Legal Updates (March 09 – March 14, 2026)
Where an ex-parte injunction is obtained by deliberately suppressing material facts, the court is empowered under Order 39 Rule 4 of the CPC to vacate the injunction on the ground of suppression alone, as a penalty and to deter such abuse of the court process, without delving into the merits of the case
The Bombay High Court in the case of Elder Prroject Limited vs Elder Neutraciticals Private Limited [Interim Application (L) No. 35091 of 2025] dated March 09, 2026, has held that a party who is itself an infringer of a third party’s registered trademark cannot maintain a suit for infringement or passing off against another party. Referring to the decision of Capital Plastic Industries vs. Kappv Plastic Industries [1998 (8) PTC 182 (Del)], the Court reiterated that a pirator cannot sue another pirator for infringement.
The Court noted that the Plaintiff’s act of applying for and securing ex-parte ad-interim injunction by deliberately withholding the relevant material from Court has undoubtedly led to immense inconvenience and losses for the Defendant. The High Court clarified that a party seeking an equitable relief like an injunction, especially an ex-parte one, must approach the court with clean hands and is under a high duty to make a full, fair, and accurate disclosure of all material facts. A fact is material if it has the potential to significantly influence the court’s decision-making process. Thus, where an ex-parte injunction is obtained by deliberately suppressing material facts, the court is empowered under Order 39 Rule 4 of the CPC to vacate the injunction on the ground of suppression alone, as a penalty and to deter such abuse of the court process, without delving into the merits of the case.
The Court identified four major areas of suppression by the Plaintiff, i.e., (i) the prior registration and use of the ‘ELDER’ mark by EPL since 1983; (ii) the familial relationship between the directors of the Plaintiff and Defendant and their past association with EPL; (iii) four adverse orders from the Delhi High Court where the Plaintiff’s claims over the ‘ELDER’ mark were repeatedly rejected; and (iv) proceedings initiated by the Official Liquidator of EPL against the Plaintiff for unauthorized use of the mark. The Court observed that the Plaintiff approached the court with a plain story of being the originator of the mark since 1992, completely concealing that EPL was the originator and registered owner of the ‘ELDER’ mark and that the Plaintiff was merely a contract manufacturer for EPL.
The Court also found the suppression of the Delhi High Court orders to be ‘more disturbing’, as in those proceedings, the Plaintiff’s director had admitted on oath that the Plaintiff claimed no right in the trademark ‘ELDER’ and was only a job worker for EPL. In its previous order, the Delhi High Court had also held that the Plaintiff was an infringer of EPL’s mark and could not claim any shared or independent reputation.
Further, the Court observed that the Plaintiff itself appears to be an infringer of EPL’s trademark, having taken advantage of EPL’s liquidation to secure a registration for a similar mark. The Bench held that it can go behind a trademark registration at the interim stage if there are doubts about its validity, and in this case, there was substantial material creating such doubts.
Since the Plaintiff’s claim of prior use since 1992-93 was found to be prima facie fallacious in light of its own admissions that it was a contract manufacturer for EPL until March 2016, and in contrast, the Defendant had established prima facie use of its mark since 2015, the Court concluded that the Plaintiff failed to satisfy the classic trinity test for passing off, and that the balance of convenience was tilted in favour of the Defendant.
An attempt to secure a decree behind the back of the true owner is a circumstance that cannot be lightly brushed aside; Passing of an ex-parte decree followed by the expeditious mutation of revenue entries, casts a shadow over the bona fides of the proceedings
The Supreme Court in the case of Govind Singh vs Union of India [Civil Appeal Nos. 5168-5169 of 2011] dated March 09, 2026, has held that parties to an appeal are not entitled to produce additional evidence as a matter of right under Order XLI Rule 27 of the CPC. The appellate court’s discretion to permit additional evidence is to be used sparingly and is limited to cases where it is necessary to pronounce a satisfactory judgment, not to allow a litigant to fill lacunae or cure fundamental defects in their case.
The Apex Court held that an attempt to secure a decree behind the back of the true owner is a circumstance that cannot be lightly brushed aside, and the proximity of events, namely, the passing of an ex-parte decree followed by the expeditious mutation of revenue entries in favour of the appellant-plaintiffs, casts a shadow over the bona fides of the proceedings.
Thus, when the appellant-plaintiffs themselves asserted title on the basis of long and continuous possession through their predecessors, the subsequent attempt to introduce additional evidence at the appellate stage assumes little legal significance, added the Court.
The Court also explained that an application to adduce additional evidence at the appellate stage cannot be used to fortify a claim that is fundamentally flawed from its inception, such as one based on a prior decree that is not binding on the opposing party. If the appellate court can render a satisfactory judgment on the basis of the evidence already on record, the application for additional evidence has no purpose and should be rejected.
The Apex Court noted that while the High Court did not decide the application for additional evidence in its main appeal judgment, it did subsequently consider and reject the application as being without merit while dismissing the review petition. The initial omission was thus addressed in the review proceedings.
On the principles of Order XLI Rule 27 CPC, the Court reiterated that parties to an appeal are not entitled to produce additional evidence as a matter of right. Such evidence can be permitted only in three specific situations: (i) the trial court wrongly refused to admit evidence; (ii) the party proves that despite due diligence, the evidence was not within its knowledge or could not be produced at trial; or (iii) the appellate court itself requires the evidence to pronounce judgment or for any other substantial cause.
The Court observed that the appellant-plaintiffs’ claim of ownership was primarily based on a decree from an earlier suit instituted by their predecessors. However, the respondent-defendants were not parties to that earlier suit, rendering the decree non-est and not binding on them. Consequently, the onus shifted to the appellant-plaintiffs to independently establish their title in the present suit, which they failed to do by not producing any cogent title deeds at the trial stage.
Further, the Court held that the additional evidence sought to be produced, i.e., entries in the General Land Register showing the land as ‘private’, was impermissible at the appellate stage to cure inherent defects in the case. The Court stated that even if this evidence were accepted, it would not impact the High Court’s findings, as mere recording of land as ‘private’ does not establish the appellants’ ownership claim, especially against the respondents’ title traced to a 1953 government decision and a 1954 Gazette Notification.
Principle of business efficacy cannot be invoked by the Arbitral Tribunal to rewrite the express terms of a contract or to imply a term that contradicts the agreed-upon structure, such as converting a deliberately chosen fixed charge into a variable one
The Delhi High Court in the case of JSW Ispat Steel Limited vs Gas Authority of India [FAO(OS)(COMM) 4/2024] dated March 09, 2026, has ruled that the principle of business efficacy cannot be invoked to rewrite the express terms of a contract or to imply a term that contradicts the agreed-upon structure, such as converting a deliberately chosen fixed charge into a variable one. An interpretation that does so is not a ‘plausible view’ but an ‘impossible one’ that amounts to perversity and is a ground for setting aside the award.
The Court clarified that an arbitral award is patently illegal and liable to be set aside if the Arbitral Tribunal fails to consider a vital contractual clause imposing a time limit for disputes and a waiver of rights, that goes to the root of the dispute, affecting jurisdiction, limitation, and the maintainability of the claims.
The Court also asserted that an arbitral award must contain intelligible reasoning that discloses the evidentiary path to its conclusions, especially on contested issues like limitation. Merely stating that one party’s contention is ‘correct’ without addressing the opponent’s arguments does not meet the standard of a reasoned award under Section 31(3) of the Arbitration and Conciliation Act, 1996, and can be a ground for setting aside the award for patent illegality.
Hence, an award that contains irreconcilable internal contradictions, such as finding that an obligation to pay is unaffected by an event but simultaneously ordering a refund based on that same event, is perverse, flawed, and legally untenable, added the Court.
The Court agreed with the Single Judge that the tribunal’s failure to consider the amended Article 12.03 was a fatal flaw. It held that this clause was a vital contractual stipulation going to the root of the matter, as it directly affected the maintainability of the claim, limitation, and the tribunal’s jurisdiction.
The Court also concurred with the Single Judge that the tribunal’s reasoning on limitation was inadequate and legally unsound, as the award failed to provide any intelligible reasoning for rejecting GAIL’s contentions on limitation and merely stated that JSW’s argument was correct.
The Court however, disagreed with the Single Judge’s finding that the tribunal’s view on merits was plausible, and held that the tribunal’s application of the ‘business efficacy’ principle was a misapplication, and the contract was deliberately amended to a fixed charge, and implying a term to make it variable amounted to rewriting the contract.
Further, the Court found the award to be internally contradictory, as the Tribunal first held that the force majeure event did not affect the obligation to pay fixed charges, but then directed a proportionate reduction of those very charges. This inconsistency was held to be a flaw that rendered the award untenable.
Section 34 of the Trade Marks Act, 1999, protects the vested rights of a prior user. Merely because fans and water purifiers fall under the same class (Class 11), they are not automatically considered cognate goods, as classification is for registration purposes and not determinative of similarity
The Delhi High Court in the case of Kent RO Systems vs Kent Cables [FAO(OS)(COMM) 141/2023] dated March 11, 2026, has clarified that an appellate court will not interfere with the exercise of discretion by a Single Judge in granting or refusing an interlocutory injunction unless the discretion is shown to have been exercised arbitrarily, capriciously, perversely, or by ignoring settled principles of law. The High Court ruled that the Kent RO Systems (appellants) were rightly denied an interim injunction against the Kent Cables (respondents) and were correctly injuncted from using the mark ‘KENT’ for fans.
The ruling was premised on the grounds that the respondents were the prior users of the mark for fans, a right protected under Section 34 of the Trade Marks Act, 1999, and the appellants, despite being aware of the respondents’ use of the mark for fans for over a decade, delayed taking action, thereby acquiescing to such use and disentitling themselves to the discretionary relief of injunction.
As the appellants had not yet launched their fans, while the respondents had an established business, the balance of convenience lay in favour of the respondents, who were the prima facie proprietors of the mark for that specific product, added the Court.
The Court observed that while Kent RO adopted the mark ‘KENT’ for oil meters in 1988, Kent Cables had adopted the same mark for wires and cables in 1986. Therefore, Kent Cables was the first adopter of the mark, albeit for different products, and their adoption could not be considered mala fide.
The Court analysed Kent RO’s claim of infringement under Section 29(2)(a) of the Trade Marks Act, 1999, and noted that Kent RO’s trademark registrations in Class 11 were specifically for ‘water purifiers’ and related goods, not for ‘fans’. It held that merely because fans and water purifiers fall under the same class (Class 11), they are not automatically considered cognate goods, as classification is for registration purposes and not determinative of similarity.
The Court considered that the expansion by Kent Cables from electric wires and cables into fans could be seen as a natural progression of their business. Since Kent Cables started using the mark for fans in 2009, when Kent RO was admittedly not in the fan business, their use could not be said to be taking unfair advantage of Kent RO’s trademark.
Further, the Court found that Kent RO was aware of Kent Cables’ use of the mark for fans since at least 2011, when it issued a cease-and-desist notice, and had opposed their trademark application in 2007. By not taking legal action for over a decade and allowing Kent Cables to grow its business, Kent RO had acquiesced to the use of the mark by Kent Cables. This delay and acquiescence disentitled Kent RO from the discretionary relief of an interim injunction.
The Court also observed that Section 34 of the Trade Marks Act, 1999, protects the vested rights of a prior user. The prior use of the mark ‘KENT’ for fans by Kent Cables was found to be sufficient to disentitle Kent RO from obtaining an injunctive relief against them at the interim stage.
As far as propriety of injunction against Kent RO is concerned, the Court upheld the injunction restraining Kent RO from launching fans. It reasoned that Kent RO had not used the mark for fans until the suit was filed. Ordinarily, there can only be one proprietor of a mark for a specific product, and prima facie, for fans, that proprietor is Kent Cables.
The losses suffered by a bank due to fraudulent ATM withdrawals using debit cards issued by other banks are not covered under a Banker’s Indemnity Insurance Policy when the policy expressly excludes losses arising from the use of ATMs
While setting aside the Trial Court decree that had directed the insurance company (New India Assurance – Appellant) to indemnify the bank (Federal bank) for losses caused by ATM fraud, the Kerala High Court in the case of New India Assurance vs Federal bank [RFA NO. 202 OF 2017] dated March 02, 2026, has ruled that what is covered under the insurance policy is, a theft occurring in the premises of the ATM counter and malicious damage of the ATM; it does not extend to a fraudulent use of the ATM.
The High Court explained that under insurance law, repudiation of a claim is the rejection of claim by the insurer, which could be on various grounds including, lack of coverage under the policy, breach of policy conditions, exclusion clauses. An “excess”, which is the proportion of the loss that the insured has to bear, could not be strictly said to be a repudiation, under which, the very liability is disputed. It is essentially a limitation on the quantum payable and not a denial of the very liability.
The Court clarified that in a case where the excess clause is applicable, there is no repudiation of the liability as such, it only deals with the mode of computation of the quantum payable by the insurance company, and such a question would arise only when the insurance company is found liable. Therefore, generally, the Court pointed out that it may not be possible to say that the excess clause operates as repudiation of liability and hence, such ground ought to have been taken in the repudiation letter issued by the insurance company.
However, in the case at hand, the Court found that the insurance company relies upon the excess clause to contend that no amounts are payable to the plaintiff under the policy, the loss being within the limit of excess. Such a contention essentially amounts to denial of the claim in its entirety and practically amounts to repudiation. Such contention was available to the insurance company even at the time when they issued the repudiation letter, however, not taken.
The Court observed that the instances in question are a form of ‘theft’ or ‘malicious damage’ under clause ‘A’ of the policy. But the exception clause specifically excludes losses arising out of the use of ATMs. Therefore, losses occurring due to any direct or indirect use of ATMs are excluded under the clause.
Also, the Court found that the incidents in question, upon which damage resulted to the respondent have arisen out of the fraudulent use of the ATMs, which is covered by the exclusion clause. The fact that fraudulent use of the plaintiff Bank’s debit cards are specifically included in the Add-on cover taken under the additional/extended policy, implies that, there is no coverage with regard to fraudulent use of other debit cards.
The Court noted that under the original policy, losses arising out of any use of ATMs, whether direct or indirect have been excluded. However, in the additional policy, protection is given to the debit card holders of the respondent bank alone, against fraudulent transactions. This is specifically included as an add-on cover under the head “ADD ON COVERS”.
‘Deposit’ under Section 2(4) of the Banning of Unregulated Deposit Schemes Act, 2019, is not confined to transactions involving physical currency but extends to arrangements clothed as sales of commodities like digital gold; Absence of express regulation by SEBI/ RBI over purchase or storage of digital gold does not confer it sanctuary
The Karnataka High Court in the case of Nishchay Babu Arkalgud vs State of Karnataka [Writ Petition No.5968 of 2026 (GM – RES)] dated March 04, 2026, has held that the definition of ‘deposit’ under Section 2(4) of the Banning of Unregulated Deposit Schemes Act, 2019, is to be interpreted expansively and purposively. It is not confined to transactions involving physical currency but extends to arrangements clothed as sales of commodities like digital gold, where the intrinsic character and economic substance of the transaction resemble a deposit scheme designed to circumvent regulatory oversight.
The High Court said that its inherent power to quash an FIR under Section 528 of the BNSS should not be exercised when the case involves serious and triable allegations, sharply contested questions of fact, and requires a thorough investigation. Essentially, an FIR is only a trigger for investigation, and the court should not stifle a legitimate inquiry by delving into the merits of the evidence at a preliminary stage.
The Court observed that rejected the petitioners’ primary contention that their business involves the sale of gold and does not constitute a ‘deposit’ under Section 2(4) of the Banning of Unregulated Deposit Schemes Act, 2019 (BUDS Act), noting that the definition of the term ‘deposit’ is expansive. It added that the argument to construe the statute narrowly to exclude digital or gold-backed arrangements must be repelled.
Further, the Court emphasized that the law is concerned with the ‘intrinsic character and its economic substance of a transaction, not the ‘cosmetic garb’ it is clothed in. Further, in the modern landscape of financial frauds, deception assumes subtle forms like commodities and digital assets to circumvent regulatory vigilance.
The Court also addressed the petitioners’ submission that the transactions are in gold, not currency or cash, and opined that confining the expression ‘money’ to only physical currency would be a pedantic and myopic construction. Such a narrow interpretation would render the BUDS Act, a remedial and protective legislation, ineffective against evolving financial stratagems and would defeat the very purpose for which it was enacted.
Further, the Court observed that it must refrain from appreciating disputed facts or evaluating the probative worth of material at the investigation stage. It noted that an FIR is not an encyclopaedia of all facts and that the police must be permitted to complete the investigation, especially when the allegations disclose serious and triable issues.
Also, the Court noted that serious allegations have surfaced, including assertions that physical gold could not be traced when demanded by customers, and that searches allegedly yielded gold with the Company’s branding at the premises of its office bearers. Given these sharply contested questions of fact, the Court found that it could not lend its protective hands to the petitioners to obliterate the crime at its incipient stage. It concluded that an investigation is imperative as investors have already raised concerns about not receiving their gold or money.
Foreign award requires a positive affirmation and validation by an Indian court to be treated as a decree, unlike a domestic award which is statutorily treated as a decree upon the expiry of the challenge period or the rejection of a challenge
The Bombay High Court in the case of Osterreichischer Lloyd Seereederei (Cyprus) Ltd vs Victore Ships Pvt Ltd [Commercial Arbitration Petition No. 398 of 2025] dated March 10, 2026, has clarified that the jurisdiction of a court to grant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, is not ousted by the mere filing of a petition for recognition and enforcement of a foreign award under Part II of the 1996 Act. The remedy under Section 9 remains available at least until the stage where the Part II Court is satisfied that the foreign award is enforceable and deems it to be a decree of that Court under Section 49 of the 1996 Act.
The High Court ruled that a foreign award requires a positive affirmation and validation by an Indian court to be treated as a decree, unlike a domestic award which is statutorily treated as a decree upon the expiry of the challenge period or the rejection of a challenge. The Court explained that the temporal limitation contained in Section 9(1), i.e., “but before it is enforced in accordance with section 36”, is specific to the enforcement of domestic awards under Section 36 of the 1996 Act, and cannot be extrapolated to limit the applicability of Section 9 in relation to foreign awards, for which Parliament has not provided a similar restriction.
The Court undertook a detailed analysis comparing the enforcement mechanism for domestic awards under Part I with that for foreign awards under Part II, and noted that the proviso to Section 2(2) of the 1996 Act explicitly makes Section 9 applicable to international commercial arbitrations where the award is enforceable under Part II. The limitation in Section 9(1), i.e., “but before it is enforced in accordance with section 36”, is specifically linked to Section 36, which governs domestic awards.
The Court also draw a critical distinction between how the two types of awards become decrees, and explained that a domestic award automatically becomes a decree for enforcement under Section 36 once the time to challenge it under Section 34 expires, or a challenge is rejected. However, a foreign award becomes a decree only when the Part II Court, after being satisfied that it is enforceable, makes a positive declaration to that effect under Section 49. Until this positive affirmation, the foreign award does not have the status of a decree.
The Court observed that when Parliament amended the 1996 Act in 2015 to extend Section 9 to foreign awards, it did not introduce a corresponding time limit linked to Part II proceedings. This was deemed a conscious legislative choice, recognizing the difference in enforcement mechanisms. Therefore, the court cannot judicially infer a time limit that the legislature did not provide.
Further, the Court clarified that a petition filed under Part II is ‘first and foremost a petition for recognition’, and it only ‘translates into execution proceedings’ after the court confers the status of a decree upon the foreign award under Section 49. Until that point, the award is not being ‘enforced’ in a manner that would bar a Section 9 application.
Lastly, the Court stated that the possibility of concurrent jurisdiction between the Section 9 Court and the Part II Court was acknowledged but not considered a bar. The Court said that this is a legislative scheme, and in the absence of a statutory provision to the contrary (similar to Section 9(3) which regulates the overlap with Section 17), the court should not refuse to exercise jurisdiction.
Section 66 of the Companies Act, 2013, does not statutorily require a valuation report to be prepared or circulated to shareholders for a capital reduction scheme. Therefore, the non-attachment of such a report to the general meeting notice does not vitiate the process, provided the price offered is disclosed
The Supreme Court in the case of Pannalal Bhansali vs Bharti Telecom Limited [Civil Appeal No. 7655 of 2025] dated March 10, 2026, has clarified that the reduction of share capital is a domestic affair of a company, to be decided by a special resolution of the majority. In short, the court’s or Tribunal’s role is not to substitute its own business wisdom but to ensure the scheme is fair, just, and not egregiously wrong or prejudicial to any class of shareholders.
The Apex Court ruled that Section 66 of the Companies Act, 2013, does not statutorily require a valuation report to be prepared or circulated to shareholders for a capital reduction scheme. Therefore, the non-attachment of such a report to the general meeting notice does not vitiate the process, provided the price offered is disclosed and the underlying documents are made available for inspection.
The Court also held that the application of a Discount for Lack of Marketability (DLOM) is a valid and permissible valuation methodology under Indian Accounting Standards for determining the fair value of unlisted, illiquid shares in the context of a capital reduction, particularly when it is not a case of a court-ordered buyout due to oppression.
For a court to find a capital reduction scheme prejudicial, the objector must demonstrate more than just receiving a price lower than desired. It must be shown that the offer is ‘inherently unjust’ or that the valuation is so off-track that it offends the judicial conscience. The approval of the scheme by a majority of the affected shareholders is a strong indicator of its fairness, added the Court.
The Court further held that Section 66 of the Companies Act, 2013, unlike other sections such as Section 230 (compromise/arrangement) or Section 232 (merger), does not statutorily mandate a valuation report for a reduction of share capital. Therefore, not annexing the report to the notice did not constitute a misleading disclosure or make the notice ‘tricky’. The company had disclosed the final price and made the reports available for inspection for over a month, which was deemed sufficient.
Regarding the valuer’s independence, the Court stated that bias must be demonstrably real and present and cannot be assumed merely because the valuer was an affiliate of the internal auditor. This was further supported by the fact that a separate fairness report was obtained and two other independent agencies later affirmed the valuation.
Mere dominant position in the relevant market and seat reservation, differential data sharing, and varied revenue sharing from convenience fees, cannot be termed as unfair or discriminatory, and violative to the provisions of Sections 4(2)(a)(i), 4(2)(b)(i), and 4(2)(c) of the Competition Act, 2002, if the entities being compared were not ‘similarly-situated’ and/or the practices were supported by legitimate business justifications
The Competition Commission of India (CCI) in the case of Showtyme vs Big Tree Entertainment [Case No. 46 of 2021] dated March 12, 2026, has held that although Big Tree Entertainment Pvt Ltd. (BookMyShow) enjoys a dominant position in the relevant market of ‘market for online intermediation services for booking of movie tickets in India’, no case of contravention of the provisions of Sections 4(2)(a)(i), 4(2)(b)(i), and 4(2)(c) of the Competition Act, 2002, is made out against it.
The CCI noted that the alleged abusive practices, including seat reservation, differential data sharing, and varied revenue sharing from convenience fees, were not found to be unfair or discriminatory, primarily because the entities being compared (single-screen cinemas and multiplexes) were not considered ‘similarly-situated’ and/or the practices were supported by legitimate business justifications.
Further, the exclusive agreements, coupled with lock-in periods and security deposits, were not found to cause a denial of market access. The Commission concluded that there was no evidence of substantial market foreclosure, the practices were supported by legitimate business reasons (such as recovering financial advances), and the market remained contestable for new and existing competitors.
The Commission concurred with the Director General’s (DG) finding that the relevant market is the ‘market for online intermediation services for booking of movie tickets in India’. It observed that booking tickets through online platforms is not substitutable with purchasing them at a cinema’s box office, given the clear distinctions in service characteristics, price, and consumer preferences.
The geographic market was determined to be the whole of ‘India’ due to the pan-India presence of BMS and the homogenous nature of its services across the nation, added the Bench.
The Competition Commission also agreed with the DG’s conclusion that BMS holds a dominant position in the delineated relevant market. This was based on a cumulative assessment of factors under Section 19(4) of the 2002 Act, including BMS’s substantial and sustained market share, large scale of operations, significant economic strength, and the presence of network effects. However, the Commission also noted that this dominance is ‘tempered’ by the dynamic nature of the market, the presence of other competitors, and the reciprocal commercial dependence between BMS and cinema operators.
The Commission disagreed with the DG’s finding that reserving seats was an unfair condition. It accepted BMS’s justification that in Tier-2 and Tier-3 cities where cinemas lack real-time integration technology, reserving a portion of inventory is necessary to prevent overlapping bookings between the online platform and the box office. The Commission noted that un-booked tickets from the reserved quota are released for sale at the box office before the show begins.
Further, the Commission did not find the varied revenue sharing arrangements to be discriminatory or in contravention of Section 4(2)(a)(i). It reiterated that it cannot act as a price regulator. Similar to the data ownership issue, the Commission observed that single-screen cinemas and multiplexes are not on the same footing and do not form a homogenous class. It also noted that the data showed instances of single-screen cinemas receiving a high share of the convenience fee and some multiplexes receiving a lower share, which contradicted a simple discriminatory pattern.
Lastly, the Commission concluded that the exclusive and restrictive agreements did not result in a denial of market access in violation of Section 4(2)(c). It found that without clarity on the exact number of exclusive screens, it was not feasible to establish substantial market foreclosure. The Commission accepted the operational justification for lock-in periods, which are calibrated to the quantum of security deposits advanced to cinemas, allowing BMS a reasonable opportunity to recoup its investment. It observed no evidence that these agreements created entry barriers, highlighting the continued presence of competitors like Paytm and Justickets, and the fact that cinemas with expiring agreements would always be available for new entrants to partner with.
‘Reasons to believe’ required for an arrest under Section 19(1) of the PMLA can be founded upon tangible material gathered during an investigation, such as the seizure of disproportionate assets and incriminating statements. The sufficiency or adequacy of such material is not to be scrutinized in-depth by a court at the initial stage of the investigation
The Bombay High Court in the case of Y. Shiva Reddy vs Directorate of Enforcement [Criminal Writ Petition No. 5843 of 2025] dated March 09, 2026, has clarified that the power of judicial review in a writ petition challenging an arrest under the Prevention of Money Laundering Act, 2002 (PMLA) must be exercised with caution, and a court will not interfere unless there is manifest arbitrariness or gross non-compliance with the statutory safeguards provided under Section 19 of the PMLA.
The Court explained that the offence of money laundering under Section 3 of the PMLA is an independent offence concerning the process or activity connected with the proceeds of crime. It is not a prerequisite for a person to be arraigned as an accused in the predicate scheduled offence to be prosecuted under the PMLA.
Accordingly, the High Court held that the ‘reasons to believe’ required for an arrest under Section 19(1) of the PMLA can be founded upon tangible material gathered during an investigation, such as the seizure of disproportionate assets and incriminating statements. The sufficiency or adequacy of such material is not to be scrutinized in-depth by a court at the initial stage of the investigation.
When the statutory procedure for arrest has been duly followed and the accused has been remanded to custody by a competent court, a belated challenge to the arrest in a writ petition may be construed as an attempt to circumvent the specific and stringent provisions for bail laid down in Section 45 of the PMLA, added the Court.
The Court observed that reiterated that the power of judicial review over an arrest under special statutes like the PMLA must be exercised cautiously and only in cases of manifest arbitrariness or gross non-compliance with statutory safeguards. The Court found that the material gathered during the investigation was shared with the jurisdictional police under Section 66(2) of the PMLA, leading to the registration of the predicate offence, before the petitioner’s arrest. Also, upon arrest, the petitioner was informed of the grounds of arrest and reasons to believe under Section 19 of the PMLA, and was produced before the Special Court which remanded him to custody.
The Court rejected the petitioner’s contention that the first four FIRs were unconnected to him and the fifth FIR under the Prevention of Corruption Act, 1988 (PC Act) was distinct. It observed that the investigation into the illegal constructions, related to the first four FIRs, revealed the petitioner’s role, leading to the search and seizure operations. Further, the recovery of unaccounted cash and jewellery provided a sufficient foundation for the Arresting Officer to believe the petitioner was prima facie guilty of money laundering.
The definition of ‘proceeds of crime’ under Section 2(1)(u) of the PMLA is expansive and includes property derived from any criminal activity relatable to a scheduled offence, which would cover the alleged bribes, added the Court.
The Court also dismissed the argument that the petitioner needed to be named as an accused in the first four FIRs for the PMLA to apply. It reiterated that the offence of money laundering under Section 3 of the PMLA is an independent offence. It is not linked to the date of the scheduled offence but to the date on which a person indulges in a process or activity connected with the proceeds of crime.
Moving ahead, the Court found that the Directorate of Enforcement (ED) had sufficient tangible material to arrest the petitioner. The seizure of disproportionate assets, along with statements recorded under Section 50 of the PMLA, provided a credible basis for the ‘reasons to believe’ that the petitioner was involved in money laundering. Further, the fact that the petitioner cooperated with the investigation on twelve occasions was not a sufficient ground to declare the arrest illegal.
REGULATORY UPDATES
Ministry of Corporate Affairs announces a One-Time Relief for delayed annual returns & financial statements, and also reduced additional fees to 10%
The Ministry of Corporate Affairs (MCA) vide its General Circular No. 01/2026 has notified the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026), stating that the companies that have defaulted on filing annual returns and financial statements will get a limited window to regularise their records. This Scheme will be in force from April 15 to July 15, 2026.
Under existing provisions, companies are required to pay an additional fee of Rs.100 per day for delay in filing annual returns and financial statements, without any upper limit. The MCA said it had received representations from stakeholders, including MSMEs and private companies, stating that delays in completing annual compliances had resulted in additional financial burden.
Under the Scheme, companies can complete pending annual filings by paying 10% of the additional fees otherwise payable under the Companies (Registration Offices and Fees) Rules, 2014. Inactive companies may apply for dormant status by filing the prescribed form and paying one-half of the normal filing fee. Companies seeking strike-off may file the prescribed form during the Scheme period on payment of 25% of the applicable filing fee.
The circular states that the number of active companies in India has crossed the 20-lakh mark, reflecting growth in formalisation of the economy, including MSMEs, producer companies, OPCs and new-age enterprises. It states that the Scheme is aimed at improving compliance levels and ensuring that the corporate registry reflects accurate and up-to-date information.
The scheme provides that, in specified cases, no penalty shall be levied if filings are made before issuance of notice by the adjudicating officer or within 30 days of such notice. The circular states that Registrars of Companies shall take necessary action under the Act against companies that do not avail themselves of the Scheme and remain in default after its conclusion.
IBBI introduces Electronic Forms to monitor insolvency processes of Personal Guarantors
The Insolvency and Bankruptcy Board of India (IBBI) vide its Circular No. IBBI/II/92/2026 dated March 06, 2026, has introduced a set of electronic forms to monitor insolvency resolution processes involving personal guarantors to corporate debtors under the Insolvency and Bankruptcy Code, 2016.
As per the circular, resolution professionals currently submit periodic updates regarding such processes through emails which, the Board noted is “time-consuming and inefficient”. To address this, the IBBI has developed a set of electronic forms which, according to the Board, will facilitate systematic and transparent record-keeping and seamless reporting.
The key benefits of these forms include allowing resolution professionals to easily access and submit forms online, reducing delays and improving efficiency and minimizing the likelihood of errors and omissions, ensuring more accurate and reliable information.
The forms, PGIRP-1 to PGIRP-6, will collect information at different stages of the insolvency process, including admission of the application, public announcement, submission and approval of repayment plans and quarterly progress reports.
The forms are available on the Board’s official website. Resolution professionals will be required to access the platform using a unique username and password and submit the forms along with relevant information and records after affixing a digital signature or e-sign. The Board clarified that filing accurate and timely information is the sole responsibility of the insolvency professional.
The circular also states that failure to file the forms or submission of incomplete or inaccurate information may attract regulatory action under the Code.
Click here to read/ download the original circular
SEBI cautions against fraudsters offering to manage trading accounts for profit share
The Securities and Exchange Board of India (SEBI) vide its Press Release No: 14/2026 dated February 26, 2026, has warned investors against stock market scams carried out through “account handling” services.
SEBI stated that certain individuals, portraying themselves as experts, are offering account handling services to help investors invest in the securities market. These persons claim to generate risk free profits in investors’ trading accounts. They typically specify a minimum capital requirement and charge a percentage share of the investor’s profits.
According to SEBI, such fraudsters require investors to share their trading account credentials and operate the accounts by executing trades on their behalf. The profits or losses are directly credited or debited to the investor’s account, while the fraudster expects a share in profits, if any. Any losses incurred are not shared by the fraudster.
The regulator clarified that such entities are not registered with SEBI and do not fall under its regulatory purview. Investors have been advised not to trust such claims and to refrain from sharing their account credentials with anyone.
SEBI further urged investors to verify the registration status of intermediaries on its official website before investing and to deal with only SEBI-registered intermediaries.
SEBI introduces Voluntary Debit Freeze Facility for Mutual Fund Folios
The Securities and Exchange Board of India (SEBI) vide its Circular No: HO/24/12/12(5)2026-IMD-SEC-1/I/6373/2026 dated March 06, 2026, has introduced a voluntary lock-in / debit freeze facility for mutual fund folios across demat and non-demat folios. As per the circular, the facility will enable investors to freeze debit transactions in their mutual fund folios.
According to SEBI, this will ensure that no units are debited from the folio until the investor unlocks it. In the first phase, the facility will be made available through the inter-operable Registrar and Transfer Agents (RTA) platform, MF Central. SEBI clarified that in the first phase, RTAs shall enable investors to lock their folios through MF Central.
The facility will be available only to KYC complied (Registered/Validated) investors having a valid email ID and mobile number.
SEBI has directed the Association of Mutual Funds in India (AMFI) to prescribe the detailed process for locking and unlocking of folios for all Asset Management Companies and RTAs, and the processes to be followed by different types of investors, in consultation with SEBI. AMFI shall also specify the list of financial and non-financial transactions that may be permitted while the folio remains under lock.
Further, SEBI has mandated that the detailed procedure for opting for this facility and its impact on various transactions be disclosed by all AMCs and RTAs on their websites and in the Statement of Additional Information. The circular shall come into effect from April 30, 2026.
Click here to read/ download the original circular
SEBI issues new comprehensive guidelines for Custodians and mandates segregation of activities
The Securities and Exchange Board of India (SEBI) vide its Circular No: HO/19/(1)2025-AFD-FPICELL/I/5928/2026 dated March 04, 2026, has set out comprehensive guidelines for custodians, pursuant to amendments to the SEBI (Custodian) Regulations, 1996 notified on 18 September 2025.
The circular prescribes detailed norms on the segregation of activities, permitting custodians to carry out other financial services through Strategic Business Units, subject to safeguards such as maintaining separate accounts and compliance with net-worth criteria. Custodians providing unregulated financial services are required to make appropriate disclosures to clients.
SEBI has also clarified that while non-core activities may be outsourced, core business and compliance functions cannot be outsourced. Custodians holding physical securities must comply with the requirement of maintaining a vault, while those that do not hold such securities are not required to do so.
SEBI has also clarified that while non-core activities may be outsourced, core business and compliance functions cannot be outsourced. Custodians holding physical securities must comply with the requirement of maintaining a vault, while those that do not hold such securities are not required to do so.
Significantly, the circular introduces enhanced governance and compliance requirements, including the constitution of board committees such as the Audit Committee, Nomination and Remuneration Committee, and Risk Management Committee; the formulation of a well-documented risk management policy; the designation of a senior-level officer for overall risk management; and the maintenance of scalable infrastructure capable of handling increased transaction loads.
As per the circular, custodians are also required to put in place a framework for the orderly winding down of their business. They must further implement a comprehensive Business Continuity Plan (BCP) and Disaster Recovery (DR) mechanism. To reduce the compliance burden, SEBI has discontinued certain periodic reporting requirements.
The provisions, except for specific clauses relating to the wind-down framework and Disaster Recovery Site infrastructure, will come into force on 24 March 2026.
Click here to read/ download the original circular
SEBI mandates Twice Peak Load Capacity for Commodity Derivatives Exchanges and Clearing Corporations
The Securities and Exchange Board of India (SEBI) vide its Circular No. HO/47/13/14(1)2026-MRD-TPD1/I/4755/2026 dated February 11, 2026, has directed stock exchanges and clearing corporations in the commodity derivatives segment to maintain installed system capacity at least twice their projected peak load. This effectively requires exchanges in the segment to prepare their systems for traffic levels well above expected peak volumes.
SEBI said that Clause 16.1.2 of Chapter 16 of its Master Circular for Commodity Derivatives Segment dated August 4, 2023, requires stock exchanges to maintain arrangements, procedures and system capability to manage trading load in a manner that ensures consistent response time for members. The clause had stipulated that the capacity of the trading system should be at least four times the peak order load encountered.
The regulator stated that based on representations received from stock exchanges with commodity derivatives segments, the capacity planning framework was reviewed in consultation with SEBI’s Technical Advisory Committee and pursuant to a public consultation paper dated June 30, 2025.
SEBI has now directed that specified provisions of its December 10, 2024 circular on Revised Guidelines for Capacity Planning and Real Time Performance Monitoring framework of Market Infrastructure Institutions shall apply mutatis mutandis to the commodity derivatives segment, with certain modifications.
Under the revised framework, the installed capacity shall be at least two times the projected peak load. Further, if actual capacity utilisation of any component of stock exchanges and clearing corporations in the commodity derivatives segment exceeds 75 percent of the installed capacity, immediate action shall be taken by the market infrastructure institution. Such action may include fine tuning of applications or systems or enhancement of capacity. The Standing Committee on Technology shall oversee such action.
The framework for handling instances where utilisation exceeds 75 percent, including cases necessitating augmentation of installed capacity, must be incorporated in the Capacity Planning and Real Time Performance Monitoring Policy.
SEBI has also directed stock exchanges and clearing corporations to prepare and submit their Capacity Planning and Real Time Performance Monitoring Policy document for the commodity derivatives segment within three months from the date of the circular, after obtaining approval from their Standing Committee on Technology and the Governing Board.
The circular clarifies that the provisions shall come into effect three months from the date of issuance and that it supersedes the Master Circular insofar as it applies to the commodity derivatives segment.
SEBI tightens norms for Green Debt Securities and mandates Independent Reviewers
The Securities and Exchange Board of India (SEBI) vide its Circular No: HO/17/11/24(1)2026-DDHS-POD1/I/5967/2026 dated February 27, 2026, has revised the norms governing the appointment of independent third-party reviewers or certifiers for green debt securities.
Green debt securities are bonds or similar instruments issued to raise funds specifically for environmentally sustainable projects, such as renewable energy, clean transportation, or energy efficiency initiatives.
The move aligns the requirements for green debt instruments with the framework applicable to other ESG (Environment, Social, and Governance) debt instruments, including social and sustainability bonds.
SEBI has removed the earlier provision under Chapter IX of the Non-Convertible Securities Master Circular and introduced a revised framework specifying the eligibility and independence criteria for such reviewers.
Under the revised norms, issuers are required to appoint an independent third-party reviewer or certifier to ensure that the issuance of green debt securities complies with regulatory definitions and disclosure requirements.
The reviewer must be independent of the issuer, its directors, and senior management, free from conflicts of interest, and possess expertise in assessing ESG debt securities. Additionally, the scope of the review must be disclosed in the offer document. The circular takes immediate effect.
Click here to read/ download the original circular
SEBI warns public against fake STT notices seeking outstanding payments
The Securities and Exchange Board of India (SEBI) vide its Press Release PR No: 15/2026 dated February 26, 2026, has warned the public against fake Securities Transaction Tax notices. SEBI stated that fraudsters are circulating fake notices falsely claiming to have been issued under the SEBI Act, 1992, seeking compliance with STT under the Finance Act, 2004.
According to SEBI, these fake notices use forged SEBI letterheads and request for payments for outstanding STT amounts. The regulator said that no such notices have been issued by it.
The regulator explained that STT is levied on purchase and sale transactions of securities executed on stock exchanges and is collected by brokers. It further clarified that SEBI does not issue notices for remittance of STT amounts, nor does it coordinate with RBI in this regard.
SEBI also noted instances of fraudsters impersonating the identities of its officials and using fake email IDs. They are also sending communication to entities using the letter head, logo and seal of SEBI.
As per the Press Release, the gullible investors are losing their hard-earned money by believing these fraudsters and transferring money to these fraudulent accounts. Accordingly, it has advised investors to check its official website for enforcement actions and to ensure that emails claiming to be from SEBI end with “@sebi.gov.in”.
The press release has been issued to caution investors to remain vigilant and verify the authenticity of any communication demanding payment on behalf of SEBI.
Click here to read/ download the original press release
