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data protection law updates,
Data Protection Law Updates Every Business Should Monitor
Data protection law updates can affect how businesses collect personal information, manage customer records, use artificial intelligence, work with technology providers and respond to security incidents. As governments refine privacy legislation and introduce new regulatory requirements, businesses need a reliable process for identifying changes and translating them into practical action. In India, the Digital Personal Data Protection Act, 2023 (DPDP Act) and the Digital Personal Data Protection Rules, 2025 are central to the changing privacy landscape. International developments also matter to companies serving overseas customers or transferring information across borders. Monitoring legal updates helps businesses identify new obligations, avoid outdated practices and prepare for deadlines before they create compliance problems. Why Businesses Must Monitor Data Protection Law Updates? Privacy compliance is not a one time exercise. A business may introduce a new application, adopt an AI tool, outsource payroll or expand into another market. Each change can affect the personal information it processes and the laws applicable to its operations. A policy written several years ago may no longer reflect current legal requirements. Consent mechanisms may be outdated, vendor contracts may omit new responsibilities, and incident response plans may not account for revised reporting duties. Regular monitoring helps businesses identify these gaps and decide which changes require immediate attention. It also supports better planning. When a law introduces phased implementation, organisations can allocate resources, update systems and train employees before the relevant obligations take effect. 1. India’s DPDP Act and Rules: The Main Compliance Priority The DPDP Act establishes a framework for processing digital personal data in India. It sets out responsibilities for Data Fiduciaries, addresses individual rights and provides for security safeguards, personal data breach notifications and penalties for specified contraventions. The DPDP Rules, 2025 provide further operational detail. However, the framework has a phased commencement schedule. As of October 2026, businesses must distinguish provisions already in force from substantive requirements scheduled to commence in May 2027. Not every obligation should be treated as immediately applicable. The Government of India’s official DPDP Rules announcement and background information provides a useful starting point for understanding the framework. Businesses should monitor the effective dates of relevant provisions, assess their existing data practices and prepare for upcoming requirements. Key areas include privacy notices, consent management, data retention, individual requests, vendor arrangements and incident response. Organisations should also assess whether they may qualify as Significant Data Fiduciaries, since additional duties can apply to designated entities. 2. Personal Data Breach Reporting and Cybersecurity Rules Breach reporting deserves particular attention because several obligations may apply to the same incident. A cyberattack can involve compromised systems, exposed personal information, contractual reporting duties and regulatory notification requirements. Under applicable CERT In directions, specified cyber incidents must be reported within six hours of being noticed or brought to an organisation’s attention. The requirement applies to entities and incidents within scope. Businesses should maintain an escalation process capable of meeting the deadline even when the investigation is incomplete. The DPDP framework introduces separate personal data breach notification duties, with substantive operational requirements subject to its phased commencement. Companies should prepare for overlapping reporting timelines rather than assume one notification satisfies every obligation. The official CERT In directions and incident reporting resources provide guidance on cybersecurity reporting. Businesses should review their incident response plans, identify who can authorise notifications and ensure relevant technical logs and evidence can be accessed promptly. 3. Global Privacy Law Changes and Cross Border Operations Businesses operating internationally must track more than Indian legislation. The European Union’s General Data Protection Regulation, United Kingdom data protection law and privacy laws in other jurisdictions may apply depending on the organisation’s activities and the people whose data it processes. The global regulatory landscape continues to evolve through new laws, amendments, enforcement decisions and guidance. Current areas of attention include children’s privacy, international transfers, digital advertising, data security and the use of personal information in AI systems. The International Association of Privacy Professionals’ global privacy law resources can help organisations identify relevant developments across jurisdictions. International businesses should maintain a jurisdictional register showing which laws apply, the relevant regulator, key obligations and upcoming dates. A common global privacy programme can provide consistency, but local assessments remain necessary because definitions, exemptions, lawful processing requirements and reporting deadlines differ. 4. Artificial Intelligence and Automated Data Processing AI adoption creates new privacy questions. Businesses may use AI for recruitment, customer support, fraud detection, marketing, analytics or internal productivity. These activities can involve personal information collected from customers, employees, publicly available sources or external service providers. Legal teams should monitor developments concerning AI training data, transparency, automated decision making, children’s information and the reuse of personal data for new purposes. A business should not assume information can be used to train a model simply because it already holds the information or a supplier offers the functionality. Before adopting an AI tool, organisations should identify what information will be submitted, where it will be processed, whether the provider retains inputs and outputs, and whether information may be used for model improvement. Vendor contracts and internal policies should reflect the answers. The legal position must be assessed under the privacy laws and AI rules applicable to the specific use case. 5. Data Retention, Deletion and Record Keeping Retention requirements can change as privacy laws, tax rules, corporate obligations and sectoral regulations evolve. Keeping personal information longer than necessary can increase exposure, but deleting records too early may breach another legal duty or interfere with litigation and investigations. Under the DPDP Rules, certain future obligations address erasure after specified purposes are no longer served, subject to applicable legal requirements and the Rules’ scope. The provisions do not establish one universal retention period for every category of personal data. Businesses should review the relevant rule, schedule and commencement date before applying a deletion deadline. A practical retention schedule should identify the data category, purpose, applicable retention requirement, responsible team and deletion method. It should also account for backups, vendor systems and legal holds. Regular reviews help prevent old records from remaining in active systems without a clear business or legal reason. 6. Children’s Privacy and Sensitive Processing Businesses offering digital services to children, education platforms, gaming products or family oriented applications should monitor rules concerning children’s personal data. The DPDP Act generally defines a child as an individual under 18, subject to the Act’s applicable provisions, exemptions and rules. The framework provides for parental consent and includes restrictions concerning specified processing practices involving children, subject to applicable exceptions. Organisations should examine age assurance, consent workflows, product design and the information collected from younger users. A global service using different age thresholds across jurisdictions may need to adapt its Indian processes. Other forms of high risk processing also warrant review. Biometric information, location data, employee monitoring and large scale profiling can raise privacy, security and fairness concerns under the laws applicable to the business. The relevant legal requirements should be assessed alongside the practical impact on individuals. 7. Regulatory Guidance, Enforcement and Penalties Monitoring legislation alone is not enough. Regulatory guidance, enforcement decisions, official FAQs and court judgments can clarify how existing requirements are interpreted. They may also reveal areas where regulators expect stronger evidence of compliance.The DPDP Act provides for financial penalties for specified contraventions. For example, failure to take reasonable security safeguards to prevent a personal data breach can attract a penalty of up to ₹250 crore under the relevant provision. The actual legal exposure depends on the nature of the contravention and the applicable statutory process. Businesses should track official publications and assess whether new guidance changes their policies, contracts or technical controls. Advice from data protection law specialists can help interpret complex updates and determine whether a change requires a policy revision, a system modification or a broader compliance project. How to Build an Effective Legal Monitoring Process? A useful monitoring process starts with a clear owner. Depending on the size of the organisation, responsibility may sit with legal, compliance, privacy, risk management or a cross functional team. The team should identify the jurisdictions and sectors relevant to the business, then maintain a register of laws, regulators, deadlines and outstanding actions. Each update should be assessed for its legal status. A proposal, consultation paper, enacted law and provision already in force have different implications. The review should record what changed, which business activities are affected, when action is required and who will implement it. The team should then communicate the practical implications to relevant stakeholders. Legal may need to revise notices or contracts, IT may need to change access controls, HR may need to update employee procedures, and procurement may need to reassess suppliers. Working with corporate lawyers for technology can help align privacy developments with technology procurement, commercial agreements and wider corporate risk management. Regular reviews and management reporting help confirm whether agreed actions have been completed. The process should also be revisited when the business launches a new product, enters a market or adopts a technology involving personal data. Conclusion Data protection law updates can affect business operations, technology choices, contractual responsibilities and customer relationships. Organisations should closely monitor India’s DPDP framework, cybersecurity reporting requirements, global privacy laws, AI developments, retention rules and regulatory guidance. The most effective approach combines reliable legal monitoring with practical implementation. By tracking commencement dates, assessing business impact, assigning responsibilities and reviewing policies regularly, businesses can reduce avoidable risks and prepare for changing obligations. Privacy compliance is strongest when legal updates lead to clear, documented action rather than remaining unread announcements. Frequently Asked Questions (FAQs) Q1. What are the most important data protection law updates for Indian businesses? The DPDP Act and Rules, their phased commencement dates, applicable CERT In directions and relevant sectoral requirements are key priorities. Businesses should also monitor official guidance and changes affecting their particular industry. Q2. When do the main DPDP compliance requirements commence? The framework has a phased commencement schedule. Many substantive operational requirements are scheduled to commence in May 2027. Businesses should verify the effective date of each provision relevant to their operations rather than assume every requirement is already in force. Q3. How often should a business review data protection laws? Businesses should monitor official developments regularly and conduct a structured compliance review at suitable intervals, such as quarterly or when a major legal change occurs. New products, acquisitions, AI adoption and entry into new markets may require an earlier review. Q4. Do international privacy laws apply to Indian businesses? They may apply if a business meets the relevant territorial or jurisdictional criteria, such as offering services to people in another jurisdiction or processing their personal data in covered circumstances. Applicability depends on the law and the organisation’s activities. Q5. What happens if a business fails to comply with data protection law? Consequences depend on the applicable law and the nature of the breach. They may include financial penalties, regulatory directions, contractual claims, litigation and reputational harm. Some laws also impose specific breach reporting obligations. Q6. How can a business stay informed about data protection law updates? It should monitor official government notifications, regulator guidance, relevant court decisions and trusted privacy law publications. A compliance register, assigned ownership and documented impact assessments help convert legal developments into timely business action.
privacy by design,
Privacy by Design: Why It Matters for Modern Businesses
Privacy by design is an approach to developing products, services and business processes with privacy protection built in from the beginning. Instead of addressing privacy concerns after a product launches or a data breach occurs, businesses consider how personal information will be collected, used, stored, shared and deleted during every stage of its lifecycle. This approach helps organisations reduce legal risks, improve data security and build lasting customer trust. For modern businesses, privacy is no longer just a compliance issue. Websites, mobile applications, artificial intelligence tools, cloud platforms and customer databases all create opportunities to collect personal information. Without appropriate safeguards, these activities can expose businesses to regulatory scrutiny, disputes and reputational damage. Privacy by design provides a practical framework for managing these risks while supporting responsible innovation. What Does Privacy by Design Mean? Privacy by design means integrating privacy considerations into technology, operational processes and business decisions before personal data processing begins. It requires organisations to assess potential risks early and select suitable safeguards before those risks become difficult or expensive to resolve. For example, an online retailer may need a customer’s delivery address to fulfil an order. It may not need access to the customer’s contact list or precise location. A privacy focused design collects only the information required for the stated purpose and restricts access to authorised personnel. It also establishes suitable retention periods and secure deletion procedures. The concept covers more than software development. It applies to recruitment systems, employee monitoring, marketing campaigns, vendor selection, customer support, payment processing and internal record keeping. The UK Information Commissioner’s Office guidance on data protection by design and by default explains how privacy safeguards should be considered from the planning stage and maintained throughout a system’s lifecycle. Why Privacy by Design Matters for Modern Businesses 1. Reduces Legal and Regulatory Risks Privacy problems often arise when businesses collect excessive information, fail to explain their data practices or retain records longer than necessary. Correcting these issues after launch may require system changes, revised contracts and customer communications. Privacy by design helps identify these concerns before a project goes live. Legal teams can assess applicable obligations, while product and technical teams build the necessary controls into the system. This approach can reduce the likelihood of avoidable compliance failures and make it easier to demonstrate responsible decision making. 2 Builds Customer Trust Customers increasingly expect organisations to handle their personal information responsibly. Unclear privacy notices, intrusive tracking and excessive requests for information can undermine confidence in a brand. A privacy focused experience gives people understandable information and meaningful choices. It avoids collecting unnecessary details and limits access to information according to business needs. When privacy protections are visible and consistent, customers can make more informed decisions about using a service. 3. Reduces Long Term Costs Adding privacy safeguards during initial development is often more efficient than redesigning an established system. A business may otherwise need to change its database structure, rebuild consent mechanisms, renegotiate vendor contracts or remove information already shared with multiple systems. Early risk assessments help teams identify these issues while changes remain manageable. Privacy by design can therefore support more efficient development, smoother procurement and fewer expensive corrections after deployment. 4. Supports Responsible Innovation Privacy and innovation are not opposing goals. Businesses can often develop useful services while limiting exposure of personal information. Techniques such as aggregation, pseudonymisation and privacy enhancing technologies may support analytics or product development without providing unrestricted access to identifiable records. The appropriate solution depends on the purpose, sensitivity of the information and risks to individuals. Privacy by design encourages businesses to evaluate these factors before choosing a technology or processing method. Core Principles of Privacy by Design 1. Privacy From the Beginning Privacy should be considered during project planning, requirements gathering and system architecture. Teams should identify the personal information involved, the reasons for processing it and the possible consequences for individuals. For example, a company developing an employee management platform should consider access permissions, retention rules and confidentiality before deciding how its database will operate. Adding these controls later may be more complex and costly. 2. Privacy Friendly Default Settings Privacy by default means systems should use only the personal information necessary for their specified purposes. The amount collected, period of storage and level of access should be restricted according to the circumstances. A new account should not automatically make a user’s personal profile publicly accessible if public access is unnecessary. Similarly, optional marketing permissions should not be bundled into an unrelated service without an appropriate legal basis. Default settings should reflect the intended purpose and applicable legal requirements. 3. Data Minimisation and Purpose Limitation Businesses should collect personal information only when it is relevant and necessary for a defined purpose. They should also avoid reusing it for unrelated activities without assessing whether the new use is permitted. A retailer processing delivery information, for example, should distinguish between information needed to complete an order and information intended for promotional campaigns. Clear separation makes privacy choices easier to understand and reduces the risk of inappropriate use. 4. Security Throughout the Data Lifecycle Privacy safeguards must continue after a product launches. Information should be protected during collection, storage, access, transfer, backup and deletion. Appropriate measures may include encryption, access controls, authentication, security testing, monitoring and secure disposal. Businesses should also review third party systems and update safeguards as their technology and risk profile change. A secure launch does not guarantee continued protection if permissions, software or vendor arrangements later change. 5. Transparency and Accountability People should be able to understand how their information is used and how they can exercise applicable rights. Privacy notices should be clear, accessible and consistent with actual processing activities. Internally, organisations should document decisions, assign responsibility and review whether controls work as intended. Accountability requires evidence of implementation, not simply a written policy. Privacy by Design Under Indian Data Protection Law India’s Digital Personal Data Protection Act, 2023 establishes a framework for processing digital personal data. It addresses obligations of Data Fiduciaries, reasonable security safeguards, personal data breach notifications and individual rights. The Government of India’s overview of the Digital Personal Data Protection Rules, 2025 explains the framework and its implementation. The DPDP framework is being implemented in phases. As of October 2026, businesses should distinguish provisions already in force from substantive operational requirements scheduled to commence in May 2027. Organisations should verify the effective date of each relevant provision rather than assume every requirement applies immediately. Privacy by design is a useful way to prepare for these obligations. Businesses can map personal data, review collection practices, improve security controls, assess vendor arrangements and establish retention procedures before applicable deadlines. The concept should not, however, be confused with a separate universal statutory requirement under the DPDP Act to maintain a document specifically called a privacy by design policy. Companies operating internationally may also need to consider the GDPR or other foreign privacy laws. Article 25 of the GDPR expressly addresses data protection by design and by default. A global privacy programme can provide a strong foundation, but organisations should assess the requirements applicable to each market. How to Implement Privacy by Design in a Business 1. Start With a Privacy Risk Assessment Before launching a product or changing a process, identify the personal information involved, the purpose of processing, the people who may access it and the potential impact on individuals. Consider whether less information could achieve the same business objective. For projects involving extensive monitoring, sensitive contexts or other significant privacy risks, a structured privacy impact assessment can help identify risks and suitable safeguards. The assessment should lead to practical changes rather than remain a document prepared only for compliance records. 2. Involve Legal, Technical and Business Teams Privacy is not solely the responsibility of a legal or IT department. Product managers determine features, developers implement controls, marketing teams decide how information is used, and procurement teams select service providers. Legal specialists can identify relevant obligations and assess risks, while technical teams translate them into system requirements. Businesses seeking guidance from privacy compliance lawyers can use this collaboration to align privacy notices, consent processes, retention schedules and vendor contracts with actual operational practices. 3. Review Vendors and Technology Providers Third party software can introduce privacy risks even when a business manages its own systems responsibly. Before adopting a service, organisations should assess the provider’s data practices, security controls, access permissions, subcontracting arrangements and deletion procedures. Contracts should explain permitted processing, confidentiality, incident notification, cooperation obligations and what happens to personal information when the relationship ends. Reviews should continue throughout the relationship, particularly when services or data flows change. 4. Monitor, Test and Improve Privacy by design is an ongoing process. Businesses should periodically review access permissions, retention settings, privacy notices, security incidents and complaints. New product features, acquisitions, artificial intelligence tools and changes in business operations may introduce risks which were not present during initial development. Working with corporate legal advisors can help businesses assess these changes, review technology contracts and integrate legal requirements into development and procurement decisions. Regular testing and documented improvements help ensure privacy safeguards remain effective as the organisation grows. Common Privacy by Design Mistakes One common mistake is treating privacy as a final approval step immediately before launch. By this stage, important design decisions may already be difficult to change. Another is relying on a privacy policy while collecting more information than necessary or using unclear default settings. Businesses also sometimes assume security certification guarantees legal compliance. Security controls are important, but they do not automatically resolve questions about lawful processing, transparency, retention or individual rights. A further mistake is failing to review vendors after signing a contract. The better approach is to integrate privacy into project approvals, technical specifications, procurement, staff training and ongoing reviews. Each decision should reflect the purpose of processing and the risks involved. Conclusion Privacy by design helps modern businesses protect personal information while developing useful products and services. By considering privacy from the earliest planning stages, organisations can reduce avoidable legal risks, improve security, build customer confidence and limit costly changes after launch. For Indian businesses, this approach also supports preparation for the phased DPDP framework and other applicable privacy obligations. Effective implementation requires cooperation between legal, technical and business teams, along with regular reviews of systems, vendors and data practices. Privacy works best when it is part of everyday business decision making rather than a task addressed only after a problem occurs. Frequently Asked Questions (FAQs) Q1. What is privacy by design in simple terms? Privacy by design means building privacy protection into products, systems and business processes from the beginning. It involves collecting necessary information, limiting access, protecting records and establishing clear rules for use, retention and deletion. Q2. Is privacy by design legally required in India? The DPDP Act establishes duties relating to personal data processing and security safeguards, while its provisions are commencing in phases. Privacy by design is a practical approach to meeting applicable obligations, but businesses should not assume the Act creates a separate universal requirement for a document specifically called a privacy by design policy. Q3. What are the benefits of privacy by design? It can help reduce legal and security risks, improve customer trust, lower the cost of correcting design problems and support responsible innovation. It also encourages better documentation and accountability. Q4. How does privacy by design differ from privacy by default? Privacy by design means considering privacy throughout the development and operation of a system or process. Privacy by default focuses on ensuring the system automatically limits personal data collection, use, storage and accessibility to what is necessary for its purpose. Q5. What is a privacy impact assessment? A privacy impact assessment is a structured review of how a proposed project or activity may affect individuals’ privacy. It identifies potential risks and recommends safeguards before processing begins or changes are implemented. Q6. Which businesses should adopt privacy by design? Any business collecting or using personal information can benefit, including ecommerce companies, financial services providers, healthcare organisations, technology businesses, employers and digital marketing agencies. The measures should be proportionate to the nature of processing and the risks involved.
data protection compliances,
Data Protection Compliance for International Companies Operating in India
Data protection compliance in India is an important consideration for international companies serving Indian customers, employing local staff, establishing Indian subsidiaries or using Indian service providers. As business operations become increasingly digital, organisations must understand how Indian privacy laws interact with their existing global compliance programmes. A policy designed for Europe or the United States may provide a useful starting point, but it does not automatically satisfy Indian legal requirements. India’s Digital Personal Data Protection Act, 2023 (DPDP Act), together with the Digital Personal Data Protection Rules, 2025, introduces a dedicated framework for processing digital personal data. International businesses should assess its territorial scope, consent requirements, security obligations, cross border transfers and phased implementation timeline. Early preparation can reduce legal uncertainty and help organisations maintain consistent privacy standards across jurisdictions. Does Indian Data Protection Law Apply to Foreign Companies? The DPDP Act applies to digital personal data processed within India. It can also apply to processing outside India when the processing is connected with offering goods or services to individuals in India. A foreign company does not necessarily need a physical office in the country for its activities to fall within the Act’s scope. For example, an overseas ecommerce platform selling directly to Indian customers, a global application collecting information from users in India or an international company processing Indian customer records through a central database may need to assess its obligations under the Indian framework. The precise position depends on the activities and circumstances involved. The Act generally covers personal data in digital form, including information collected offline and subsequently digitised. Purely offline personal data which is never digitised falls outside its scope, subject to the Act’s provisions and other applicable laws. Businesses should therefore map their data processing activities rather than assume every operation is covered in the same way. Understanding India’s DPDP Act and Rules The DPDP Act establishes obligations for Data Fiduciaries, the entities which determine the purpose and means of processing personal data. Data Processors handle personal data on behalf of a Data Fiduciary. An international group may occupy different roles across its operations, so these roles should be assessed for each processing activity. The framework addresses transparency, consent, specified legitimate uses, reasonable security safeguards, personal data breach notifications and individual rights. It also provides for enhanced responsibilities for Significant Data Fiduciaries and financial penalties for specified breaches. The Digital Personal Data Protection Rules, 2025 were notified in November 2025. However, implementation is phased. As of October 2026, businesses must distinguish provisions already in force from substantive operational requirements scheduled to commence in May 2027. The Government of India’s official explanation of the DPDP Rules provides background on the framework and its implementation. International companies should maintain a commencement tracker and assign responsibility for preparing each requirement. Treating every provision as already operational may create confusion, while waiting until the final implementation date can leave insufficient time for system and contract changes. Key Compliance Obligations for International Businesses 1. Review Consent and Privacy Notices A central compliance task is to ensure personal data is collected and used under a valid basis recognised by the Indian framework. Consent is important, but the Act also recognises specified legitimate uses. Companies should not assume the broader lawful bases available under other privacy laws automatically justify processing in India. Privacy notices should explain the personal data being collected and the purposes for which it will be used in clear, accessible language. Businesses should review website forms, mobile applications, employee notices, marketing subscriptions and customer onboarding processes. Where consent is relied upon, the organisation should maintain a reliable record and provide appropriate mechanisms for managing or withdrawing it. 2. Protect Customer and Employee Data International businesses often process Indian customer information, recruitment records, payroll details and employee performance data through shared global systems. Access should be limited to people who need the information for authorised purposes, and appropriate safeguards should be applied to storage, transmission and use. Practical measures include access controls, encryption where appropriate, secure authentication, monitoring, backup arrangements and staff training. Organisations should also review how personal information is used by analytics platforms, artificial intelligence tools and external service providers. A global security certification may support a compliance programme, but it does not by itself establish compliance with Indian law. Companies need to assess their actual processing activities, applicable legal obligations and the effectiveness of their controls. 3. Prepare for Personal Data Breaches A data breach can trigger legal, regulatory, contractual and reputational consequences. International groups should establish a response process covering detection, containment, evidence preservation, impact assessment, internal escalation and required notifications. Indian requirements must be assessed alongside other applicable reporting duties. CERT In directions, for example, require specified cyber incidents to be reported within six hours of noticing them or being informed of them, for entities and incidents within scope. The DPDP framework introduces separate personal data breach obligations, with substantive operational provisions subject to phased commencement. A multinational company may also have contractual duties to notify a global customer or parent company within a shorter period. A single incident response plan should identify each applicable deadline, responsible decision maker and reporting channel. 4. Manage Cross Border Data Transfers International companies frequently transfer personal data between India, regional offices, global headquarters and cloud service providers. The DPDP Act does not impose a universal requirement to store all personal data in India. Instead, Section 16 provides a framework under which the Central Government may restrict transfers to specified countries or territories, while preserving stricter requirements under other applicable Indian laws. This means companies must assess the relevant transfer restrictions rather than assume either unrestricted transfers or blanket localisation. Sector specific requirements, contractual commitments and foreign privacy laws may impose additional conditions. For example, regulated financial services may have separate rules governing particular records or systems. A transfer review should identify the data involved, recipient entities, processing purpose, storage locations, onward transfers and applicable restrictions. Contracts and vendor assessments should reflect the findings. 5. Review Vendor and Intra Group Agreements A multinational group may share services across several jurisdictions, including human resources, customer support, finance, cybersecurity and cloud hosting. These arrangements need clear documentation of each party’s responsibilities and the permitted use of personal data. Legal and procurement teams should review confidentiality obligations, security measures, incident notification, subcontracting, access controls, data retention, deletion and cooperation with regulatory requests. Intra group data sharing should be assessed with the same care as transfers to external suppliers. Companies seeking advice from data protection advocates can use legal reviews to identify gaps between their existing global contracts and Indian requirements. The objective is to establish enforceable responsibilities and workable processes, not merely add generic privacy clauses to every agreement. DPDP Act and GDPR: Why One Global Policy May Not Be Enough Companies already complying with the European Union’s General Data Protection Regulation may have mature privacy notices, records of processing, security controls and vendor management procedures. These resources can help with Indian compliance, but the two regimes are not interchangeable. The GDPR provides several lawful bases for processing, including legitimate interests, while the DPDP Act uses consent and specified legitimate uses within its own framework. The laws also differ in their treatment of territorial scope, individual rights, children’s data, organisational duties and international transfers. For example, the DPDP Act generally treats a child as an individual under 18 and establishes specific requirements for processing children’s personal data, subject to applicable statutory exceptions and exemptions. A global platform designed around a different age threshold may need to review its Indian user journey. International businesses should maintain a common global privacy standard where practical, supported by a country specific assessment for India. This approach preserves consistency while allowing local legal requirements to be addressed accurately. Practical Steps for Building an India Compliance Programme A useful starting point is a data inventory covering customer, employee, supplier and website information. The business should identify which legal entities determine processing purposes, which service providers process data, where information moves and which retention periods apply.The next step is a gap assessment against current Indian obligations and requirements scheduled for future commencement. Findings should be converted into a prioritised plan covering notices, consent processes, security controls, contracts, individual request handling and incident response. Ownership should be assigned to legal, compliance, IT, HR and procurement teams. Businesses should also maintain records of decisions, conduct periodic vendor reviews, train relevant staff and test incident response procedures. Working with a corporate law firm may help international groups coordinate Indian privacy requirements with technology contracts, commercial arrangements, cybersecurity obligations and wider corporate governance. Conclusion Data protection compliance in India requires international companies to understand how their operations, data flows and existing global policies interact with Indian law. The DPDP Act and Rules create a distinct framework, so organisations should not assume GDPR compliance alone is sufficient or presume all personal data must be stored locally.By mapping data, reviewing notices and contracts, assessing cross border transfers, strengthening security and preparing for phased implementation, international businesses can reduce legal uncertainty and improve operational readiness. Regular legal and technical reviews will help ensure their privacy programme remains aligned with changing business activities and applicable requirements. Frequently Asked Questions (FAQs) Q1. Does the DPDP Act apply to foreign companies without an office in India? It may. The Act can apply to processing outside India when it is connected with offering goods or services to individuals in India. Applicability depends on the company’s activities and the statutory scope. Q2. Is GDPR compliance enough for operating in India? No. GDPR compliance can provide a strong foundation, but India has distinct rules on lawful processing, notices, children’s data, individual rights and other obligations. Businesses should conduct a separate Indian compliance assessment. Q3. Does India require all personal data to be stored within the country? No. The DPDP Act does not create a blanket localisation requirement for all personal data. However, government restrictions, sector specific rules and other applicable laws may limit particular transfers or require certain records to be stored locally. Q4. When do the main DPDP compliance requirements commence? The framework has a phased commencement schedule. Many substantive operational requirements are scheduled to commence in May 2027. Businesses should check the official notifications and identify the effective date of each provision relevant to their operations. Q5. What penalties can apply for DPDP Act violations? The Act provides for financial penalties depending on the type of contravention. The maximum penalty for failure to take reasonable security safeguards to prevent a personal data breach can reach ₹250 crore. The applicable provision and circumstances determine the potential exposure. Q6. What should an international company do first to prepare for Indian data protection compliance? It should map personal data, assess whether the Act applies, identify current and upcoming obligations, review privacy notices and vendor agreements, assess cross border transfers, and establish a documented breach response process. A prioritised implementation plan can then address identified gaps.
data protection lawyers for businesses
How Data Protection Lawyers Help Businesses Reduce Legal Risks
Data protection lawyers for businesses help organisations understand privacy laws, manage personal information responsibly and reduce the legal risks associated with collecting, storing, using and sharing data. As companies increasingly rely on digital platforms, customer databases, cloud services and third party providers, data protection has become an essential part of business governance. A privacy issue can lead to regulatory scrutiny, contractual disputes, financial losses and damage to customer trust. In India, the evolving data protection framework makes early legal guidance particularly valuable. Businesses need to understand their current obligations, prepare for upcoming regulatory requirements and build processes employees can follow in practice. Data protection lawyers support this work by translating legal rules into clear policies, contracts, risk assessments and incident response procedures. Why Data Protection Is a Legal Priority for Businesses? Personal information is used across nearly every business function. Sales teams manage customer details, human resources departments process employee records, finance teams handle payment information, and digital platforms collect information through websites and applications. Each activity can create legal risks if information is collected without an appropriate basis, used for an undisclosed purpose, retained unnecessarily or shared without suitable safeguards. A data breach is only one possible source of liability. Businesses may also face complaints about misleading privacy notices, inappropriate marketing, weak vendor controls, excessive employee monitoring or failure to respond properly to requests concerning personal information. Poor documentation can make it difficult to demonstrate how a decision was reached or whether the organisation followed its own procedures.  Data protection lawyers help identify these risks before they develop into disputes. Their role is not limited to interpreting legislation. They also help management understand how legal requirements affect commercial decisions, technology projects, employment practices and customer relationships. Understanding India’s Data Protection Legal Framework 1. Digital Personal Data Protection Act, 2023 The Digital Personal Data Protection Act, 2023 establishes a framework for processing digital personal data in India. It sets out obligations for Data Fiduciaries, provisions relating to individual rights, safeguards for personal data and consequences for non compliance. The Digital Personal Data Protection Rules, 2025 provide further detail on how key requirements are intended to operate. The framework is being implemented in phases. As of October 2026, some institutional and preliminary provisions are in force, while many substantive operational duties are scheduled to commence on 13 May 2027. Businesses should therefore distinguish between requirements already effective and those requiring advance preparation. The official DPDP Act commencement notification and implementation timeline provides the legal basis for these dates. Data protection lawyers can help businesses assess which provisions currently apply, identify future obligations and prepare an implementation plan. This may involve reviewing privacy notices, consent mechanisms, internal responsibilities, data retention practices, individual request procedures and arrangements with service providers. 2. Information Technology Act and CERT In Directions The Information Technology Act, 2000 and applicable rules remain relevant to cybersecurity and information handling. CERT In, India’s national cyber incident response agency, has issued directions under Section 70B of the Act. These include reporting specified cyber incidents within six hours of noticing them or being informed of them, alongside requirements concerning system logs and other cybersecurity practices for entities within scope. A business may have to consider cybersecurity reporting obligations even where an incident does not involve personal data. Legal advisers can help identify the relevant reporting route, coordinate with technical teams and ensure deadlines are not overlooked. The applicable directions and clarifications are available on the official CERT In website. Depending on the industry, businesses may also need to consider sector specific rules, contractual commitments and foreign privacy laws. A company serving international customers may have obligations beyond the Indian framework, depending on its activities and the laws applicable to those activities. How Data Protection Lawyers Reduce Business Legal Risks? 1. Identifying Legal Risks Through Data Mapping Businesses cannot manage data protection risks effectively without understanding what information they hold and how it moves through the organisation. Legal advisers help map personal data across customer onboarding, marketing, employee management, payments, analytics and third party services. The assessment considers why information is collected, who can access it, where it is stored, how it is shared and when it should be deleted. It can reveal unnecessary data collection, unclear responsibilities, excessive access permissions and gaps in vendor arrangements. The findings help businesses prioritise improvements based on legal exposure and practical risk. 2. Drafting Privacy Policies and Notices Privacy notices explain how an organisation handles personal information. If the notice is vague, incomplete or inconsistent with actual practices, customers may be misled and the business may struggle to demonstrate responsible data handling. Data protection lawyers help draft notices which accurately reflect the organisation’s activities and applicable legal requirements. They can also review website forms, app permissions, cookie notices, employee privacy statements and marketing communications. The objective is to ensure disclosures are understandable, relevant and consistent with how information is actually processed. A policy alone does not establish compliance. Employees and systems must follow the documented approach, and the organisation should update its notices when its data practices materially change. 3. Reviewing Contracts With Vendors and Business Partners Many businesses rely on cloud providers, payroll platforms, customer relationship management systems, marketing agencies and outsourced support teams. These arrangements can create uncertainty over security responsibilities, permitted data use, breach notifications and deletion of information when a contract ends. Lawyers help review service agreements and data processing terms to define each party’s responsibilities. Relevant provisions may cover confidentiality, access controls, security safeguards, incident notification, subcontracting, audit cooperation, data transfers and return or deletion of records. Clear terms reduce the risk of disputes and help the business respond more effectively when a vendor fails to meet its obligations. 4. Preparing for Data Breaches and Regulatory Investigations A suspected breach often requires rapid coordination between IT, management, communications teams and legal advisers. Organisations must establish what happened, which information may be affected, whether systems remain compromised and which notifications may be required. Legal advisers help interpret applicable reporting duties, preserve relevant evidence and document decisions. They can also assist with communications to regulators, affected individuals, customers and contractual partners where appropriate. A prepared response plan reduces the risk of missed deadlines, inconsistent statements and avoidable delays. Businesses should not wait for an incident before establishing these procedures. Regular exercises help confirm whether staff know how to escalate a problem and whether decision makers can access the information needed to respond. 5. Supporting Employee Data and Workplace Compliance Employee information may include identity documents, salary details, performance records, health related information and access logs. Collecting or sharing such information without appropriate safeguards can create privacy concerns and employment disputes. Lawyers help review employee notices, monitoring policies, recruitment procedures, background checks and record retention practices. They can also advise on access restrictions and internal processes for handling complaints. The approach should balance legitimate business needs with applicable privacy requirements and employee expectations. 6. Managing Data Retention and Deletion Keeping information indefinitely increases exposure if systems are compromised or records are used inappropriately. However, deleting records too early can also create legal problems where tax, corporate, employment or litigation requirements call for continued retention. Data protection lawyers help develop retention schedules based on the type of information, its purpose and applicable legal obligations. They also advise on legal holds, secure deletion, backup systems and responsibilities when a vendor relationship ends. A documented schedule helps avoid both unnecessary retention and premature destruction of important records. 7. Assessing New Technology and Business Projects New applications, artificial intelligence tools, analytics platforms and digital marketing systems may introduce privacy risks before a product reaches customers. Personal information entered into an external AI tool, for example, may be processed under terms the business has not reviewed. Legal advisers can assess proposed uses of data, review supplier terms and identify issues involving transparency, access, retention, confidentiality and transfers. Businesses seeking guidance from data privacy lawyers can use this review to build privacy considerations into product development and procurement decisions rather than trying to resolve problems after launch. When Should a Business Consult a Data Protection Lawyer? Legal support is useful when a business launches a new website or application, expands into a new market, introduces AI tools, changes its marketing practices, appoints a new data processor or experiences a suspected breach. It is also valuable when responding to a customer complaint, negotiating a contract involving personal information or preparing for upcoming legal requirements.Smaller businesses may not need a full time privacy legal team. They can still benefit from periodic reviews, clear internal responsibilities and access to specialist advice when a significant risk arises. Businesses working with technology corporate lawyers can also align privacy requirements with technology contracts, commercial transactions, intellectual property concerns and wider corporate governance. Practical Steps to Reduce Data Protection Risks Businesses should begin by creating an inventory of the personal information they hold and identifying the legal requirements relevant to each activity. They should review privacy notices, restrict access to sensitive records, establish retention schedules and assess third party providers. Staff training should explain how to handle personal information and report suspected incidents. Management should assign responsibility for privacy compliance and review progress periodically. Legal and technical teams should work together because a policy cannot compensate for weak security, while technical controls cannot resolve every issue involving lawful processing, transparency or contractual responsibility. Records of assessments, training, decisions and incident responses can help demonstrate a consistent compliance approach. Conclusion Data protection lawyers help businesses reduce legal risks by identifying gaps in data handling, interpreting applicable laws, reviewing contracts and preparing organisations for privacy complaints or security incidents. Their involvement can support better decisions throughout the data lifecycle, from collecting information to retaining, sharing and deleting it. For Indian businesses, a practical approach involves understanding the phased DPDP framework, complying with applicable cybersecurity requirements and building reliable internal processes. Early legal advice can help organisations prepare for regulatory change, protect customer trust and reduce avoidable disputes. Regular reviews are essential because business models, technology and legal requirements continue to evolve. Frequently Asked Questions (FAQs) Q1. What do data protection lawyers do for businesses? They advise businesses on privacy laws, data handling practices, privacy notices, vendor contracts, data retention, individual requests and breach response. They also help identify compliance gaps and develop practical procedures to manage legal risks. Q2. Why does a small business need data protection legal advice? Small businesses often collect customer, employee and supplier information even without operating a technology focused business. Legal advice can help them understand relevant obligations, establish appropriate policies, review vendors and avoid preventable compliance problems. Q3. What laws should Indian businesses consider for data protection? Relevant frameworks include the Digital Personal Data Protection Act, 2023 and its Rules as they commence, the Information Technology Act, 2000, applicable CERT In directions and any sector specific or contractual requirements. Businesses should verify which provisions are effective for their circumstances. Q4. Can data protection lawyers help after a data breach? Yes. They can help identify applicable reporting obligations, coordinate with technical responders, preserve evidence, review communications and advise on regulatory or contractual exposure. The business should also take immediate technical steps to contain the incident. Q5. When should a company review its privacy policies? A review is appropriate when the business changes its data collection practices, launches a new product, adopts new technology, enters a new market, appoints a new service provider or becomes subject to new legal requirements. Periodic reviews can also identify outdated disclosures and procedures. Q6. How can businesses prepare for the DPDP framework? Businesses can map personal data, assess gaps, review notices and contracts, define responsibilities, establish breach response procedures and train employees. They should also track commencement notifications and distinguish current legal duties from requirements scheduled to take effect later.
MHCO Updates
Supreme Court
MHCO UPDATE |SUPREME COURT HOLDS YES BANK ADMINISTRATOR LACKED AUTHORITY TO WRITE OFF RS. 8,415 CRORE AT-1 BONDS
In Yes Bank Limited & Anr. v. Axis Trustee Services Limited & Ors. (Civil Appeal No. 3182 of 2025 and connected matters, judgment dated 15 October 2026), the Supreme Court dismissed the appeals and upheld the Bombay High Court’s decision setting aside the write-down of Yes Bank’s Basel III-compliant Additional Tier 1 (“AT-1”) Bonds. The Court held that the Administrator could not write down the bonds contrary to the final Reconstruction Scheme or exercise a regulatory power vested in the Reserve Bank of India (“RBI”). BACKGROUND Yes Bank issued AT-1 Bonds worth Rs. 3,000 crores in December 2016 and Rs. 5,415 crore in October 2017. Following a steep deterioration in Yes Bank’s financial position, the Central Government imposed a moratorium on 5 March 2020, and the RBI appointed an Administrator. A draft reconstruction scheme published on 6 March 2020 expressly provided for the AT-1 Bonds to be permanently written down in full. However, the final Yes Bank Limited Reconstruction Scheme, notified on 13 March 2020, omitted that clause. On 14 March 2020, the Administrator nevertheless ordered a full write-down of the Rs. 8,415 crore AT-1 Bonds. Therefore, the trustee and bondholders challenged the action, and the Bombay High Court set it aside. CONTENTIONS OF THE PARTIES The appellants, including Yes Bank, the RBI and the Union of India, contended that the Administrator was empowered under Section 36ACA of the Banking Regulation Act, 1949 (“Banking Regulation Act”), the RBI’s Master Circular on Basel III Capital Regulations and the Information Memorandum to write down the bonds. They argued that invocation of Section 45 of the Banking Regulation Act triggered the point of non-viability and that the write-down, followed by SBI’s infusion of capital, was necessary to revive Yes Bank. They also argued that the reconstruction process continued after notification of the Scheme. The respondents contended that the final Reconstruction Scheme deliberately omitted the draft provision for writing down the bonds. They argued that the Administrator could not write down the bonds after the Scheme came into force and that, under the Master Circular, the relevant action had to be taken before reconstruction. They further submitted that the power to determine the write-down at the point of non-viability belonged to the RBI, not the Administrator. COURT’S FINDINGS The Court held that the omission of the write-down clause from the final Reconstruction Scheme reflected a conscious decision not to deal with the bonds through the Scheme. The Administrator could not reverse that decision. A general clause preserving existing instruments did not confer a specific power to write down the bonds; the action was therefore ultra vires the Master Circular read with the Reconstruction Scheme. The Court further held that the phrase “before reconstitution” in the Master Circular meant before the Reconstruction Scheme came into force, and not at any time while the Scheme’s effects continued. Once the point of non-viability was triggered, the RBI was required to determine the treatment of the bonds. The Administrator, whose statutory role was to act as a substitute for the Board of Directors, could not assume the RBI’s regulatory power. The Court observed that financial necessity could not excuse non-compliance with the prescribed procedure. It accordingly dismissed the appeals and clarified that its observations would not influence other pending proceedings. MHCO COMMENT The judgment reinforces that regulatory and administrative powers must be exercised strictly within the limits prescribed by statute and the applicable regulatory framework. The commercial necessity of rescuing a bank cannot override the authority, timing and procedure mandated by law. The decision is also significant for the distinction it draws between the Administrator’s powers as a substitute for the Board of Directors and the RBI’s independent regulatory powers. The Administrator cannot assume a function specifically entrusted to the RBI. Further, a general provision preserving existing contracts cannot be used to imply a specific power that the final Reconstruction Scheme has omitted. For market participants and financial institutions, the judgment highlights the importance of consistency between a reconstruction scheme, the RBI’s capital regulations and the terms of the relevant bond documentation. It also draws attention to investor-protection concerns surrounding the sale of complex, high-risk capital instruments to retail investors. Date: 19 October 2026 By: Mr.  Bhushan Shah, Partner Ms. Sayali Kshirsagar, Associate Mr. Abhishek Nair, Associate Disclaimer: This legal update is intended for general information purposes only and does not constitute legal advice. Readers are advised to seek specific legal advice before acting upon any information contained herein.
Litigation
LITIGATION UPDATE | SUPREME COURT UPHOLDS OCCUPANTS' RIGHTS IN REDEVELOPMENT PROJECTS, REINSTATES MHADA ORDERS FOR PERMANENT ALTERNATE ACCOMMODATION
Overview: The Supreme Court of India, vide its judgment dated July 23, 2026, in Mahabanoo Contractor and Another v. Kalikund Developers and Others (Civil Appeal No. 9342 of 2026), set aside a Bombay High Court decision and ruled in favour of the occupants of a redeveloped cessed building. The Supreme Court upheld the Maharashtra Housing and Area Development Authority’s (MHADA) orders directing the developer to execute the Permanent Alternate Accommodation Agreement (PAAA) and hand over possession. The ruling firmly establishes that a PAAA executed under the Maharashtra Housing and Area Development Act, 1976 (MHAD Act) and the Development Control (DC) Regulations is not merely a private arrangement but is governed by a statutory scheme protecting occupants' rights. Brief Background and Facts: The dispute arose regarding a cessed building unfit for human habitation, which the developer (Respondent No. 1) undertook to demolish and redevelop under the MHAD Act, obtaining a No Objection Certificate (NOC) from MHADA. Occupants vacated the premises on the assurance of alternate accommodation in the reconstructed building. The first Appellant and the late Ms. Gool Peshotan Unwalla were joint occupants of Room No. 5 on the third floor of the old building. Following the redevelopment, the developer refused to honour the PAAA executed on 17 October 2019, which granted the Appellants three flats (inclusive of fungible area) totalling 309.98 sq. mtrs. Instead, the developer offered a smaller area, contending that the fungible Floor Space Index (FSI) was not fully utilized due to a reduction in the building's height from 34 to 30 floors. Upon the Appellants' complaint, MHADA issued orders on 28 May 2025, and 27 June 2025, directing the developer to register the PAAA and hand over possession, which were followed by a Show Cause Notice on 10 July 2025 when the developer failed to comply with the orders. The developer challenged the orders and the Show Cause Notice in the Bombay High Court, which stayed MHADA's actions by classifying the PAAA as a "private arrangement" amenable only to civil court jurisdiction. The Hon’ble High Court recorded the developer's undertaking to keep two flats encumbrance-free until a civil suit was decided. Subsequently, the developer filed a civil suit challenging the validity of the PAAA in its entirety. Contentions of the Parties: The Appellants (Occupants): The Appellants emphasized the statutory definition of 'occupant' under the MHAD Act and Rule 33(7) of the DC Regulations. They argued that the PAAA was a statutory requirement enforced by MHADA, not a private arrangement. They further relied on contemporaneous public notices, the certified list of tenants by MHADA, and the developer's NOC, all of which documented the first Appellant as a rightful joint occupant. The Respondents (Developer): The Respondents contended that the PAAA was a concocted document executed by a former expelled partner without proper authorization. They argued that upon the original tenant's death, the tenancy was extinguished, leaving the Appellants without rights to the premises. Furthermore, they asserted the carpet area allotted in the PAAA was excessive compared to the original tenement's area, especially considering that the FSI was not fully utilised. Court’s Findings: The Division Bench of the Supreme Court consisting of the Hon’ble Justice Shri J.B. Pardiwala and the Hon’ble Justice K. Vinod Chandran made several key observations: Statutory Nature of the PAAA: The Hon’ble Supreme Court held that the High Court had misconstrued the PAAA as a mere private arrangement. It was held that the PAAA was executed under the MHAD Act, which is a statutory scheme, and was meant to facilitate redevelopment while ensuring that the original occupants were not displaced. Its enforcement therefore fell squarely within MHADA's regulatory purview. Definition of 'Occupant': The Hon’ble Court held that the MHAD Act defines "occupier" under Section 2(25) as encompassing more than just the statutory tenants. It was held that the first Appellant’s status as an occupant was firmly established by multiple contemporaneous documents, including the developer's own 2010 public notice and MHADA's certified list. Developer's Conduct and Internal Disputes: The Hon’ble Court rejected the developer's attempt to use internal partnership disputes to invalidate agreements made with the occupants, stating that the occupants were not even made a party to the consent terms executed between the partners. It was held that the settlement of inter-se disputes between partners cannot absolve the developer from obligations under a validly executed PAAA, on the basis of which vacant possession was originally obtained. Additionally, it was held that the developer's failure to utilize the full fungible area does not justify resiling from the agreed allotments. Mala Fide Civil Suit: The Hon’ble Court found the civil suit filed by the developer to be misconceived and mala fide in nature because it sought to challenge the Appellants' very claim as occupants contrary to the undertaking given by the developer to the High Court. Judgment: The Supreme Court allowed the appeal, setting aside the Bombay High Court's judgment and reviving MHADA’s original orders. The Hon’ble Court directed the developers to execute the PAAA and hand over possession of the three apartments within two months and stated that if they failed to do so, the Appellants were entitled to recover damages calculated at the monthly rental value of the flats. The Hon’ble Court further restrained the High Court from proceeding with the developer's civil suit and imposed heavy costs on the developer. MHCO Comment: This pivotal judgment strictly curtails the dilatory tactics often employed by developers in redevelopment schemes to avoid handing over agreed-upon permanent alternate accommodations. By reiterating that the PAAA is a statutory instrument governed by the MHAD Act, rather than a standard private contract, the Supreme Court has fortified the regulatory authority of bodies like MHADA to intervene and enforce these agreements. For real estate practitioners and developers, this ruling serves as a stern reminder that internal management disputes or changes in project specifications cannot be utilized to prejudice the vested statutory rights of certified occupants. By: Mr. Akash Jain, Associate Partner Mr. Divyang Salvi, Associate Ms. Diva Lathi, Associate
SEBI Update
REGULATORY UPDATE | SEBI ORDERS VARANIUM CLOUD TO RESTORE & DISGORGE FUNDS OVER IPO & RIGHT ISSUE FRAUD
The Securities and Exchange Board of India (“SEBI”) on 25 August 2025 passed a Final Order against Varanium Cloud Limited (“VCL”) and its key management for alleged fraudulent and misleading activities in connection with its Initial Public Offer (IPO), Rights Issue and subsequent disclosures. BACKGROUND The proceedings stemmed from SEBI’s preliminary examination pursuant to media reports and complaints regarding VCL’s financial statements and corporate announcements, which led to an Interim Order dated 10 May 2024 against VCL and its MD/Chairman, Harshwardhan Hanmant Sabale (Mr Sabale). VCL raised approximately Rs 40.39 crore through its IPO in September 2022 (primarily for Edge Data Centres and Edmission Digital Learning Centres) and proposed a further Rs. 48.45 crore through a Rights Issue in September 2023. SEBI examined the utilisation of issue proceeds, financial statements, Prospectus disclosures, corporate announcements, related-party transactions, and the role of directors, the CFO, the merchant banker and other intermediaries. SEBI’S FINDINGS SEBI found that VCL misrepresented its financial statements and prospectus by showing fictitious sales and purchases, and that its disclosures on utilisation of IPO proceeds (including the Statement of Deviation dated 17 November 2023) were incorrect and misleading. SEBI found that IPO and Rights Issue proceeds of Rs. 62.51 crore were diverted to related parties and other entities, including Rs. 32.73 crore transferred directly to Mr Sabale’s personal account. BM Traders (operated by Mr Raj Jagtani) received Rs. 19.66 crore in aggregate from the issue proceeds, of which Rs. 15.60 crore was transferred onwards; and that no adequate evidence of genuine business purpose was produced. SEBI found several business announcements by VCL to be false and unsubstantiated. SEBI also found that the Company also failed to support the substantial increase in reported revenues (including those of its US subsidiary) with invoices, contracts or employee details. Pending litigation was omitted from the Letter of Offer, and the Prospectus contained material omissions and misstatements. Liability was fastened on the Company, its MD, Executive Directors and CFO. SEBI found that the lead manager, First Overseas Capital Limited (FOCL), failed to exercise independent due diligence and did not disclose pending litigation. SEBI rejected FOCL’s defence that  it  could  rely  on  the  Company’s  representations  and  third-party  reports. Athos Capital Advisors Private Limited (ACAPL) and Mr Jinesh Mehta were held to have aided and abetted the misrepresentations; ACAPL received approximately Rs. 2.50 crore from VCL, and Mr Mehta admitted drafting portions of the Prospectus and assisting with fundraising. SEBI’S DIRECTIONS VCL was directed to bring back Rs. 62.51 crore (with 12% p.a. interest) within three months. Mr Sabale was directed to disgorge unlawful gains of Rs. 128.77 crore (with 12% p.a. simple interest) to the Investor Protection and Education Fund. VCL and Mr Sabale were debarred from the securities market for 7 years. ACAPL and Mr Jinesh Mehta were debarred for 2 years; Mr Raj Jagtani/BM Traders for 4 years; the Executive Directors and CFO (Mr Vinayak Jadhav, Mr Mukundan Raghavan and Mr Fahim Shaikh) for 1 year; and FOCL for 2 years (to run consecutively with an earlier debarment). Monetary penalties were also imposed, including Rs. 20.40 crore on Mr Sabale, Rs. 13 crore on VCL and Rs. 10.10 crore on Mr Raj Jagtani. Proceedings against the Company Secretary (Ms Hetal Somani) and a Non-Executive Director (Mr Kalpesh Acharekar) were disposed of without directions or penalty, the allegations against them being found unsustainable. MHCO COMMENT The order is significant for its treatment of misrepresentation in financial statements and public-issue disclosures, diversion of IPO and Rights Issue proceeds, and the accountability of directors, KMPs and intermediaries. It reiterates that a lead manager must conduct independent due diligence and cannot merely rely on the issuer’s representations or third-party reports. SEBI did not fasten liability on every director or officer; allegations against the Company Secretary and non-executive director were dropped for want of material. Overall, SEBI characterised the matter as a fraudulent scheme of raising public funds on misleading disclosures, followed by diversion of proceeds and creation of a false picture of the Company’s performance. The restoration, disgorgement, debarment and penalty directions reflect the seriousness with which the conduct was viewed. By: Mr. Bhushan Shah, Partner Mr. Abhishek Nair, Associate Ms. Sayali Kshirsagar, Associate
Rea Estate
BOMBAY HIGH COURT ALLOWS REFUND OF STAMP DUTY PAID ON CANCELLED DEVELOPMENT AGREEMENT
The Bombay High Court, vide judgment dated 20 August 2026 in Sai Innovation v. Joint District Registrar and Collector of Stamps, Pune City & Ors. (Writ Petition No. 7566 of 2016), has held that a Development Agreement which fails to achieve its intended purpose and is subsequently cancelled can qualify for refund of stamp duty under Section 47(c)(5) of the Maharashtra Stamp Act, 1958 (“the Stamp Act”), and that such an agreement can avail the extended limitation period under the proviso to Section 48(1) where stamp duty has been calculated with reference to Article 25 of Schedule I. Background: Sai Innovation had entered into a Development Agreement (“said Agreement”) dated 15 April 2013 with the owners of land at Village Mauje Balewadi, Pune, for development of approximately 8,000 sq. metres of land and paid stamp duty under Article 25 read with Article 5 of Schedule I to the Stamp Act. The owners were unable to obtain sanction of the building plans within a reasonable time, and disputes subsequently arose between the parties. The said Agreement was therefore cancelled by a registered Deed of Cancellation (“said Deed”) dated 18 February 2014, registered on 24 February 2014, and the consideration received was returned. Sai Innovation thereafter applied on 7 April 2014 for refund of the stamp duty. The Respondent Nos 1&2 vide their orders dated 11 August 2014 and 6 December 2014 (“Impugned Orders”) respectively, rejected the refund application of the Petitioner, principally on the ground that the said Agreement was not a “conveyance” and therefore did not fall within the proviso to Section 48(1) of the Stamp Act. Issue: The Court dealt with the following issues: Whether the said Agreement had failed to achieve its intended purpose to attract Section 47(c)(5) of the Stamp Act; Whether a Development Agreement could avail the benefit of the proviso to Section 48(1), particularly where stamp duty was calculated as per Article 25 of Schedule I; Whether the reference to “actual, open possession” in Clause 13 of said Agreement be interpreted as transfer of possession to the developer, notwithstanding Clause 11 of the said Agreement which described the developer as a licensee; and Whether the Respondents could subsequently rely upon the alleged transfer of possession as a ground for rejecting the refund claim, when the refund claim had initially been rejected by the Impugned Orders on other grounds, and the issue of possession did not form part of the reasons recorded in those orders. Key Findings The Court, while differentiating between Section 47 and Section 48 of the Stamp Act, held that while Section 47 is the main provision that gives the right to a refund of stamp duty, Section 48 only deals with the time limit. In the present case, the proposed development under the said Agreement was never acted upon, and the parties later cancelled the said Agreement by the said Deed. As a result, the transaction had clearly failed to achieve its intended purpose under Section 47(c)(5) of the Stamp Act. The Court therefore said the refund claim had to be examined first under Section 47 and could not be turned down simply by pointing to the limitation period. On the question of possession, the Court held that Clause 13 of the said Agreement could not be read in isolation from Clause 11. Although Clause 13 referred to “actual, open possession”, Clause 11 expressly described the developer’s rights as those of “a licensee for development”. Reading the Agreement as a whole, the Court concluded that the developer was granted only a limited contractual licence to enter the property and undertake development activities, and that there was no transfer of legal or exclusive possession. The Court also noted that the absence of a separate possession receipt, by itself, did not establish that possession had been transferred. Held In light of the above reasoning, the Court allowed the writ petition and quashed the Impugned Orders passed by the Respondents. The Court held that the refund application was filed within the extended period prescribed under the proviso to Section 48(1) of the Stamp Act and, accordingly, rejected the Respondents’ objection that the claim was barred by the ordinary six-month limitation period. MHCO Comment Parties seeking refund of stamp duty on a cancelled Development Agreement should note that Section 47 governs the substantive entitlement to refund, while the proviso to Section 48(1) determines the applicable limitation period. Further, the legal character of a Development Agreement should be assessed by reading the same meaningfully and not in isolation from other clauses provided therein. By: Mr. Bhushan Shah, Partner Ms. Meeta Kadhi, Associate Partner Mr. Saptadip Nandi Chowdhury, Associate
LIFE AT MHCO
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