India

A tragic incident recently occurred where an Air India Flight 171, a Boeing 787 Dreamliner, after just taking off from Ahmedabad got crashed within a few minutes. In accordance with the Data from the Airport Authority, the last recorded altitude of the plane was at 625 feet off the ground, just immediately after takeoff. It flew just 2 km more. The flight was carrying 230 passengers and 12 crew members. However, except for one passenger, all the passengers and the crew members died on the spot.  Moreover, the flight crashed into the B.J. Medical College Hostel's mess and, as per the report, killed around 19 people and injured at least 60 more on the ground. The flight was a scheduled international passenger flight operated by Air India from Ahmedabad Airport in India to London Gatwick Airport in the United Kingdom. After the 2010 air crash incident wherein the 2-year-old aircraft had crashed outside Mangalore airport in Karnataka on May 22, killing 158 people when it burst into flames after overshooting a tabletop runway and plunging into a nearby forest. This is the tragic incident wherein the Air India Flight 171 crashed and killed around 300 people. The Air India Flight 171 crashed in the B.J. Medical College Hostel's mess, causing damage to the properties nearby, approximately 2 square kilometres. This event has reportedly triggered what could be India's largest aviation liability, exceeding 1,000 crores. In this article, we will discuss and try to understand what kinds of liability arise because of this plane crash on the airlines and the country, and under which law. LAWS OF INDIA GOVERNING THE AIRPLANE INCIDENT The Aircraft (Investigation of Accidents and Incidents) Rules, 2012, were notified by the Central Government of India through a Gazette Notification. This notification was published as G.S.R. 536(E) on July 5, 2012. These rules were formulated based on the ICAO (International Civil Aviation Organisation) SARPs (Standards and Recommended Practices) and the Indian Civil Aviation scenario. The purpose of these rules was to establish a framework for investigating aircraft accidents and incidents, which led to the establishment of the Aircraft Accident Investigation Bureau (AAIB). As per the Definition of the Accident in the Act, it refers to an event related to the operation of a manned or unmanned aircraft occurring between boarding and disembarkation (for manned) or from readiness to engine shutdown (for unmanned), resulting in either: fatal or serious injury caused by being in or coming into contact with the aircraft or jet blast (excluding natural causes, self-inflicted harm, assaults, or injuries to hidden stowaways); aircraft damage or structural failure affecting performance or safety, requiring major repair or replacement (excluding minor or localized damage to components like engines, propellers, tires, or panels); or the aircraft being missing or completely inaccessible. In these types of cases of aircraft accidents, the airline is primarily liable for compensating victims, and the amount can vary. For international flights, the Montreal Convention sets a minimum compensation of around 1.4 crore per passenger, while domestic flights are also subject to this convention's standards. However, if negligence on the airline's part is proven, the compensation can exceed this capped amount. The Aircraft (Investigation of Accidents and Incidents) Rules, 2012, and subsequent amendments primarily focus on the investigation process and don't directly dictate compensation amounts, but they do establish the framework for investigation and reporting. The Air India Flight 171 took off from Ahmedabad Airport in India and was going to London Gatwick Airport in the United Kingdom, which means it was an International flight. Therefore, the liability would be covered under an International Convention. In this case, the damage caused to the passengers will be governed under the Montreal Convention, 1999, also known as the 'Convention for the Unification of Certain Rules for International Carriage by Air'. Montreal Convention, 1999 India was the 91st country to ratify the Montreal Convention 1999. The Convention was effective for India on 30th June 2009, wherein the death of a passenger, there is a strict liability of 100,000 SDRs. As per Article 17, the liability of an air carrier is limited under specific conditions. The carrier is liable for a passenger’s death or bodily injury only if the accident occurred on board the aircraft or during embarking or disembarking operations. As per Article 21, the air carrier cannot exclude or limit its liability for passenger death or injury damages up to 100,000 Special Drawing Rights (SDRs) per passenger. For damages exceeding this amount, the carrier is not liable if it proves that the harm was not due to its own negligence or that of its employees or agents, or that the damage was entirely caused by a third party’s negligence or wrongful act. The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. As per Article 24, the SDR amounts are reviewed and adjusted every 5 years for inflation. Thereafter, the current SDR amount is updated by the International Civil Aviation Organisation in the month of October,2024. As per the reports, one SDR is equal to 122 INR. The Kerala High Court division bench in the case of National Aviation Company Of India Ltd vs S.Abdul Salam dated 25.10.2011 has held that while an air carrier’s liability for passenger death or injury in an air accident is unlimited, only actual damages proven by the victim or claimants are payable, either through settlement or by a competent civil court. The law does not mandate any minimum compensation under Rule 21(1) or any other provision, although carriers are encouraged to offer reasonable ex gratia payments to avoid prolonged litigation. In the absence of a settlement, claimants must establish the extent of damages in court. The carrier may defend itself by proving contributory negligence on the part of the passenger. For claims exceeding the threshold, the carrier can escape additional liability only by proving that the accident was not due to its own or its agents' negligence, or was solely caused by a third party, failing. Judgement Link Who is to claim compensation The legal heirs or dependents of the deceased can file a claim for compensation. In case of injury, the passenger themselves can do so. The amount depends on the proof of damage or loss (for claims beyond the strict liability limit). As per Article 33, an action for damages may be initiated, at the plaintiff’s choice, in the territory of a State Party either where the carrier is domiciled, has its principal place of business, where the contract was made through a business location, or at the place of destination. In cases involving death or injury of a passenger, the plaintiff may also sue in the State where the passenger had their principal and permanent residence at the time of the accident, provided the carrier operates services to or from that State under its own or a partner carrier’s aircraft, and conducts its business from premises it owns or leases. CONCLUSION The tragic crash of Air India Flight 171, resulting in nearly 300 fatalities and massive property damage, marks one of the most catastrophic aviation disasters in India’s history, raising critical questions about airline accountability and systemic safety failures. Governed by the Montreal Convention, 1999, and India’s Aircraft (Investigation of Accidents and Incidents) Rules, 2012, the legal framework mandates strict liability up to 100,000 SDRs per passenger, with scope for higher compensation if negligence is proven. Legal heirs of the deceased can seek damages through various jurisdictions, though claims beyond the fixed threshold require evidence and may involve prolonged litigation. The crash not only exposes the country to liabilities exceeding ₹1,000 crore but also highlights the urgent need for stronger aviation safety standards, accountability mechanisms, and crisis response systems to prevent such devastating incidents in the future. Author: Mr Akhand Pratap Singh Chauhan, Partner Co-Author: Mr. Sachin Sharma, Assessment Intern

SNG & Partners represented investors and the debenture trustee in relation to the issuance of rated, listed, senior, secured, redeemable, taxable, transferable non-convertible debentures (NCDs) aggregating to a total of INR 500 Crores by Lodha Developers Limited, formerly known as Macrotech Developers Limited (Lodha Developers), one of India’s largest and most prominent real estate developers. The NCDs were issued in two issuances comprising (i) 20,000 debentures of face value INR 1,00,000 each, and (ii) 30,000 debentures of face value INR 1,00,000 each, aggregating to INR 500 crores. The debentures were privately placed and subsequently listed on the stock exchange, marking a significant capital mobilisation by the company. The issuances attracted participation from some of India’s most prominent and sophisticated institutional investors, including a leading mutual fund and a major private sector bank—underscoring strong market confidence in the company’s performance and governance standards. Lodha Developers is a key player in India’s real estate sector with a diversified and expansive portfolio spanning residential, commercial, and mixed-use developments. With a strong footprint in core urban markets such as Mumbai, Pune, and Bangalore, Lodha Developers is known for delivering high-quality developments under marquee brands such as “Lodha,” “CASA by Lodha,” and “Crown – Lodha Quality Homes”. Lodha Developers’ vision and execution continue to shape the urban real estate landscape in India. The funds raised through this issuance are intended to be utilised towards Lodha Developers’ capital expenditure, refinancing of existing debt, meeting long-term working capital requirements, and general corporate purposes—forming an integral part of the company’s broader strategy to optimise its capital structure and fuel future growth. SNG & Partners acted as legal counsel to the investors and the debenture trustee, advising on all aspects of the transaction including structuring of the issuance, drafting, reviewing, and negotiating the transaction documents, conducting legal due diligence, and overseeing regulatory compliances leading to successful listing of the debentures on the stock exchange. The transaction was led by Aditya Vikram Dua (Partner & Head – Financial Services), with Aniket Sawant (Associate Partner), Parvathi Menon (Senior Associate), Kartikeya Rao (Associate) and Prashant Dubey (Associate) forming the core team that provided end-to-end legal support and seamlessly executed the transaction within tight timelines. This transaction further reinforces SNG & Partners' deep-rooted capabilities and experience in the debt capital markets space and its commitment to delivering high-quality, solution-oriented legal services in complex financing transactions.

Introduction and Regulatory Context On May 8, 2025, the Reserve Bank of India (RBI) issued a very significant notification in respect of the regulatory framework governing Foreign Portfolio Investor (FPI) investment in India's corporate debt market. In removing the short-term investment limit, and the concentration limit, for FPIs investing in India via the general route, the RBI is signaling its commitment to develop a more transparent, liquid, and internationally competitive bond market.[1] This is part of a series of steps that would foster foreign capital inflows, enhance domestic financial market depth, and bring India's regulatory framework in line with international best practices. In the past, there were two restrictions related to FPI investment in Indian corporate debt applicable under the Master Directions - Reserve Bank of India (Non-Resident Investment in Debt Instruments) Directions, 2025. The first restriction was the "short-term investment limit" that limited FPI amounts in corporate debt securities with residual maturity up to one year, to 30% of the total corporate debt portfolio based on a daily measurement. The second restriction was a concentration limit that capped investments (with related persons) by the FPI in corporate debt securities at 15% long-term FPI and at 10% for other FPIs in respect to their maximum investment limit.[2] Initially, these policies were designed to assist with market stability, managing short-termism, and monitoring systemic risks (Provisions to this effect were contained in a scheme entitled "FPIs in the corporate bond market"). However, these clearly had operational problems and restricted active FPI engagement. Essentially, it meant that FPIs had to sell bonds that had less than one year of residual maturity, or increase the total amount of bonds (to comply with the 30% cap), and the amount of bonds they purchased was somewhat wasted; in early 2025 FPIs had only exploited 14.3% (₹1.1 lakh crore) of the total potential limit of ₹7.63 lakh crore. Additionally, the restriction imposed on FPIs prevented them from responding to market opportunities and steward capital prudently. To ameliorate these issues, the RBI had steadily increased limits for FPIs and now cover ₹8.22 lakh crore from April to September 2025, and ₹8.80 lakh crore from October 2025 to March 2026. Thus, the May 2025 notification represented not a fundamental shift, but merely a pragmatic optimization of the compliance regime so that it could deal with the real frustrations experienced by global investors and improve efficiency within India's corporate bond market. The 2025 Relaxations: Nature, Rationale, and Global Alignment On May 8, 2025, the Reserve Bank of India (RBI) released a notification[3] that caused a major shift in regulation, when it removed two significant restrictions on foreign portfolio investors ('FPIs'), investing in corporate debt through the General route: the short-term investment limit and the concentration limit. The short-term investment limit which had been defined by the Master Directions (RBI Non-Resident Investment in Debt Instruments, 2025) to restrict FPIs from holding more than 30% of their corporate debt portfolio at any time in instruments with a residual maturity of up to one year.[4] The concentration limit was defined, to prevent any single FPI (and related) entity from having exposure to 15% of the highest investment limit proposed for long term FPIs or 10% for others. These limits were set in place to address the threat to market stability posed by capital flows (as a result of excess volatility from short-term holdings) and concentration posed by large pools in a few entities. The RBI eliminated these caps based on the premise that FPI investment limits in corporate debt are barely utilized (around 14.3 % in total in early 2025). Industry inputs also confirmed that these limits created operational issues such as forced rebalancing, and tying up inefficiently assigned or allocated capital which caused FPIs to invest less than their available limits. Deregulation is designed to provide more flexibility for FPIs to manage their portfolio and will hopefully foster more active investing and liquidity in the market. Relaxing limits will help align India's framework with what is common in the rest of the world. For example, many EM and developed markets do not implement as strict regulations on foreign holdings of short-term debt, or no restrictions on indicating concentration of ownership by foreign investors, therefore allowing more Foreigners to invest and making it easier to capital to move in and out of EM. Therefore, RBI's deregulation should help India's ability to get added to global bond indices (e.g. JPMorgan GBI-EM), and increase foreign investment in India. Overall, the 2025 relaxations represent a pragmatic and strategic response by the RBI to market reality, and investor concerns to support an ongoing effort to deepen India's corporate debt market with a focus on regulatory monitoring. Capital Market Deepening and Economic Implications The RBI's May 2025 relaxations have the potential to substantially deepen India's corporate debt market by allowing FPIs to invest more flexibly and efficiently than before. The removal of short-term investment and concentration limits will likely prompt greater foreign capital inflows, which have historically been hampered by regulations and restrictions. One of the biggest benefits of these relaxations is the expected increase in FPI ownership. The removal of the 30% limit on short-term corporate debt securities now means that FPIs can hold securities at any maturity without having to adjust their portfolios, thus reducing transaction costs for the issuers and complexity of operations for the FPIs' operations.  The removal of concentration limits means that FPIs can now put larger amounts into preferred issuers or sectors, improving investment decisions and implementing a better risk engineered portfolio. This flexibility is expected to draw a broader group of institutional global investors, such as sovereign wealth funds, pension funds and asset managers wanting diversified coverage of India's robust growing corporate sector. The addition of FPIs and larger ownership of corporate securities as investors will enhance liquidity, which is an important condition for an active corporate bond market. As more liquidity is added into the market, price discovery is more sustainable, bid-ask spreads are narrower, and the cost of trading is lower, thus encouraging issuers and investors to participate further. For Indian corporates, these developments mean greater access to long-term funding at competitive rates, facilitating business expansion and infrastructure spending. This economic development aspect is particularly relevant, in so far as the corporate bond market deepening is aligned to India's broader financial sector reforms designed to reduce reliance on bank credit and promote alternative sources of capital. A healthy bond market exists alongside equity markets and bank channels of supply, better characterized by a more resilient and diversified financial system. Finally, the RBI's alignment of India's FPI investment direction with global best practices increases India's capacity for inclusion in major global bond indices. Such inclusion generates passive inflows from global funds into the Indian bond market, further integrating the market to global capital flows. Overall, the 2025 relaxations should lead to a more liquid, efficient, and globally integrated corporate debt market which has spillover effects for economic development and financial stability. Systemic Risk, Volatility, and Regulatory Safeguards Although the 2025 relaxations from the RBI are widely expected to expand the corporate debt market and draw in additional foreign capital, they also introduce new aspects of risk that may require closer attention from regulators. The two risk areas that are of particular concern are the potential increase in market volatility arising from changes in FPI flows and the general increase of systemic risk arising from removing previous restrictions. By removing the short-term investment limit, the portfolio of FPIs can now allocate a significantly larger portion to shorter maturity instruments, which are typically more sensitive to fluctuations in risk sentiment and changes in the global interest rate environment. In conditions of extreme financial stress (also called contagion) or rapid changes in monetary policy from central banks (in the current example the US), foreign capital could exit the market at very high speeds, exerting pressure on bond prices and the INR. Not only could the resulting volatility affect the corporate debt market, but volatility on such a large scale could also increase the risk of embarrassment for the financial system (in the worst-case scenario if lots of people are forced to liquidate), especially if there is a lot of debt currently held by FPIs in a short space of time. Likewise, the removal of the concentration limit increases the risk of undue concentration in issuers or sectors. If a handful of large FPIs were to over concentrate their holdings in a handful of corporate bonds - then any negative event, for example a credit downgrade or default, could have exaggerated consequences that could potentially lead to contagion across the market. This risk is more pronounced in emerging markets, where there are likely to be fewer investors in general, and likely also to have less depth in the market. In order to mitigate these risks, the RBI has retained various macro prudential tools and regulatory safeguards. The central bank has the ability to reinstate restrictions, or impose restrictive measures, if the risks evolve into a systemic risk. In addition to monitoring FPI flows, the simple introduction of regulation requiring increased disclosure will ensure that updating disclosures is another risk management control not only for FPIs, but for all investors. Clear coordination with the SEBI provides the necessary "forward looking" mechanism for basic information sharing, and the extension of FPI monitoring risk management will be added layers of FPI investment management and ongoing recognition of the limits of authority by the RBI. The introduction of basic stress testing and scenarios fitting the various volatility ranges will be an important addition to risk management for showing the resilience of the corporate bond market to upside and downside external shocks. In summary the 2025 relaxations are a welcome step forward to developing a bond market, however the success of the measures will rely on the continuous vigilance of the RBI to recognize and respond to risk in an expanding global environment. Trade Integration, Foreign Relations, and Policy Effectiveness The RBI's 2025 foreign portfolio investor (FPI) relaxations to corporate debt securities must also be understood in the context of India’s larger economic diplomacy objectives in an increasingly integrated global financial system. The liberalization of FPI norms accompanying rather significant developments in India’s trade policy, most notably the India-UK Free Trade Agreement (FTA) and the UK’s reduction of import duties on Indian goods. Trade agreements such as these are established to encourage the exchange of goods and services but more broadly as an impetus to facilitate cross-border investment flows. As such, it is particularly relevant and timely to talk about India’s capital market regulations alongside international expectations. By liberalizing FPI norms, India is signaling support for financial openness and a welcome alignment of its regulatory framework with global expectations, thus enhancing its appeal to foreign investors. Especially as India seeks inclusion to large global bond indexes, which requires clear, predictable, and investor-friendly regulatory frameworks. Once India is included in indexes, this can lead to significant passive inflows from most international funds further developing and deepening the corporate bond market in India and the country’s integration with international capital markets. The success of these reforms depends on the RBI's Master Directions (Non-Resident Investment in Debt Instruments, 2025), which present an integrated and dynamic regime for foreign investment in Indian debt[5]. The Master Directions have been constructed to be flexible, allowing the RBI the ability to move quickly to capitalize on prevailing market conditions and stakeholder input. The relaxations instituted in May 2025 are a clear indication of this flexibility, reflecting a consultative process that considered the investors' needs while ensuring the continued exercise of macroprudential oversight. The early feedback from the market has been mostly favorable, with domestic corporates and international investors appreciating the regulatory clarity and operational leeway afforded them. However, a meaningful indication of whether the policy is effective will be in whether the RBI is able to maintain the openness now afforded to the market space while appropriately moderating risk, ensuring that more foreign capital can flow into India and lead to sustained economic benefits, without undermining financial stability. The recent reforms of the RBI offer a clear and concise path forward for India's aspirations to be better integrated into trade and investment; but they also have a strong line of attack for reaffirming both the legitimacy and reliability of regulatory institutions within India, at a crucial time when India is evolving as a major player on the global stage. Authored by Ms. Jyostna Chaturvedi, Head - Corporate Practice and Shreya Mazumdar, Associate References "India-UK FTA: Tariff Reductions and Market Access," Ministry of Commerce, https://commerce.gov.in/fta/india-uk-fta-details/ "RBI relaxes requirement for investment by FPIs in Corporate Debt Securities," SCC Online Blog (13 May 2025), https://www.scconline.com/blog/post/2025/05/13/rbi-relaxes-requirement-for-investment-by-fpis-in-corporate-debt-securities/ "RBI’s Financial Stability Report," RBI (June 2024), https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56067 "SEBI’s role in monitoring FPI flows," SEBI (May 2025), https://www.sebi.gov.in/legal/circulars/may-2025/sebi-role-in-fpi-monitoring [1] RBI, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12847&Mode=0 [2] RBI, https://m.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12765#F_i [3] RBI, https://www.rbi.org.in/commonman/English/scripts/FAQs.aspx?Id=836 [4] RBI, https://www.rbi.org.in/commonman/English/scripts/Notification.aspx?Id=856 [5] RBI, https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12765    

SNG & Partners has advised UGRO Capital Limited, a prominent DataTech NBFC focused on MSME lending, on its successful capital raise aggregating ₹1,315 crore through a rights issue and a preferential allotment. The ₹400 crore rights issue and ₹915 crore preferential issue form a critical component of UGRO’s broader capital augmentation plan aimed at strengthening its balance sheet, enhancing liquidity, and supporting future growth across secured lending segments. The fundraise also positions UGRO to meet regulatory capital adequacy requirements and diversify its investor base. SNG & Partners advised UGRO on all legal and regulatory aspects of the capital raise, including drafting and finalisation of the Letter of Offer, assisting with shareholder and board approval processes, handling SEBI and stock exchange compliances, and providing inputs on structuring and procedural matters. The transaction was led by Amit Aggarwal, Managing Partner – Corporate & Non-Contentious Practice, who oversaw the strategic legal execution. The team comprised Aditya Vikram Dua, Partner and Head of Financial Services, Devyani Dhawan, Counsel, and Chandra Shekhar Mishra, Associate Partner, with support from Mohit Goyal, Yash Dogra, Carishma Bhargava, and Hemant Bohra.