Media Coverage

tax on reit

The Imposition of Tax on REIT / INVIT Under The Finance Act 2020: A Critical Evaluation

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The Imposition of Tax on REIT/INVIT Under Finance Act 2020

Real Estate Investment Trusts and Infrastructure Investment Trusts are rapidly growing investment vehicles that allow developers to monetize revenue-generating real estate and infrastructure assets while also allowing unitholders to participate without owning the assets.

The Indian real estate sector has long campaigned for the creation of “Real Estate Investment Trusts (hereinafter REITs)” and “Infrastructure Investment Trusts (IITs)” (hence InvITs). Although these industry launches were originally permitted a few years ago, their popularity has waned because of the ambiguity surrounding the tax legality of all pass-through transfers. REIT may be defined as a sort of mutual fund that enables investors to invest in real estate.

A real estate investment trust (REIT) is a firm that receives money from interested investors and invests it in real estate projects. InvITs, on the other hand, vary from REITs in that the majority of willing investors often participate in capital investments with a long gestation period.

They are collectively known as “Business Trusts,” and they have enormous potential to aid the government in accomplishing one of the country’s large infrastructure expansion goals while also encouraging the country’s commercial real estate market to improve.

Dividends (received by unitholders of REITs and InvITs) were not subject to tax prior to the approval of the Finance Bill tabled in Lok Sabha. The Finance Minister, Ms. Nirmala Sitharaman, released the Union Budget for the years 2020-2021 and requested several changes. For the fiscal year 2021, the Bill tabled in the Lok Sabha comprised many budgetary and taxation-related suggestions to change the Income-tax Act, 1961 (“Income-tax Act”).

Following the passage of the bill, the government decided to tax profits received by unitholders in REITs and InvITs, jeopardizing the developers’ and road-to-port the builders’ intentions to collect all money from such instruments. It may as well had been a tax policy enforced, but the dividend distribution tax was eliminated in Budget 2020-21, putting the burden of proof on the holders.

Although tax-free SPVs and trusts will remain, unitholders of InvITs and REITs will no longer be exempt. They will also be subjected to be taxed at the applicable income tax rate for the dividend income under the finance act 2020.

Upon the bill’s ratification, there was some unanimity on the fairness of the taxation policy imposed on dividend unitholders, and some remained unaffected by the adjustment in the taxation policy since it was not a major problem and was not unreasonable given that the government had already decreased the corporate tax rate. The aim behind such imposition seems to be convincing as it was to apply one advantage – either exempt the dividends or offer a lower corporate tax rate to the SPVs.

The imposition of tax responsibility on REITs and InvITs, like two sides of a coin, has its own set of benefits and downsides. The idea in the Union Budget to tax the profits obtained in the hands of unitholders/investors was developed after studying the chances of imposing the tax and taking into account the views addressed by real estate industry authorities.

 It would have a detrimental effect on the potential of InvITs and REITs, as a budget choice would go against the government’s immediate efforts. This was done to entice InvITs and REITs to give some tax certainty to long-term infrastructure developers. The introduction of the tax, on the other hand, contributes to the uncertainty among international/foreign investors who are skeptical of India’s tax regime’s stability and will be irreversibly hurt by the tax regime’s unpredictability.

The government’s proposed/passed reforms, as well as the application of a tax on dividends earned by REIT and InvIT unitholders, seem to have a significant influence on the business trust’s future potential in one way or another. Nevertheless, the appeal of these structures remains unresolved following a comparative review of the revisions.


Tags: finance bill 2020, reit taxation, the finance act 2020, tax on reit, 2020 finance act, reit tax benefits, finance act 2020, reit dividend tax, finance act 2020 summary

intellectual property rights

Intellectual Property Rights VS Open Access Initiatives

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Intellectual Property Rights and Open Access Initiatives

In the wake of the global epidemic, the conflict between open access and traditional IP rights is becoming a significant problem. The essence of IPR and open access is that they are opposed to one another, to the point that approving one is destructive to the other. Let’s break down and find a balance between them.

IPR registration primarily consists of safeguarding one’s intellectual work for innovations and creative works, indicating its origin, and providing the owner unlimited control over that particular product for a certain length of time.

Whereas the fundamental goal of most open-access efforts is to help people and organizations overcome barriers. And to aid individuals and organizations in overcoming legal barriers, sharing and developing knowledge, and addressing global concerns.

 The effort encourages open access sharing and gives information on how to distribute information while avoiding prejudice against any individual or group of individuals. It would also stimulate fresher ideas and solutions to society’s broader issues, as well as provide a fair playing field for all entrepreneurs and people to compete on an equal footing with giant corporations with more resources.

As a result, these ideas are intended to both promote and enable access to individuals who may not otherwise be able to afford it.

The basics of open access, as can be shown, contravene one of the most fundamental concepts of intellectual property rights, which is to safeguard intellectual property. The rationale for the parties wanting legal protection for their IP is mostly commercial profit. The patent helps provide a framework to share protected work without letting go of any commercial benefits like product sales and licensing royalties. For instance, a person can patent his scientific tool and then sell the same to a huge corporation.

As an outcome, the firm may create it in big quantities at a lesser cost, lowering the cost to the customer. For all parties concerned, this is a triple-win situation. The patent owner makes money from the invention, the business sells the item to the consumer, and the customer gets a cheaper product. Copyrights are also for anyone who wants to safeguard their work, such as literary works or movies, while simultaneously benefiting from IP protection.

A large portion of this labor is shown in front of the public to get advantages. Without copyright protection, the author’s work might be duplicated or exploited without the originator receiving any recompense.

Furthermore, a trademark serves as a means of distinguishing one company’s goods or services from those of another. It also allows an owner to restrict other parties from using his or her trademark. A trademark’s main purpose is to provide information about a product’s origin and excellence to help consumers make better purchasing decisions.

It also gives a single owner monopolistic power because a large number of registered marks means fewer marks are accessible for others to use in the public domain.

As a result, in addition to symbolism, a trademark may be extremely valuable to a firm, causing some to incorporate it into their value. Trademarks are perpetually protected as long as they are in use and the owner can defend them. It protects companies from impersonators who want to profit by creating uncertainty in the marketplace by attempting to imitate an already recognized brand.

Striking a balance between traditional intellectual property rights and open access projects may be difficult, because artists may contemplate the consequences of doing something for the greater good, but they are also likely to consider how profitable their invention may be. However, recently this convergence has been seen in the Open COVID Pledge where the world is coming together to fight the pandemic. 

The goal of the committee is to urge organizations all around the globe to share their intellectual property so that we can all combat COVID together. This vow will eventually assist in the defeat of COVID-19 and will benefit humanity as a whole. Participating in this promise may also benefit businesses by generating goodwill and resulting in future commercial benefits.


Tags: open access initiatives, intellectual rights, ipr law, intellectual property rights law, ip rights, intellectual property rights, intellectual property protection, ipr act

personal guarantor insolvency

The New Legislation of Personal Guarantor’s Insolvency Under IBC

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Personal Guarantor Insolvency

IBC 2016 was created to replace the old framework for insolvency and bankruptcy with single legislation. With the adoption of the IBC, the winding-up procedure was brought under the supervision of the National Company Law Tribunal, guaranteeing prompt and speedy action during the early phases of a firm’s financial default. The IBC’s primary goal is to help distressed corporate debtors.

History of Personal Guarantor Insolvency

As defined by Section 5(22) of the Code, a personal guarantor is an individual who is the surety under a contract of guarantee to the corporate debtor. While the provisions of the IBC pertaining to the insolvency resolution process of corporate debtors were implemented by the Central Government in 2016, the provisions of the IBC pertaining to the insolvency resolution process of corporate debtors were not.

The provisions pertaining to Personal Guarantors to Corporate Debtors’ bankruptcy resolution procedure were not. Prior to the Code’s creation, the Presidency Towns Insolvency Act of 1909 and the Provincial Insolvency Act of 1920 covered insolvency and bankruptcy for all persons, including personal guarantors.


The IBC shall apply to the personal guarantor of the corporate debtor as of 1.12.2019, according to a notice dated 15.11.2019. Section III of the IBC will only apply to personal guarantors, according to this notice.

The Supreme Court in landmark judgment held that lenders can now initiate insolvency proceedings against promoters, managing directors, and chairpersons who issued personal guarantees on corporate loans if the borrower defaults.

Prior to the Notification concerning Section 60 of the Code, the Debt Recovery Tribunal had jurisdiction over insolvency and bankruptcy procedures against personal guarantors, whereas procedures against corporate debtors for the same default were either underway or became pending before an NCLT. 

This had the opposite effect, delaying the legal procedure and producing inaccuracies in estimating the amount to be recovered from the guarantors. To resolve this issue, Sections 60(2) and 60(3) of the Code were inserted, mandating that bankruptcy procedures against personal guarantors and corporate debtors be conducted by the same court, namely the NCLT.


  1. Consolidation of proceedings safeguards the debtors’ and guarantors’ interests by ensuring that the claim amounts issued to creditors do not overlap.
  2. For creditors, it allows for simultaneous actions before the same court, removing the burden of having to go to two separate forums to recover the same amount.
  3. The new legislation is likely to significantly reduce delays in the collection of creditors’ dues, as the Code mandates a time-bound approach.
  4. In addition to the SARFAESI Act, debt recovery suits, and other civil remedies, creditors now have another option for recovering their loans, resulting in a concentration of power in their hands.
  5. There appears to be no clear provision in Part III of the IBC, 2016 that allows an aggrieved personal guarantor to challenge the adjudicating authority’s decision.
  6. A pro-creditor insolvency framework presently applies to personal guarantors. Liabilities do not exclude guarantors. As a result, organizations must exercise prudence and prudence before issuing assurances in order to protect themselves from unanticipated events.


In Lalit Kumar Jain vs. Union of India, the Hon’ble Supreme Court confirmed the legality of the 2019 notice expanding the IBC rules to personal guarantors. The Court also concluded that approving a Corporate Debtor’s resolution plan did not free a Personal Guarantor of their responsibility to repay the Corporate Debtor’s debt owed to an independent contractor.

A distinctive aspect of loans supplied to MSMEs is that it is frequently backed by personal guarantees supplied by promoters (which account for around 29 percent of GDP). Promoters will be encouraged to employ the pre-packaged insolvency resolution procedure for MSMEs to get creditor-friendly outcomes and strengthen credit discipline across the loan market as a result of the decision.


Despite being a good legislative attempt at efficiency, asset valuation maximization, and resolution process optimization, the new legislation fails to address the realities of the bankruptcy process.

For instance, an ordinance dated 05.06.2020 halted the implementation of Sections 7, 9, and 10 of the IBC, 2016, which were intended to safeguard corporations against new insolvency actions, citing the COVID-19 epidemic as the rationale. 

However, relevant provisions of Part III of the IBC, 2016 dealing with individual/personal insolvency, including personal guarantors to corporate debtors, are not suspended in the same way, even though it is reasonable to assume that the economic slowdown caused by COVID-19 will affect both corporates and individual guarantors equally.

This has led to the creditors having the option, even during a COVID-19 pandemic, to take action against personal guarantors but not against corporate debtors.


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indian startup

SEBI Gives Indian Startup Wings

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Indian Startup Wings

The Securities Exchange Board of India has issued a long-awaited circular on a revision in the criteria of listing. This approach allows Indian primary startups to grow their market and gives small investors an investment opportunity. A large number of Indian companies are now in the early stages of development.

At which point the essential market list is in the logical stage to offer initial financial backers the chance to invest cash, yet additionally to take their story to a more extensive crowd.

It is not, however, a smooth journey, since a list of these businesses’ accomplishments might serve as a test based on specific standards that are more extensive and demanding than they have ever been exposed to. Private bankers, private equity funds, and investors treat their children with extraordinary generosity. Since, in the initial phases, the financial backers of the startups, look for development instead of return.

Additionally, the numbers are a result of outstanding advancement. That is the reason we’ve seen terms like gross worth added (GVA) utilized as a measuring stick for computerized business development. Tragically, the benefit of the same in the environment of most new companies has not yet been perceived.

SEBI has also introduced provisions for startups that are similar to mainboard businesses. “Issuer businesses that have given promoters/founders Superior Voting Rights (SR) equity shares will be able to list under the Investors Growth Platform (IGP) framework.” The regulator has increased the set-off mark for open offers for IGP organizations from 25% to 49%.

In any case, independent of procurement or holding of offers or casting ballot rights in an objective organization, any adjustment of control straightforwardly or by implication over the target organization will trigger an open offer. The controller has devised cautious starting instructions.

Currently, a company must have 75 percent of its capital owned by QIBs as of the date of use for moving from IGP to Main Board if it does not meet the conditions of productivity, net resources, total assets, and so on. This need has now been reduced to half of its original size.

The amendments have been made according to the partner’s suggestions for the Innovators Growth Platform. It made changes in the wake of dissecting remarks on the discussion paper given in last November. SEBI has cut the personal period for backers to having 25% of pre-issue capital held by qualified financial backers from 2 years to 1 year for qualification prerequisites which were of significant interest for new businesses.

Other actions done by the controller include rebranding Accredited Investor to ‘Innovators Growth Platform Investors’ with the final purpose of IGP. Currently, such financial supporters’ pre-issue ownership for fulfilling qualification criteria is considered for just 10%, but this is being increased and will be considered for the entire 25% needed to achieve qualification conditions.

Profit is important to experienced investors, and they want it now. Given the current state of main startups, the market is still uncertain about the immediate consequence of earnings. SEBI, on the other hand, has attempted to speed up the process by establishing the Innovators Growth Platform on the National Stock Exchange. Some other discounts such as simplifying open offer trigger requirements and adjusting delisting rules are also intended to make life easier for startups.

Apart from the above-mentioned rules, the market regulator also mandated the public disclosure of analyst calls, and quick reporting of earnings, and expanded the requirement of setting up a Risk Management Committee. Thereby, the startups will eventually have to follow the rules.

According to Renaissance Capital, half of the IPO enrollments in the United States will be withdrawn at long last. Financial backers are disillusioned in the store, even with those documented. For example, McAfee, an internet security corporation, meets all of the criteria to be included on the list for 2020.

It declined on the first day of the season, to $ 20 per offer, and then climbed a half year later. On the other side, Infosys may serve as an inspiration and a good example of how to profitably build a firm. These criteria have made it simpler for startups in India to go public, preventing a possible outflow of Indian firms to international capital markets.


Tags: india startups, startups in india 2021, indian startup, startup companies in india, start up india, start up business in india

the renewable energy sector

Challenges in Cross Border M&A Deals in The Renewable Energy Sector

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Cross Border M&A Deals in The Renewable Energy Sector

Cross Border M&A Deals: India’s government has emphasized the potential of renewable energy to address the country’s rising energy needs. Due to the increasing relevance of renewable energy as an economically viable source of electricity, M&A activity in this sector has increased in India in recent years.

This industry has demonstrated tremendous potential for investment from both domestic and foreign firms, resulting in a surge in cross-border M&A deals.

Although both the acquirer and the acquired firm face obstacles, cross-border M&A may help organizations extend their operations throughout the world without having to start from scratch.

Cross Border M&A Deals – Pros and Cons


  • Capital builds up:

Long-term capital accumulation is aided by cross-border mergers and acquisitions. It invests not only in plants, buildings, and equipment to develop its enterprises but also in intangible assets like technical know-how and talents, rather than simply the physical element of the capital.

  • Employment creation:

It can sometimes be observed that mergers and acquisitions (M&As) done to drive restructuring may result in downsizing but, in the long run, increase employment. It is sometimes necessary to downsize businesses in order to keep them running. In the long run, as firms grow and become more successful, additional job possibilities will arise.

  • Technology handover:

Once enterprises from other nations join forces, beneficial impacts such as technology transfer, sharing of best management skills and practices, and investment in the host country’s intangible assets are sustained. This, in turn, leads to innovations and has an impact on the company’s operations.


a. Political concern:

The political environment might have a big impact on cross-border mergers and acquisitions, especially in politically sensitive areas like defense and security. 

b. Legal considerations:

Companies wanting to merge cannot overlook the challenge of meeting the various legal and regulatory issues that they are likely to face. Various laws concerning security, corporate, and competition law are bound to diverge from each other.

Hence before considering the deal, it is important to review the employment regulations, antitrust statutes, and other contractual requirements to be dealt with. These laws are active while the deal is under process and also after it has been closed. 

c. Due diligence:

Due diligence is a crucial aspect of the mergers and acquisitions process. Due diligence can influence the terms and conditions under which the M&A transaction takes place, the deal structure, and the deal price. It assists in identifying the potential for hazards and provides a complete perspective of the proposed transactions.

There is a slew of additional aspects to consider since each transaction has its own set of advantages and disadvantages.

Industry Impact

Frequent improvements, such as energy sources, indicate that market changes reflect the desire for eco-sustainable growth. The availability of renewable energy sources varies. This complicates the complete integration of renewable energy sources into the distribution system, as well as the reduction of system-wide electric imbalances.

Several solutions on the market, on the other hand, allow for the technological exploitation of synergies across diverse energy networks, therefore relieving the issues associated with the integration of renewable energy sources. Political, economic, social, technical, legal, and environmental issues all have a role in M&A decision-making, as well as the number and value of acquisitions that follow.

The most important factors are commodity price fluctuations, increased oil supply, increased penetration and active development of renewable energy sources, use of smart grid technology, which allows for lower transaction costs and optimal operation of electrical grids, and liberalization of energy markets.

 In February 2021, a total of $3.53 billion in cross-border power industry M&A agreements were announced throughout the world, headlined by IFM Investors, and the $2.19 billion asset purchase between Ontario Teachers’ Pension Plan and Brookfield Infrastructure Partners.


Despite the issue, we have discussed above the number of cross-border transactions has increased quite radically over the past few decades. Though there have been a few economic crises and the situation has not been so conducive, it had not disturbed the upward trend in cross-border M&A deals and activity.

More and more firms desire to go global since it provides excellent chances and is a less expensive choice for them to expand themselves inside. Looking into M&A attitudes throughout the world reveals that the business’s acquisition focus is shifting from domestic to cross-border transactions due to the numerous advantages it provides.


Tags: global renewable energy, renewable energy industry, renewable energy investment, cross border m&a deals, renewable energy market, renewable energy finance, the renewable energy sector, renewable energy sector

adjudicating authority

How Does The Adjudicating Authority Approve The Resolution Plan?

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The Adjudicating Authority

A resolution plan is a proposal that aims to provide a resolution to the problem of the corporate debtor’s insolvency and its consequent inability to pay off debts. It needs to be approved by the committee of creditors (“COC”), and comply with mandatory requirements prescribed in IBC.

The Code (Insolvency and Bankruptcy Code, 2016) attempts to solve corporate debtors’ difficulties by putting them through a corporate insolvency resolution procedure (CIRP) and transferring them as going concerned to Resolution Applicants prepared to take over their management and assets and pay their obligations.

The CIRP is seen as a more beneficial alternative to liquidation, as a going concern is likely to fetch a higher value for the creditors than a simpliciter sale of its assets.

The market will determine the remedy. Interested resolution applicants can join the CIRP and submit “resolution plans,” which are mechanisms for taking over a corporate debtor, settling its creditors’ debts, and reviving and turning it around. The Adjudicating Authority/National Company Law Tribunal (“NCLT”) then reviews and approves the authorized plan, bringing the CIRP to a close.

While analyzing an authorized plan, the NCLT has limited powers and cannot intervene in a commercial decision made by the Committee of Creditors. When it comes to the Resolution plan’s approval, an adjudicating body must make a judgment in accordance with Section 31 of the Code.

It must go through the reasons to accept or reject one or more suggestions or objections, and it has the option of expressing its own judgment. As a matter of fact, now, the Committee of Creditors ought to record their reason when approving or rejecting one or another Resolution plans.

The Supreme Court has declared in Antanium Holdings Pte. Ltd. Vs. M/s. Sujana Universal Industries Limited, that the adjudicating authority is to record analytical subjective satisfaction which is a precondition before according approval to the Resolution Plan. In other words, the ‘Approval’ of ‘The Resolution Plan’ is to be judged with the utmost care, caution, circumspection, and diligence.

The threadbare examination of the scheme is to be studied astutely before arriving at a subjective satisfaction by the ‘Adjudicating Authority’.

The expression “subjective satisfaction” means the satisfaction of a reasonable man and it can be arrived at based on some material that satisfies a rational mind. It’s worth noting that a Resolution applicant can’t appeal the judgment of the Committee of Creditors (COC).

Given the legislative constraints of Section 30 of the Code, it is the COC that will approve or disapprove a resolution plan. An ‘Adjudicating Authority’ functions in a ‘Quasi-Judicial’ capacity and has the power to set the ‘Resolution Plan.’


Tags: adjudicating authority under ibc, adjudicating authority approval, adjudicating authority, approval of resolution plan, resolution plan approval, adjudicating authority under insolvency and bankruptcy code

legal lens

TRUST – Through The Legal Lens

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Trust Through The Legal Lens

Trust is an arrangement whereby a person holds property as its nominal owner for good of one or more beneficiaries. We can see many trusts working for different purposes. But are they liable for the paying of tax while working? Does the creation of trust become the device of tax evasion? The answer is No, that is not the case.

The income tax appeal tribunal (ITAT) in Delhi ruled on this. The trust’s legitimacy is discussed in the decision. Second, trust is used to store treasuries and stock. Finally, under the provisions of sections 160 to 166 of the Income-tax Act of 1961, its income is taxed as a representative of the beneficiary or beneficiaries (IT act ).

The trust cannot escape the tax, according to the ruling, and the trust will have the same tax responsibilities and exemptions as the beneficiaries. Escort benefit and welfare trust vs. ITO was the lawsuit that resulted in this decision. The following are the details of the case.

A trust called the escort benefit and welfare trust was founded on February 14, 2012. A trust deed was used to establish it. The Escort benefit and welfare trust’s sole beneficiary and management was the corporation Escort. The trust’s first gift was $10,000, which was made by its three trustees.

Three companies amalgamated into Escort limited. Through this merger, it was decided that the shares of all the companies were to be transferred to Escort benefit and welfare trust, for giving the benefit to the Escort limited and its successor. 

The Escort benefit and welfare trust generated a large amount of money in the fiscal year 2016-17, with an income of over Rs 4,47,60,037. Escort Limited paid the dividend distribution tax under section 115-o of the Income Tax Act.

However, Escort’s claim of exemption under section 10(34) of the IT Act was restricted. Since the settlor and the beneficiary were the same in the case of Escort benefit and welfare trust, the assessing officer found out and claimed that the trust, in this case, is itself valid, under the Indian trust act 1882. 

Furthermore, the assessing officer discovered that, though a few trustees were chosen for this trust, they did not have any discretion, and therefore it was determined that the beneficiary, Escort Limited, was acting as a trustee to the Escort benefit and welfare trust.

The exemption was not granted to the Escort benefit and welfare trust and it was helped that the trust was only created to get an exemption from the taxpaying. And further assessor ordered Escort benefit and welfare trust to pay the tax over the dividend income that they have as the income from the other source under section 56 of the IT act.

 Thereafter, the Escort benefit and welfare trust filed an appeal with the commissioner of income tax (appeals), i.e. CIT (A). Escort benefit and welfare trust is not a genuine and properly created trust, and therefore cannot be taxed as a representative assessee, according to the commissioner of income tax (appeals). It will be held as an association of the people.

The ITAT overturned the commissioner of income tax (appeals) judgment, ruling that the Escort benefit and welfare trust is a legal trust. Since the trust legislation makes no reference to the settlor and single beneficiary being the same person. And also the exemption in taxes under section 10(34) was also granted to the Escort benefit and welfare trust. 


Tags: tax fraud, tax evasion and tax avoidance, income tax appeal tribunal, tax evasion, creation of trust, income tax appellate tribunal, tax evasion penalties, income tax evasion, legal lens, tax evasion and avoidance, income tax fraud

bitcoin technology and legality

Critically Analyzing The Bitcoin Technology and Legality in India

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Analysis of The Bitcoin Technology and Legality in India

From bartering to cash to digital payments to cryptocurrencies, the financial industry has evolved through time. In 2009, Satoshi Nakamoto, a mysterious and pseudonymous figure, is said to have invented digital money. Surprisingly, the identity of the person or group of people who devised this technique is still unknown.

Bitcoins are significantly simplified by mining, in which a ‘miner’ utilizes his computer ability to solve computationally challenging riddles that are crucial to blockchain technology, therefore assisting in the maintenance of the entire system of blockchains and earning fresh bitcoins as a reward.

Nevertheless, the most common method of purchasing a bitcoin is to use a bitcoin exchange to swap actual money for bitcoins, which are then held in an online bitcoin wallet in digital form. Another option is to accept bitcoins in exchange for selling products and services.

Furthermore, Bitcoin promises lower transaction fees than other traditional online payment methods and is operated by a decentralized authority by virtue of its intangible form, the balances are only kept on a public transparent ledger that everyone has access to, therefore it is a more lucrative currency alternative.

The bitcoin system is made up of a group of machines that execute the bitcoin code and store the blockchain. In simple words, a blockchain may be thought of as a collection of blocks, each of which is a collection of transactions with an identical list of transactions on each system. As the transactions are done in real-time, whether they have a computer running Bitcoin or not, abusing the system is quite unlikely.

Somebody would have to control 51 percent of the computing power that makes up bitcoin to scam the system. However, if a cheat assault is likely to occur, bitcoin miners (computer users that participate in the bitcoin network) would most likely split to a different blockchain, rendering the invader’s efforts worthless.

Nonetheless, bitcoins cannot be used to purchase products or services in India, and only a few firms accept bitcoins instead of actual cash for the sale of the goods and services they provide. Individual bitcoins are not valued as commodities since they are not issued or backed by any banks or governments. Bitcoin transactions are not currently guaranteed by any banks, and no central body in India has sanctioned or regulated them.

There are no established norms, laws, or standards for addressing disputes that may occur while dealing with bitcoins. As a result, these bitcoin transactions have their own set of hazards. Given this context, it is impossible to conclude that bitcoins are unlawful, given no ban has been enforced on bitcoins in India. 


Tags: bitcoin legality in india, bitcoin technology and legality, analysis of bitcoin and legality, digital payments, analyzing Bitcoin Technology

land acquisition in india

Impact of The Judgment on Land Acquisition Proceedings in India

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Impact of The Judgment on Land Acquisition in India

It is widely perceived that the Indian state holds the right of “eminent domain,” which refers to the sovereign’s capacity to acquire private immovable property for public use, provided that the nature of the public purpose can be established beyond a reasonable doubt, and that the owner of such property receives fair and equitable compensation.

The most essential component of land acquisition jurisprudence in India is the payment of fair compensation to the landowners in exchange for the state’s expropriation of their land for public use.

In its March 6, 2020, verdict in the Indore Development Authority v Manoharlal & Ors., a five-judge constitution bench of the Apex Court decided that land acquisition proceedings would not expire if the state has unconditionally provided appropriate compensation.

The bench also clarified that if a person was offered compensation but refused to accept it, he cannot claim lapse of acquisition due to non-performance of payment or non-deposit of compensation.

Furthermore, once the state makes an award and publishes a memorandum, the landowner loses title to the property, and Section 24(2) of the new land acquisition legislation prohibits landowners from reopening settled cases, reviving time-barred claims, or challenging the legitimacy of ended processes.

The Court stated – “Overruling all precedents and resolving the ambiguity relating to the interpretation of Section 24(2) of the New LA Act, the bench held that the word ‘or’ used in Section 24(2), should be read as ‘nor’ or as ‘and’. Since Section 24(2) prescribes two negative conditions, even if one condition is satisfied, there is no lapse in acquisition proceedings.

Therefore, only if both the conditions mentioned under Section 24(2) have not been fulfilled before the New LA Act came into force, would the land acquisition proceedings lapse. The bench observed that the alternative interpretation would place an undue burden on the state in land acquisition proceedings.”

The bench responded by saying that under S. 24(2), the phrase “paid” does not include a court-ordered reparation deposit. If a person has been granted compensation under the Old LA Act, he cannot claim that the acquisition has lapsed owing to non-payment or non-deposit of compensation in court under Section 24(2).

The bench went on to say that if the state has issued the compensation under the Old LA Act, it has fulfilled its duty to pay. 

Thereby, it was held that S. 24(2) of the New Act does not allow landholders to reopen settled cases, revive time-barred claims, or challenge the legality of concluded proceedings. S. 24(2) applies only to pending proceedings where the award was made at least five years prior to the effective date of the 2013 Act.

Impact of the judgment on land acquisition

The Supreme Court’s ruling is anticipated to pave the way for the prompt settlement of issues arising out of current purchase processes under the Old LA Act.

One may fairly anticipate this to open the way for fast physical and associated infrastructure development operations in the post-COVID-19 period, which had previously been blocked or put on hold owing to a variety of litigations concerning outstanding acquisition actions.

More land parcels would be liberated from the clutches of long-standing litigation and given access to the purchasing state or authority for use in significant infrastructure development and construction operations, which would definitely enhance the government’s endeavors to fulfill its goals under the “Housing for All by 2022” program and hasten urban growth.


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force majeure

Force Majeure: Will The Pre Litigation Mediation Helps The Companies?

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Force Majeure: Will Pre Litigation Mediation Helps Companies

In a contract, a clause in which there is a reference to Force Majeure which removes the liability of the participants for not fulfilling their obligation caused by the natural and unavoidable catastrophes that interrupt the expected course of events.


This notion is defined and handled differently depending on the jurisdiction. It is also based on French civil law and is recognized by the Napoleonic Code. The English invented the concept of the Force Majeure clause. An English court determined in Taylor v. Caldwell that circumstances beyond the control or fault of two contractual parties excused performance under their agreement.

In the case of The Tornado, the Supreme Court of the United States established the same rule of law 20 years later. And in this case, the US SC very clearly said that if the contract doesn’t include this clause then the court will apply and go with the principles first laid down in the case of Tyler v Caldwell. (1863).

The Indian Contract Act of 1872 incorporates a Force Majeure provision. Section 32 is dedicated to contingent interaction. The frustration of the Contract is dealt with in Section 56.

It is crucial to note that even though Covid-19 comes within the scope of the force majeure provision, this does not automatically provide relief to the parties. The force majeure event must have a direct impact on the non-performance. 

Current scenario:

As previously stated, this idea is applied when the parties are unable to complete the contract owing to circumstances beyond their control. The question that now emerges is what specifically is covered by this concept.

Although Indian Courts have not directly ruled on whether an epidemic/ pandemic like Covid-19 is an ‘Act of God’, the decision of the Supreme Court in The Divisional Controller, KSRTC v. Mahadeva Shetty, which holds that the expression ‘Act of God’ signifies the operation of natural forces which is beyond the human control with the caveat that every unexpected natural event does not operate as an excuse from liability if there is a reasonable possibility of anticipating their happening.


  ‘Force Majeure’ clause to protect your business interests and the contract.

▪  With legal help, you can retain the contract.

  With the help of this clause, parties can obtain temporary relief from performing their obligation.  


  The Force Majeure clause not only excuses a party from performing but sometimes eliminates damage for breach of contract. 

  It is difficult to find out what event is considered under the ambit of Force Majeure. 

Industry impact:

COVID-19 has wreaked havoc on the economy in a variety of industries, including hotels, aviation, automotive, construction, logistics, and more, and many contractual performance duties have been rendered impossible. Many others, though more difficult, demanding, or expensive, are nevertheless physically or legally viable. COVID-19, on the other hand, will continue to have a destructive effect on world health and economics.

The worldwide COVID-19 epidemic has wreaked havoc on all industries and put a large portion of the world’s population under lockdown. This has caused firms to cease operating efficiently, as well as affecting other operations and contracts.

On the issue of contracts, this outbreak has brought many new aspects one of which includes the Force Majeure clause that impacts formal contracts. The COVID-19 pandemic has made many contracts delayed, interrupted, or even canceled.

Companies are facing disruptions to their supply chains, whether it’s due to vendors that are no longer providing services or customers who seemingly vanish.

Then who’s to blame if the supply chain breaks down in the event of a pandemic? What should a corporation do if its vendors refuse to work or are unable to work because its staff is at home? And, when a company’s revenue stream has abruptly dried up, how can it avoid paying payments under its contracts?


While various contractual parties may attempt to rescind their commitments in the wake of the Covid-19 epidemic, relying on the force majeure provision in the applicable contract or Section 56 of the Act to do so is not guaranteed.  The onus of demonstrating whether Covid19 affected the performance of the specific contractual obligations in a particular case lies heavily on the party seeking to have its non-performance excused. 

Although determining whether the Covid-19 epidemic is within the scope of the appropriate force majeure clause is a good place to start, other factors such as causality and the duty to mitigate must also be considered in order to analyze the relative strengths and weaknesses of each party’s position.

Relevant letters and correspondence (including force majeure notices) should also meticulously document not just the fact that a force majeure event has occurred, but also the specific effects of the same on the contractual obligation which the party seeks to be excused from performing. 


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