Legal Updates (Dec 22 – Dec 27, 2025)
CASE UPDATES:
Disclosure of personal data is permissible for a “legitimate interest”. Thus, seeking information to curb IP infringement and cyber fraud constitutes a legitimate interest, mandating disclosure by Domain Name Registrars
The Delhi High Court in the case of COLGATE PALMOLIVE COMPANY vs NIXI [CS(COMM) 193/2019] dated December 24, 2025, reiterated that a domain name has all the characteristics of a trademark, and its registration can constitute infringement and passing off, and emphasised that Domain Name Registrars (DNRs) are not passive intermediaries. They actively profit by offering alternative infringing domain names, premium-priced domains based on well-known marks, and other value-added services. This active participation and profiteering from infringement make them complicit.
Finding that the infringing domain names were identical to the Plaintiff’s well-known and distinctive marks (‘COLGATE’, ‘COLPAL’) and were used to deceive the public, the Court granted a Dynamic+ interim injunction against the seven identified infringing domain names and any future infringing domains. This injunction restrained the use of the domain names, directed the DNRs to disclose registrant details and suspend the domains, along with a direction to the MeitY/DoT to issue blocking orders.
The Court noted that these cases were not one-off instances but part of a large-scale fraud, wherein a Special Investigation Team, IFSO, was constituted by the Delhi Police to investigate. Since a major challenge for law enforcement was the delay by banks in providing information sought for investigations, the Court directed the RBI and the Indian Banks’ Association (IBA) to formulate a Standard Operating Procedure (SOP) to ensure timely and efficient sharing of information with Law Enforcement Agencies (LEAs).
The Court observed that by using a well-known trademark, a whole network is built to deceive consumers. Infringers open bank accounts for a temporary period, collect money, and withdraw it before the trademark owner can take effective action. Even after a court grants an injunction against one domain, new infringing domains are registered, continuing the same fraudulent pattern.
Further, the Court noted that these are not isolated incidents but systemic issues requiring significant changes and measures from various stakeholders, including DNRs, Domain Name Registries, ICANN, banks, telecom providers, government ministries (MeiTY, DoT), and law enforcement agencies. The Court also noted that the “privacy protect” feature, often offered as a default bundled service by DNRs, was a major impediment to identifying infringers. This practice required IP owners to approach a court in almost every case, which is impractical given the sheer volume of infringing registrations.
As the plaintiffs faced difficulties in enforcing court orders against DNRs, especially those without a physical presence in India, the Court directed all DNRs offering services in India to appoint Grievance Officers in compliance with the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. For non-compliant DNRs, the Court directed MeitY/DoT to take appropriate action, including blocking their services in India, which prompted several DNRs to comply.
The Court analysed the agreements governing the domain name system (ICANN-Registry, ICANN-DNR, etc.) and found that DNRs have significant obligations, including verifying registrant data, investigating inaccuracies, and acting against abuse. The NIXI Agreement for ‘.in’ domains is even stricter, prohibiting anonymous/proxy registrations and mandating e-KYC. The Bench, therefore, pointed out that DNRs are completely failing in their obligation to verify the accuracy of details provided by registrants, as evidenced by the widespread use of fake and fictitious information.
The Court held that while privacy is important, it cannot be a blanket cover for illegal activities. Under both GDPR and the Indian DPDP Act, disclosure of personal data is permissible for a “legitimate interest”. Thus, the Court affirmed that seeking information to curb IP infringement and cyber fraud constitutes a legitimate interest, mandating disclosure by DNRs.
The Court pointed out that DNRs who fail to observe due diligence and actively participate in or profit from infringement lose their “safe harbour” protection under Section 79 of the IT Act. Their conduct crosses the line from being an intermediary to an active participant in the unlawful act. The Court also rejected the DNRs’ argument that IP infringement does not affect “public order.” The large-scale, systematic fraud that dupes the public and erodes trust can disturb the “even tempo of the life of the community” and thus impact public order.
Lastly, the Court endorsed the use of “Dynamic Injunctions” to tackle mirror/redirect websites without requiring the plaintiff to file a new suit for every new iteration. It also introduced the concept of a “Dynamic+ Injunction” to protect future works of a copyright owner as soon as they are created, to prevent immediate piracy on rogue websites. Further, in cases of repeated non-compliance, the Court directed the authorities to block the services of the non-compliant DNR itself under Section 69A of the IT Act.
Where a director is an admitted signatory to the dishonoured cheques and the genuineness or effect of his resignation is disputed, the proceedings cannot be interdicted at the threshold under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023
The Delhi High Court in the case of Dinesh Kumar Pandey vs Singh Finlease [CRL.M.C. 8175/2025] dated December 25, 2025, has refused to quash multiple criminal complaints filed under Sections 138 and 141 of the Negotiable Instruments Act, 1881, against Dinesh Kumar Pandey, a former director and signatory of cheques issued by borrower companies, holding that his plea of resignation prior to dishonour raises disputed questions of fact which cannot be adjudicated at the quashing stage.
The Court exercising jurisdiction under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, held that the complaints disclosed the basic ingredients of offences under the NI Act and that the petitioner had failed to place unimpeachable material on record to warrant interference at the threshold.
The complaints were instituted by M/s Singh Finlease Pvt. Ltd., a non-banking financial company, in relation to loan facilities extended to two private limited companies. The cheques issued towards repayment were dishonoured in March 2024 due to insufficiency of funds, following which statutory notices were issued and criminal proceedings initiated. Petitioner, who had been a director at the time of sanction of loans and execution of documents and was also a signatory to the cheques, was arrayed as an accused. The petitioner contended that he had resigned from the boards of the borrower companies prior to the dishonour of the cheques and could not be held vicariously liable under Section 141 of the NI Act. He relied on Form DIR-12 filings and extracts from the Ministry of Corporate Affairs portal to claim that his resignations were duly recorded and effective before the offence was complete.
The Court held that for the purpose of Section 141, liability is not confined to the date of dishonour alone, as the offence under Section 138 is a composite one involving several stages. The Court noted that the petitioner’s resignations closely followed the onset of defaults, and their timing and bona fides were disputed by the complainant. It further observed that the petitioner was an admitted signatory to the cheques and had actively participated in negotiating the loan facilities and executing related documentation.
The Court reiterated that while quashing may be permissible where unimpeachable and incontrovertible material clearly establishes a lack of responsibility at the relevant time, the present case did not fall within that narrow exception. Holding that the statutory presumptions under Sections 118 and 139 of the NI Act operated in favour of the complainant, the Court dismissed the petitions. Accordingly, the High Court declined to interfere with the summoning orders and directed that the criminal proceedings against the petitioner shall continue in accordance with law, and the petitioner’s defence would have to be tested at trial.
Dispute between co-legal heirs over the mutation of ancestral agricultural land is essentially civil in nature and lacks the foundational ingredients required to attract offences under the Indian Penal Code
The Delhi High Court in the case of Ved Prakash vs State (NCT of Delhi) [CRL.A. 45/2010] dated December 12, 2025, has quashed criminal proceedings for cheating and forgery initiated between co-legal heirs over the mutation of ancestral agricultural land, holding that the dispute was essentially civil in nature and lacked the foundational ingredients required to attract offences under the Indian Penal Code. The Court, exercising inherent jurisdiction under Section 482 of the Code of Criminal Procedure, held that “allowing the proceedings to continue would not vindicate the criminal law; it would merely prolong a family succession dispute in the garb of serious penal charges.”
The case arose from a private complaint alleging that the petitioners had forged the complainant’s signature on an affidavit and mutation application filed before the Tehsildar, Najafgarh, to secure mutation of ancestral land in their favour. The complainant alleged that the documents were filed without his consent and apprehended that they could be misused to deprive him of his share in the property. Notably, the mutation ultimately recorded the names of all legal heirs, including the complainant. Acting on the complaint, the Metropolitan Magistrate took cognisance and summoned the petitioners to face trial for offences under Sections 419, 420, 467, 468 and 471 read with Section 34 of the IPC.
The High Court noted that even if the allegations of forged signatures were assumed to be correct, the essential ingredients of cheating for cheating and forgery were not made out, and therefore, held that “there is no deception-linked deprivation or loss of property, no legally cognisable interference with a valuable security, and no identified maker of a false document who can be fastened with the requisite mens rea.”
The Court also took note of the inconclusive forensic report, the complainant’s son having recorded a no-objection before the Sub-Divisional Magistrate during mutation proceedings, and the suppression of this material fact while pursuing criminal action. It held that continuation of the prosecution, in the absence of core statutory ingredients of the alleged offences, would amount to an abuse of the process of law. Accordingly, the High Court quashed the complaint and all consequential proceedings against the petitioners, while clarifying that the parties were free to pursue their civil or revenue remedies in accordance with law.
A person who only mortgages his property as collateral security cannot be treated as a financial creditor of the borrower if he has not advanced any money; Insolvency law can be invoked only if there is a financial debt
The Hyderabad National Company Law Tribunal (NCLT) in the case of P.L. Srinivas Reddy vs Techtrans Constructions India Private Limited [Company Petition IB/186/7/HDB/2024] dated December 19, 2025, has held that the insolvency law can be invoked only if there is a financial debt, which necessarily involves disbursal of money against consideration for time value. Accordingly, a person who only mortgages his property as collateral security cannot be treated as a financial creditor of the borrower if he has not advanced any money.
The ruling came in reference to the facts that there is no disbursal of money by the applicant to the respondent, which is an essential requirement for constituting a financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC). The Applicant can be said to be a security provider having a security interest, but not a Financial Creditor within the meaning of Sections 5(7) and 5(8) of the IBC.
The Tribunal was dealing with an application under Section 7 of the IBC filed by the Applicant, who had mortgaged his properties to secure credit facilities availed by the Respondent from State Bank of India (SBI). Aggrieved by the actions of SBI in initiating the SARFAESI proceedings calling upon him to discharge the outstanding liability, the Applicant approached the Debt Recovery Tribunal (DRT). The Applicant contended that, by depositing an amount of Rs. 1.5 crore pursuant to the order of DRT, he stepped into the shoes of the Financial Creditor by application of the principle of subrogation.
The Tribunal observed that the credit facilities in question were sanctioned by the SBI in favour of the Respondent, and not in favour of the Applicant, and it was limited to that of a collateral security provider. It held that the deposit of title deeds, in the absence of disbursal or a covenant creating a primary debt obligation, does not by itself create a financial debt. The Tribunal also reiterated that disbursal of money against time value is an indispensable element of a financial debt, and that even non-loan transactions fall within the ambit of financial debt only if they have the commercial effect of borrowing.
The NCLT further noted that the sequence of events unmistakably demonstrated that the Applicant has approached one forum after another, not for the resolution of insolvency but with the object of delaying the recovery process and protecting the mortgaged property, which was offered by him as security for the loans availed by the Respondent from SBI. Even the DRT proceedings were confined to interim protection, and not annulment of the security. Thus, the NCLT concluded that the Applicant was neither a financial creditor nor did the amount claimed constitute a financial debt under the IBC.
REGULATORY UPDATES:
Ease of doing investment – Review of simplification of procedure and standardisation of formats of documents for issuance of duplicate certificates
The Securities and Exchange Board of India (SEBI) issued a Circular No. HO/38/13/11(3)2025-MIRSD-POD/I/1102/2025 dated 24 December 2025 to further simplify and standardise the procedure for issuance of duplicate securities certificates, with the objective of easing investments and protecting investor rights.
Revising its earlier framework, SEBI enhanced the threshold for simplified documentation from ₹5 lakh to ₹10 lakh, thereby expanding the scope of cases eligible for a streamlined process. It introduced a standardised Affidavit-cum-Indemnity format, rationalised documentation requirements for securities valued above ₹10 lakh, and dispensed with notarisation for cases involving securities up to ₹10,000, where only an undertaking on plain paper is required.
For higher-value cases exceeding ₹10 lakh, additional safeguards such as FIR or equivalent legal documents and newspaper publication requirements were retained. The circular applies with immediate effect, including to pending applications, and mandates that duplicate securities be issued only in dematerialised form, promoting dematerialisation and improving efficiency.
Ease of investments and ease of doing business measures – Enhancing the ‘Facility for Basic Services Demat Account (BSDA)’
The Securities and Exchange Board of India (SEBI), through its Circular No. HO/38/11/11(3)2025-MIRSD-POD/I/1101/2025 dated 24 December 2025, introduced further reforms to enhance the Basic Services Demat Account (BSDA) framework to ease investments for investors and simplify compliance for Depository Participants (DPs).
The SEBI decided to exclude Zero Coupon Zero Principal (ZCZP) bonds and delisted securities from the valuation threshold used to determine BSDA eligibility, thereby preventing such instruments from disqualifying eligible investors.
The Circular also clarifies valuation norms for illiquid and unlisted securities and mandates that DPs reassess BSDA eligibility quarterly. Importantly, demat accounts eligible for BSDA must be opened or converted into BSDA by default unless investors provide explicit, authenticated consent to maintain a regular demat account.
These changes, effective from 31 March 2026, replace specific provisions of the earlier June 2024 circular and require depositories to amend bylaws, update systems, and complete implementation within prescribed timelines to strengthen investor protection and market efficiency.
