Code’s provisions have been announced in stages and on a need-to-know basis. The sections of the Code relating to the Corporate Insolvency Resolution Process (CIRP) went into effect in December 2016. Individual insolvency provisions were planned to be published in three stages: first, personal guarantors to corporate creditors (effective December 2019), next partnership businesses and proprietorship firms, and finally other people (yet to come in force).


Despite the fact that the IBC was passed more than three years ago, its impact has been felt. As of February 2020, over 26,250 applications have been filed under the IBC, with roughly 3600 of them being accepted. 205 cases have been settled, and 890 cases have been liquidated, out of the accepted cases. Under the IBC, the period it takes to resolve a company has decreased from around 4.3 years to about 364 days. Furthermore, in comparison to their claims, financial creditors realised roughly 42% of their claims under settlement programmes. Gross nonperforming assets (NPAs) fell to roughly 9.1% in the fiscal year ending in 2019, down from 11.2 percent in 2018. 5 The average rate of recuperation through the Code is much higher than through other methods of recovery and exercise. According to the World Bank’s Doing Business Report’s ‘resolving insolvency index,’ 2020: (a) India’s ranking has risen from 136th in 2015 to 52nd in 2019, (b) the recovery rate has increased from 25.7 percent in 2015 to 71.6 percent in 2019, and (c) the recovery time has decreased from 4.3 years in 2015 to 1.6 years in 2019.


The Code distinguishes between the business and judicial parts of insolvency and bankruptcy procedures. The legislation’s main goal is to safeguard the corporate debtor’s resuscitation and continuance by shielding it from its management and from a corporate death by liquidation. As a result, the Code is both an useful piece of legislation aimed at reviving a failing firm and a simple recovery law for creditors. As a result, the interests of the corporate debtor have been divided and separated from those of its promoters and/or management. As a result, rather than being adversarial, the settlement procedure protects the corporate debtor’s interests. The Code’s framework safeguards creditors’ interests in the liquidation waterfall by prioritising payments to secured creditors over payments to crown debts. However, it is the commercial wisdom of the majority of creditors to define, via discussion with the potential resolution applicant, how and in what way the corporate resolution process, including the distribution of cash, would take place throughout the resolution process. The following are some of the important components of the CIRP framework and the liquidation procedure for corporate debtors:

Corporate insolvency Resolution Process CIRP: On a minimum default of ‘1,00,00,000, a financial creditor (either alone or jointly), an operational creditor, or the corporate debtor itself is eligible to commence CIRP. The government recently increased the threshold limit for commencing CIRP from ‘1 lakh to ‘1 crore to avert bankruptcy procedures against medium and small businesses during the COVID-19 crisis. Upon admittance, a moratorium on litigation, asset transfers, and security enforcement begins. The board of directors is removed from office, and an interim resolution professional (IRP) is appointed to assume charge of the corporate debtor and its assets, among other things. Following that, IRP appoints a committee of financial creditors (CoCs). CoC is needed to make important (66 percent voting share) and regular (51 percent voting share) decisions that are not within the realm of IRP. The resolution professional (RP) creates the qualifying conditions for the submission of the resolution plan with the CoC’s permission and publishes an expression of interest. In order to prevent the tainted person from regaining power, some persons who are subject to impairment in or outside India under Section 29A of the Code are barred from proposing a resolution plan. With a 66% majority vote, the CoC approves a legally compliant, financially viable, and practical resolution plan, which is subsequently submitted to the NCLT’s relevant bench for approval. The corporate debtor must be liquidated if no resolution plan is received or authorised by the CoC by the end of the maximum resolution term, which is 270 days or 330 days (including litigation). The 330-day deadline is not required, and the Supreme Court regarded it as such in the case of Essar Steel India Limited vs. Satish Kumar Gupta & Others. 11 A corporate debtor may be restructured by a merger, amalgamation, or demerger as part of the resolution plan permitted under the Code.

Liquidation process: Under the Code, a CIRP may or may not be followed by liquidation. Triggers for liquidation include (a) rejection of a resolution plan by NCLT if it fails to meet certain necessary conditions, (b) the resolution plan not being approved by the CoC by 66 per cent in value or no resolution plan is received, (c) a decision of the CoC to proceed with liquidation during the CIRP period, or (d) failure of the debtor to adhere to the terms of the resolution plan approved by NCLT. In the event that a firm has not made any payment defaults, it may decide to voluntarily dissolve the corporation. When NCLT issues a liquidation order, a liquidator is appointed, CoC is dissolved, and a stakeholders’ (creditors entitled to distribution) consultation committee is formed. Liquidator checks, acknowledges, or rejects creditors’ claims, creates an asset document, and takes custody of and controls all of the corporate debtor’s assets. The liquidator may sell the corporate debtor’s assets in bulk or individually, in parcel or slump sales, or on a continuing concern basis. Auction is the most common method of sale. A person who is ineligible under the IBC to propose a plan for the corporate debtor’s bankruptcy resolution

Other key features: The Code requires that transactions that are preferential, undervalued, or exorbitant in nature be examined for the advantage of creditors. The assessment review period is set as follows (a) two years where transactions are entered into with related parties and (b) one year in all other cases. Furthermore, transactions conducted with the aim to cheat creditors must be examined, although the Code’s provisions do not provide for a lookback time.


The government has raised the filing threshold for IBC cases from one lakh to one crore. Because of the rise in coronavirus infections, the government is considering suspending IBC registrations for a few months. The regulations pertaining to insolvency and bankruptcy of financial service providers were recently put into effect by the government (FSPs). Non-banking financial firms (which include home finance companies) with an asset size of 500 crore or more are currently covered by the regulations as a category of FSP (with the RBI as the financial sector regulator). Dewan Housing Finance Corporation Limited is the first FSP to be subjected to CIRP. The definition of “interim financing” was enlarged to include “any additional debt that may be disclosed.” As a result, certain pre-IBC financing may be eligible for inclusion in the category of ‘interim finance.’ Minimum filing thresholds under the IBC are (a) in the case of homebuyers/allottees, less than 100 homebuyers/allottees under the same project or at least 10% of the total number of such allottees; and (b) in the case of a class of creditors, less than 100 creditors of such class or at least 10% of the total number of such creditors. The ability to define important products and services that cannot be terminated during the moratorium has been given to RP (provided dues are paid during moratorium). Similarly, there will be no automatic termination/suspension of a licence, permit, registration, quota, concession, clearances, or any other right granted by the central government, state government, local authority, sectoral regulator, or any other authority, and they must continue during the moratorium subject to the payment of dues for services rendered during the moratorium.14 In many cases, it was noted that the corporate debtor does not have sufficient funds during the liquidation period. In effect, a modification said that COC must assess the firm’s liquid assets and compare them to the fees that the liquidator is anticipated to spend if the company goes into liquidation (liquidation cost). CoC will contribute to the difference, if any, between the liquidation costs and the liquid assets available to the firm if the estimate of liquid assets is less than the liquidation costs. Furthermore, secured creditors who choose to realise their security interest must contribute their share of the insolvency resolution process costs, liquidation process costs, and workmen’s dues (for the 24 months prior to the liquidation commencement date) to the extent of their relinquished security interest. They must pay these payments within 90 days of the liquidation’s start date. They must also pay any excess proceeds realised over the amount of their accepted claims within 180 days of the liquidation’s start date. The asset will become part of the Corporate Debtor’s liquidation estate assets if the secured creditor fails to pay such sums to the liquidator within 90 days or 180 days, as the case may be. 16 Secured creditors can’t sell assets to someone who isn’t allowed to file an insolvency plan (Section 29A).


IBC has enhanced creditors’ positions and changed India’s corporate credit culture. It has also influenced the behaviour of non-performing company promoters by establishing credit discipline. The impact of the IBC has been increased by the announcement of regulations linked to the beginning of insolvency of personal guarantors to corporate debtors. Other factors that complicate the proper resolution of firms under the IBC include: (a) the resolution applicant’s breach of the resolution plan after NCLT approval, (b) the lack of cross-border insolvency regulations and rules, (c) the lack of cross-border insolvency regulations and rules for group insolvency, (d) post-closure litigation by operational creditors, such as tax authorities or unsuccessful bidders, and (e) conflicting NCLT judgments, etc. Some of the issues encountered in the implementation of the IBC can be alleviated by (a) holding timely colloquia for NCLT judges and increasing interaction between practitioners from various jurisdictions; (b) sensitising various government and statutory authorities about the treatment of government and statutory dues under the IBC to reduce the scope for litigation and the resulting delay in the resolution of companies under corporate insolvency; and (ii) NCLTs according to higher prioritisation standards.


Following the adoption of the IBC, challenges to the resolution process at every level resulted in a slew of litigation, which caused delays and hampered the timely completion of such processes. Since the founding of the Securities and Exchange Board of India (SEBI), many modifications and judicial discussions have helped to close the vulnerabilities in the framework and ringfence both lenders and borrowers. However, fundamental adjustments that would strengthen the financial sector are required in the near future, Furthermore, we must alter our attention in order to balance the interests of diverse stakeholders and minimise friction caused by regulatory overlaps, if any exist. A fragmented approach to the insolvency process may not be in the best interests of the Indian economy, particularly in these times of uncertainty and scepticism.

Since the founding of the Securities and Exchange Board of India (SEBI), many modifications and judicial discussions have helped to close the vulnerabilities in the framework and ringfence both lenders and borrowers. However, fundamental adjustments that would strengthen the financial sector are required in the near future.

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Legally Speaking

Supreme Court holds off on decision in Baba Ramdev contempt case



The Supreme Court has deferred its decision on a contempt notice issued against yoga guru Ramdev, his associate Balkrishna, and their company Patanjali Ayurved in connection with a case involving misleading advertisements. The bench, comprising Justices Hima Kohli and Ahsanuddin Amanullah, stated, “Orders on the contempt notice issued to respondents 5 to 7 (Patanjali Ayurved Ltd, Balkrishna, and Ramdev) are reserved.” The Uttarakhand State Licensing Authority (SLA) informed the court that manufacturing licenses for 14 products of Patanjali Ayurved Ltd and Divya Pharmacy have been suspended immediately. The Supreme Court noted that the counsel representing the firm had requested time to submit an affidavit detailing the actions taken to retract the advertisements of Patanjali products and to recall the medicines.

Highlighting the importance of public awareness and responsible influence, the court emphasized that Baba Ramdev wields significant influence and should employ it responsibly. It awaits an affidavit from Patanjali outlining the measures implemented to withdraw the existing misleading advertisements of the company’s products, with instructions for submission within three weeks.

During the proceedings, Indian Medical Association (IMA) President R V Asokan extended an unconditional apology to the bench for remarks made against the top court in a recent interview with news agency PTI. Justice Kohli conveyed to Asokan that public figures cannot criticize the court in media interviews. However, the court indicated its disinclination to accept the apology affidavit submitted by the IMA president at present. In an earlier hearing on May 7, the apex court had denounced Asokan’s statements as “very, very unacceptable.” The court reiterated its stance that celebrities and social media influencers are equally liable for the products they endorse, warning that if such products are found to be misleading, they could face repercussions.

The case stems from a plea filed in 2022 by the IMA alleging a smear campaign by Patanjali against the Covid-19 vaccination drive and modern medical systems. As the legal proceedings unfold, the Supreme Court continues to emphasize the importance of accountability and responsible conduct in advertising and public discourse. The case underscores the need for stringent regulations to curb misleading advertisements and ensure consumer protection. With the demand for transparency and ethical practices on the rise, the judiciary plays a pivotal role in upholding standards of integrity in commercial communications.

As the court awaits the submission of the affidavit from Patanjali, stakeholders across industries are keenly observing the developments, anticipating their implications on advertising practices and regulatory enforcement in the country.

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Australia fights Musk’s platform over control of online content



In a courtroom battle that underscores the complex interplay between global tech giants and national regulatory frameworks, Elon Musk’s X, formerly known as Twitter, finds itself at odds with Australian law over the removal of graphic content depicting a terrorist attack.

At the heart of the dispute lies a fundamental question: to what extent should a platform like X be compelled to adhere to the laws of a specific country when it comes to content moderation? The legal showdown commenced as the eSafety Commissioner of Australia sought the removal of 65 posts showcasing a harrowing video of an Assyrian Christian bishop being stabbed during a sermon in Sydney, classified as a terrorist incident by authorities.

Tim Begbie, representing the cyber regulator, argued that while X has policies in place to remove harmful content, it cannot claim unilateral authority to decide what is acceptable under Australian law. He contended that X’s resistance to globally removing the posts challenges the notion of reasonableness within the scope of Australia’s Online Safety Act.

X’s stance, guided by its mission to uphold free speech, underscores a broader philosophical debate surrounding the jurisdictional reach of national laws in the digital realm. The company maintains that while it has blocked access to the posts for Australian users, it refuses to implement global removal, asserting that the internet should not be governed by the laws of a single nation.

However, Begbie argued that geo-blocking, the solution proposed by X, is ineffective due to the widespread use of virtual private networks (VPNs) by a significant portion of the Australian population.

Amidst the legal wrangling, X’s lawyer, Bret Walker, contended that the company had taken reasonable steps to comply with Australian laws while balancing the principles of free expression. He emphasized the importance of allowing global access to newsworthy content, cautioning against the suppression of information on a global scale. The implications of such an approach, he argued, extend beyond Australia’s borders, potentially setting a precedent for censorship on a global scale.

As the case unfolds in the Federal Court, Judge Geoffrey Kennett has issued a temporary takedown order for the posts, extending it until June 10 pending a final decision. The outcome of this legal battle is poised to have far-reaching implications, not only for the regulation of online content in Australia but also for the broader discourse surrounding internet governance and free speech in the digital age.

Beyond the legal arguments, the case underscores the evolving dynamics between tech platforms and regulatory authorities, highlighting the challenges of reconciling competing interests in an increasingly interconnected world. With the proliferation of digital platforms and the rise of social media, questions surrounding content moderation, censorship, and the balance between freedom of expression and societal harm have come to the forefront of public discourse.

In the digital era, where information knows no borders and online platforms wield immense influence over public discourse, the case of X versus Australian law serves as a microcosm of the broader tensions between technology, governance, and individual rights. As societies grapple with the complexities of the digital age, the need for robust legal frameworks, ethical guidelines, and international cooperation becomes ever more apparent.

As the legal battle between X and Australian authorities unfolds, it underscores the intricate relationship between technology, law, and societal norms in the digital age. At stake is not just the removal of graphic content depicting a heinous act but also the broader principles of free speech, censorship, and the jurisdictional reach of national regulations in a globalized world.

The outcome of this case carries significant implications for the future of online content moderation and regulation. On one hand, proponents of free speech argue that platforms like X should have the autonomy to determine their content policies without being unduly influenced by the laws of individual countries. They contend that a global approach to content moderation ensures consistency and prevents the fragmentation of the internet along national lines.

On the other hand, proponents of regulation argue that national laws play a crucial role in safeguarding citizens from harmful content and upholding community standards. They assert that while platforms may operate globally, they must abide by the laws of the countries in which they operate, particularly when it comes to content that poses a threat to public safety or incites violence.

Amidst these competing interests, the case highlights the need for a nuanced approach to content moderation that balances the principles of free speech with the protection of users from harm. It also underscores the importance of international cooperation and dialogue in addressing cross-border challenges in the digital realm.

Beyond the legal realm, the case has broader implications for the future of internet governance and the regulation of online platforms. As technology continues to evolve at a rapid pace, policymakers around the world face the daunting task of crafting regulations that are effective, enforceable, and adaptable to the ever-changing digital landscape.

Moreover, the case raises important questions about the role of tech companies in shaping public discourse and influencing democratic processes. With social media platforms serving as key channels for information dissemination and political engagement, the decisions made by companies like X have far-reaching consequences for the functioning of democratic societies.

Ultimately, the resolution of this case will have significant implications not only for X and its users but also for the broader digital ecosystem. It will shape the future trajectory of online content moderation, influence regulatory approaches to technology platforms, and set precedents for how governments and tech companies interact in the digital age.

As the legal proceedings continue, stakeholders from across sectors will closely monitor developments, recognizing that the outcome of this case has the potential to reshape the digital landscape for years to come. Whether it leads to greater clarity in content moderation policies, a re-evaluation of regulatory frameworks, or a deeper understanding of the complexities of governing the internet, the case of X versus Australian law represents a pivotal moment in the ongoing debate over the future of online governance and free speech in the digital age.

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Legally Speaking

Supreme Court Framed Issues To Consider, Hearing In July 2024: Challenge To Surrogacy Law



SC seeks Centre’s reply on fresh pleas against CAA

The Supreme Court in the case Arun Muthuvel v. Union of India has elucidated the issues it will consider in a batch of petitions challenging provisions of the Surrogacy Regulation Act, 2021 and the Surrogacy Regulation Rules, 2022. The bench comprising of Justice BV Nagarathna and Justice AG Masih passed the order recording the following issues:

  1. Whether the prohibition of commercial surrogacy as stated under Section 4(ii)(b) and Section 4(ii)(c) of the Surrogacy (Regulation) Act, 2021 is constitutional?
  2. Whether the right of a couple to avail surrogacy being restricted to married couples between the age of 23 to 50 years and in case of female and between 26 to 55 years in case of male as it is being provided as stated under Section 4(iii)(c)(I) read with Section 2(1)(h) of the Surrogacy (Regulation) Act, is constitutional?
  3. Whether the right of a single woman to avail surrogacy being restricted to only widows or divorcees between the ages of 35 to 45 years as it is provided being under Section 2(1)(s) of the Surrogacy, the Regulation Act 2021, is constitutional?
  4. Whether the right of an intending couple to avail surrogacy being restricted to only those couples who do not have a surviving child as provided as stated under Section 4(iii)(c)(II) of the Surrogacy (Regulation) Act 2021, is constitutional?
  5. Whether individuals who initiated the process of availing surrogacy which being prior to the enactment of the Surrogacy, the Regulation Act, 2021 have any right to avail surrogacy in a manner which being beyond the scope of the Surrogacy (Regulation) Act, 2021, save for cases falling within the ambit of Section 53 of the Act?

The petitioner in the plea highlighted an additional issue which relates to exclusion of single men from the purview of Surrogacy Regulation Act.

Therefore, the lead petition in the matter has been filed by an infertility specialist from Chennai, Dr. Arun Muthuvel, through Advocate Mohini Priya and Advocate Ameyavikrama Thanvi.

Therefore, while highlighting various contradictions in the Surrogacy Regulation Act and the Assisted Reproductive Technology (Regulation) Act, 2021, thus, the petitioner in the plea points out that the twin legislations inaugurated a legal regime that was discriminatory and was violative of the constitutional rights of privacy and reproductive autonomy.

The Supreme Court in the case observed and has agreed to hear the petition wherein it challenges against the two Acts. In September last year, several other petitions and applications were filed wherein similar questions were raised, such as whether it was constitutional to exclude unmarried women from the ambit of the Surrogacy Act, or whether limiting the number of donations made by an oocyte donor under the ART Act would amount to unscientific and irrational restrictions.

The bench in the case observed and has expressed reservations about hearing the challenges to both the Acts simultaneously, as the linkage between the provisions of the two Acts could not be ascertained in the present matter. Further, the said court decided that issues wrt the Surrogacy Regulation Act will be heard first, followed by those which relate to the ART Act.

The court asked the parties to file written submissions on the foregoing issues. It has also been clarified by the said court that the petitioners need not restrict their submissions to the issues recorded by the court. Any ‘related’ issue may also be raised during the proceedings.

Accordingly, the court listed the matter for further consideration on July 30, 2024.

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Legally Speaking

SC ruling on spectrum allocation doesn’t affect satellites



SC seeks Centre’s reply on fresh pleas against CAA

The Supreme Court’s decision to reject the government’s application seeking clarification on administrative allocation of spectrum for non-mobile services is not expected to impact the allocation of satellite spectrum as outlined in the Telecom Bill, according to highly placed sources. In February 2012, the Supreme Court had upheld that auctions were the preferred method for allocating scarce public resources like telecom spectrum.

The Centre had filed a miscellaneous application in December last year seeking a clarification on the matter of administrative allocation of spectrum, which was mentioned in court last week. However, the SC registrar refused to accept the plea, arguing that it was seeking a review of the 2012 order and that there was no ‘reasonable cause’ to entertain it.

Government sources emphasized that this decision would not change the existing laws governing spectrum allocations for satellite communications, as clearly stated in the Telecom Bill. Sources clarified that the application did not seek to amend the 2012 judgment on 2G spectrum allotment nor did it seek permission for administratively allocating spectrum. Spectrum will continue to be auctioned for mobile services, while for the 19 specific use cases cited in the Telecom Bill, it will be allocated administratively.

The government had filed the miscellaneous application at the Supreme Court to explain its intentions before tabling the bill in Parliament, emphasizing that it was not seeking any permission from the court. The application aimed to seek appropriate clarifications from the court regarding the CPIL judgment in 2012, to establish a spectrum assignment framework that includes methods of assignment other than auction in suitable cases, to best serve the common good. In 2012, the SC had criticized the ‘first-come, first served’ method for spectrum allocation, known as the CPIL judgment, and had quashed the 2G spectrum allotted by the United Progressive Alliance government.

Since then, the government has been issuing spectrum administratively in certain cases where auctions are not technically or economically preferred or optimal. The Telecom Bill’s First Schedule lists satellite spectrum and 18 other sectors where administrative allocations will be compulsory, including law enforcement, public broadcasting, in-flight and maritime connectivity, the Indian Army and Coast Guard, and radio backhaul for telecom services. Government sources noted that all stakeholders were consulted on the issue, and the government was confident of its legal standing as outlined in the Telecommunications Act.

The SC, in a presidential reference, did not specify that all spectrum should be auctioned, only that for mobile services. The Supreme Court’s decision not to accept the government’s application seeking clarification on spectrum allocation for non-mobile services does not alter the framework outlined in the Telecom Bill. While auctions remain the preferred method for mobile services, administrative allocations will continue for specific use cases, including satellite spectrum, as delineated in the bill.

The rejection of the application underscores the importance of adherence to established legal procedures and the judiciary’s role in upholding regulatory frameworks. Moving forward, the government remains committed to transparent and efficient spectrum allocation, balancing the imperatives of economic efficiency and public interest in the telecommunications sector.

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Legally Speaking

Legal Victory for Ankiti Bose: Limits Imposed on Defamatory Content Regarding Former Zilingo Chief



A legal dispute has unfolded involving B2B fashion startup Zilingo, with former CEO Ankiti Bose on one side, and co-founder Dhruv Kapoor and former COO Aadi Vaidya on the opposing side.

A recent court decision in Delhi has brought focus to a legal dispute involving Ankiti Bose, the former CEO of Zilingo, a prominent technology platform. The court issued an ex parte order in Bose’s favor, instructing certain parties, including Zilingo co-founder Dhruv Kapoor and former COO Aadi Vaidya, to refrain from making defamatory statements against Bose. This decision underscores the importance of protecting reputational rights against unfair reporting.

The court’s ruling cited a prima facie case in Bose’s favor, acknowledging her legal right to safeguard her reputation from damaging remarks. It emphasized that failure to act promptly could lead to irreparable harm to Bose’s reputation. The order specifically bars Kapoor and Vaidya from making any further defamatory postings against the former CEO.

This legal action stems from a broader conflict within Zilingo, a B2B fashion startup that has faced financial struggles since its inception in 2015. Bose’s departure from the company was contentious, marked by allegations of misconduct and underperformance. She subsequently filed a First Information Report (FIR) accusing Kapoor and Vaidya of sexual harassment and business irregularities. In response, the accused have dismissed these claims as retaliatory, asserting that Bose’s actions were prompted by her dismissal from the company.

The litigation highlights the complexities of corporate disputes and the broader implications for individuals and businesses. Beyond the legalities, it reflects the challenges faced by startups navigating internal strife amidst financial difficulties. Zilingo’s trajectory, from inception to liquidation, encapsulates the turbulent landscape of the tech industry and underscores the importance of legal protections for individuals like Bose seeking to safeguard their professional standing amidst controversy. The court’s intervention serves as a reminder of the gravity of reputational issues in the modern corporate environment, particularly amidst the complexities of startup dynamics and leadership disputes.

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Legally Speaking

Supreme Court In Patanjali Case: Concerned With All FMCG/Drugs Companies Affecting Lives Of Children And Elderly Through Misleading Ads



The Supreme Court in the case Indian Medical Association v. Union Of India observed and has clarified against Patanjali over publication of misleading advertisements that it was not dealing with Patanjali as a standalone entity; rather, the Court’s concern, in public interest, extended to all those Fast Moving Consumer Goods, FMCGs or drugs companies which take consumers of their products for a ride through misleading advertisements. The bench comprising of Justice Hima Kohli and Justice Ahsanuddin Amanullah in its order stated that, this court must clarify that we are not here to gun for a particular party, or a particular agency or a particular authority.

This being the absolute Public Interest Litigation, PIL since it is in the larger interest of the consumers, the public to know which way they are going and how and why they can be misled and how […] is acting to prevent that misuse. Thus, at the end, this is also as we said a part of the process of rule of law. If that is violated, then it affects […].

The court in the case observed that the implementation of laws regulating misleading ads in relation to medicines require deeper examination, as the products are used for babies, school going children and senior citizens based on the ads: Further, the court stated that this court is of the opinion that the issue which relates to implementation of the relevant provisions of the Drugs and Magic Remedies Act and the Rules, the Drugs and Cosmetic Act and the Rules, and the Consumers Act and the relevant Rules needs closer examination in the light of the grievances raised by the petitioner…not just limited to the respondents before this court but to all similarly situated or placed FMCGs who have […] misleading advertisements, and taking the public for a ride…affecting the health of babies, school going children and senior citizens who have been consuming products on the basis of the said misrepresentation.

The court while taking into account the misleading ads issued in electronic media impleaded the Ministry of Information and Broadcasting, Ministry of Information Technology, and Ministry of Consumer Affairs. Therefore, the same was being done with a view to examine the steps taken by these Ministries to prevent abuse of Drugs and Magic Remedies (Objectionable Advertisements) Act 1954 (and the Rules), the Drugs and Cosmetic Act 1940 (and Rules) and the Consumer Protection Act. Accordingly, the court listed the matter for further consideration on May 07, 2024.

Background Of The Case:

The Court raps Uttarakhand authorities The said court also came down heavily on the State of Uttarakhand for the failure of its licensing authorities to take legal action against Patanjali and its subsidiary Divya Pharmacy. The bench also asked why it should not think that the authorities were ‘hand in glove’ with Patanjali or Divya Pharmacy.

The court in its order stated that it was ‘appalled’ to note that apart from ‘pushing the file’, the State Licensing Authorities did nothing and were merely trying to ‘pass on the buck’ to ‘somehow delay the matter.’ The court stated that the State Licensing Authority is “equally complicit” due to its inaction against Divya Pharmacy despite having information about t heir advertisements violating the Drugs and Magic Remedies (Objectionable Advertisements) Act.

Further, the court stated that it was refraining from issuing contempt notices to other officers. Further, the court directed that all officers holding the post of Joint Director of the State Licensing Authority, Haridwar between 2018 till date shall also file affidavits explaining inaction on their part.

Background of the Case:

The contempt case was initiated wherein the petition is filed by the Indian Medical Association against Patanjali’s advertisements attacking allopathy and making claims about curing certain diseases. On the Supreme Court reprimand, the Patanjali on last November had assured that it would refrain from such advertisements. The court in the case noted that the misleading advertisements continued, thus, the Court had issued contempt notice to Patanjali and its MD in February.

The court in march considering that reply to the contempt notice was not filed, the personal appearance of the Patanjali MD as well as Baba Ramdev, who featured in the press conferences and advertisements published after the undertaking, was ordered by the said Court. Therefore, the Patanjali MD filed an affidavit wherein it is stated that the impugned advertisements were meant to contain only general statements but inadvertently included offending sentences. Further, the court stated that the advertisements were bona-fide and that Patanjali’s media personnel was not ‘cognizant’ of the November order (wherein the undertaking was given before the Supreme Court).

The affidavit filed also contained an averment that the Drugs and Magic Remedies Act was in an “archaic state” as it was enacted at a time when scientific evidence regarding Ayurvedic medicines was lacking. On the last date of hearing, both Baba Ramdev and MD Balkrishna were physically present in Court. The court expressed its reservations about MD Balkrishna’s affidavit, calling it “perfunctory” and “mere lip service”. The court gave last opportunity to the alleged contemnors for filing a proper affidavit.

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