Judicial Reference
Landmark Judgements
Supreme Court, High Court and appellate tribunal decisions that shaped Indian commercial law — from IBC milestones to tax rulings, M&A precedents, and competition law authorities. Explained for business decision-makers.
Tata Consultancy Services Ltd. v. Cyrus Investments Pvt. Ltd.
Background
A closely followed corporate governance dispute. After the Tata Sons board removed Cyrus Mistry as Executive Chairman in October 2016, companies of the Shapoorji Pallonji (SP) group — which holds about 18.37% of Tata Sons — petitioned the NCLT Mumbai under Sections 241–242 of the Companies Act 2013, alleging oppression and mismanagement. The NCLT dismissed the petition in July 2018. On appeal, the NCLAT (18 December 2019) held the removal illegal, ordered Mistry's restoration and declared Tata Sons' 2018 conversion into a private company illegal. The Supreme Court allowed the Tata appeals and set aside the NCLAT's judgment.
Key Holdings
The Supreme Court held that: (i) removal from the post of Executive Chairman — a post not statutorily recognised, unlike that of a director — does not by itself amount to oppressive or prejudicial conduct under Sections 241–242; (ii) the NCLAT's findings of oppression and mismanagement could not be sustained, since the facts did not show that winding up the company on just and equitable grounds would have been justified, as Section 242(1) requires; (iii) the NCLAT could not order reinstatement — relief that was not sought in the pleadings and falls outside the scheme of Sections 241–242; (iv) the NCLAT could not mute Article 75 (the power to require a shareholder to transfer shares) without setting it aside, and the affirmative voting rights of Tata Trusts-nominated directors under Article 121 were not oppressive; and (v) Tata Sons' conversion into a private company, and the Registrar of Companies' action on it, were in accordance with law.
Practical Impact
Clarified the high threshold for establishing "oppression" under the Companies Act 2013 and the limits of the Tribunal's remedial powers under Section 242. Confirmed the Board's primacy in management decisions and upheld bespoke governance rights written into the Articles of Association. A key reference on minority shareholder rights versus majority governance authority.
Practice Area
Corporate Disputes & Governance
Vodafone International Holdings BV v. Union of India
Background
Vodafone International Holdings BV, a Netherlands company, acquired from Hutchison Telecommunications International the entire share capital of CGP Investments (Holdings) Ltd — a Cayman Islands company whose shareholding gave it a 67% controlling interest in Hutchison Essar Ltd, an Indian telecom company. The Revenue sought to tax the transaction in India. Applying the "look at" test, the Supreme Court held that the offshore transaction fell outside India's territorial tax jurisdiction, so no capital gains tax arose in India on the transfer of shares of a foreign company between two non-residents, even though the underlying business was Indian. Parliament responded with a retrospective amendment to the Income Tax Act in 2012, which led to an investment treaty arbitration against India.
Key Holdings
The Supreme Court held that: (i) the Revenue must apply the "look at" test to the transaction as a whole rather than dissecting it, and an offshore holding structure is not a sham merely because it reduces tax; (ii) tax planning within the framework of law is legitimate — McDowell does not conflict with Azadi Bachao Andolan, and only colourable devices may be disregarded; (iii) Section 9(1)(i) of the Income Tax Act cannot, by a process of interpretation, be extended to cover indirect transfers of capital assets situated in India; and (iv) the Indian tax authorities had no territorial tax jurisdiction to tax the offshore transaction.
Practical Impact
Triggered the Finance Act 2012 retrospective amendment taxing indirect transfers — a widely criticised legislative intervention — and a claim under the India–Netherlands bilateral investment treaty in which the tribunal ruled in Vodafone's favour in September 2020. The Taxation Laws (Amendment) Act 2021 then withdrew the retrospective reach: no demand can be raised for indirect transfers made before 28 May 2012, and existing demands are nullified — with amounts paid refunded without interest — once the taxpayer withdraws litigation and gives the prescribed undertakings. The case remains a core reference for offshore M&A structuring and source-basis taxation analysis in India.
Practice Area
M&A & Transactions, Tax, FEMA & Foreign Investment
Pioneer Urban Land and Infrastructure Ltd. v. Union of India
Background
The Supreme Court upheld the constitutional validity of the Insolvency and Bankruptcy Code (Second Amendment) Act 2018, which added an Explanation to Section 5(8)(f) deeming any amount raised from an allottee under a real estate project to have the commercial effect of a borrowing — making homebuyers "financial creditors" under the IBC. The change gave allottees the right to file insolvency applications against defaulting developers and to participate in the Committee of Creditors, fundamentally altering the landscape for stalled real estate projects.
Key Holdings
The Court held: (i) amounts raised from allottees under real estate projects have the commercial effect of a borrowing and are therefore "financial debt" under Section 5(8)(f); (ii) homebuyers are accordingly financial creditors entitled to file Section 7 applications before the NCLT; (iii) the 2018 amendment does not violate Articles 14, 19(1)(g) or 300-A of the Constitution; and (iv) RERA is to be read harmoniously with the Code — the Code prevails only in the event of conflict, and allottees' remedies under the Consumer Protection Act, RERA and the Code are concurrent.
Practical Impact
Transformed IBC proceedings involving real estate developers — homebuyers are now a significant creditor class in real estate CIRPs, voting through an authorised representative under Sections 21(6A) and 25A, which the same 2018 amendment introduced. RERA and IBC remedies can be pursued concurrently by aggrieved allottees.
Practice Area
Insolvency & IBC, Real Estate
Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta
Background
The Supreme Court's judgment in the Essar Steel CIRP, in which the Committee of Creditors had approved ArcelorMittal's resolution plan. The NCLAT had modified the CoC's distribution so that financial and operational creditors would recover the same proportion — about 60.7% — of their admitted claims. The Supreme Court resolved critical questions about the relative powers of the Committee of Creditors and the adjudicating authorities in approving resolution plans, and about differential treatment of financial and operational creditors.
Key Holdings
The Court held: (i) the commercial wisdom of the CoC governs whether a resolution plan is approved and how its proceeds are distributed, and the NCLT and NCLAT cannot substitute their own commercial judgment — their review is confined to the statutory requirements, including Section 30(2); (ii) the Code requires equitable, not equal, treatment — financial and operational creditors, and secured and unsecured financial creditors, may be treated differently, provided operational creditors receive at least the minimum guaranteed by Section 30(2)(b) and the CoC has taken their interests into account; (iii) the Section 53 liquidation waterfall does not itself govern distribution under a resolution plan, and the 2019 amendment to Section 30(4), which lets the CoC consider the Section 53 order of priority and the value of security interests, is valid; (iv) the word "mandatorily", inserted in 2019 into the 330-day outer limit under Section 12(3), was struck down, so the period may be exceeded in exceptional cases; and (v) the NCLAT's equal-distribution order was set aside.
Practical Impact
Cemented the CoC's primacy in IBC proceedings while anchoring operational creditors' protection in the statutory minimum under Section 30(2)(b). Frequently cited on the limited scope of NCLT and NCLAT review of resolution plans.
Practice Area
Insolvency & IBC
Swiss Ribbons Pvt. Ltd. v. Union of India
Background
The Supreme Court upheld the constitutional validity of the Insolvency and Bankruptcy Code 2016 against a broad challenge. The petitioners attacked, among other things, the differential treatment of financial and operational creditors, the exclusion of operational creditors from voting in the Committee of Creditors, admission of financial creditors' applications under Section 7, the 90% CoC approval needed to withdraw an admitted application under Section 12A, the Section 29A disqualifications and the Section 53 liquidation waterfall.
Key Holdings
The Court upheld the challenged provisions. Classifying financial creditors differently from operational creditors is not arbitrary — the nature of their debts and contracts differs, and financial creditors are involved from the outset in assessing the viability of the corporate debtor and restructuring its debt. Once an application is admitted, the proceeding is in rem, which justifies the 90% CoC approval required for withdrawal under Section 12A. The Section 29A disqualifications do not impair any vested right and serve the legitimate objective of keeping undesirable persons out of the resolution process. The Code reflects a legislative policy choice in economic matters, to which the Court deferred.
Practical Impact
Provided constitutional certainty for the IBC framework; later challenges to IBC provisions have been decided against the backdrop of Swiss Ribbons' reasoning on the Code's architecture. Supported the widespread use of the IBC for corporate insolvency resolution.
Practice Area
Insolvency & IBC
Union of India v. Infrastructure Leasing & Financial Services Ltd.
Background
When the IL&FS group defaulted in 2018, with consolidated debt of about ₹91,000 crore, the Union of India petitioned the NCLT Mumbai under Sections 241 and 242 of the Companies Act 2013, alleging that the company's affairs were being conducted in a manner prejudicial to the public interest. On 1 October 2018 the NCLT suspended the IL&FS board and allowed six Government-nominated directors, with Uday Kotak as non-executive chairman, to take charge. On 12 October 2018 the NCLT declined the Government's plea for a moratorium, holding that the IBC does not apply to IL&FS as a financial service provider. The Union appealed to the NCLAT.
Key Holdings
By its interim order of 15 October 2018, the NCLAT stayed, in favour of IL&FS and its 348 group companies, the institution or continuation of suits and legal proceedings, the enforcement of security interests, the acceleration or premature withdrawal of loans and other facilities, and set-off by banks. It cited the nature of the case, the larger public interest, the economy of the nation and the interest of the company and its group companies, and acted under its powers in the Sections 241–242 proceedings rather than under the IBC.
Practical Impact
Showed that for a systemically important financial group outside the IBC's reach, the Government can use the Companies Act route — supersession of the board plus a tribunal-supervised stay — to enable an orderly, group-wide resolution outside the IBC CIRP mechanism. The NCLAT continued to supervise the resolution in later orders, including a judgment of 12 March 2020 dealing with group entities classified as green, amber and red according to their ability to meet their obligations.
Practice Area
Insolvency & IBC, Corporate Law
ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta
Background
The Supreme Court's detailed interpretation of Section 29A of the IBC — the provision that bars certain persons from submitting resolution plans. The case arose from competing bids for Essar Steel. The Resolution Professional found both bidders ineligible: ArcelorMittal because of its group's links with the NPA accounts of Uttam Galva Steels and KSS Petron, and Numetal because of the involvement of Rewant Ruia, son of an Essar promoter.
Key Holdings
The Court held: (i) ineligibility under Section 29A attaches when the resolution plan is submitted; (ii) where a corporate vehicle is set up to submit a plan, it is "not only permissible but imperative" to look behind it and identify its constituent elements — including persons acting jointly or in concert and "connected persons" under Section 29A(j); (iii) both ArcelorMittal and Numetal were ineligible as their plans stood; and (iv) invoking Article 142, the Court gave both two weeks to pay the overdue NPA dues of their connected companies and then resubmit plans for the CoC's consideration. It also observed that the time taken in litigation ought to be excluded from the CIRP timeline.
Practical Impact
Set out the approach to Section 29A eligibility that every resolution applicant must address, including scrutiny of the persons behind bid vehicles. Clearing the overdue amounts of NPA-linked connected companies before submitting a plan — the route under the proviso to Section 29A(c) — was the course the Court allowed both Essar bidders. Section 29A eligibility analysis is now a standard first step in CIRP bidding.
Practice Area
Insolvency & IBC
Mardia Chemicals Ltd. v. Union of India
Background
The Supreme Court upheld the constitutional validity of the SARFAESI Act 2002 — which enables secured creditors to enforce security interests without court intervention — but struck down Section 17(2), which required a borrower to deposit 75% of the amount claimed before appealing to a Debt Recovery Tribunal. The case balanced the rights of secured creditors to efficient enforcement against borrowers' access to an effective remedy.
Key Holdings
The SARFAESI Act is constitutionally valid as it provides a mechanism for secured creditors to recover dues without court intervention, consistent with the objective of reducing NPAs. However, the requirement to deposit 75% of the amount claimed as a condition for approaching the DRT is arbitrary and oppressive and violates Article 14. The condition was struck down, enabling borrowers to challenge SARFAESI enforcement actions before DRTs without any pre-deposit.
Practical Impact
A foundational case for SARFAESI enforcement practice. The removal of the pre-deposit condition has shaped NPA enforcement strategy for two decades — secured creditors must factor in DRT challenge timelines even after initiating SARFAESI action. Remains essential reading for any matter involving secured creditor enforcement.
Practice Area
Banking & Finance, Insolvency & IBC
BCCI v. Kochi Cricket Pvt. Ltd.
Background
The Supreme Court addressed the operation of the 2015 amendments to the Arbitration and Conciliation Act 1996 — specifically whether the substituted Section 36, which ended the automatic stay of an arbitral award on the filing of a challenge under Section 34, applied to Section 34 challenges filed before the amendment came into force on 23 October 2015.
Key Holdings
The Court held that Section 36, as substituted in 2015, is procedural and applies to Section 34 petitions pending on 23 October 2015, even in arbitrations commenced before that date. Filing a Section 34 challenge does not by itself stay enforcement; the award debtor must obtain a specific stay order from the court.
Practical Impact
Shifted leverage in arbitration enforcement: the award debtor must now apply for a stay under Section 36(3), and for money awards courts apply the principles governing stay of money decrees under the Code of Civil Procedure, typically on conditions such as a deposit or security. When Parliament sought to reverse this position through Section 87 (inserted in 2019), the Supreme Court struck Section 87 down in Hindustan Construction Co. Ltd. v. Union of India (November 2019).
Practice Area
Arbitration & Dispute Resolution
WhatsApp LLC v. Competition Commission of India
Background
The CCI took suo motu cognisance of WhatsApp's 2021 Terms of Service and Privacy Policy update, which made sharing of user data with Facebook group companies a condition of continued use, and directed an investigation by its Director General under Section 26(1) of the Competition Act 2002 into a possible abuse of dominant position. WhatsApp and Facebook challenged the CCI's jurisdiction, arguing that the policy was already under challenge before the Supreme Court on privacy grounds. A Single Judge of the Delhi High Court dismissed their petitions in April 2021, a Division Bench dismissed their appeals on 25 August 2022, and the Supreme Court dismissed their special leave petitions on 14 October 2022.
Key Holdings
The Delhi High Court Division Bench held that parallel inquiries by different authorities in their respective spheres are not uncommon and a slight overlap does not oust either — the privacy challenge before the Supreme Court and the CCI's competition inquiry operate in different spheres. It found a prima facie case that the "take-it-or-leave-it" policy could contravene Section 4 of the Competition Act, and held Facebook a proper party as the direct beneficiary of the data sharing. Dismissing the special leave petitions, the Supreme Court observed that the CCI is an independent statutory authority whose investigation cannot be restrained.
Practical Impact
Established that the CCI can investigate a dominant digital platform's data practices under competition law, alongside privacy and data protection regimes such as the DPDP Act 2023. The investigation culminated in a CCI order of November 2024 imposing a penalty of ₹213.14 crore on Meta, which has since been the subject of further appeals.
Practice Area
Competition Law, Data Privacy & DPDP
Vidya Drolia v. Durga Trading Corporation
Background
A three-judge bench clarified the law on arbitrability of disputes in India — overruling Himangni Enterprises v. Kamaljeet Singh Ahluwalia, which had held landlord-tenant disputes under the Transfer of Property Act non-arbitrable, and N. Radhakrishnan v. Maestro Engineers on the arbitrability of fraud allegations. The Court laid down a comprehensive framework for determining when disputes are non-arbitrable.
Key Holdings
The Court laid down a fourfold test: a dispute is non-arbitrable when the cause of action and subject matter (i) relate to actions in rem that do not pertain to subordinate rights in personam; (ii) affect third-party rights, have erga omnes effect or require centralised adjudication; (iii) relate to inalienable sovereign and public interest functions of the State; or (iv) are expressly or by necessary implication non-arbitrable under a mandatory statute. Landlord-tenant disputes under the Transfer of Property Act are arbitrable, but not where rent control legislation confers jurisdiction on a specified court or forum. At the referral stage, review is prima facie — "when in doubt, do refer" — and reference is declined only where the dispute is manifestly non-arbitrable.
Practical Impact
The governing framework for subject-matter arbitrability in India: parties drafting arbitration clauses should assess whether the disputes contemplated fall within any of the four Vidya Drolia categories. The referral-stage enquiry has since been narrowed: the seven-judge bench in In re Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899 (December 2023) held that a court acting under Section 11 examines only the existence of an arbitration agreement.
Practice Area
Arbitration & Dispute Resolution
V.B. Rangaraj v. V.B. Gopalakrishnan
Background
A foundational case on the enforceability of share-transfer restrictions agreed among shareholders. The heads of two branches of a family had orally agreed in 1951 that each branch would always hold an equal number of shares in their private company, and that a member wishing to sell would first offer the shares to his own branch. The restriction was not in the Articles of Association. The Supreme Court held that it bound neither the company nor the shareholders — a ruling that created lasting uncertainty about shareholder-agreement restrictions not mirrored in the Articles.
Key Holdings
Shares are movable property, transferable in the manner provided by the Articles. The only restriction on transfer is the one laid down in the Articles; a restriction not specified in the Articles is not binding either on the company or on the shareholders, and a purchaser cannot be refused registration on a ground other than one stated in the Articles. For public companies, the proviso to Section 58(2) of the Companies Act 2013 now makes any contract or arrangement between two or more persons in respect of transfer of securities enforceable as a contract.
Practical Impact
For decades, transaction counsel have incorporated SHA restrictions into the Articles of Association to ensure enforceability — a practice that continues today. The limitations identified in V.B. Rangaraj shaped Indian corporate M&A documentation practice, with ROFO, ROFR, drag-along and tag-along provisions typically replicated in the AOA for private companies.
Practice Area
Corporate Law & Governance, M&A & Transactions
Amazon.com NV Investment Holdings LLC v. Future Retail Ltd.
Background
The Amazon–Future dispute arose from the Future Group's proposed transfer of Future Retail's retail assets to the Reliance group, which Amazon said breached restrictions in its agreements with Future Coupons and Future Retail. In an arbitration under the SIAC Rules seated in New Delhi, an Emergency Arbitrator on 25 October 2020 restrained Future Retail from proceeding with the transaction. Amazon sought enforcement in the Delhi High Court, and the questions of law reached the Supreme Court.
Key Holdings
The Supreme Court held that: (i) an Emergency Arbitrator's award under institutional rules the parties have agreed to (here, the SIAC Rules) is an order under Section 17(1) of the Arbitration and Conciliation Act 1996, enforceable under Section 17(2), in an arbitration seated in India; (ii) a party that has agreed to rules making such an award binding cannot later treat it as a nullity; and (iii) no appeal lies under Section 37 against an order under Section 17(2) enforcing an Emergency Arbitrator's award.
Practical Impact
Emergency arbitrator relief is now enforceable in India-seated arbitrations conducted under institutional rules that provide for it, giving parties a practical route to interim relief before the tribunal is constituted. The ruling does not extend Section 17(2) to emergency orders made in arbitrations seated outside India. Relevant to cross-border M&A and joint venture agreements with Indian parties that choose an Indian seat and institutional rules.
Practice Area
Arbitration & Dispute Resolution, M&A & Transactions
Commissioner of Income Tax v. Walfort Share and Stock Brokers (P) Ltd.
Background
The Supreme Court considered whether Section 14A of the Income Tax Act 1961 — which disallows expenditure incurred in relation to income that does not form part of total income — could be used to disallow the loss on a "dividend-stripping" transaction. The assessee bought mutual fund units on the record date at ₹17.23 per unit, received a tax-free dividend of ₹4 per unit (then exempt under Section 10(33)), and redeemed the units days later at the reduced NAV of ₹13.23, claiming a loss of ₹4 per unit.
Key Holdings
The Court held that: (i) Section 14A requires a proximate relationship between the expenditure and the exempt income; (ii) the loss on redemption — the difference between purchase and sale price, arising from the dividend payout — is not "expenditure incurred" in relation to exempt income, so Section 14A did not apply; (iii) a dividend-stripping loss arising before Section 94(7) took effect (1 April 2002) could not be disallowed, and even Section 94(7) disallows such a loss only to the extent of the dividend; and (iv) a genuine transaction cannot be ignored merely because it is tax-motivated — tax planning without colourable devices is permissible.
Practical Impact
Regularly cited for the "proximate relationship" test under Section 14A: the provision reaches expenditure connected with exempt income, not the purchase price of the income-yielding asset. The computation of the disallowance is governed by Rule 8D of the Income Tax Rules, which was not in issue in Walfort.
Practice Area
Tax & Corporate
Sahara India Real Estate Corporation Ltd. v. SEBI
Background
The Supreme Court held that two Sahara group companies — Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) — had raised money from roughly three crore investors through Optionally Fully Convertible Debentures (OFCDs) in breach of the requirements governing public issues under the Companies Act 1956 and SEBI regulations. The Court directed the companies to refund the amounts collected — more than ₹24,000 crore — with interest at 15% a year, through SEBI. In later contempt proceedings for non-compliance, the Court ordered the detention of the group's chairman in March 2014, upheld in Subrata Roy Sahara v. Union of India (2014) 8 SCC 470.
Key Holdings
The Court held: (i) an offer of shares or debentures to fifty or more persons is a public offer under the proviso to Section 67(3) of the Companies Act 1956, attracting mandatory listing however the issuer labels it; (ii) SEBI has jurisdiction under Section 55A over unlisted public companies that make such offers — jurisdiction that cannot be avoided by calling the issue a "private placement"; and (iii) the OFCDs were debentures, and describing them as "hybrid" instruments did not take them outside SEBI's regulatory ambit.
Practical Impact
Settled the boundary between private placement and public offer in Indian securities law. Under Section 42 of the Companies Act 2013 and the PAS Rules, a private placement may be offered to no more than 200 persons in a financial year (excluding qualified institutional buyers and employees under ESOPs), and a non-compliant offer is treated as a public offer.
Practice Area
SEBI & Capital Markets, Corporate Law
Engineering Analysis Centre of Excellence Pvt. Ltd. v. Commissioner of Income Tax
Background
Resolving a long-running conflict between High Court decisions, the Supreme Court held that payments by Indian end-users and distributors to non-resident software suppliers for the use or resale of computer software, under end-user licence agreements or distribution agreements, are not "royalties" — so no tax was required to be withheld under Section 195 of the Income Tax Act 1961. The judgment covered four categories: software bought directly by Indian end-users from non-resident suppliers; software bought by Indian distributors for resale; software resold in India by non-resident distributors; and software bundled with hardware sold by foreign suppliers.
Key Holdings
The Court held: (i) a non-exclusive, non-transferable licence to use software transfers no right in the copyright — the payment is for a copyrighted article, not for the use of or the right to use a copyright, and is therefore not royalty under the applicable DTAAs; (ii) where the DTAA definition of royalty is more beneficial, it prevails under Section 90(2), and the wider domestic definition introduced retrospectively by Explanation 4 to Section 9(1)(vi) in 2012 cannot be read into the treaties; and (iii) persons making payments before 2012 could not be expected to deduct tax on the basis of that later amendment. The Court reversed the Karnataka High Court's contrary view in CIT v. Samsung Electronics and endorsed the Delhi High Court's approach.
Practical Impact
Settled the characterisation of cross-border payments for software licences and distribution: absent any transfer of rights in the copyright, such payments are not royalty under India's tax treaties, and Indian payers have no Section 195 withholding obligation on them. Relevant to every Indian business licensing software from foreign vendors and to IT distribution structures.
Practice Area
Tax, Technology & Intellectual Property
The summaries above are provided for educational and informational purposes only. They do not constitute legal advice. Legal precedents are applied in context — the precise application to any specific matter requires legal analysis by qualified counsel. See our Disclaimer for full terms.
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