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Corporate Update: Penalty for Not Appointing a Whole- Time Company Secretary After Crossing the Threshold
Background: The Registrar of Companies, NCT of Delhi & Haryana, acting as the Adjudicating Officer, has issued a penalty order under Section 203 of the Companies Act, 2013 (“the Act”) against United Technologies Corporation India Private Limited ("the Company") and its officers. This action follows an application by the Company for adjudication of penalties related to a default in appointing a whole-time Company Secretary as required by Section 203 of the Act. Facts of the Case: The Company's paid-up capital increased to INR 10,56,99,990 effective 28 July 2022, triggering the requirement to appoint a whole-time Company Secretary under Section 203(1) of the Companies Act, 2013, read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, the Company appointed a whole-time Company Secretary only on October 30, 2023, resulting in a default period of 458 days (from July 28, 2022, to October 29, 2023). The delay being attributed to a lack of suitable candidates for the position. In view of the same the Company filed an application for adjudication before the Registrar of Companies, NCT of Delhi and Haryana. Relevant Provisions: Section 203 of the Companies Act, 2013: Deals with the appointment of Key Managerial Personnel (KMP), including the requirement for certain classes of companies to have a whole-time Company Secretary. Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: Specifies that every private company with a paid-up share capital of ten crore rupees or more shall have a whole-time company secretary. Section 203(5) of the Companies Act, 2013: Prescribes penalties for non-compliance with Section 203, including a penalty on the company and every director and KMP in default. Adjudication of Penalty: The Adjudicating Officer, upon due consideration, determined that the paid-up share capital of the Company exceeded ₹10 crores with effect from 28 July 2022. Consequently, the Company became statutorily obligated to appoint a Whole-Time Company Secretary in accordance with the provisions of Section 203 of the Act. Furthermore, the Adjudicating Officer held that the Company remained in continuous default for a period of 458 days for failing to comply with the aforesaid statutory requirement. In view of the said non-compliance, penalties were imposed upon the Company as well as its officers in default, pursuant to the provisions of Section 203(5) of the Act. Penalties Imposed: Party Period of Default Penalty (INR) United Technologies Corporation India Private Limited 458 days 5,00,000 Ashmita Sethi (Whole Time Director) 458 days 5,00,000 Rajiv Thapar (Director) 458 days 5,00,000 Paruthippara Ravindran Rema (Director) 396 days 4,45,000 Kurt Andrew Percy (Director) 458 days 5,00,000 Surinder Singh Kainth (Director) 458 days 5,00,000 Sandeep Sharma (Director) 394 days 4,43,000 Amit Pathak (Director) 110 days 1,59,000 Pankaj Anand (Director) 343 days 3,92,000 Divyesh Jamnadas Dalal (Director) 201 days 2,50,000 MHCO Comment: This penalty order highlights the importance of timely compliance with the provisions of the Companies Act, 2013, regarding the appointment of key managerial personnel. Companies must ensure adherence to these requirements to avoid penalties and maintain regulatory compliance. Such penalties are extremely important to ensure corporate governance and to ensure due compliance with the provisions of the companies act and its accompanying rules. This article was released on 7 March 2025. The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.
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IPR Update: Delhi High Court Holds Amazon Technologies Liable for Trademark Infringement
On 25 February 2025, the Delhi High Court ruled in favour of Lifestyle Equities CV & Anr. in their trademark infringement suit, Lifestyle Equities CV & ANR. v. Amazon Technologies, INC. & ORS. The Court held that Amazon’s private label ‘Symbol’ used a horse-rider logo deceptively similar to the Beverly Hills Polo Club (BHPC) mark, leading to consumer confusion and brand dilution. Facts of the case The Plaintiffs, owners of the BHPC trademark, alleged that Amazon Technologies (Defendant No.1) was selling apparel under its private label Symbol, using a horse-rider logo nearly identical to their mark. These products were distributed by Cloudtail (Defendant No.2) and sold on Amazon India (Defendant No.3). The Plaintiffs discovered the infringement in May 2020, but the Defendants had been selling the infringing products since 2015. The suit sought a permanent injunction and damages, citing economic losses, brand dilution, and unfair competition. Contentions of the Parties Plaintiffs' Arguments The Plaintiffs asserted that the BHPC mark is well-known, and its horse-rider logo enjoys global recognition. They also emphasized that there is a striking similarity between the Symbol logo and BHPC, which was a deliberate attempt to mislead consumers. Defendants’ Arguments Cloudtail admitted liability and agreed to a permanent injunction and damages of ₹4,78,484. However, it argued that Amazon Technologies had no direct role in the infringement. Amazon Technologies did not appear and was proceeded ex parte, effectively conceding the claims. Amazon Seller Services (Defendant No.3) contended that it was merely an intermediary and had removed all listings containing the infringing mark. Findings of the Court The Court applied the ‘Triple Identity Test’ to assess trademark infringement, concluding that the marks, goods, and trade channels were identical, thereby establishing a clear case of infringement. It held that Amazon Technologies, as the owner of the Symbol brand, was responsible for the infringing conduct of Cloudtail on Amazon India and could not disclaim liability. The Court noted that Amazon Technologies did not appear before the Hon’ble Court despite having knowledge of the suit. The Court observed that this approach indicated an intent to withhold crucial information rather than participate fully in the proceedings. The Court observed that Amazon Technologies' significant presence in the e-commerce sector and noted that its market position allows it to influence pricing and competition. It further observed that the substantial discounts applied to products featuring a similar mark or logo could affect the BHPC brand’s positioning. The Court also took into account that the infringing products were being sold at just 10% of BHPC’s retail price, which could have implications for the brand’s value and consumer perception. Given these factors, the Court imposed damages on Amazon Technologies to the tune of $38.78 million. MHCO Comments This judgment marks a significant milestone in e-commerce trademark enforcement, reaffirming that brand owners cannot evade liability by structuring their business through licensing arrangements. It provides much-needed clarity on the multi-faceted roles of e- commerce platforms, which often operate as intermediaries, retailers, and brand owners simultaneously. By addressing how these overlapping roles are used to shift responsibility, the ruling strengthens accountability in trademark infringement cases, ensuring that e-commerce platforms cannot use complex business models to circumvent trademark infringement. This article was released on 28 February 2025. The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.
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RERA UPDATE | MAHA RERA TRIBUNAL ORDERS FULL REFUND, INCLUDING OTHER COSTS
In a significant ruling, the Maharashtra Real Estate Appellate Tribunal (“Tribunal”) has upheld the rights of homebuyers under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (“RERA”), directing the promoter of the Ekta Parksville project in Vasai to refund the entire amount paid by the complainants, including stamp duty, registration fees, MVAT, pre- EMI payments, and loan settlement costs. The appeal was filed against the Maharashtra Real Estate Regulatory Authority (“MahaRERA”) order seeking a full refund due to delays in possession beyond the agreed timeline. Brief Facts: The complainants booked a flat in the Promoter's Project, Ekta Parksville, for ₹32,17,400/- and executed an Agreement for Sale on 2 December 2014, with possession promised by December 2016. The complainants made payments amounting to ₹11,00,298, while HDFC disbursed ₹23,80,876 as a housing loan directly to the promoter. However, possession was delayed beyond the agreed timeline, prompting the complainants to file a refund claim before MahaRERA. MahaRERA directed the promoter to refund the paid amount with interest from 1 January 2017, but the complainants appealed the decision, seeking a full refund, including stamp duty, registration fees, MVAT, brokerage, and pre-EMIs paid to HDFC. Tribunal's Findings: Absolute Right to Refund Under Section 18: The Tribunal held that homebuyers have an unconditional right to withdraw if possession is delayed. The promoter's justifications, including regulatory delays and the pandemic, were rejected. Interest from Payment Dates: Interest at 2% above SBI's highest Marginal Cost of Funds based Lending Rate (“MCLR”) was awarded from the respective payment dates until full realization, modifying MahaRERA's previous order. Refund of Additional Payments: The Tribunal directed a refund of stamp duty, registration fees, MVAT, brokerage, and pre-EMIs paid to HDFC, rejecting the argument that statutory charges paid to third parties are non-refundable. Penalty for Non-Compliance: The promoter must refund the amount within 41 days or face additional interest from 1 April 2025. The complainants were also awarded ₹15,000 as costs. MHCO Comment: This ruling strengthens homebuyer protections under RERA, reinforcing their absolute right to a refund with compensatory interest. The Tribunal's decision to expand the scope of refundable amounts underscores that delays will not go unpunished. This judgment is a strong deterrent against developers failing to meet contractual commitments. However, the judgment has come out after 8 years under appeal. Justice delayed is justice denied. Accordingly, it is important for the tribunals implement these orders and use this caselaw in a time bound manner. This article was released on 21 February 2025. The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.
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SEBI UPDATE | SEBI BANS FAMOUS FINFLUENCER FOR BEING UNREGISTERED INVESTMENT ADVISOR
The Securities and Exchange Board of India (SEBI), vide an ex-parte interim order (Order) dated 6 February 2025, has barred Ms Asmita Patel, a prominent financial influencers (FinFluencer) on Instagram and YouTube, along with her company, Asmita Patel Global School of Trading Private Limited (AGSTPL), and four other entities, from participating in the securities market. This order stems from complaints by 42 individuals who alleged that Ms Asmita Patel and AGSTPL misled them into investing in overpriced educational courses that falsely guaranteed financial success. Brief Background and Facts: Business Activity: AGSTPL provided stock buy/sell recommendations through Telegram channels, Zoom meetings, and emails in addition to offering educational courses. Courses Offered: AGSTPL’s course offerings included Masters in Price Action Trading (MPAT), Let’s Make India Trade (LMIT), Options Multiplier (OM), Trend Following Income System (TFIS), The Freedom Project (TFP), OneLife, and Unleash The Trader Within (UTW). Complainant Allegations: The 42 complainants had enrolled in AGSTPL courses, including MPAT, for which they were charged up to INR 8,26,000/. As per the Order Asmita Patel allegedly used Telegram channels and Zoom meetings to disseminate trade recommendations and course details, urging complainants to liquidate existing investments and borrow funds to cover course fees. Patel, who referred to herself as the ‘She Wolf of the stock market’ and the ‘options queen,’ claimed to have mentored over hundred thousand students/investors/participants worldwide and managed assets of INR 1.4/2.83 billions using her proprietary system; however, investigations revealed that she was managing assets of only INR 152.7 millions. The Noticees received a total sum of approximately INR 1.04 billion as fees for unregistered investment advisory services. SEBI’s Ex-Parte Decision The Adjudicating Officer (AO) of SEBI determined that Ms Patel, along with AGSTPL and other entities, had misled investors by inducing them to exit investments like mutual funds and invest in the options market with promises of assured returns upon purchasing their courses. The Learned AO noted that the courses were not merely educational but involved providing specific stock entry/exit points and monitoring live market investments to ensure compliance with recommendations, thus falling under the purview of unregistered investment advisory services. The Learned AO also deemed it necessary to impound INR 536.7 million to prevent its dissipation. Consequently, interim orders were issued to cease and desist unregistered investment advisory services, bar the entities from the securities market, and impound a sum of INR 536.7 million jointly and severally. Furthermore, the entities were directed to explain why the direction for disgorgement of INR 1.04 billion and other directions should not be enforced against them. MHCO Comment SEBI with the recent orders and crackdown on FinFluencers shows its intent to complying stricter regulations to curb misleading financial advice disseminated through social media platforms. SEBI has also removed contents of 15000 unregulated entities from social media platforms with the objective to protect general public, emphasizing the importance of accurate financial information and the potential consequences of unchecked financial advice online. The cease and desist Order and the impounding of INR 536.7 million are warranted, given the substantial fees collected and the numerous complaints received, highlighting the regulator's need for immediate action. We believe this crackdown by SEBI on FinFluencers will hold them accountable in near future and benefit the small investors. This article was released on 17 February 2025. The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.
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ARBITRATION UPDATE: SUPREME COURT CLARIFIES LIMITS ON MODIFICATION OF ARBITRAL AWARDS
  Overview: In a recent landmark judgment by the Hon’ble Supreme Court of India in the case of Gayatri Balasamy v. M/s. ISG Novasoft Technologies Limited and other connected appeals, the Court addressed the contentious issue of whether courts exercising jurisdiction under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") have the power to modify arbitral awards. This decision resolves conflicting judicial precedents and clarifies the scope of judicial intervention in arbitration, emphasising the balance between limited judicial oversight and the need to prevent protracted litigation while adhering to the legislative framework of the Arbitration Act. Brief Background of the Case: The case arose from multiple appeals challenging the scope of judicial powers under Section 34 of the Arbitration Act, which provides for setting aside arbitral awards on specified grounds but is silent on modification. A three-judge Bench referred the matter to a five-judge Constitution Bench to resolve inconsistencies in prior judgments, such as Project Director, NHAI v. M. Hakeem (2021), which held that courts lack modification powers, and others like Vedanta Limited v. Shenzhen Shandong Nuclear Power (2019), where awards were modified. The core issue was whether courts could modify awards to achieve justice without overstepping the statutory limits of Section 34. Issues: The Supreme Court framed the following questions for consideration: i. Whether courts under Sections 34 and 37 of the Arbitration Act have the power to modify an arbitral award? ii. If modification is permissible, whether such power is limited to cases where the award is severable, and only a part can be modified? iii. Whether the power to set aside an award under Section 34, being a broader power, includes the power to modify, and if so, to what extent? iv. Whether the power to modify can be read into the power to set aside under Section 34? v. Whether the judgment in M. Hakeem (2021), followed in subsequent cases, lays down the correct law, given conflicting decisions where awards were modified? Ruling: The Supreme Court, in a detailed judgment, held that courts under Section 34 do not have a general power to modify arbitral awards, except in limited circumstances. The key findings are: 1. No General Power to Modify: The Court reaffirmed that Section 34 restricts judicial intervention to setting aside awards on specified grounds, such as incapacity, invalid arbitration agreements, procedural irregularities, or violations of public policy. Modification, except in specific cases, would amount to exercising appellate powers, which is contrary to the Arbitration Act’s framework and the UNCITRAL Model Law. 2. Severability and Partial Setting Aside: The Court recognised the power to partially set aside awards under the proviso to Section 34(2)(a)(iv), where decisions on non-arbitrable matters can be severed from arbitrable ones, provided the valid and invalid portions are legally and practically separable. This power is inherent in the authority to set aside and does not extend to modifying the substance of the award. 3. Limited Exception for Errors: Courts can correct computational, clerical, typographical, or similar errors under Section 34, based on the principle of actus curiae neminem gravabit (an act of the court shall prejudice no one). Such corrections do not involve merit-based evaluation and are akin to powers under Section 152 of the Code of Civil Procedure, 1908. 4. Remand as an Alternative: Where modification is inappropriate due to uncertainty or complexity, courts may remand the matter to the arbitral tribunal under Section 34(4) to cure defects, such as inadequate reasoning or procedural issues, provided the defect is curable and does not require rewriting the award. 5. Interest Awards: The Court held that interest rates cannot be modified by Section 34 courts. If interest awards are excessive, inadequate, or beyond the agreement, the matter must be remanded to the tribunal under Section 34(4) for reconsideration. 6. Suo Moto Exercise of Section 34(4): The Court clarified that the power to remand under Section 34(4) can be exercised suo motu or on an oral request, overruling Kinnari Mullick v. Ghanshyam Das Damani (2018), which required a written application. 7. New York Convention and Doctrine of Merger: The Court rejected arguments that modifications would complicate enforcement under the New York Convention, noting that domestic law governs the validity of awards at the seat of arbitration. The doctrine of merger was deemed inapplicable, as modifications do not merge with the original award. 8. Hakeem Upheld with Exception: The Court upheld M. Hakeem (2021) as correctly interpreting Section 34, except for the limited exception allowing correction of computational, clerical, or typographical errors. The judgment was not per incuriam, as it aligned with the statutory framework and distinguished prior cases like Oil and Natural Gas Corporation v. Western GECO (2014). Highlights of the Judgment: 1. Limited Judicial Role: The Court emphasized the Arbitration Act’s intent to minimize judicial interference, restricting courts to setting aside awards or remanding them for correction, except for minor error corrections. 2. Severability Principle: The power to sever invalid portions of an award is inherent and applies when claims are independent, ensuring valid parts are preserved without affecting the award’s integrity. 3. Error Correction: Courts can rectify manifest errors (e.g., computational or typographical) without engaging in merits review, aligning with the principle that court actions should not prejudice parties. 4. Remand Mechanism: Section 34(4) serves as a “safety valve” to preserve awards by allowing tribunals to address curable defects, exercisable suo motu or on request, enhancing arbitration efficiency. 5. Uniform Interpretation: The Court rejected differential interpretations for statutory or commercial arbitrations, ensuring a consistent application of Section 34 across all cases. 6. International Compliance: The ruling aligns with the New York Convention, as modifications are limited and do not affect the enforceability of awards abroad. MHCO Comments The Hon’ble Supreme Court’s judgment is a significant step toward clarifying the scope of judicial intervention in arbitration under the Arbitration Act. By upholding the restrictive framework of Section 34 while allowing limited error corrections and severability, the Court strikes a balance between arbitration’s autonomy and the need for equitable outcomes. The emphasis on remand under Section 34(4) as a primary remedy for curable defects promotes efficiency and reduces litigation costs, reinforcing arbitration as a viable alternative dispute resolution mechanism.
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SEBI Update: Amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
SEBI Update: Amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The Securities and Exchange Board of India (SEBI) introduced significant amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 LODR Regulations on April 14, 2025. These amendments, primarily effective from April 1, 2025, strengthen corporate governance frameworks, with a particular focus on entities with high-value listed non-convertible debt securities, i.e., High-Value Debt Listed Entities (HVDLEs). The changes aim to enhance transparency, protect debenture holders, and align with global sustainability and governance standards. Expansion of the Scope of Corporate Governance for HVDLEs The changes address the need for robust governance in entities with significant debt obligations, ensuring protection for debenture holders and alignment with global standards. Under Regulation 15 and the newly introduced Chapter V-A of the LODR Regulations, the governance framework for HVDLEs now includes the following key provisions, summarized below: Increased Debt Threshold: The threshold for non-convertible debt securities triggering governance requirements is raised from ₹500 crore to ₹1,000 crore. Board Composition: Mandates a balanced board with at least one woman director, 50% non-executive directors, and independent directors based on the chairperson’s status. Audit Committee Oversight: Requires approval for related party transactions (RPTs), with conditions for omnibus approvals. Stakeholders Relationship Committee: Addresses debenture holder grievances, including issues related to charge creation, interest/principal payments, and covenant maintenance. RPT Approvals: Mandates No-Objection Certificates from Debenture Trustees for material RPTs, followed by shareholder approval. Subsidiary Governance: Ensures independent director representation and financial oversight for material unlisted subsidiaries. Secretarial Audit: Requires annual secretarial audits and compliance reports within 60 days of the financial year-end. Independent Director Norms: Sets strict rules for appointment, tenure, liability, and mandatory annual performance review meetings. Key Managerial Vacancies: Mandates filling critical roles like CEO and CFO within three to six months. Risk Management Committee: Requires assessment of financial and operational risks. Vigil Mechanism: Mandates a whistleblower policy to report unethical practices. Modifications to Existing Provisions 1. Regulation 3(2)(b) of the LODR Regulations now requires listed entities to assess or assure compliance with prescribed sustainability criteria, replacing the earlier requirement of submitting a report. 2. Regulation 34(2)(f) of the LODR Regulations clarifies that Environmental and Sustainable Governance (ESG) disclosures involve assessment or assurance of prescribed criteria, aligning with sustainability goals. Deferred Compliance Timeline Post-amendment, a new proviso under Regulation 15 of the LODR Regulations allows HVDLEs exceeding the ₹1,000 crore threshold to comply with governance provisions within six months, with reporting in the immediate next quarterly corporate governance report. Debenture Holder Protections As per the new provisions under Regulation 62K of Chapter V-A of the LODR Regulations, material RPTs require No-Objection Certificates from Debenture Trustees and approval from debenture holders holding more than 50% of the debentures in value, ensuring enhanced investor protection. MHCO Comments: The amendments to the LODR Regulations expanding the scope of corporate governance for HVDLEs underscore SEBI’s focus on enhancing transparency and accountability in India’s capital markets. By introducing stringent governance norms, robust RPT oversight, and a strong emphasis on ESG compliance, SEBI signifies its commitment to a regulatory framework that adapts to evolving market dynamics. Further, the harmonization of governance requirements with global sustainability standards ensures consistency, reducing ambiguity for listed entities in meeting their obligations.
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RERA UPDATE | DUAL REGISTRATION DISPUTE: MAHARERA DIRECTED TO INVESTIGATE PROJECT DUPLICATION
Background The Maharashtra Real Estate Appellate Tribunal recently passed a significant interim order in Meghna Devang Juthani & Ors v J.P. Porwal Realty & Ors, addressing a dispute involving multiple registrations for a single real estate project. The appellants—legal heirs of a deceased allottee—challenged the actions of the landowners and a new developer who allegedly sought to sidestep the rights of the original purchaser by registering the same project property under a different name and developer, without adhering to the transfer procedures mandated under Section 15 of the Real Estate Regulation and Development) Act 2016 (“RERA Act”). The matter pertains to a shop initially allotted in 2014 under the project “Sambhav Classic”, later renamed and re-registered as “Rajkamal Building” and “Dipti’s Royal Arc”. The core of the dispute lies in the dual project registrations issued by MahaRERA based on the same property and commencement certificate Issues Addressed Whether the landowners, now acting as developers, qualify as "promoters" under RERA and are responsible for obligations arising from the original agreement for sale. Whether two concurrent MahaRERA registrations can exist for the same property. Whether the original agreement executed with the first promoter remains enforceable against subsequent developers. The legality and enforceability of the new project registration undertaken without following the procedure in Section 15 of the RERA Act, 2016.   Judgment Landowner as Promoter: The landowners, by terminating the original development agreement and registering the project themselves, assumed the role of promoters under Section 2(zk) of the RERA Act which defines “Promoter” as inter alia a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees. In the present case, the Tribunal noted that the landowners executed a power of attorney in favour of the old developer and by virtue of the development agreement authorized the old developer to construct building/s of flats/ premises to be sold to outsiders which amounts to “causes to be constructed” and hence qualifies him as a “Promoter”. No Parallel Registrations Permitted: The Tribunal further emphasized that two separate registrations for the same property are impermissible. Original Agreement Remains Binding: The Tribunal reiterated that rights under the original agreement remain enforceable even if the agreement predates the RERA Act. Transfer Obligations Under Section 15 Ignored: The Tribunal held that the project transfer without consent and MahaRERA approval was a violation of Section 15 of the RERA Act.   MHCO Comment This ruling serves as a landmark interpretation of promoter liability and reinforces the intent of the RERA Act to protect homebuyers and ensure transparency. The Tribunal’s observations make it clear that once a landowner takes over a stalled project, it inherits the full spectrum of liabilities, including those arising from pre-RERA agreements. Further, the attempt to sidestep Section 15 of the RERA Act by duplicating project registration undermines the regulatory intent and invites scrutiny. The affirmation that the original agreement remains enforceable, coupled with the direction to restrain any third-party transactions regarding the disputed unit, offers significant relief to aggrieved allottees. This decision reinforces that RERA is a buyer-protection statute and cannot be diluted by technical maneuvers. Going forward, developers—including landowners—must exercise strict compliance with both procedural and substantive aspects of the RERA Act, especially when dealing with ongoing or legacy projects. 
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MSME UPDATE | AMENDMENT TO MICRO, SMALL AND MEDIUM ENTERPRISES
Introduction The Ministry of Micro, Small and Medium Enterprises (MSME) has significantly revised the investment and turnover thresholds for MSME classification. The changes have been notified vide Notification S.O. 1364(E) dated 21 March 2025. This amendment supersedes the earlier notification S.O. 2119(E) dated 26 June 2020, issued under the Micro, Small and Medium Enterprises Development Act, 2006. Key Changes The Notification increases the investment and turnover limits for MSMEs. The revised thresholds for MSME are as follows: Enterprise Category Revised Investment Limit Revised Turnover Limit Micro Enterprises Increased from ₹ 1 crore to ₹ 2.5 crore Increased from ₹5 crore to ₹10 crore Small Enterprises Increased from ₹10 crore to ₹25 crore Increased from ₹50 crore to ₹100 crore Medium Enterprises Increased from ₹50 crore to ₹125 crore Increased from ₹250 crore to ₹500 crore Effective Date The revised thresholds shall come into force from 1 April 2025. MHCO Comment The upward revision of thresholds is a welcome move and is expected to benefit a larger number of enterprises, particularly those in the growth stage who were previously at the cusp of losing MSME status due to marginal increases in investment or turnover. With broader criteria, more enterprises will now be eligible for MSME-related incentives such as easier access to credit, priority sector lending, subsidies, and various support schemes offered by the central and state governments.
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