Govt appoints Justice B L Bhat as officiating chairman of NCLAT

The government has appointed Justice Bansi Lal Bhat as the officiating chairperson of the National Company Law Appellate Tribunal (NCLAT).

NCLAT Chairperson Justice Sudhansu Jyoti Mukhopadhaya retired on Friday.

"Consequent on the completion of the term of Office of Justice (Retd.) Shri S.J. Mukhopadhaya, as Chairperson NCLAT on March 14, 2020, Central Government hereby appoints, Justice (Retd.) Shri Bansi Lal Bhat, Member (Judicial), NCLAT, as officiating Chairperson," an official notification said.

The appointment of Justice Bhat, a former judge of the Jammu and Kashmir High Court, is "for a period of three months with effect from 15.03.2020 or until a regular Chairperson is appointed or until further orders, whichever is earliest."

In a separate notification, the government appointed Justice Anant Bijay Singh as judicial member and Shreesha Merla and Alok Srivastava as technical members of the appellate tribunal.

Justice Bhat had joined NCLAT as a judicial member on October 17, 2017.

Prior to this, he was a judicial member of the Armed Forces Tribunal and has also presided over benches at Chandigarh, Shimla, Jaipur and Delhi.

The NCLAT was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of the National Company Law Tribunal (NCLT). It is also the appellate tribunal for hearing appeals against orders passed by NCLT under the IBC and Insolvency and Bankruptcy Board of India.

It is also the appellate tribunal to hear and dispose of appeals against any order passed by the Competition Commission of India (CCI).

NCLAT dismisses Deloitte, KPMG pleas against impleadment in IL&FS case

The National Company Law Appellate Tribunal (NCLAT) on Wednesday dismissed the pleas of debt-ridden IL&FS auditors -- Deloitte Haskins & Sells and KPMG arm BSR & Associates -- challenging their impleadment in the case involving alleged fraud in IFIN, a subsidiary of IL&FS.

A two-member NCLAT bench led by Chairman Justice S J Mukhopadhaya dismissed the pleas of auditors and other independent directors.

The appellate tribunal, however, granted a relief to both auditors and other independent directors by allowing the operation of its earlier interim order passed on July 29, 2019 for two weeks.

On July 29, the NCLAT stayed the order of the Mumbai bench of the National Company Law Tribunal (NCLT) to implead the auditors and the independent directors of IL&FS.

Earlier on July 23, the NCLT had allowed the plea of the Ministry of Corporate Affairs (MCA) to implead the auditors and independent directors of IFIN.

"On the request of the counsel, we allow (that) interim order dated July 29 would continue till another two weeks," the bench said.

The MCA had asked the NCLT to freeze the assets of the former auditors in the case involving alleged fraud in IFIN.

While, commenting on the development, Delloite India spokesperson said: We will review the written order before determining our further course of action, which may include an appeal."

Auditors cannot be treated as part of the management which is responsible for managing the affairs of the company and therefore should not be charged, the spokesperson said.

"We will continue to present and protect its position, supported by the facts, to the relevant authorities. The firm remains committed to high standards of audit quality and ethical conduct in its professional practice," he added.

I-T dept reverses stance on NCLAT's proposed demerger order of Reliance Jio

Within eight months of challenging the National Company Law Tribunal’s (NCLT’s) order giving a green signal to Reliance Jio Infocomm’s proposed demerger, the income-tax (I-T) department is learnt to have found merit in the appellate tribunal’s December ruling, which dismissed the I-T petition.

The tax department shared its opinion and the rationale in a communique to the law ministry 10 days ago, where it sought the ministry’s legal opinion on the matter to decide further course of action, said an official privy to the development.

The National Company Law Appellate Tribunal (NCLAT) had dismissed the I-T department’s petition objecting to the proposed demerger of Jio’s tower and fibre optic network assets into two infrastructure trusts.

According to sources, the department is of the view that the NCLAT order, which had cited multiple verdicts by the Supreme Court, including the Vodafone-Essar tax avoidance case, needs to be taken into consideration. “Some of the instances quoted in the appellate order apply to the Jio case as well. So an appeal against the existing verdict may not stand legal scrutiny in the apex court,” said a tax official.

The final decision on whether to challenge the appellate tribunal order in the Supreme Court would, however, depend on the law ministry’s response, which is expected in two weeks, said an official.

I-T dept reverses stance on NCLAT's proposed demerger order of Reliance Jio

An email sent to the Reliance group did not elicit any response.

The NCLAT in its December 20 order dismissed the objection raised by the I-T department over the approval granted to Reliance Jio Infocomm’s scheme by the NCLT, Ahmedabad, to reduce debt by transferring the telecom tower and the fibre businesses into two separate entities. The I-T department had raised concerns over avoidance and evasion of taxes.

“Mere fact that a scheme may result in reduction of tax liability does not furnish a basis for challenging the validity of the same… We are not inclined to interfere with the scheme of arrangement as approved by the tribunal. Both the appeals are dismissed,” the appellate tribunal had said in the final order. The NCLAT had also questioned the basis of the tax department interference in the scheme of arrangement when approved by the NCLT.

“While sanctioning the scheme, it is observed that the said sanction shall not defeat the right of the income-tax department to take appropriate recourse for recovering the existing or previous liability of the transferor company,” it had said in the order.

The appellate tribunal quoted the Supreme Court order in the Vodafone-Essar case, where it stated, “We are not inclined to entertain the special leave petitions… I-T is entitled to take out appropriate proceedings for recovery of any tax statutorily due from the transferor or the transferee company or any other person who is liable for payment of such due,” the NCLAT said.

The tribunal also quoted the legal standpoint of the Gujarat High Court in a similar objection by the tax department where it had stated that "it cannot be said that the scheme has no purpose or object and that it is a mere device/subterfuge with the sole intention to evade taxes, particularly when even the incidence of tax purportedly sought to be evaded is not established on facts”.

The tax department contested the scheme of arrangement following the NCLT order granting permission to the composite scheme of arrangement, through which two companies – Jio Digital Fibre and Reliance Jio Infratel -- proposed to be demerged.

According to the proposed scheme, the transferor company, Reliance Jio Infocomm, had sought to convert the redeemable preference shares into loans. The I-T department was of the view that such conversion of equity into debt would reduce the profitability of the transferor company which could result into revenue loss to the tax department.

Further, it would also bring down the payment of dividend distribution tax, which is again a way to avoid payment of taxes. The structure of the proposed composite scheme adopted by the respondent (Jio) was a permissible method of tax planning or is a tool to avoid and evade payment of taxes.

The department had also alleged the proposed scheme did not identify the interest rate payable on the loan, which will be a charge on the profits of the company, Reliance Jio Infratel.

Even if a 10 per cent interest rate is considered, this would amount to annual interest of Rs 782 crore, which would reduce Jio’s tax by about Rs 258 crore each year, the I-T had said. To this, the NCLAT said this particular issue had already been addressed by the NCLT.

SC stays NCLAT order restoring Cyrus Mistry as Tata Sons' chairman

The Supreme Court on Friday stayed the NCLAT order restoring Cyrus Mistry as executive chairman of the Tata Group, observing that there were "lacunae" in the orders passed by the Tribunal.

At the outset, a bench of Chief Justice S A Bobde and Justices B R Gavai and Surya Kant said the National Company Law Appellate Tribunal (NCLAT) decision suffers from "basic errors and we have to hear the matter in detail".

The bench also said, "You (Cyrus) have been out of the saddle quite a long time. Does this hurt you....How does it hurt you today".

The bench said there was no prayer in the petition for reinstatement of Mistry but the tribunal went ahead with it and ordered his reinstatement.

"We find there are lacunae in the judicial orders passed by the NCLAT," the bench said issuing notices to Mistry and others.

Tata Sons Private Ltd (TSPL) challenged the December 18 decision of NCLAT that gave a big relief to Cyrus Investment Pvt Ltd and Mistry, restoring him as the executive chairman of TSPL.

The bench posted the matter after four weeks.

The top court also ordered that the Tatas will not exercise power under Article 25 of the Company Law for pushing out shares of minority holders in the company.

Senior advocate C A Sundaram, appearing for the company Cyrus Investment Pvt Ltd, submitted that instead of staying the NCLAT order, notice should be issued and two weeks be given for filing the reply.

However, the bench said, "Our first impression is not good about the order of the tribunal. The tribunal granted the prayer which was not prayed".

The Mistry's side wanted to place a note about interim arrangement which was not accepted by the bench.

Senior advocate N K Kaul appeared for Mistry while senior advocate Shyam Divan was appearing for the shareholders which were on Mistry's side.

During the hearing, Sundaram said he was not pressing for the consequential relief of reinstatement of Mistry but was against the wrongful removal of Mistry from Tata.

Senior advocates A M Singhvi, Harish Salve, Mukul Rohatgi and Mohan Parasaran represented the Tatas.

Cyrus Mistry case: Tata Trusts nominees did not exceed their brief, SC told

The National Company Law Appellate Tribunal (NCLAT) direction restraining Tata Group patriarch Ratan Tata and other Tata Trusts nominees from taking any decision in advance about Tata Sons affairs is nebulous and stifles the rights of Tata Sons shareholders, the Tata Group holding firm said in its petition to the Supreme Court.

The NCLAT order requires majority decision of the board of directors or in the annual general meeting which, the Tata Sons petition said, will result in the disenfranchisement of majority shareholders and cripple corporate democracy.

The Tata Trusts holds 66 per cent stake in Tata Sons — the holding company of Tata Group companies — and Ratan Tata is the chairman of the Trusts. Tata, along with other Trusts nominees, played an important role to remove Cyrus Mistry as Tata Sons chairman. This led to a three-year-old feud between Mistry and Ratan Tata.

The Tata petition says that Article 118 of Tata Sons — which provides for selection of the chairman — has been given a go-bye by the NCLAT order without even giving a reason on how it is illegal.

In the case of Tata Sons (since Tata Trusts holds approximately 66 per cent of the share capital, but is not involved in the day-to-day management), Article 121 was inserted in the articles of association to protect the interests of majority shareholders.

“There was nothing per se offensive, illegitimate or immoral about the existence of the affirmative vote and incidentally, even the impugned judgment does not hold so. Yet, the NCLAT judgment is full of adverse observations about the fact that the Trusts-nominated directors had an affirmative right over matters to be resolved in a board meeting of Tata Sons,” says the Tata Sons petition.

“In other words, the NCLAT judgment has rewritten the articles of association of Tata Sons, where the majority shareholders are subject to minority-capsizing the fundamental rule of corporate democracy,” adds the petition.

Tata Sons said the rights not provided under the articles of association — which is a contract between the shareholders — have been conferred upon the Mistry investment firms and in the same breath, taken away from Tata Trusts by the NCLAT, which is legally not permissible.

“This is despite the fact that the Mistry firms hold around 2 per cent of share capital of Tata Sons (and around 18.37 per cent of equity share capital of Tata Sons),” it said.

The NCLAT seems to have been influenced by a factually wrong finding that the Mistry firms invested around Rs 1 trillion in Tata Sons. The Mistry firms have acquired majority of their shareholding through bonus issue and rights issues and had invested only Rs 69 crore as initial capital of Tata Sons.

Tata Sons case: NCLAT ready to expunge remarks against RoC; seeks details

The National Company Law Appellate Tribunal (NCLAT) has said that it is ready to remove the strictures against the Registrar of Companies, Mumbai from its order that said Tata Sons conversion from public to private entity was illegal and directed the RoC to reverse the same.

NCLAT adjourned the hearing till tomorrow and has sought clarification from RoC on what constitutes a private company.

RoC Mumbai had sought the removal of the words "illegal" and “with the help of RoC" in the tribunal’s order pertaining to Tata Sons' transition from a public to private company, in September 2017.

In the order dated December 18, the NCLAT had passed serious strictures against the RoC, stating that Tata Sons had hurriedly changed its status to a private company from public "with the help of the RoC", which was illegal. NCLAT chairperson, Justice S J Mukhopadhaya said, “The finding may be wrong but the judgment is not.”

In its petition, the RoC said there were some factual and legal errors in the judgment, and hence appealed to the appellate tribunal to amend the order so that it correctly reflected the conduct of the RoC, Mumbai, as not being illegal and acting in accordance with the provisions of the Companies Act 1956/2013.

"The appellate tribunal be pleased to delete the aspersions made regarding any hurried help accorded by the RoC, Mumbai, to Tata Sons except what was statutory required from the RoC, Mumbai," the petition stated.

Govt to set up NCLAT bench in Chennai to cut down on backlog: Minister

The Government of India has decided to set up a bench of National Company Law Appellate Tribunal (NCLAT) at Chennai as part of its efforts to reduce the pending cases. It has also set up five new benches of NCLT during 2018-2019 at Jaipur, Cuttack, Kochi, Indore and Amaravati, with this aim.

The development comes in pursuance to a judgement of Supreme Court, said Anurag Singh Thakur, Union Minister for State for Finance and Corporate Affairs, in a written reply to a question in Lok Sabha today.

Benches of National Company Law Tribunal (NCLT) are set up in various states depending on the case load and other relevant factors. Considering the heavy case load at some existing benches, additional members have been appointed and additional courts have been operationalised from time to time.

The Minister further stated that the Government is taking all steps to strengthen NCLT and NCLAT in terms of number of benches, number of courts and number of members, to reduce the pendency.

The Government recently appointed 28 more members in NCLT and four more in NCLAT. For capacity building of members, regular colloquiums are being held. The e-Court project has also been implemented in a few benches with heavy case load.

Can financial creditor sell assets of firms in liquidation? NCLAT to decide

The National Company Law Appellate Tribunal (NCLAT) has reserved its judgment on whether a secured financial creditor can sell the assets of a corporate debtor back to the promoter if there are no resolution plans and the firm has to be liquidated.

The judgment is likely to have a big impact on the insolvency process and will decide if errant promoters have one last shot at regaining control of their company and its assets, experts said.

Sanaa Syntex, a Mumbai-based fabric trading company, was admitted for insolvency proceedings in August 2017. The company, however, found no takers, following which the Mumbai Bench of the National Company Law Tribunal (NCLT) ordered its liquidation.

Subsequently, the liquidator moved to sell the company’s assets and distribute the realised amounts to the creditors under the rules of the Insolvency and Bankruptcy Code (IBC). The State Bank of India (SBI), a financial creditor to the company, however, took “custody of the immovable mortgaged assets” of the company by “locking the premises of two units of factory situated in Gujarat”.

The bank said it wanted to opt out of the liquidation process and realise its dues on its own. The bank had then said it wanted to sell the assets of the company back to the erstwhile promoters as the process was no longer under the IBC.

The Mumbai Bench of the NCLT had, while allowing SBI to opt out of the liquidation process, barred the bank from selling the assets to the promoters or any other persons ineligible under Section 29 (A) of the IBC.

Section 29A of the IBC bars non-performing asset (NPA) holders, including promoters, from taking part in the resolution process.

The bank then approached the NCLAT with a plea that it should be allowed to sell the assets out of the liquidation process and keep the amount realised. The liquidator of the company, however, opposed the bid of the bank and said that allowing such a move would “shake entire dynamics of the claims of other stakeholders”.

“It is to be understood that if secured creditor is allowed to realise the secured interests through channels of promoters who are barred under the IBC, the same will corrupt the very purpose of the Code,” the liquidator said in a written submission to the NCLAT.

NCLAT halts Bhushan Power sale to JSW Steel; asks ED to release BSPL assets

The National Company Law Appellate Tribunal (NCLAT) on Monday asked the Enforcement Directorate (ED) to release the attached properties of Bhushan Power and Steel and directed the agency not to attach any further assets without its permission.

The appellate tribunal also put the Rs 19,700-crore payout by the JSW Steel to buy the debt-ridden company on hold till further orders.

An NCLAT bench headed by Chairman Justice S J Mukhopadhyaya slammed the ED, saying that Insolvency and Bankruptcy Code (IBC) would fail if the agency functions like this and directed it to file a reply in the next two days, along with CBI.

The ED had seized a portion of Bhushan Power and Steel's (BPSL) assets in the money laundering case against its former promoters.

"IBC cannot be annulled in this manner. Money laundering is by an individual," observed NCLAT.

The tribunal further said ED has no jurisdiction to attach the property of a corporate debtor, particularly when an appeal is pending with regard to attachment.

The appellate tribunal has directed to list the matter on October 25 for further hearing.

"Under facts and circumstances, while we allow the ED to file a reply affidavit, the deputy director ED and any other officials of the ED are to release the property attached in favour of resolution professional immediately," the NCLAT said.

The ED's provisional attachment order of October 10 is stayed until this issue is decided by this appellate tribunal. Officers and directors are also prohibited from attaching any property of Bhushan Steel and Power till permission from this appellate tribunal (is granted), it said.

Meanwhile, over the bid amount to be paid, the tribunal said that JSW Steel would not pay the funds until its further order.

JSW Steel does not have to pay the money as successful bidder till next date of hearing (October 25), said NCLAT.

During the proceedings, the Ministry of Corporate Affairs (MCA) told NCLAT that the ED has no jurisdiction to attach assets under insolvency process. MCA's stand is in consultation with the Department of Financial Services and banks.

The NCLAT was hearing petitions filed by JSW Steel, former promoters of BPSL, among others, challenging the order of the principal bench of the National Company Law Tribunal (NCLT).

On September 5, NCLT had approved the JSW Steel's Rs 19,700 crore resolution plan for BPSL.

However, JSW Steel approached NCLAT seeking protection from the ongoing investigation in money laundering cases against former promoters of BPSL.

It had also challenged NCLT's direction to redistribute profits earned by BPSL during the Corporate Insolvency Resolution Process (CIRP), from July 2017 to August 2019, among the financial creditors and operational creditors of the debt-ridden firm.

While, in its 138-page-long order, the NCLT had given it protection from the criminal cases filed against the promoters, it was silent over the money laundering cases.

NCLAT refuses to entertain RCom resolution professional, sends him to NCLT

The National Company Law Appellate Tribunal (NCLAT) on Wednesday refused to entertain a plea moved by the resolution professional (RP) of Reliance Communications Limited (RCom) seeking refund of nearly Rs 580 crore from Ericsson India. Instead, he was asked to approach the Mumbai bench of National Company Law Tribunal (NCLT).

The RP of the company had approached NCLAT with a plea stating that since RCom was now under Corporate Insolvency Resolution Process, the money that it had given to Ericsson as a part of the settlement deal should now be returned to the company as Ericsson was only an operational creditor.

RCom had paid a sum of Rs 577 crore to Swedish telecom equipment maker Ericsson India following a judgment of the Supreme Court (SC) in which the company’s promoter Anil Ambani had been held guilty of contempt of court. In February this year, the SC had held Ambani and two of his top executives guilty of contempt of court for wilfully failing to pay the dues to telecom equipment maker Ericsson.

A two-judge Bench of Justice Rohinton Fali Nariman and Justice Vineet Saran held that the three Reliance group companies had “no intention, at the very least, of adhering to the time limit of 120 days or to the extended time limit of 60 days plus, as was given by way of indulgence.”

Ericsson India had in September 2017 moved insolvency petitions against RCom, Reliance Telecom, and Reliance Infratel at the Mumbai Bench of the NCLT for failing to pay their dues amounting to nearly Rs 1,500 crore. The petition was admitted by the NCLT in May 2018, following which the three Reliance group companies approached the NCLAT. It was in the NCLAT that Ericsson India and the three Reliance companies had come to a settlement that the latter would pay Rs 550 crore within 120 days, which was September 30, 2018.

The NCLAT had in its order noted that if RCom and its two subsidiaries failed to pay the said amount within the timeline, Ericsson India would be at liberty to revive the insolvency application.

NCLAT asks RCom's RP to approach NCLT for refund of Rs 577 cr from Ericsson

The NCLAT on Wednesday directed resolution professional of Reliance Communications to raise demand for Rs 577 crore paid to Swiss telecom gear maker Ericsson before the NCLT-Mumbai.

Anil Ambani-led Rcom is presently going through Corporate Insolvency Resolution Process.

A two-member National Company Law Appellate Tribunal (NCLAT) bench headed by Chairperson Justice S J Mukhopadhaya asked the Resolution Professional to file the claims before the NCLT.

"We are not inclined to take this interim Application…," said the NCLAT.

RCom has paid Rs 577 crore on the direction of the Supreme Court.

NCLT asks Amtek Auto lenders to examine bids of Deccan Value Investors

The National Company Law Appellate Tribunal (NCLAT) on Wednesday asked the lenders of Amtek Auto to consider the resolution plans submitted by Deccan Value Investors (DVI) along with others based on the original information memorandum inviting bids.

Besides, a two-member NCLAT bench, headed by Chairman Justice S J Mukhopadhaya, slammed the committee of creditors (CoC) of Amtek Auto for issuance of fresh information memorandum inviting new resolution plans.

"We have not allowed the committee of creditors or resolution professional to issue fresh information memorandum or invitation calling for more applications," said NCLAT.

On June 13, the resolution professional (RP) of the debt-ridden auto component maker had issued a fresh information memorandum inviting fresh submission of resolution plans.

The CoC has received 5-6 fresh expressions of interest (EoI) after the NCLAT's May 20 order.

Clarifying its earlier order passed on May 20, NCLAT asked CoC to consider the bids submitted by the previous information memorandum.

"In view of such interim order, the CoC is required to consider the resolution plan, if any, filed by any persons including resolution plan submitted by DVI," said NCLAT.

DVI was second highest with a bid of Rs 3,150 crore.

Meanwhile, the appellate tribunal also gave liberty to DVI to modify and improve its offer after negotiation with the CoC.

"However, it will be open to the committee of creditors to negotiate and ask the resolution applicants to improve their plan in terms of the original information memorandum," said NCLAT.

Earlier, the UK-based Liberty House had withdrew its Rs 4,119-crore bid for Amtek Auto after being selected by the lenders but later it backed out and refused to furnish the bank guarantee after emerging as the highest bidder.

Appellate tribunal lashes out at Amtek Auto CoC, RP for calling new bids

The National Company Law Appellate Tribunal (NCLAT) on Wednesday slammed the Committee of Creditors (CoC) and the Resolution Professional (RP) of Amtek Auto for issuing a fresh information memorandum calling new bids for the company. The NCLAT’s observations came on a plea moved by Deccan Value Investors LP (DVI), which alleged that the new Expression of Interest (EOI) calling for fresh bids disqualified it as a bidder for Amtek Auto. On June 13, the RP of Amtek Auto called for fresh submission of binding resolution plan based on a new information memorandum.

According to the new EOI, resolution applicants who “had withdrawn or sought any deviation from their resolution plan in any corporate insolvency resolution process after CoC approval, or avoided or delayed or defaulted in the implementation of the resolution plan approved by committee of creditors and NCLT or delayed or failed to implement any conditions as contained in the process document,” would not be eligible to bid for Amtek Auto.

DVI challenged the new information memorandum and the eligibility criteria alleging that the same was done in contravention of NCLAT’s orders. The company had run into trouble while bidding for Metalyst Forgings and had withdrawn its bid after approval from CoC and NCLT.

The second round of bidding was allowed by the NCLAT after UK-based Liberty House Group, which was initially declared successful, withdrew from the process. The NCLAT had then allowed the CoC and RP to consider all the bids that had been placed, but said that the final decision would not be placed before National Company Law Tribunal (NCLT). At the time, it had also not allowed a new information memorandum or fresh EOI to be called.

On Wednesday, the NCLAT also allowed the CoC and RP to renegotiate with the bidders, including DVI, and improve upon their plan submitted for Amtek Auto. It also said that the CoC and RP would now consider all the bids that had come so far, including that of DVI.

Amtek Auto’s total dues to lenders in July last year stood at Rs 12,603 crore. DVI, which had emerged as the second highest resolution applicant for Amtek Auto after Liberty House, had placed a bid of Rs 3,150 crore.

NCLAT admits online vendors' petition against CCI clean chit to Flipkart

The National Company Law Appellate Tribunal (NCLAT) has admitted a petition filed by an online vendors association challenging the orders of fair trade regulator Competition Commission of India (CCI), which had absolved e-commerce major Flipkart of unfair practices using its dominant position.

The NCLAT has also approved the delay of 12 days in filing appeal (by the association) against the order of the CCI.

"The appeal is admitted for hearing. As the respondents have appeared, no further notice need be issued," said the NCLAT in its order on May 15.

A three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya has directed to list the matter for hearing on July 30.

The NCLAT is the appellate authority for the orders passed by the CCI since May 2017.

Passing an order on November 6, 2018, the CCI had held that the business practices of Flipkart and Amazon are not in violation of competition norms and rejected allegations of abuse of market dominance made by All India Online Vendors Association (AIOVA).

AIOVA has alleged abuse of market dominance against Flipkart India Pvt Ltd, which is into wholesale trading/ distribution of books, mobiles, computers and related accessories, and e-commerce marketplace Flipkart Internet Pvt Ltd.

The CCI had ruled that looking at the present market construct and structure of online marketplace platforms in India, "it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market".

While concluding that there is no violation of Section 4 of the Competition Act, which pertains to abuse of dominant market position, the CCI said that the Flipkart marketplace is required to comply with conditions applicable to entities involved in the business of e-commerce, as set out in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017.

"As such, Flipkart Internet is bound by these laws, the compliance of which is ensured by the relevant authorities," the order said.

Citing the market construct and the context of examining allegations against Flipkart, the CCI noted that there is also no case of contravention of Section 4 by Amazon as well.

AIOVA, as mentioned in CCI order, is a group of over 2,000 sellers selling on e-commerce marketplaces such as Flipkart, Amazon, Snapdeal etc.

Essar Steel shareholder moves NCLAT, seeks rejection of ArcelorMittal bid

An Essar Steel's majority shareholder on Tuesday moved NCLAT seeking rejection of ArcelorMittal's Rs 42,000 crore bid of the bankrupt company, alleging that its promoter Lakshmi Mittal hid his association with loan defaulting firms run by his brothers, that made his firm ineligible to participate in insolvency proceedings.

The plea by Essar Steel Asia Holdings Ltd (ESAHL), which holds 72 per cent shares of Essar Steel, cames weeks after an insolvency court cleared ArcelorMittal's bid for Essar Steel, which was auctioned by lenders to recover unpaid loans.

In its plea before the National Company Law Appellate Tribunal (NCLAT), ESAHL alleged that Mittal was a promoter of GPI Textiles, Balasore Alloys and Gontermann Piepers - firms run by his brothers Pramod and Vinod Mittal that had been classified as non-performing assets or bad loans by banks.

Insolvency and Bankruptcy Code (IBC) rules had previously compelled Mittal to shell out an extra Rs 7,000 crore to clear bank dues of Uttam Galva Steels and KSS Petron where he held some stake and reportedly sold his holdings in one of them for Re 1 a share.

In its petition, ESAHL said Arcelor Mittal India Ltd and its promoter Lakshmi Mittal had "misled" the Supreme Court, lenders and insolvency court into believing that they had ceased to have any business association with Pramod and Vinod Mittal and their companies.

It challenged a sworn affidavit filed by Sanjay Sharma on behalf of Lakshmi Mittal and ArcelorMittal on October 17, 2018 that stated that there was no business association between Mittal and/or Arcelor and his brothers and their companies for more than 20 years and that Lakshmi Mittal and/or Arcelor has no shareholding in any of the companies where his brothers are promoters, including GPI Textiles, Balasore Alloys and Gontermann Piepers.

ESAHL enclosed with its application various documents to show that as late as September 30, 2018 Mittal was a co-promoter of one Navoday Consultants Ltd (Navoday) along with his brothers Pramod and Vinod, and that Navoday was in turn a promoter of GPI Textiles, Balasore Alloys and Gontermann Piepers.

ESAHL stated that these facts make it clear that ArcelorMittal had suppressed and concealed from the Committee of Essar Steel Creditors and all courts that its promoter Lakshmi Mittal continued to have business relations with his brothers Pramod and Vinod and accordingly ArcelorMittal was ineligible to submit a resolution plan under Section 29A of the IBC.

ESAHL alleged that ArcelorMittal was fully aware of such ongoing business association and consequent ineligibility. And in order to hide this, Mittal sold his shareholding in Navoday between October 1, 2018 and December 31, 2018 and stopped showing himself as the promoter of the company.

This, it said, was the same tactic that was previously used by ArcelorMittal to avoid making payment of the overdue debts of Uttam Galva Steels and KSS Petron and that the Supreme Court had previously held to be unlawful.

Both Gontermann Peipers and GPI Textiles are classified as NPA and due to an alleged association of Mittal with these companies, ArcelorMittal would be a related party of these companies, making it ineligible under the provisions of the IBC, the petition said.