King, Stubb & Kasiva

Bengaluru, June 17th 2026: In a significant legal victory for Andhra Pradesh Deputy Chief Minister and Jana Sena Party President Sri Konidala Pawan Kalyan, the Bengaluru City Civil Court has granted an interim injunction restraining the publication and circulation of allegedly defamatory content concerning him across various digital and social media platforms. The suit was instituted following the circulation of a series of videos, articles, social media posts, and online publications alleging that Sri Pawan Kalyan had encroached upon public land and water bodies in Telangana. The Plaintiff asserted that the allegations were entirely false, malicious, and designed to tarnish his reputation as a public servant, political leader, and public figure. Recognising the seriousness of the allegations and the potential for irreparable reputational harm, the Court passed an interim order restraining the defendants and all persons acting through them from publishing, republishing, broadcasting, transmitting, uploading, displaying, or otherwise disseminating the impugned content. The Court further directed the concerned social media intermediaries to block access to the allegedly defamatory material pending adjudication of the dispute. In a subsequent hearing, the Court expanded the scope of protection by modifying its earlier order to expressly include additional URLs, videos, and content sources identified by the Plaintiff, ensuring comprehensive interim relief against the continued circulation of the impugned material. The matter assumes particular significance given Sri Pawan Kalyan's stature as the Deputy Chief Minister of Andhra Pradesh and one of India's most prominent political leaders. The order highlights the judiciary's willingness to intervene where digital publications are alleged to cause serious and immediate harm to an individual's reputation, while reaffirming that freedom of expression carries with it corresponding responsibilities. The case also represents an important development in the evolving legal landscape governing online defamation, intermediary liability, and the regulation of digital content in India. Senior Counsel Dr. Aruna Shyam M appeared on behalf of the Plaintiff and successfully advanced the case before the Court. The matter was led and strategically handled by Navod Prasannan, Rahul Mehta, and Atul Menon, Partners at King Stubb & Kasiva, along with Mehak C and Maya B from the firm's Dispute Resolution team. Statement from the Legal Team "This order reinforces a fundamental principle that reputation is an invaluable right deserving of protection, irrespective of the medium through which defamatory content is disseminated. In an era where digital publications can spread instantly and cause far-reaching harm, timely judicial intervention remains critical in safeguarding individuals from the consequences of false and misleading allegations." The matter is presently pending further proceedings before the Bengaluru City Civil Court. Appearances For the Plaintiff: Sri Konidala Pawan Kalyan Dr. Aruna Shyam M, Senior Counsel Navod Prasannan, Partner, King Stubb & Kasiva Rahul Mehta, Partner, King Stubb & Kasiva Atul N. Menon, Partner, King Stubb & Kasiva Mehak Chaichani, Associate, King Stubb and Kasiva Maya B, Associate, King Stubb and Kasiva  

Introduction Employee Stock Option Plans (ESOPs) have emerged as one of the most effective tools for attracting, motivating and retaining talent in India’s increasingly competitive startup ecosystem. As startups seek to conserve cash while competing for skilled employees, equity-based compensation has become a critical component of employee reward structures. From early-stage ventures to unicorns and publicly listed companies, ESOPs are widely used to align employee interests with long-term business growth. However, despite their popularity, many startups fail to appreciate that ESOPs are not merely compensation tools, they are legal instruments governed by corporate, tax, foreign exchange and securities regulations. Improperly structured ESOP schemes can create significant issues during funding rounds, mergers and acquisitions, investor due diligence exercises, employee exits and public listings. Investors routinely scrutinise ESOP compliance, and defects in implementation can delay transactions, increase legal costs and result in unexpected liabilities. This article examines the twenty most common legal mistakes startups make while implementing ESOPs in India and outlines practical measures to mitigate legal and regulatory risks. What Is an ESOP? An Employee Stock Option Plan (ESOP) gives employees the right to acquire shares of a company at a predetermined price after satisfying specified vesting conditions. ESOPs are designed to: Retain key talent; Reward long-term contribution; Align employee and shareholder interests; Promote an ownership culture; and Reduce dependence on cash-heavy compensation structures. For startups, ESOPs often serve as a strategic alternative to higher salaries, particularly during early growth stages. Legal Framework Governing ESOPs in India For private and unlisted companies, ESOPs are primarily governed by: The Companies Act, 2013; The Companies (Share Capital and Debentures) Rules, 2014; Foreign Exchange Management Act (FEMA) regulations, where applicable; Income-tax Act, 1961; and Applicable accounting standards. Listed companies must additionally comply with SEBI regulations governing employee benefit schemes. Understanding these requirements at the outset is essential to avoid compliance failures later. 20 Common ESOP Mistakes Startups Make Creating an ESOP Pool Without Shareholder Approval A common misconception among founders is that a board resolution alone is sufficient to create an ESOP pool. Under the Companies Act, shareholder approval by way of a special resolution is generally required before granting employee stock options. Failure to obtain appropriate approvals may call into question the validity of grants and allotments. Key Takeaway: Ensure that both board and shareholder approvals are obtained before implementing the ESOP scheme. Using Generic ESOP Templates Without Customisation Many startups rely on publicly available ESOP templates that fail to address business-specific requirements. Generic plans often omit provisions relating to: Founder exits; Change of control transactions; Good leaver and bad leaver scenarios; Accelerated vesting; Buyback rights; and Liquidity events. Poor drafting frequently leads to disputes at critical stages of the company’s growth journey. Failing to Clearly Define Vesting Conditions Unclear vesting provisions are among the most common causes of ESOP disputes. Common issues include: Ambiguous performance criteria; Undefined milestones; Contradictory vesting schedules; and Unclear employment continuity requirements. Vesting conditions should be objective, measurable and clearly documented. Ignoring Good Leaver and Bad Leaver Provisions What happens when an employee resigns, retires or is terminated? Many ESOP schemes fail to address these scenarios adequately. A well-drafted ESOP policy should clearly define: Treatment of vested options; Treatment of unvested options; Exercise periods after exit; and Consequences of termination for misconduct. Poor ESOP Pool Planning One of the most common founder mistakes is creating an ESOP pool without understanding its impact on dilution. Improper planning can result in: Excessive founder dilution; Investor concerns; Fundraising complications; and Cap table imbalances. ESOP pool creation should always be integrated into broader capitalisation planning. Granting Options Without Reserving Adequate Shares Some startups grant options without ensuring that sufficient authorised and reserved share capital exists. This becomes problematic when employees seek to exercise vested options and shares are unavailable for allotment. Companies should periodically review authorised capital and ESOP reserves. Failure to Maintain Statutory Records Many startups focus heavily on granting options but neglect compliance documentation. Essential records include: Board resolutions; Shareholder resolutions; ESOP registers; Grant records; and Exercise records. Missing documentation frequently becomes a due diligence issue during fundraising and acquisitions. Inadequate Grant Letters An ESOP scheme alone is insufficient. Each employee grant should be supported by a detailed grant letter specifying: Number of options granted; Exercise price; Vesting schedule; Expiry date; and Applicable conditions. Poor documentation often leads to conflicting interpretations of employee rights. Ignoring ESOP Tax Implications One of the most frequently asked questions is: How are ESOPs taxed in India? Tax implications generally arise at two stages: Exercise Stage: The difference between the fair market value of shares and the exercise price may be taxable as a perquisite. Sale Stage: Subsequent appreciation may be subject to capital gains tax. Employees should be educated about these tax consequences at the time of grant. Misunderstanding Startup ESOP Tax Benefits Certain eligible startups may benefit from deferred taxation provisions relating to ESOPs. However, many companies incorrectly assume automatic eligibility without verifying statutory conditions. Companies should obtain tax advice before relying on such benefits. Overlooking FEMA Compliance Requirements Cross-border ESOP structures require careful legal review. Where employees are granted options in an overseas parent entity, businesses must evaluate: FEMA compliance; Reporting obligations; Pricing considerations; and Remittance requirements. Cross-border employee stock option plans should always be reviewed from a foreign exchange perspective. Ignoring Foreign Employee Requirements As startups expand globally, ESOP plans increasingly cover employees located outside India. Different jurisdictions may impose: Securities law obligations; Employment law restrictions; Tax reporting requirements; and Disclosure obligations. International expansion often requires local law review. Not Defining Post-Exit Exercise Periods What happens to vested ESOPs after an employee resigns? Many startups fail to specify a post-employment exercise window. Clearly defining exercise periods can prevent disputes and employee dissatisfaction. Failing to Address Mergers, Acquisitions and Corporate Restructuring Startups routinely undergo: Funding rounds; Acquisitions; Mergers; Group restructurings; and Holding company transitions. ESOP documents should clearly explain how options will be treated during such events. Ignoring Investor Rights and Funding Round Requirements Investors frequently negotiate specific protections relating to ESOP pools. Common provisions include: Pre-money ESOP pool requirements; Approval rights; Anti-dilution protections; and Governance controls. Failure to align ESOP planning with investment documentation can create transaction delays. Lack of Employee Liquidity Planning Employees value liquidity as much as ownership. Many startups create ESOP programmes without considering: Buyback opportunities; Secondary transactions; Tender offers; and Liquidity events. A well-designed ESOP strategy should address how employees may ultimately monetise their holdings. Inconsistent Allocation of ESOP Grants Inconsistent grant practices may create perceptions of unfairness. Companies should establish transparent criteria based on: Seniority; Role criticality; Performance; and Retention objectives. Consistency promotes trust and programme effectiveness. Poor Employee Communication Many employees do not fully understand: Vesting schedules; Exercise mechanics; Tax implications; Valuation concepts; and Liquidity opportunities. Regular ESOP education sessions can significantly improve employee engagement. Failing to Conduct ESOP Compliance Audits ESOP compliance should be reviewed periodically. Investors and acquirers frequently examine: Shareholder approvals; Grant validity; Cap table consistency; Allotment records; and Regulatory compliance. Periodic internal audits can identify issues before they become transaction obstacles. Treating ESOPs Solely as an HR Tool Perhaps the most significant mistake is viewing ESOPs purely as a compensation mechanism. ESOPs sit at the intersection of: Corporate law; Tax law; Securities law; Employment law; Fundraising strategy; and Corporate governance. Successful ESOP implementation requires coordination between legal, finance, HR and management teams. ESOP Compliance Checklist for Indian Startups Before implementing or reviewing an ESOP programme, companies should confirm: Board approvals obtained Shareholder approvals completed ESOP scheme legally reviewed Grant letters issued Cap table updated Statutory registers maintained Tax implications assessed FEMA implications reviewed Exit provisions documented Change of control provisions included Liquidity strategy considered Employee communications completed Frequently Asked Questions About ESOPs in India Can a Startup Grant ESOPs Without Shareholder Approval? Generally, no. Shareholder approval by special resolution is typically required under the Companies Act framework. What Happens to ESOPs When an Employee Resigns? The answer depends on the ESOP scheme. Most plans distinguish between vested and unvested options and specify a limited post-exit exercise period. How Are ESOPs Taxed in India? Tax generally arises at the exercise stage as a perquisite and again upon sale as capital gains, subject to applicable exemptions and rules. How Large Should an ESOP Pool Be? While there is no universal answer, startup ESOP pools commonly range between 5% and 15%, depending on hiring plans, growth stage and investor expectations. What Do Investors Review During ESOP Due Diligence? Investors typically review approvals, grant documentation, cap tables, dilution impact, vesting provisions and compliance with applicable laws. Conclusion Employee Stock Option Plans remain one of the most powerful tools available to startups seeking to attract and retain talent while building long-term enterprise value. However, the benefits of ESOPs can be significantly undermined by poor legal structuring, inadequate governance and regulatory non-compliance. As investor scrutiny increases and Indian startups mature, businesses must approach ESOP implementation with the same level of diligence applied to fundraising, governance and strategic transactions. A carefully structured ESOP programme not only enhances employee engagement but also improves investor confidence, facilitates smoother transactions and supports sustainable growth. By avoiding the common mistakes discussed above, startups can create ESOP frameworks that are legally robust, commercially effective and aligned with long-term business objectives. By Priyanka Kwatra, Director - Legal https://ksandk.com/people/priyanka-kwatra/

India’s Digital Personal Data Protection Act, 2023 (“DPDP Act”) represents one of the most significant regulatory developments affecting corporate governance, data privacy compliance and risk management in recent years. While many organisations initially viewed the legislation as a technology or legal compliance issue, the DPDP Act has rapidly emerged as a boardroom concern requiring active involvement from directors, chief executive officers, managing directors and senior management. Can Directors Be Liable Under the DPDP Act? As businesses increasingly rely on digital ecosystems, customer analytics, artificial intelligence, cloud infrastructure and data-driven decision making, the collection and processing of personal data have become central to commercial operations. Consequently, questions relating to DPDP Act compliance, director liability, board responsibilities and data breach management are becoming increasingly important for corporate leadership. One of the most common questions raised by boards and senior executives is whether directors can be held personally liable for violations of the DPDP Act. While the legislation primarily imposes obligations on organisations acting as Data Fiduciaries, directors and senior management cannot afford to treat data privacy compliance as solely an operational issue. The DPDP Act introduces a governance framework where privacy failures, inadequate oversight and weak compliance systems may create significant legal, regulatory, financial and reputational risks for organisations and their leadership. Why the DPDP Act Is a Board-Level Governance Issue Historically, privacy compliance was often delegated to legal, information technology or cybersecurity teams. However, the DPDP Act fundamentally changes the nature of data protection obligations in India. Data privacy is now closely linked with: Enterprise risk management; Corporate governance; Regulatory compliance; Cybersecurity preparedness; Investor confidence; Customer trust; and Business continuity. The legislation empowers regulators to impose substantial penalties for non-compliance. Depending on the nature of the contravention, penalties may extend up to INR 250 crore for certain violations. For large corporations, financial institutions, healthcare providers, technology companies, e-commerce platforms and multinational enterprises processing substantial volumes of personal data, the consequences of non-compliance can be significant. As a result, boards are increasingly expected to exercise oversight over data governance frameworks and privacy risk management programmes. DPDP Act Compliance Requirements for Companies The DPDP Act applies to the processing of digital personal data by entities that determine the purpose and means of such processing. These entities, referred to as “Data Fiduciaries,” are required to comply with several obligations, including: Providing clear and accessible privacy notices; Obtaining valid consent where required; Implementing reasonable security safeguards; Ensuring data accuracy where necessary; Facilitating data principal rights; Establishing grievance redressal mechanisms; Reporting personal data breaches; and Maintaining accountability throughout the data processing lifecycle. For organisations, compliance extends beyond drafting privacy policies. It requires a structured governance framework supported by technology, processes and executive oversight. Can Directors Be Personally Liable for DPDP Act Violations? A critical concern for boards is whether directors, CEOs and managing directors can be personally liable under the DPDP Act. Unlike certain regulatory statutes that expressly impose vicarious liability upon officers in default, the DPDP Act does not generally provide for automatic personal liability of directors for every violation committed by the company. The primary obligations under the Act are imposed upon the Data Fiduciary itself. Accordingly, regulatory penalties are generally expected to be imposed upon the organisation rather than individual directors. However, this should not be interpreted as providing complete insulation from risk. The absence of express statutory liability does not eliminate governance obligations or accountability expectations imposed upon directors under broader corporate law principles. Indirect Risks Facing Directors, CEOs and Managing Directors Although direct personal liability may not arise in every case, directors and senior executives face several forms of indirect exposure when significant privacy failures occur. Fiduciary Duty and Governance Obligations Under the Companies Act, 2013, directors are required to exercise due care, skill, diligence and independent judgment in carrying out their responsibilities. Where a significant privacy incident occurs due to inadequate oversight, regulators, shareholders and stakeholders may question whether the board discharged its governance responsibilities appropriately. In many cases, scrutiny focuses less on the occurrence of the incident itself and more on whether adequate governance mechanisms existed before the incident occurred. Regulatory Investigations A major personal data breach may trigger investigations by multiple regulators depending upon the industry involved. Apart from privacy-related scrutiny, organisations may also face examination from sector-specific regulators, consumer protection authorities, financial regulators and other governmental agencies. Senior management may be required to demonstrate that appropriate privacy compliance frameworks and cybersecurity safeguards were implemented. Shareholder and Investor Concerns Institutional investors increasingly assess cybersecurity and data governance risks when evaluating companies. A significant privacy incident may affect investor confidence, corporate valuation and governance ratings. As environmental, social and governance (ESG) considerations continue to evolve, data privacy is increasingly viewed as an important governance metric. Executive Accountability Globally, major cybersecurity and privacy incidents have often resulted in increased scrutiny of CEOs, CIOs, CISOs and other senior executives. Although liability may not necessarily be personal under the DPDP Act, executive accountability expectations continue to rise. DPDP Act Responsibilities of CEOs, Managing Directors and Senior Management Chief executive officers and managing directors occupy a particularly important position within the DPDP compliance framework. While privacy obligations may be operationally implemented by legal, compliance and technology teams, executive leadership remains responsible for ensuring that sufficient resources, oversight and governance mechanisms are in place. Following a significant data breach, regulators and stakeholders may ask: Was privacy compliance adequately funded? Were known vulnerabilities addressed? Were internal warnings ignored? Were cybersecurity safeguards proportionate to the risk? Was incident response planning effective? Were breach reporting obligations complied with? These questions inevitably place executive decision-making under scrutiny. Accordingly, CEOs and managing directors should treat data privacy as a strategic business risk rather than merely a compliance requirement. Board Responsibilities Under the DPDP Act Effective DPDP Act compliance requires active board engagement. Directors should ensure that privacy and cybersecurity risks form part of the organisation’s enterprise risk management framework. Key governance measures include: Establishing Board-Level Oversight Boards should periodically review: Data protection programmes; Privacy compliance frameworks; Cybersecurity preparedness; Regulatory developments; Vendor risks; and Data breach trends. Many organisations are increasingly assigning responsibility to Audit Committees, Risk Committees or dedicated Technology and Cybersecurity Committees. Implementing Reporting Mechanisms Management should provide periodic updates on: Compliance status; Security incidents; Vendor assessments; Privacy complaints; Regulatory developments; and Emerging technology risks. Meaningful reporting enables directors to make informed governance decisions. Approving Data Governance Policies Boards should ensure that organisations maintain documented policies governing: Personal data protection; Information security; Data retention and deletion; Incident response; Third-party risk management; and Employee awareness and training. Documented governance measures may prove important when responding to regulatory inquiries. Third-Party Vendor Risks Under the DPDP Act Many organisations depend on cloud service providers, payroll processors, software vendors, consultants and outsourcing partners. However, outsourcing a function does not necessarily outsource accountability. A privacy incident involving a third-party service provider may still expose the Data Fiduciary to regulatory scrutiny and reputational damage. Accordingly, organisations should establish robust vendor management frameworks incorporating: Due diligence procedures; Contractual safeguards; Security assessments; Audit rights; and Ongoing monitoring mechanisms. Third-party risk management is likely to become a key area of regulatory focus under India’s evolving privacy regime. Data Breach Response and Incident Management An organisation’s preparedness is often tested during a data breach rather than during routine compliance reviews. Boards should ensure that management maintains: Incident response plans; Escalation procedures; Internal investigation protocols; Regulatory notification mechanisms; Communication strategies; and Business continuity arrangements. The effectiveness of these measures may significantly influence how regulators assess an organisation’s compliance posture following an incident. DPDP Act Compliance Checklist for Boards and Corporate Leadership Boards and executive management should consider the following immediate action points: Conduct a DPDP Act Compliance Assessment Review existing practices relating to: Consent management; Privacy notices; Data retention; Security safeguards; Vendor oversight; and Data subject rights management. Create a Personal Data Inventory Identify: What personal data is collected; Why it is collected; Where it is stored; Who has access; and How long it is retained. Establish Accountability Structures Clearly allocate responsibilities across: Legal; Compliance; Information security; Human resources; Marketing; and Business operations. Strengthen Data Breach Preparedness Conduct tabletop exercises and periodically test incident response procedures. Review Insurance Coverage Evaluate cyber insurance, technology liability coverage and directors and officers insurance policies. Train Directors and Senior Management Privacy governance awareness should extend beyond operational teams and include board members and executive leadership. Frequently Asked Questions on Director Liability Under the DPDP Act Can directors be personally liable under the DPDP Act? The DPDP Act primarily imposes obligations on Data Fiduciaries rather than directors personally. However, directors may still face scrutiny regarding governance failures, oversight responsibilities and fiduciary duties where significant privacy incidents occur. Can a CEO be held responsible for a data breach under the DPDP Act? Although regulatory penalties are generally directed at the organisation, CEOs are expected to ensure that appropriate compliance programmes, cybersecurity safeguards and governance frameworks are implemented. What is the maximum penalty under the DPDP Act? Depending on the nature of the violation, penalties under the DPDP Act may extend up to INR 250 crore for certain contraventions. What are the key board responsibilities under the DPDP Act? Boards should oversee privacy compliance programmes, cybersecurity preparedness, vendor risk management, incident response planning and ongoing regulatory compliance efforts. What should companies do to prepare for DPDP Act compliance? Organisations should conduct privacy assessments, map personal data, strengthen security controls, review vendor arrangements, establish governance frameworks and train employees and management teams. Conclusion The Digital Personal Data Protection Act, 2023 has transformed data privacy from a technical compliance issue into a critical corporate governance priority. While directors, CEOs and managing directors may not automatically incur personal liability for every violation, the DPDP Act creates an environment in which privacy governance failures can generate substantial regulatory, financial and reputational consequences. For boards, the question is no longer whether data privacy deserves attention. The real challenge is demonstrating that appropriate governance structures, compliance frameworks and oversight mechanisms are in place. As enforcement under the DPDP Act evolves, organisations that proactively integrate privacy governance into their broader risk management framework will be better positioned to navigate regulatory scrutiny, maintain stakeholder confidence and build long-term resilience in an increasingly data-driven economy. Authored by Dhruv Kaushal, Partner  https://ksandk.com/people/dhruv-kaushal/ Co-authored by Aniket Ghosh, Partner  https://ksandk.com/people/aniket-ghosh/

Introduction Cross-border Employee Stock Option Plans (ESOPs) have become an increasingly important component of global compensation strategies. As multinational corporations, Global Capability Centres (GCCs), private equity-backed businesses and internationally expanding startups continue to grow their operations in India, employee participation in foreign equity incentive plans has become commonplace. Today, many Indian employees receive stock options, Restricted Stock Units (RSUs), performance shares and other equity-linked incentives from overseas parent companies incorporated in jurisdictions such as the United States, Singapore, the United Kingdom, the Netherlands and the UAE. While cross-border ESOPs can be highly effective in attracting and retaining talent, they also raise several complex legal and regulatory issues. Employers must navigate Indian foreign exchange regulations, taxation rules, employment law considerations, securities regulations and data privacy requirements while ensuring alignment with global compensation frameworks. What Are Cross-Border ESOPs? Cross-border ESOPs are employee equity incentive plans where the issuing entity and the employee are located in different jurisdictions. Typically, these structures involve: A foreign parent company issuing stock options to employees of its Indian subsidiary. An overseas holding company granting equity incentives to employees of an Indian operating entity. Global equity programmes covering employees across multiple jurisdictions. RSU-based compensation structures offered by multinational corporations. Cross-border equity compensation has become particularly common among: Global Capability Centres (GCCs). Technology companies. Venture-backed startups. Multinational corporations. Private equity-backed portfolio companies. Are Foreign ESOPs Legal for Indian Employees? One of the most frequently asked questions is whether Indian employees can legally receive stock options from foreign companies. The answer is generally yes. Indian employees may participate in employee stock option plans established by overseas parent companies, subject to compliance with applicable foreign exchange regulations, taxation requirements and corporate governance frameworks. However, employers should not assume that a globally adopted ESOP automatically complies with Indian regulatory requirements. Local legal review remains essential to ensure compliance with Indian law. Can Indian Employees Hold Shares in a Foreign Parent Company? Many multinational groups grant stock options or RSUs that ultimately result in Indian employees acquiring shares in the foreign parent company. Such arrangements are generally permissible under India’s foreign exchange framework, provided the programme complies with applicable regulatory requirements. Key considerations typically include: Nature of the equity award. Terms of the employee stock option plan. Method of acquisition. Exercise mechanisms. Sale and repatriation procedures. Reporting and documentation requirements. Employers should assess compliance obligations at the structuring stage rather than after implementation. What Are the FEMA Compliance Requirements for Cross-Border ESOPs? Foreign exchange compliance is often one of the most critical aspects of a cross-border ESOP programme. Questions commonly arise regarding: Acquisition of foreign securities by Indian residents. Payment of exercise prices. Overseas remittances. Sale of foreign shares. Receipt and repatriation of sale proceeds. Multinational employers and GCCs should ensure that their global equity plans are reviewed from a FEMA compliance perspective before launching them for Indian employees. Failure to properly evaluate foreign exchange implications can result in avoidable regulatory risks. How Are Foreign Company Stock Options Taxed in India? Taxation remains one of the most significant considerations for both employers and employees. Taxation at Exercise Generally, the difference between Fair Market Value (FMV) and Exercise Price may be taxable as a perquisite under Indian tax laws at the time of exercise. Employers may have withholding and reporting obligations depending on the structure of the arrangement. Taxation at Sale When employees subsequently sell the shares, capital gains tax implications may arise. The tax treatment may depend upon: Nature of the shares. Holding period. Tax residency status. Availability of treaty benefits. Applicable valuation rules. Given the complexity of foreign ESOP taxation in India, employees should seek professional tax advice before exercising or disposing of shares. What Is the Difference Between ESOPs and RSUs for Indian Employees? Many multinational corporations have increasingly shifted from traditional stock option plans to Restricted Stock Units (RSUs). While both serve as equity incentive mechanisms, they operate differently. ESOPs: Employees receive the right to purchase shares at a predetermined exercise price after vesting. RSUs: Employees generally receive shares upon satisfaction of vesting conditions without requiring a separate exercise process. RSUs often provide greater certainty for employees and are increasingly common among listed multinational corporations. From a legal and tax perspective, however, both structures require careful evaluation in the Indian context. Can GCC Employees Participate in Overseas ESOP Plans? Yes. Many Global Capability Centres operating in India offer stock options, RSUs and other equity incentives issued by overseas parent entities. Cross-border equity compensation is increasingly used by GCCs to: Retain key talent. Align employee interests with global business objectives. Promote long-term value creation. Compete for highly skilled professionals. However, GCCs frequently encounter additional challenges relating to: Cost recharge arrangements. Transfer pricing considerations. Tax withholding obligations. Global mobility of employees. Consistency between global and local compensation policies. How Are Cross-Border ESOPs Taxed for Mobile Employees? Internationally mobile employees often present the most complex taxation challenges. Consider the following scenario: Options granted while the employee is based in India. Employee relocates overseas before vesting. Shares are exercised while working in another country. Shares are sold after acquiring foreign tax residency. In such cases, multiple jurisdictions may seek to tax the same economic benefit. Important considerations may include: Residence-based taxation. Source-based taxation. Double taxation relief. Tax treaty provisions. Allocation of income across jurisdictions. As global mobility continues to increase, multinational employers should develop clear policies addressing these issues. Common Legal and Regulatory Risks in Cross-Border ESOPs Organisations frequently underestimate the complexity of international employee stock option programmes.  Some of the most common issues include: Assuming Global Plans Automatically Comply with Indian Law: A plan that works in the United States or Europe may require modifications for Indian implementation. Inadequate FEMA Review: Foreign exchange compliance should be assessed before rollout. Poor Employee Communication: Employees often remain unaware of taxation implications until exercise or sale. Failure to Address International Mobility: Cross-border taxation issues can become significant where employees relocate. Weak Documentation: Insufficient documentation can create disputes regarding vesting, exercise and termination rights. Ignoring Data Privacy Requirements: Cross-border transfer of employee information may trigger additional compliance obligations. Data Privacy and Cross-Border Equity Compensation The administration of modern ESOP programmes often involves substantial employee data processing. Information frequently shared across jurisdictions includes: Compensation details. Personal information. Tax records. Equity ownership information. Multinational companies should assess compliance with: India’s Digital Personal Data Protection framework. Internal privacy policies. Cross-border data transfer requirements. Employee consent and disclosure obligations. Data privacy considerations are increasingly becoming a core component of cross-border compensation compliance. Best Practices for Structuring Cross-Border ESOPs in India Employers implementing global equity incentive plans should consider: Conducting legal and regulatory reviews before launch. Assessing FEMA compliance requirements. Evaluating tax withholding obligations. Establishing clear employee communication programmes. Developing policies for internationally mobile employees. Reviewing transfer pricing implications. Periodically auditing compliance frameworks. Cross-border ESOPs should be treated as an ongoing governance exercise rather than a one-time implementation project. Frequently Asked Questions on Cross-Border ESOPs Can Indian employees receive stock options from a foreign company? Yes. Indian employees may generally participate in stock option plans established by overseas parent companies, subject to compliance with applicable foreign exchange, tax and regulatory requirements. Are foreign ESOPs taxable in India? Generally, taxation may arise both at the time of exercise and upon the subsequent sale of shares. Do GCC employees receive stock options from foreign parent companies? Yes. Many multinational GCCs use stock options, RSUs and other equity incentives as part of their compensation strategy. Do Indian employees need RBI approval to hold foreign shares under ESOPs? The applicable regulatory framework depends on the structure of the arrangement and should be evaluated carefully from a foreign exchange compliance perspective. What is the difference between ESOPs and RSUs? ESOPs provide a right to purchase shares at a predetermined price, whereas RSUs generally result in the issuance of shares upon vesting without a separate exercise process. Conclusion Cross-border ESOPs have become a critical component of global workforce compensation. As multinational corporations, GCCs and internationally expanding businesses continue to deepen their presence in India, participation by Indian employees in foreign equity incentive plans is expected to increase significantly. However, successful implementation requires careful consideration of FEMA compliance, taxation of foreign stock options, employment law issues, securities regulations, transfer pricing concerns and data privacy obligations. Businesses that proactively address these legal and regulatory challenges while maintaining commercially attractive incentive structures will be better positioned to attract, retain and motivate talent in an increasingly global workforce.

Introduction One of the principal advantages of arbitration is its ability to deliver a final and binding resolution without becoming entangled in the multiple layers of procedural litigation that often characterize traditional court proceedings. However, that objective can be undermined when parties repeatedly approach courts at various stages of the arbitral process, challenging interim decisions before a final award is rendered. Over the past decade, Indian arbitration jurisprudence has steadily evolved towards a model that discourages fragmented judicial intervention and encourages parties to raise all objections at the post-award stage. This approach reflects a broader legislative objective embedded within the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) to ensure that arbitral proceedings progress efficiently and are not derailed by successive court challenges. In its recent decision in M/s. MCM Worldwide Private Limited v. M/s. Construction Industry Development Council[1], the Supreme Court has reaffirmed this philosophy by holding that a party cannot independently challenge an arbitral tribunal’s rejection of a jurisdictional objection under Section 16 of the Arbitration Act. Instead, such objections must ordinarily await the final award and be raised in proceedings under Section 34. While the ruling addresses a specific procedural question, its broader significance lies in strengthening what may be described as India’s emerging “single-challenge” approach to arbitration which is an approach that seeks to consolidate judicial review and minimize piecemeal litigation. Arbitration and the Problem of Procedural Fragmentation Arbitration was designed as an alternative to prolonged court litigation. Yet, arbitration can become equally inefficient if parties are permitted to challenge every procedural or jurisdictional determination before courts during the pendency of proceedings. Common examples include challenges relating to: Jurisdiction of the arbitral tribunal; Limitation and maintainability; Appointment of arbitrators; Admissibility of claims; Procedural directions; Interim determinations. If each of these issues became independently appealable, arbitration would lose many of its core advantages, including speed, efficiency, confidentiality, and cost-effectiveness. Recognizing this concern, modern arbitration statutes around the world seek to restrict judicial intervention during the pendency of proceedings. The Indian Arbitration Act adopts the same philosophy. The Legislative Policy of Deferred Judicial Review A defining feature of the Arbitration Act is that judicial review is generally deferred until after the arbitral tribunal has rendered its final award. The statutory framework reflects a deliberate legislative choice. Rather than permitting multiple challenges throughout the arbitration process, the Act seeks to consolidate objections and channel them into a limited post-award review mechanism. This policy can be seen across several provisions of the Act. Section 5 expressly limits judicial intervention except where specifically provided. Section 16 empowers tribunals to rule on their own jurisdiction. Section 34 provides a consolidated mechanism for challenging arbitral awards. Together, these provisions demonstrate a clear legislative preference: arbitration first, judicial review later. The Supreme Court’s Recent Clarification The dispute before the Supreme Court arose from a challenge to an arbitral tribunal’s rejection of a jurisdictional objection under Section 16. After the tribunal rejected the objection and proceeded with the arbitration, the aggrieved party sought judicial intervention before the final award had been rendered. The Supreme Court held that such an approach was inconsistent with the statutory framework. The Court emphasized that where a tribunal rejects a jurisdictional challenge, the arbitration must continue to its logical conclusion. Any objection regarding jurisdiction can subsequently be raised as part of a challenge to the final award under Section 34. Permitting immediate challenges at an intermediate stage would defeat the legislative objective of minimizing judicial interference and encouraging expeditious resolution of disputes. The judgment therefore reinforces the principle that parties should ordinarily await the outcome of arbitration before approaching courts. Why the Decision Matters Beyond Section 16 Although the ruling concerns jurisdictional objections, its implications extend much further. The judgment reflects an increasingly consistent judicial preference for procedural consolidation. Rather than allowing multiple court proceedings at different stages of arbitration, the courts are encouraging parties to aggregate their grievances and present them through a single challenge mechanism after the award is rendered. This approach serves several important objectives. Reducing Delay Arbitration proceedings frequently suffer delays when parties initiate collateral litigation during the pendency of proceedings. Deferring challenges until the final award stage helps prevent disruption and ensures that proceedings remain focused on resolution of the underlying dispute. Improving Cost Efficiency Multiple court proceedings increase legal costs for all parties. A consolidated challenge mechanism reduces duplication of effort and promotes more economical dispute resolution. Enhancing Finality The effectiveness of arbitration depends heavily on finality. Allowing repeated challenges at different procedural stages risks transforming arbitration into a prolonged multi-forum dispute. The Supreme Court’s approach preserves the finality that arbitration seeks to achieve. India’s Evolving Arbitration-Friendly Jurisprudence The judgment is consistent with a broader trend in Indian arbitration law. Over the last decade, the Supreme Court has repeatedly emphasized: Party autonomy; Limited judicial intervention; Respect for arbitral processes; Procedural efficiency; Enforcement of arbitral awards. Legislative amendments to the Arbitration Act have similarly sought to align India with internationally accepted arbitration practices. The objective has been clear: position India as a credible and arbitration-friendly jurisdiction capable of handling complex domestic and cross-border commercial disputes. The present ruling contributes to that objective by reducing opportunities for procedural obstruction. International Perspective The Supreme Court’s approach also mirrors developments in leading arbitration jurisdictions. International arbitration systems generally discourage fragmented judicial review during the arbitral process. Courts in jurisdictions such as England, Singapore, Switzerland, and France typically permit arbitral proceedings to continue even where jurisdictional objections are raised, reserving comprehensive judicial review for a later stage. This reflects a practical recognition that excessive court intervention undermines the efficiency and effectiveness of arbitration. By adopting a similar approach, Indian courts continue to align domestic arbitration law with global best practices. Strategic Implications for Commercial Parties The decision carries important lessons for businesses, lenders, investors, and parties engaged in arbitration. First, parties should recognize that jurisdictional objections remain important and should be raised at the earliest possible opportunity before the tribunal. However, they must also appreciate that unsuccessful objections may not result in immediate judicial review. Second, parties should adopt a long-term arbitration strategy rather than viewing procedural challenges as standalone litigation opportunities. Finally, businesses drafting arbitration clauses should understand that courts are increasingly inclined to allow arbitral proceedings to run their course before intervening. This reinforces the importance of carefully negotiated arbitration agreements and effective case management during proceedings. The Future of Arbitration Challenges in India The Supreme Court’s ruling may be viewed as part of a broader judicial movement towards procedural discipline in arbitration. As Indian arbitration law continues to mature, courts are increasingly focused on ensuring that arbitration remains a viable alternative to litigation rather than becoming a parallel form of litigation itself. The emphasis is shifting from procedural contests to substantive resolution. This trend is likely to strengthen confidence among commercial parties, foreign investors, and international businesses that choose India as a seat of arbitration or seek enforcement of arbitral awards within the country. Conclusion The Supreme Court’s decision is significant not merely because it clarifies the treatment of jurisdictional objections under Section 16, but because it reinforces a larger principle that has become central to modern arbitration law: arbitral proceedings should not be interrupted by piecemeal judicial challenges. By requiring parties to consolidate objections and raise them at the post-award stage, the Court has strengthened India’s evolving single-challenge framework and further advanced the legislative objective of minimizing judicial intervention. The judgment promotes efficiency, reduces procedural fragmentation, and reinforces arbitration’s role as a speedy and effective mechanism for commercial dispute resolution. For businesses and arbitration practitioners alike, the message is increasingly clear arbitration is intended to proceed first, and court challenges should ordinarily follow only after the tribunal has completed its work. https://indiankanoon.org/doc/75707947/ ↑ By Atul N. Menon, Partner  https://ksandk.com/people/atul-n-menon/

Introduction In a significant development for India’s insolvency regime, the Supreme Court has taken suo motu cognizance of systemic delays by the National Company Law Tribunal (NCLT) in approving resolution plans under the Insolvency and Bankruptcy Code, 2016 (IBC). The Court observed that prolonged pendency of resolution plan approval applications threatens the very objective of the IBC, which was enacted to provide a time-bound insolvency resolution process, preserve enterprise value, and maximise recoveries for creditors. The proceedings could have far-reaching implications for insolvency professionals, financial creditors, resolution applicants, distressed asset investors, and companies undergoing Corporate Insolvency Resolution Process (CIRP), as they highlight structural shortcomings in the functioning of the NCLT and may pave the way for institutional reforms. Background The issue came before the Supreme Court while hearing appeals arising out of insolvency proceedings involving AVJ Developers (India) Pvt. Ltd. During the proceedings, the Court noted that although the Committee of Creditors (CoC) had approved a resolution plan in July 2024, the application seeking approval under Section 31 of the IBC continued to remain pending before the NCLT for an extended period. Recognising that the issue was not confined to a single case, the Bench directed the NCLT Principal Bench and the Insolvency and Bankruptcy Board of India (IBBI) to furnish comprehensive data regarding: the number of pending resolution plan approval applications; the duration of their pendency; and the reasons for such delays. The data revealed a concerning nationwide pattern rather than isolated administrative delays. Supreme Court’s Observations Upon examining the report submitted by the NCLT, the Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan described the situation as “grim” and “dismal.” The Court noted that: 383 applications for approval of resolution plans were pending before various NCLT benches across the country; the period of pendency ranged from 48 days to approximately 738 days, with certain matters remaining pending for almost four years; and such delays fundamentally undermine the legislative purpose of the Insolvency and Bankruptcy Code. The Court emphasised that once the commercial wisdom of the Committee of Creditors has culminated in approval of a resolution plan, prolonged judicial delays erode the effectiveness of the insolvency framework. Accordingly, the matter was directed to be placed before the Chief Justice of India for consideration as a suo motu proceeding involving broader systemic reforms. Why Timely Approval of Resolution Plans Matters Under the IBC The Insolvency and Bankruptcy Code is founded upon one central principle – speed. Unlike traditional recovery proceedings, the IBC seeks to preserve the value of distressed businesses by ensuring that insolvency proceedings conclude within prescribed timelines. While the Code originally contemplated completion of the Corporate Insolvency Resolution Process within 180 days, extendable to 330 days (including litigation), judicial delays at the stage of approval under Section 31 often extend the process well beyond the statutory framework. Such delays have significant commercial consequences: deterioration in the value of the corporate debtor; uncertainty for successful resolution applicants; reduced recoveries for financial and operational creditors; disruption of employee and supplier relationships; erosion of investor confidence in distressed asset acquisitions; and increased litigation costs. The Supreme Court has consistently held that time is the essence of the IBC, recognising that delays often destroy the economic value sought to be preserved through the insolvency process. Consistency with Earlier Supreme Court Jurisprudence The Court’s observations are consistent with earlier landmark judgments interpreting the Insolvency and Bankruptcy Code. In Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, the Supreme Court emphasised that the IBC is designed to achieve speedy resolution, maximise the value of corporate assets, and balance the interests of all stakeholders. Similarly, in Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd., the Court observed that permitting uncertainty or prolonged delays after approval by the Committee of Creditors would undermine the commercial certainty upon which the insolvency framework is built. Likewise, in K. Sashidhar v. Indian Overseas Bank, the Court reaffirmed that while the commercial wisdom of the Committee of Creditors deserves judicial deference, the adjudicatory process must remain efficient to ensure that the objectives of the Code are realised. The present suo motu proceedings extend this jurisprudence beyond interpretation of statutory provisions and focus on the institutional capacity required to implement the Code effectively. Structural Challenges Identified by the Supreme Court The Court attributed the delays to broader structural deficiencies within the NCLT. Among the issues highlighted were: substantial vacancies in judicial and technical member positions; inadequate administrative infrastructure; frequent reconstitution of benches; reduced working capacity due to limited bench strength; growing backlog of insolvency matters; and procedural delays arising from numerous objections filed during approval proceedings. The Court observed that unless these institutional shortcomings are addressed urgently, statutory timelines under the IBC will continue to remain difficult to achieve in practice. Legal and Commercial Implications The Supreme Court’s intervention is likely to have implications extending beyond the immediate proceedings. The decision signals increased judicial scrutiny of institutional delays affecting insolvency adjudication and may accelerate reforms relating to: appointment of judicial and technical members to the NCLT; strengthening tribunal infrastructure; streamlining procedures for approval of resolution plans; reducing avoidable objections at the approval stage; and ensuring greater adherence to the timelines envisaged under the IBC. For lenders, insolvency professionals, distressed asset funds, strategic investors, and successful resolution applicants, the proceedings underscore that speed remains a critical component of value maximisation under the insolvency framework. The development also reinforces that delays occurring after approval by the Committee of Creditors can significantly impact transaction certainty, financing arrangements, employee retention, and implementation of revival plans. Key Takeaways The Supreme Court’s suo motu proceedings represent one of the most significant institutional reviews of the insolvency framework since the enactment of the IBC. Rather than addressing an isolated dispute, the Court has focused on a systemic issue that affects the efficiency and credibility of India’s insolvency ecosystem. The proceedings acknowledge that the success of the Insolvency and Bankruptcy Code depends not only upon robust legislation but equally upon adjudicatory institutions capable of delivering timely justice. If the concerns identified by the Court translate into structural reforms, the outcome may substantially strengthen India’s insolvency resolution framework, improve confidence among domestic and international investors, and restore the time-bound character that lies at the heart of the IBC. By Navod Prasannan, Partner https://ksandk.com/people/navod-prasannan/

Introduction In an important judgment on service law and government employment, the Supreme Court has reaffirmed that an employee appointed for a fixed tenure subject to the condition “until further orders” cannot claim an enforceable right to continue for the entire tenure merely because the appointment order mentions a specified term. The decision is significant for government departments, statutory authorities, public sector undertakings (PSUs), autonomous institutions, and employees serving in tenure-based appointments. It clarifies how courts interpret appointment orders containing conditional tenure clauses and reiterates the limited scope of judicial review over administrative decisions concerning tenure curtailment. The judgment reinforces a settled principle of Indian service jurisprudence—that the rights of a public servant flow from the governing statute and the express terms of appointment, and courts cannot rewrite contractual or administrative conditions that were consciously accepted by the employee at the time of appointment. Background of the Dispute The appellant, a Senior Scientist with the Indian Council of Agricultural Research (ICAR), was appointed in 1998 as Assistant Director General (Agricultural Research Information System).  The appointment order provided that: the appointment would be for five years or until further orders, whichever occurred earlier. During his tenure, the appellant alleged financial irregularities relating to procurement and project implementation. According to him, these disclosures resulted in retaliation by the authorities, culminating in the premature curtailment of his tenure and his repatriation to his substantive post of Senior Scientist in January 2001. The appellant challenged the decision before the Central Administrative Tribunal (CAT) and subsequently before the Delhi High Court. Both forums rejected his challenge, leading to an appeal before the Supreme Court. Legal Issue Before the Supreme Court The principal question before the Court was: Whether a government employee appointed for a specified tenure acquires a vested legal right to continue for the entire tenure where the appointment order expressly states that the tenure is subject to “until further orders.” The answer to this question required the Court to examine the legal effect of conditional tenure clauses and determine whether such appointments create an enforceable right capable of judicial protection. Supreme Court’s Analysis The Bench comprising Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi upheld the decisions of the CAT and the Delhi High Court and dismissed the appeal. The Court observed that the language of the appointment order must be interpreted as a whole. Although the order mentioned a tenure of five years, it simultaneously reserved the employer’s power to terminate that tenure earlier through the phrase “until further orders.” According to the Court, this qualifying expression was not merely procedural or incidental – it formed an integral part of the appointment itself. Consequently, the employee accepted the appointment with the knowledge that the employer retained the authority to curtail the tenure before completion of the five-year period. The Court therefore held that the appointment order did not create any vested or indefeasible right to continue for the entire tenure. Understanding “Vested Right” in Service Jurisprudence A significant aspect of the judgment is its discussion on the concept of a vested right. In service law, an employee acquires an enforceable right only where: the governing statute guarantees a minimum tenure; constitutional protections are attracted; service rules confer a legal entitlement; or the appointment itself does not reserve any discretion to the employer. Where the appointment order expressly permits premature curtailment, continuation in office cannot ordinarily be claimed as a matter of legal right. The Court distinguished the present case from situations involving statutory tenure, where legislation expressly protects an office-holder from premature removal except through a prescribed statutory procedure.  Accordingly, the appellant’s appointment remained contractual and conditional in nature rather than statutorily protected. Limited Scope of Judicial Review The judgment also reiterates an important principle governing judicial review in service matters. The Supreme Court relied upon Deputy General Manager (Appellate Authority) v. Ajai Kumar Srivastava (2021) to reaffirm that courts exercising judicial review do not sit in appeal over administrative decisions. Instead, judicial intervention is confined to examining whether the decision suffers from recognised public law infirmities such as: arbitrariness; mala fides; violation of statutory provisions; procedural unfairness; irrationality; or punitive action disguised as an administrative order. Unless one of these recognised grounds is established, courts ordinarily will not interfere merely because another administrative decision may have been possible. The Court found that the appellant had failed to establish any such illegality or mala fide exercise of power. Whistleblower Allegations and the Court’s Approach The appellant argued that his tenure had been curtailed because he had exposed financial irregularities during his posting. While the allegations formed part of the factual background, the Supreme Court observed that no material had been produced demonstrating that the curtailment was vitiated by mala fides or constituted punitive action disguised as an administrative transfer. The Court therefore declined to infer retaliation merely because the tenure ended before completion of five years. The judgment illustrates that allegations of victimisation or whistleblower retaliation must be supported by credible evidence establishing a direct nexus between the protected disclosure and the administrative action complained of. Why This Judgment Matters The decision has important implications for public employment and administrative law. Appointment Orders Must Be Read Holistically  Employees cannot rely solely upon the stated duration of tenure while ignoring qualifying expressions contained in the same appointment order. Where words such as “until further orders,” “subject to administrative exigencies,” or similar reservations are incorporated, they substantially qualify the tenure itself. Conditional Tenure Is Not Equivalent to Statutory Protection The judgment draws an important distinction between: statutory tenure protected by legislation; fixed-term appointments; contractual appointments; and tenure appointments subject to administrative discretion. Each category attracts a different level of judicial protection. Judicial Review Remains Limited  The judgment reinforces that courts do not substitute their own opinion for that of the employer merely because an employee expected to continue for the full tenure. Interference is justified only where recognised grounds of judicial review are established. Importance for Government Employers  Government departments, autonomous bodies, universities, regulators, and PSUs should ensure that appointment orders clearly define: tenure conditions; circumstances permitting premature curtailment; administrative discretion; and applicable service rules. Carefully drafted appointment orders reduce ambiguity and minimise future service disputes. Key Takeaways The Supreme Court’s decision reinforces a long-settled principle of service jurisprudence: an appointment order must be interpreted according to its express terms. Where an employee accepts an appointment providing for a fixed tenure “until further orders,” the qualifying clause cannot subsequently be ignored to claim an absolute right to continue until expiry of the stated period. For employers, the judgment underscores the importance of precise drafting of appointment orders and tenure clauses. For employees, it serves as a reminder that the legal protection available in service matters depends not merely upon the duration of appointment but upon the governing statutory framework and the conditions accepted at the time of appointment. The ruling is therefore likely to serve as an important precedent in future disputes involving premature curtailment of tenure in government service and appointments within statutory and autonomous bodies. By Rohitaashv Sinha, Partner https://ksandk.com/people/rohitaashv-sinha/

Introduction In a significant interim order impacting forest land disputes, urban development, and Transferable Development Rights (TDR) in Maharashtra, the Supreme Court has stayed the operation of the Bombay High Court’s judgment directing the release of approximately 193 acres of land at Manpada, Thane from acquisition under the Maharashtra Private Forests (Acquisition) Act, 1975. Although the Supreme Court has not decided the merits of the dispute, the interim stay is legally significant because it preserves the status quo in a matter involving competing claims of environmental conservation, statutory vesting of private forest land, municipal planning, and development rights. The proceedings are likely to have important consequences for landowners, real estate developers, municipal authorities, infrastructure projects, and government agencies dealing with forest land situated in rapidly urbanizing regions of Maharashtra. Background of the Dispute The dispute concerns whether nearly 193 acres of land situated at Manpada, Thane qualifies as “private forest” under the Maharashtra Private Forests (Acquisition) Act, 1975. The State’s Position The State of Maharashtra contends that the land vested in the Government upon commencement of the Act and forms part of a larger environmentally sensitive landscape adjoining or connected with the Sanjay Gandhi National Park. According to the State: Nearly 168 acres are already in Government possession; The land possesses ecological significance; Permitting its release would undermine forest conservation; and The consequent grant of development rights would irreversibly alter the character of the area. The Landowner’s Position The landowner, D. Dahyabhai & Co. Pvt. Ltd., disputed this classification, arguing that historical revenue records and the actual use of the land demonstrated that substantial portions had been utilised for cultivation, quarrying and other non-forest purposes well before the appointed date under the 1975 Act. The landowner therefore asserted that the statutory vesting provisions were inapplicable and that it remained entitled to development benefits, including Transferable Development Rights. Bombay High Court’s Decision The Bombay High Court upheld the order of the Maharashtra Revenue Tribunal directing release of the land from acquisition. The Court found that the State had failed to establish compliance with certain procedural requirements contemplated under the Maharashtra Private Forests (Acquisition) Act, particularly with respect to the statutory process relied upon for treating the land as private forest. The High Court also considered documentary evidence relating to historical land use and concluded that substantial portions of the property were being used for non-forest activities. As a result, the Court affirmed the release of the land from acquisition, thereby strengthening the landowner’s claim for Transferable Development Rights arising out of the surrender of land for public purposes. Supreme Court Grants Interim Stay The Thane Municipal Corporation challenged the High Court’s judgment before the Supreme Court by way of a Special Leave Petition. A Bench comprising Justice Sanjay Kumar and Justice K. Vinod Chandran issued notice and stayed the operation of the High Court’s judgment pending further consideration. Although the order is purely interim in nature, it effectively restores the position existing before the High Court’s decision. Consequently: The release of the land remains suspended; Any consequential claim to Transferable Development Rights also remains in abeyance; and No irreversible development activity can proceed until the Supreme Court finally determines the dispute. The interim stay reflects the Court’s cautious approach where questions involving forest conservation and irreversible land-use changes arise. Legal Issues Before the Supreme Court The proceedings raise several important questions under environmental and property law. What Constitutes a “Private Forest” Under the 1975 Act? The dispute requires interpretation of the statutory definition of “private forest” and the circumstances in which privately owned land automatically vests in the State upon commencement of the legislation. The outcome will influence how similar lands across Maharashtra are classified where historical revenue records and present ecological characteristics point in different directions. Importance of Historical Land Use Another important issue concerns the evidentiary value of: Revenue records; Cultivation entries; Quarrying activities; Satellite imagery; Survey records; and Forest notifications. The case illustrates the recurring challenge of determining whether land should be classified according to its legal status on the appointed date or its present ecological condition. Procedural Compliance Under the 1975 Act The High Court attached significance to whether the statutory procedure prescribed under the Maharashtra Private Forests (Acquisition) Act had been properly followed before treating the land as vested in the State. The Supreme Court’s eventual decision may clarify whether procedural irregularities are sufficient to invalidate acquisition where ecological considerations strongly favour conservation. Impact on Transferable Development Rights (TDR) One of the commercially significant aspects of the litigation concerns Transferable Development Rights (TDR). Under Maharashtra’s planning framework, TDR often operates as a mechanism to compensate landowners whose land is surrendered or reserved for public purposes without immediate monetary compensation. However, entitlement to TDR depends upon the legal status of the underlying land. If the property ultimately continues to vest as private forest under the 1975 Act, the landowner’s entitlement to development rights may substantially change. The Supreme Court’s decision is therefore likely to influence future disputes involving forest land and TDR claims across the State. Environmental Conservation Versus Development Rights The litigation also reflects the continuing tension between environmental protection and urban expansion. Courts are increasingly required to balance: Preservation of ecologically sensitive areas; Sustainable urban planning; Legitimate expectations of private landowners; Infrastructure development; and Public interest in environmental conservation. The Supreme Court has repeatedly recognised through the T.N. Godavarman Thirumulpad line of decisions that forest conservation cannot depend solely upon revenue classifications and that the expression “forest” may extend beyond its narrow statutory meaning where ecological considerations so require. The present proceedings may therefore have implications extending beyond the Maharashtra Private Forests (Acquisition) Act by contributing to the broader jurisprudence governing forest identification and environmental governance. Why This Judgment Matters Although only an interim order, the proceedings are important for several stakeholders. For Real Estate Developers: Projects involving land situated near protected forests or environmentally sensitive zones may face increased judicial scrutiny until the legal status of such land is conclusively determined. For Landowners: The case highlights the importance of maintaining historical land records, revenue entries and evidence demonstrating the nature of land use prior to statutory acquisition. For Municipal Authorities: The proceedings may affect future planning decisions involving acquisition, reservation of land, grant of development permissions and issuance of TDR certificates. For Environmental Governance: The litigation underscores the judiciary’s continued emphasis on preventing irreversible ecological consequences while legal disputes regarding forest classification remain pending. Key Takeaways The Supreme Court’s interim stay does not determine whether the disputed land is, in fact, private forest. However, it demonstrates judicial caution in disputes where development rights, environmental protection and statutory acquisition intersect. The final judgment is expected to clarify several important questions, including: The evidentiary standards for determining private forest under Maharashtra law; The extent to which procedural defects affect statutory acquisition; The relationship between forest classification and Transferable Development Rights; and The balance between ecological conservation and urban development. Given the growing number of disputes involving forest land on the outskirts of rapidly expanding cities such as Mumbai and Thane, the eventual decision is likely to become an important precedent in environmental, property and urban development law. Frequently Asked Questions (FAQs) What is the Maharashtra Private Forests (Acquisition) Act, 1975? The Act provides for the acquisition and vesting of certain privately owned forest lands in the State to promote conservation and environmental protection. Why has the Supreme Court stayed the Bombay High Court’s judgment? The Court has granted an interim stay to preserve the status quo until it finally examines whether the disputed land was correctly released from acquisition under the 1975 Act. Can Transferable Development Rights (TDR) be granted if land is classified as private forest? The answer depends on the final legal status of the land. Since the Supreme Court has stayed the High Court’s judgment, any consequential TDR claim presently remains uncertain. By Adnan Siddiqui, Partner https://ksandk.com/people/adnan-siddiqui/

Introduction Can the police arrest an accused merely because a private criminal complaint has been filed before a Magistrate? Is anticipatory bail necessary after receiving summons in a complaint case? These questions have long created uncertainty among litigants and legal practitioners, particularly in jurisdictions where anticipatory bail applications became routine immediately after the institution of complaint proceedings. In a significant judgment delivered in Om Prakash Chhawnika v. State of Jharkhand (2026), the Supreme Court has clarified the legal position by reaffirming a fundamental principle of Indian criminal procedure: a private complaint does not, by itself, empower the police to arrest an accused. Unless the Magistrate simultaneously issues a non-bailable warrant (NBW) in accordance with the Code of Criminal Procedure (“CrPC”), the accused is only required to appear before the court in response to summons. The decision is an important reaffirmation of constitutional protections under Article 21 and the carefully balanced procedural safeguards governing complaint cases. It also addresses the growing practice of filing anticipatory bail applications in complaint proceedings where no legal apprehension of arrest actually exists. Complaint Cases and FIR Cases: Understanding the Difference One of the most common misconceptions in criminal law is the assumption that every criminal proceeding exposes an accused to immediate police arrest. The law, however, draws a clear distinction between police cases initiated through an FIR and private complaint cases instituted before a Magistrate. In an FIR-based prosecution involving cognizable offences, the police investigate the matter under Chapter XII of the CrPC and, subject to statutory safeguards under Sections 41 and 41A, may exercise powers of arrest where the circumstances warrant. Private complaints follow an entirely different statutory mechanism. Here, criminal proceedings originate directly before a Magistrate under Chapter XV of the CrPC without any police investigation being set in motion. The Magistrate not the investigating agency, retains control over whether criminal process should be issued. This distinction is not merely procedural; it reflects Parliament’s conscious intention to ensure that private complaints remain subject to judicial scrutiny before coercive measures affecting personal liberty are employed. The Statutory Scheme Governing Private Complaint Proceedings The CrPC establishes a structured process before any accused can be compelled to face trial in a complaint case. Upon receiving a complaint under Section 200, the Magistrate examines the complainant and supporting witnesses on oath. If additional verification is necessary, the Magistrate may postpone the issuance of process and conduct an inquiry or direct a limited investigation under Section 202. The object of a Section 202 inquiry is not to investigate guilt but to assist the Magistrate in determining whether sufficient grounds exist to proceed further. The inquiry acts as an important safeguard against frivolous, malicious or premature criminal prosecutions. Only after satisfying himself or herself that a prima facie case exists may the Magistrate issue process under Section 204. Even at this stage, the legislative framework clearly demonstrates that summons, not arrest, are the normal rule. A warrant may be issued only in exceptional situations contemplated by law. Section 87 empowers the court to issue a warrant only where there are recorded reasons demonstrating that the accused is likely to evade service or intentionally avoid judicial process. Consequently, coercive process remains the exception rather than the default mechanism. The statutory design therefore reveals an important principle: the purpose of complaint proceedings is to secure the accused’s appearance before the court not to facilitate custodial detention. Can Police Arrest During a Section 202 Inquiry? The Supreme Court’s judgment directly addresses another recurring source of confusion, whether police officers conducting an inquiry under Section 202 possess powers of arrest. The answer is unequivocally no. A Magistrate may seek police assistance during a Section 202 inquiry for limited purposes such as: verification of factual allegations; confirmation of addresses or identities; collection of preliminary material; or submission of an inquiry report. However, such assistance does not convert the inquiry into a police investigation under Chapter XII of the CrPC. Nor does it confer statutory powers to arrest the proposed accused. The distinction is crucial. At the Section 202 stage, the Magistrate has not yet concluded that sufficient grounds exist for issuing criminal process. Permitting arrest before such judicial satisfaction would defeat the very safeguards built into the complaint procedure. The Supreme Court rightly observed that police participation in a Section 202 inquiry remains subordinate to judicial supervision and cannot be expanded beyond the limited authority expressly granted by law. Constitutional Protection Against Unnecessary Arrest The judgment must also be viewed against the backdrop of the Supreme Court’s consistent jurisprudence recognising personal liberty as the cornerstone of criminal procedure. Article 21 guarantees that no person shall be deprived of personal liberty except according to procedure established by law. Over the past two decades, the Supreme Court has repeatedly cautioned against unnecessary arrests. In D.K. Basu v. State of West Bengal, the Court prescribed procedural safeguards governing arrest and detention, emphasising accountability and protection against arbitrary exercise of police powers. In Arnesh Kumar v. State of Bihar, the Court held that arrest is not mandatory merely because an offence is cognizable. Police officers must satisfy themselves that arrest is necessary and must record reasons demonstrating compliance with statutory requirements. More recently, Satender Kumar Antil v. CBI reinforced the principle that criminal procedure should ordinarily secure an accused’s participation through summons rather than incarceration. The Court emphasised that arrest should never become a routine procedural step divorced from its statutory necessity. The ruling in Om Prakash Chhawnika extends these constitutional principles into the context of complaint proceedings. Where the governing statutory framework itself does not authorise police arrest, courts must remain particularly vigilant against practices that unnecessarily curtail personal liberty. The Supreme Court’s Decision in Om Prakash Chhawnika The case arose from complaint proceedings initiated before a Magistrate in Jharkhand. During the pendency of the Section 202 inquiry, the accused approached the High Court seeking anticipatory bail due to apprehensions that they could be arrested. The High Court dismissed the anticipatory bail application while directing the accused to surrender before the trial court. The Supreme Court found this approach fundamentally flawed. Justice M.M. Sundresh observed that a practice had developed in certain jurisdictions particularly Bihar and Jharkhand where accused persons routinely filed anticipatory bail applications in complaint cases despite there being no legal power of arrest. The Court categorically held that: police officers conducting inquiries under Section 202 possess no authority to arrest the accused; issuance of summons merely requires the accused to appear before the Magistrate; arrest becomes legally permissible only where the Magistrate simultaneously issues a non-bailable warrant in accordance with the CrPC; and High Courts should refrain from directing accused persons to surrender while rejecting anticipatory bail applications in complaint proceedings, since such directions have no statutory basis. The judgment therefore restores the procedural balance intended by the legislature and prevents complaint proceedings from becoming instruments of unnecessary coercion. Why Anticipatory Bail Is Ordinarily Unnecessary in Complaint Cases One of the most significant practical consequences of the judgment concerns anticipatory bail. For several years, accused persons receiving summons in complaint cases often rushed to seek anticipatory bail out of fear of imminent arrest. This practice imposed unnecessary burdens on litigants and contributed to avoidable judicial workload. The Supreme Court has now clarified that such apprehensions are ordinarily misplaced. Where the Magistrate has issued only summons, there exists no statutory authority permitting police arrest. Since arrest itself is legally impermissible, the very foundation for seeking anticipatory bail is absent. This clarification is likely to reduce unnecessary anticipatory bail litigation while allowing courts to devote greater attention to cases involving genuine apprehensions of arrest. Practical Implications for Magistrates, Lawyers and Litigants The judgment carries important implications for every stakeholder in the criminal justice system. For Magistrates, it reinforces that summons should remain the primary mechanism for securing attendance. Non-bailable warrants should be issued only after careful judicial application of mind and in strict compliance with statutory requirements. For High Courts, the decision discourages routine directions requiring accused persons to surrender while disposing of anticipatory bail applications arising from complaint proceedings. For defence practitioners, the ruling provides greater clarity in advising clients who receive summons in private complaints. Unless accompanied by a valid warrant, receipt of summons alone should not ordinarily generate apprehensions of arrest. For complainants, the judgment preserves access to criminal remedies while ensuring that complaint proceedings remain consistent with constitutional guarantees of fairness and due process. More broadly, the decision strengthens judicial oversight over coercive criminal process and reaffirms that arrest cannot become a substitute for securing attendance before the court. Conclusion The Supreme Court’s decision in Om Prakash Chhawnika v. State of Jharkhand is an important reaffirmation of one of the foundational principles of Indian criminal procedure—that liberty cannot be curtailed unless authorised by law and supported by judicial application of mind. The judgment makes it abundantly clear that police cannot arrest an accused in a private complaint case merely because a complaint has been filed or a Section 202 inquiry is underway. Unless the Magistrate issues a non-bailable warrant in accordance with the statutory requirements, the accused is only required to respond to summons and participate in the proceedings. Beyond resolving a procedural controversy, the decision strengthens the constitutional commitment that criminal process should facilitate the administration of justice without becoming an instrument of punishment before trial. By reaffirming that summons are the governing rule in complaint proceedings, the Supreme Court has restored clarity to an area of law that had generated considerable confusion across several jurisdictions. For litigants, legal practitioners and courts alike, the message is unequivocal: the objective of criminal procedure is to secure the presence of the accused before the court, not to unnecessarily deprive individuals of their liberty where the law itself does not authorise arrest. By Abhishek Paliwal, Partner https://ksandk.com/people/abhishek-paliwal/

Introduction The intersection of cooperative society governance, constitutional law, and writ jurisdiction has been a subject of enduring judicial discourse in India. A recurring question before courts is whether cooperative societies — particularly those that operate independently of Government control — can be classified as “State” under Article 12 of the Constitution of India, thereby subjecting their actions to judicial review under Articles 32 and 226. Equally significant is the question of whether election disputes within cooperative societies can be adjudicated through writ petitions or whether aggrieved members must pursue the statutory remedies provided under cooperative legislation. The Supreme Court of India has recently addressed these questions and provided important clarifications that reinforce the principle of institutional autonomy for cooperative societies while upholding the primacy of statutory dispute resolution mechanisms for election-related controversies. Understanding Article 12: The Concept of “State” Article 12 of the Constitution defines “State” to include the Government and Parliament of India, the Government and Legislature of each State, and all local or other authorities within the territory of India or under the control of the Government of India. The expression “other authorities” has been the subject of extensive judicial interpretation, particularly in determining whether bodies such as public sector undertakings, statutory corporations, and cooperative societies fall within its ambit. The landmark decisions of the Supreme Court in cases such as Rajasthan State Electricity Board v. Mohan Lal (1967), Sukhdev Singh v. Bhagatram (1975), and R.D. Shetty v. International Airport Authority (1979) expanded the scope of “other authorities” to include bodies that function as instrumentalities or agencies of the Government. The test evolved further in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002), where the Supreme Court laid down a comprehensive framework to determine whether a body qualifies as “State” under Article 12. The Test for Instrumentality of the State The factors that courts consider in determining whether a body is an instrumentality or agency of the State include: Financial Assistance: Whether the Government provides substantial financial assistance to the body, such that the body is substantially dependent on Government funding for its operations. Government Control: Whether the Government exercises deep and pervasive control over the management, policies, and decision-making of the body, going beyond mere regulatory oversight. Public Function: Whether the body discharges functions that are closely related to governmental functions or are of public importance. Monopoly Status: Whether the body enjoys a monopoly status conferred by the State in a particular field of activity. Government Shareholding: Whether the Government holds the entire or dominant share capital of the body. Transfer of Government Department: Whether the body was created by transfer of a Government department or its functions. It is important to note that no single factor is determinative. The cumulative effect of all relevant factors must be considered to arrive at a conclusion on whether a body is an instrumentality of the State. Cooperative Societies and Their Legal Framework Cooperative societies in India are typically registered and governed under State-level cooperative societies acts, such as the Maharashtra Co-operative Societies Act, 1960, the Karnataka Co-operative Societies Act, 1959, and similar legislation in other States. These statutes provide for the registration, management, election of committees, audit, and dissolution of cooperative societies. The societies are also subject to the regulatory oversight of the Registrar of Cooperative Societies appointed under the respective State acts. However, the mere fact that a cooperative society is registered under a State statute and subject to statutory regulation does not, by itself, make it an instrumentality of the State. Many cooperative societies operate as autonomous, member-driven organisations with their own bylaws, elected management committees, and independent sources of funding. Such societies are distinct from Government-controlled cooperative bodies where the State exercises substantial control over their affairs. The Supreme Court’s Clarification: Independent Cooperative Societies Are Not “State” The Supreme Court has now reaffirmed the position that independent cooperative societies — those that are not substantially financed, controlled, or functionally dependent on the Government — do not qualify as “State” under Article 12 of the Constitution. The Court’s reasoning rests on the following key principles: Autonomy of Cooperative Societies The Court has emphasised that cooperative societies are fundamentally voluntary associations of members formed for mutual benefit. Their autonomy in governance, including the election of their management committees, is a core feature of the cooperative movement. Subjecting all cooperative societies to the discipline of Article 12 would undermine this autonomy and blur the distinction between public bodies and private voluntary associations. Regulatory Oversight Is Not Control The Court has drawn a clear distinction between regulatory oversight by the Registrar of Cooperative Societies and deep and pervasive control by the Government. While the Registrar may exercise supervisory powers such as conducting audits, directing elections, or intervening in cases of mismanagement, these powers are regulatory in nature and do not amount to the kind of control that would transform a cooperative society into an instrumentality of the State. Financial Independence The Court has noted that many cooperative societies are financially self-sustaining, deriving their income from member contributions, business operations, and market activities rather than from Government grants or subsidies. In the absence of substantial Government financial assistance, the financial independence criterion weighs against classifying such societies as “State.” Absence of Public Function The Court has also observed that many cooperative societies engage in commercial activities for the benefit of their members — such as credit, housing, consumer, or agricultural cooperatives — which do not constitute public functions of the kind that would attract the application of Article 12. These activities, while socially beneficial, are essentially private in nature and driven by the members’ collective interests. Election Disputes and Writ Jurisdiction The second significant aspect of the Supreme Court’s ruling concerns the maintainability of writ petitions under Article 226 of the Constitution in relation to election disputes within cooperative societies. Statutory Remedies Must Be Exhausted The Court has held that cooperative societies legislation in most States provides a comprehensive mechanism for the resolution of election disputes. These mechanisms typically include the power of the Registrar to conduct or supervise elections, provisions for challenging election results before designated authorities or tribunals, and appellate remedies. The Court has emphasised that these statutory remedies are adequate and efficacious, and aggrieved members must exhaust them before approaching the High Court under Article 226. Writ Jurisdiction Is Not a Substitute The Court has cautioned that writ jurisdiction under Article 226 should not be used as a substitute for the statutory remedies available under cooperative societies legislation. The High Courts, while possessing wide powers under Article 226, should exercise restraint and decline to entertain writ petitions in election disputes where the legislature has provided a complete adjudicatory framework. Entertaining such petitions would not only burden the High Courts with matters better suited for specialised forums but also undermine the legislative scheme for cooperative governance. Exceptions to the Rule The Court has, however, acknowledged that there may be exceptional circumstances where writ jurisdiction may be invoked in cooperative society election matters. These include situations where the statutory authority has acted wholly without jurisdiction, where there has been a gross violation of principles of natural justice, or where the statutory remedy is inadequate or illusory. In such cases, the High Court retains its power to intervene, but only as a measure of last resort and not as a matter of course. Implications of the Ruling The Supreme Court’s clarification has several important implications for cooperative societies, their members, and legal practitioners: Protection of Cooperative Autonomy The ruling reinforces the autonomy of cooperative societies and shields them from being subjected to the obligations that apply to State instrumentalities, such as compliance with fundamental rights under Part III of the Constitution in their internal governance. This is significant for the cooperative movement, which thrives on self-governance and member participation. Channelising Election Disputes By directing election disputes to the statutory forums, the Court has ensured that such disputes are resolved expeditiously by authorities with specialised knowledge of cooperative law and governance. This also reduces the burden on the High Courts, which are already dealing with significant pendency of cases. Clarity for Legal Practitioners The ruling provides clarity to legal practitioners advising cooperative societies and their members on the appropriate forum for redressal of election-related grievances. It discourages the practice of directly filing writ petitions in the High Court and emphasises the importance of pursuing statutory remedies. Impact on Government-Controlled Cooperatives While the ruling protects independent cooperative societies from being treated as “State,” it does not affect the position of cooperative societies that are substantially financed or controlled by the Government. Such bodies would continue to be treated as instrumentalities of the State and would be subject to the obligations arising under Article 12. Conclusion The Supreme Court’s ruling is a welcome reaffirmation of the principles governing the classification of cooperative societies under Article 12 and the appropriate forum for resolution of election disputes. By distinguishing between independent cooperative societies and Government-controlled bodies, the Court has struck a balance between protecting cooperative autonomy and ensuring accountability where the State exercises substantial control. The emphasis on exhaustion of statutory remedies in election disputes is consistent with the broader judicial policy of respecting legislative frameworks and promoting specialised adjudication. King Stubb & Kasiva’s Litigation practice regularly advises cooperative societies, their members, and statutory authorities on governance disputes, election challenges, and constitutional issues. For further guidance on cooperative society law and related matters, please contact our team. By Sukrit Kapoor, Partner https://ksandk.com/people/sukrit-kapoor/

I. Introduction What happens if a party files an application under Section 33 of the Arbitration and Conciliation Act, 1996 (“the Act”) seeking correction of an arbitral award, does the limitation period for challenging the award under Section 34 run from the date of the original award, or from the date on which the Section 33 application is disposed of? The Hon’ble Supreme Court has now addressed this question with great clarity in National Highway Authority of India v. T. Younis & Anr. (2026 INSC 616) (NHAI v. Younis). The Court held that once an application under Section 33 is filed and entertained by the arbitral tribunal, the limitation under Section 34(3) runs only from the date of disposal of that application, regardless of whether the application was ultimately allowed, dismissed, or held to be outside the scope of Section 33. The judgment is significant as it offers significant clarifications for parties navigating post-award proceedings. II.  FACTUAL BACKGROUND OF THE DISPUTE: The dispute arose from a land acquisition proceeding under the National Highways Act, 1956 (“1956 Act”). A land parcel belonging to the first Respondent was acquired for highway development in Bellary District. After the competent authority determined compensation in 2011, the National Highway Authority of India (“Appellant/NHAI”) invoked arbitration under Section 3G(5) of the 1956 Act. The arbitrator passed an award in February 2013. The award was challenged and the High Court set aside that award in March 2019 and remitted it for fresh consideration. Following de novo proceedings, a fresh award was passed on 03.02.2022, granting the Respondent the benefit of additional market value and statutory interest under the Land Acquisition Act, 1894 (“1894 Act”). Both parties moved the arbitral tribunal under Section 33 of the Act within the prescribed period. NHAI filed an application under Section 33(1)(a) on 08.03.2022, contending that the grant of additional market value and interest under the 1894 Act was legally unsustainable and sought correction of the award on that basis. The Respondent No. 1 filed a cross-application under Section 33(4) on 10.03.2022, seeking an additional award for a claim that had allegedly been raised but omitted in the final award. By a common order dated 04.07.2022, the arbitrator dismissed both applications. The certified copy of that order was received by NHAI on 15.09.2022 and NHAI then filed applications under Section 34 on 29.10.2022 being within three months of receiving the disposal order, but well beyond three months from the original award date of 03.02.2022.   The Respondent objected on the grounds of limitation. The Principal District and Sessions Judge, Bellary condoned the delay by order dated 05.08.2023. The Respondent challenged this in a writ petition before the Karnataka High Court, Dharwad Bench. The High Court allowed the writ petition, holding that NHAI’s application under Section 33(1)(a) was not maintainable in the first place because it sought substantive modification of the award rather than correction of clerical or typographical errors and, therefore, could not extend the limitation period under Section 34(3). The High Court accordingly dismissed the Section 34 applications as time-barred. Accordingly, NHAI appealed to the Supreme Court. III. THE ISSUE BEFORE THE SUPREME COURT: The fundamental question before the Supreme Court was whether the limitation period under Section 34(3) commences from the date of the original arbitral award, or from the date of disposal of an application filed under Section 33 of the Act. Apart from the above issue, another subsidiary question arose from the High Court’s reasoning: does the benefit of the extended limitation period under Section 34(3) apply only to applications under Section 33 that are ultimately held to be maintainable, or does it apply to any application formally filed and entertained by the tribunal under Section 33? IV. ANALYSIS BY THE SUPREME COURT The Court’s analysis was primarily on the text of Section 34(3), that an application for setting aside an award may not be made after three months from the date on which the party received the award, “or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal.” The Court noted that the language in Section 34 (3) draws no distinction between applications under Section 33 that succeed and those that fail. It does not say “if a valid request under Section 33 had been made,” nor does it say “if a maintainable request under Section 33 had been made.” The provision uses the word “request” without qualification. In view thereof, the Court noted that had the legislature intended to restrict the benefit to applications that were ultimately allowed or found to be maintainable, it would have said so expressly. The Court held that it could not read into a statute a restriction that the legislature had consciously chosen not to include. Supreme Court on the meaningful exercise of Section 34: The Court also addressed the practical dimension of the problem. The Court observed that once a Section 33 application is filed and entertained, the award remains within the limited jurisdiction of the tribunal for correction, interpretation, or supplementation. In that situation, it would be unreasonable and procedurally absurd to require a party to simultaneously file a Section 34 challenge “as a matter of abundant caution.” A party can meaningfully exercise its right under Section 34 only after the Section 33 proceedings have concluded because until then, the final shape of the award is not settled. The Court then dealt with the Respondent’s reliance on the case of State of Arunachal Pradesh v. Damani Construction Co. ((2007) 10 SCC 742), which the High Court had also cited in support of its view. It was noted that in State of Arunachal Pradesh, the party had not filed a formal application under Section 33 at all. It had merely written a letter that was, in substance, a request for review of substantive findings and certain ancillary clarifications that went beyond the contours of Section 33. The Court held that a letter seeking review cannot be treated as a request under Section 33, and on those facts, it was correct to hold that no fresh starting point of limitation arose. It was observed that the present case was completely distinguishable on facts. In the present case, formal applications under Section 33 was filed by both parties within the statutory period, the applications were entertained by the tribunal, and were disposed of by a reasoned common order. The Court observed that the said issue was no longer res integra and placed reliance on a line of its own earlier decisions including Ved Prakash Mithal and Sons v. Union of India (2018 SCC OnLine SC 3181), USS Alliance v. State of U.P. (2023 SCC OnLine SC 778), and most recently Geojit Financial Services Ltd. v. Sandeep Gurav (2025 INSC 1021) all of which had consistently held that the date of disposal of a Section 33 application marks the starting point of limitation under Section 34(3). V. Observations OF SUPREME COURT and THE Judgment Two specific observations of the Court are worth highlighting, as they have implications beyond the facts of this case. First, the Court addressed the concern that parties might file frivolous or sham applications under Section 33 purely to extend the limitation window for a Section 34 challenge. The Court did not ignore this risk. It made clear that where applications under Section 33 are found to be sham, frivolous, or mala fide, courts would be justified in imposing exemplary and punitive costs. Second, the Court rejected the argument that only a "valid" or "maintainable" Section 33 application can extend the limitation period. The reason being that whether a Section 33 application is maintainable is itself a disputed question, often decided only after months of litigation. In this very case, NHAI and the Respondent disagreed about whether NHAI's application sought a mere clerical correction or was actually a challenge to the merits of the award. If a party had to correctly predict, at the time of filing under Section 34, whether its earlier Section 33 application would eventually be held maintainable, it would be placed in an impossible position. The Court, therefore, held that what matters is whether the Section 33 application was formally filed and taken up by the tribunal, not whether it ultimately succeeded or was found to be maintainable. On the facts, the Court found that NHAI received the disposal order on 15.09.2022 and filed the Section 34 applications on 29.10.2022, which was well within the three-month period from the date of receipt of the disposal order. The applications were therefore within time. The Supreme Court accordingly set aside the High Court’s judgment and order dated 22.01.2024 and restored the order of the Principal District and Sessions Judge, Bellary dated 05.08.2023, which had condoned the delay. The Section 34 applications were directed to be decided on their merits in accordance with law. VI. Conclusion The judgment in NHAI v. Younis settles a question that had generated inconsistent outcomes across courts and tribunals notwithstanding the earlier line of decisions on the point. The principle that emerges is straightforward and builds on earlier decisions in Ved Prakash Mithal (2018), USS Alliance (2023), and Geojit Financial Services (2025), but takes the law a step further. Earlier, it was settled that a pending Section 33 application pauses the limitation period under Section 34(3). The Court has now made it clear that it does not matter whether the Section 33 application was maintainable, what it sought, or how it was eventually decided. If it was formally filed and taken up by the tribunal, the limitation clock stops. To guard against misuse, the Court makes clear that parties who file Section 33 applications merely to gain more time risk facing exemplary costs. The extended limitation window is meant to protect genuine litigants, not to serve as a delay tactic. For practitioners, the judgment offers clear guidance on both sides of the table. A party challenging an award should ensure that it files its Section 34 application within three months of receiving the order disposing of any Section 33 proceedings, and not from the date of the original award. Conversely, a party opposing such a challenge cannot defeat it on limitation grounds merely by arguing that the Section 33 application was not maintainable, as the Court has now foreclosed that argument as well. What it has not foreclosed is the argument that a Section 33 application was filed with mala fide for the sole purpose of buying time. Parties who rely on this extended starting point would be well advised to ensure their Section 33 applications are substantive and genuinely within the scope of the provision. What the judgment ultimately protects is the integrity of the process by ensuring that procedure serves justice, not the other way around. By Pragalbh Bhardwaj, Associate Partner  https://ksandk.com/people/pragalbh-bhardwaj/

Artificial Intelligence (AI) is transforming the way decisions are made across critical sectors worldwide. This shift from automation to autonomy presents significant challenges for traditional tort law, which has historically been built around concepts such as human fault, foreseeability and direct causation. Introduction Unlike traditional software systems that operate according to predefined instructions, modern AI systems increasingly rely on machine learning and adaptive decision-making processes. These systems allow them to function with varying degrees of autonomy across sectors such as: Healthcare Transportation Finance Public administration Traditional tort principles evolved in an era where harmful conduct could generally be traced to an identifiable individual or entity. Today, however, many AI systems operate through complex algorithms whose decision-making processes may be difficult to understand even for their developers. The “black box” nature of artificial intelligence complicates efforts to determine fault, establish causation and assign legal responsibility. At the same time, the fragmented AI ecosystem, comprising software developers, data providers, hardware manufacturers and system deployers, further complicates liability assessments. As AI systems continue to exercise greater decision-making authority, legal systems worldwide are increasingly examining whether traditional tort law remains adequate to address AI-related harm.1 The Nature of AI and the Shift from Automation to Autonomy Understanding AI liability requires distinguishing between automated and autonomous systems. Automated vs. Autonomous Systems Automated systems operate according to predefined rules established by human programmers. When harm occurs, liability can generally be traced to programming errors, design defects or human oversight failures. Autonomous systems rely on machine learning and environmental inputs to generate decisions and adapt their behaviour over time. Their outputs may not always be directly predictable because they are based on probabilistic models rather than fixed instructions. This distinction has significant implications for legal liability because traditional tort law assumes a degree of predictability and human control that may not exist in autonomous systems. The Autonomous Vehicle Example The development of autonomous vehicles illustrates this challenge. The Society of Automotive Engineers (SAE) classifies vehicle automation on a scale from Level 0 to Level 5. While Levels 0 to 2 require meaningful human supervision, Levels 3 to 5 increasingly transfer decision-making authority to the vehicle itself. Particularly difficult legal questions arise at the transition between Levels 2 and 3, where human operators remain legally responsible for intervention despite being largely disengaged from active vehicle control. This phenomenon has been described as the “human-machine interaction paradox,” where liability continues to rest on human actors even though critical operational decisions are made by autonomous systems. Tort Law and the Crisis of Traditional Liability Principles Traditional tort law allocates liability through doctrines such as: Negligence Strict liability Product liability These doctrines depend heavily upon concepts of human conduct, reasonable care and foreseeability. Artificial intelligence challenges these assumptions because harmful outcomes may result from algorithmic processes rather than direct human instructions. The Negligence Framework Under Strain The negligence framework is particularly strained because the traditional “reasonable person” standard was developed to evaluate human behaviour. AI systems, however, process information differently and often outperform humans in specific tasks. Some scholars have therefore proposed a “reasonable computer” standard, under which AI behaviour would be assessed against industry standards, accepted technological practices and comparable algorithmic systems rather than human conduct. Foreseeability in an AI Context Foreseeability also becomes more complex in the context of AI. Autonomous systems may achieve their intended objectives while simultaneously producing harmful unintended consequences. For example, a healthcare AI designed to optimise patient triage may incorrectly classify patients, resulting in delayed treatment or medical harm. While the precise outcome may not have been foreseeable, the broader risks associated with deploying autonomous systems may nevertheless be foreseeable to developers and operators. Causation and the But-For Test Causation presents an equally significant challenge. Tort law traditionally relies upon the “but-for” test, requiring claimants to demonstrate that the harm would not have occurred but for the defendant’s conduct. However, AI systems often operate through vast datasets, self-generated correlations and adaptive learning processes that obscure the causal relationship between human design decisions and resulting harm. As a result, victims may be able to demonstrate injury without being able to identify precisely which actor within the AI ecosystem caused the harm. The Black Box Problem and Evidentiary Challenges One of the most significant obstacles in AI liability litigation is the opacity of algorithmic decision-making. Many advanced AI systems, particularly those based on deep learning, do not generate outcomes through transparent rule-based processes. Instead, decisions emerge through multiple layers of internal computational processes that may be difficult or impossible for users, regulators or courts to fully interpret. This creates a substantial information asymmetry between AI developers and those affected by AI-generated decisions. Unlike traditional defective products, which can often be physically inspected and tested, AI-related claims may require access to: Proprietary source code Training datasets System logs Technical documentation Such information is frequently protected as confidential business information or trade secrets. Even where access is available, the non-deterministic nature of many AI systems may make it difficult to reproduce a particular outcome. Consequently, plaintiffs may struggle to satisfy evidentiary burdens relating to negligence, causation and defectiveness. These challenges have prompted increasing calls for greater transparency, explainability and documentation requirements for high-risk AI systems. The Fragmented AI Supply Chain Liability becomes further complicated by the fragmented nature of AI development and deployment. Responsibility may be distributed among multiple actors, including: Data suppliers Software developers Model trainers Hardware manufacturers Deploying entities such as hospitals, banks or transportation companies Traditional tort law generally seeks to identify a proximate cause and a responsible defendant. AI systems, however, function through interconnected technological contributions that blur traditional distinctions between creators, operators and users. This has led scholars and policymakers to explore alternative approaches such as joint liability, enterprise liability and risk-based allocation frameworks. Under such models, liability may be imposed on the entity best positioned to prevent harm, manage risks or compensate victims. The 2018 Uber Autonomous Vehicle Accident The 2018 Uber autonomous vehicle accident illustrates these difficulties. Although the vehicle’s systems detected the pedestrian before impact, technical design choices and disabled safety features contributed to the collision. Yet much of the legal scrutiny focused on the human safety driver rather than the broader technological and organisational factors that contributed to the incident. The case highlighted the continuing challenges associated with assigning responsibility for AI-enabled harm. Comparative Approaches to AI Liability Different jurisdictions have adopted varying approaches to regulating AI-related risks and liability. European Union The European Union has emerged as a global leader in AI regulation through measures such as the EU AI Act and reforms to product liability legislation. These frameworks adopt a risk-based approach and recognise that software and AI-enabled products may generate liability even where traditional product concepts are difficult to apply. The reforms seek to ensure that victims are not deprived of remedies simply because harm was caused by autonomous or self-learning systems. United Kingdom The United Kingdom has adopted a more flexible, principles-based approach. Rather than creating a single AI regulator, the UK relies on existing regulators to apply overarching principles within their respective sectors, including: Safety Transparency Accountability Fairness United States In the United States, AI regulation continues to develop primarily through litigation and sector-specific regulation. Courts have increasingly examined the extent to which manufacturers may be liable when users place excessive reliance on semi-autonomous systems. India India currently lacks a dedicated legal framework governing AI liability. Existing laws address certain aspects of technology regulation but do not comprehensively address liability arising from autonomous decision-making systems. These include: Consumer Protection Act, 2019 Information Technology Act, 2000 Digital Personal Data Protection Act, 2023 However, India’s jurisprudence on strict and absolute liability may offer useful insights. The doctrine of absolute liability established in M.C. Mehta v. Union of India demonstrates the willingness of Indian courts to impose liability on enterprises engaged in inherently hazardous activities. While this doctrine was developed in an environmental context and does not presently apply to AI systems, some scholars have suggested that risk-based liability frameworks may provide a useful model for regulating high-risk AI applications. Conclusion The rapid advancement of artificial intelligence has exposed the limitations of traditional tort law principles developed for a world in which human actors exercised direct control over decision-making. Concepts such as negligence, foreseeability and causation remain foundational to civil liability, yet their application becomes increasingly complex when autonomous systems operate through adaptive and often opaque algorithms. The “black box” nature of AI, the fragmented technological supply chain and the growing autonomy of machine-learning systems have created significant accountability challenges. Victims of AI-related harm may struggle to identify the responsible party, establish causation or obtain access to the technical information necessary to prove their claims. Comparative approaches adopted by jurisdictions such as the European Union, the United Kingdom and the United States demonstrate a growing recognition that existing legal frameworks must evolve to address the risks posed by artificial intelligence. While India does not yet have a dedicated AI liability regime, existing principles of tort law, consumer protection and regulatory oversight may provide a foundation for future reforms. As artificial intelligence becomes increasingly integrated into critical sectors such as healthcare, transportation, finance and public administration, legal systems will need to develop frameworks that balance innovation with accountability. The future of tort liability for artificial intelligence will likely depend on creating mechanisms that ensure effective compensation for victims while promoting responsible development and deployment of AI technologies. By Dhruv Kaushal, Partner https://ksandk.com/people/dhruv-kaushal/

Introduction Arbitration has emerged as the preferred dispute resolution mechanism for commercial parties seeking speed, confidentiality, technical expertise and finality. The success of any arbitration regime depends not only upon the quality of arbitral proceedings but also upon the willingness of courts to respect arbitral autonomy and limit judicial intervention. India’s arbitration framework, governed by the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), is founded on the principle that courts should play a supervisory rather than appellate role. Over the past two decades, Indian courts have progressively moved towards a pro-arbitration approach by limiting interference with arbitral awards and reinforcing the finality of arbitral decisions. The Supreme Court’s recent decision in Madhya Pradesh Road Development Corporation Ltd. v. M/s Jabalpur Corridor Pvt. Ltd.[1] serves as another important reaffirmation of these principles. The judgment highlights the judiciary’s continuing commitment to preserving the finality of arbitral awards and preventing repeated challenges that undermine the efficiency of arbitration. The Principle of Finality in Arbitration One of the defining characteristics of arbitration is the finality of the arbitral award. Unlike traditional litigation, arbitration is intended to provide a conclusive resolution of disputes with limited avenues for challenge. This objective is reflected throughout the Arbitration Act. Section 5 expressly limits judicial intervention except where specifically provided under the statute. Similarly, Sections 34 and 37 establish narrowly defined grounds upon which arbitral awards may be challenged. The legislative intent is clear: courts are not expected to act as appellate forums reviewing the merits of arbitral decisions. Rather, judicial review is confined to exceptional circumstances involving jurisdictional defects, procedural irregularities or violations of fundamental legal principles. This approach is essential to maintaining commercial certainty and ensuring that arbitration remains a viable alternative to litigation. Evolution of Judicial Review under the Arbitration Act Indian arbitration jurisprudence has undergone a significant transformation. Earlier decisions often permitted broader judicial scrutiny of arbitral awards. The concept of “public policy” in particular became a frequent basis for challenges. In ONGC v. Saw Pipes Ltd.,[2] the Supreme Court expanded the scope of public policy review by introducing the concept of “patent illegality.” Although intended to prevent manifest injustice, the decision generated concerns regarding excessive judicial intervention. Subsequent judgments sought to restore balance. In Associate Builders v. Delhi Development Authority[3], the Supreme Court clarified the limits of judicial review and emphasised that courts cannot reassess evidence or substitute their own interpretation merely because another view is possible. A significant shift occurred in Ssangyong Engineering & Construction Co. Ltd. v. NHAI[4], where the Court narrowed the scope of public policy review and aligned Indian arbitration law more closely with international standards. Similarly, in Delhi Airport Metro Express Pvt. Ltd. v. Delhi Metro Rail Corporation Ltd.[5], the Supreme Court reiterated that courts exercising jurisdiction under Section 34 are not appellate authorities and cannot re-evaluate factual findings reached by arbitral tribunals. Together, these decisions reflect a consistent judicial trend towards respecting arbitral autonomy and preserving the finality of awards. Why Excessive Judicial Intervention Undermines Arbitration Excessive judicial interference poses significant risks to the effectiveness of arbitration. First, it undermines the efficiency that parties seek when choosing arbitration over conventional litigation. If arbitral awards become subject to multiple rounds of judicial review, arbitration loses its commercial advantage. Secondly, prolonged litigation increases costs and delays enforcement, defeating one of the principal objectives of alternative dispute resolution. Thirdly, uncertainty regarding award enforcement can adversely affect investor confidence. Domestic and foreign investors often evaluate dispute resolution mechanisms when making investment decisions. A legal system perceived as allowing endless challenges to arbitral awards may discourage commercial investment and infrastructure development. Recognising these concerns, Indian courts have increasingly emphasised that arbitration must not be converted into another layer of litigation. The Jabalpur Corridor Case: A Reaffirmation of Judicial Restraint The Supreme Court’s decision in Madhya Pradesh Road Development Corporation Ltd. v. M/s Jabalpur Corridor Pvt. Ltd.[6] provides a recent illustration of these principles. The dispute arose from the termination of a concession agreement between Madhya Pradesh Road Development Corporation (MPRDC) and Jabalpur Corridor Pvt. Ltd. (JCPL). Following termination, arbitration proceedings were initiated and the arbitral tribunal awarded compensation to JCPL while holding the termination invalid. Over the course of nearly two decades, the dispute became the subject of multiple proceedings involving challenges to the tribunal’s jurisdiction and the validity of the award. One of the central arguments advanced by MPRDC was that subsequent developments in law warranted reopening the jurisdictional issue. The appellant also challenged the award of pre-award interest. The Supreme Court rejected these contentions and held that issues that had already attained finality could not be reopened merely because subsequent judicial developments altered the legal landscape. The Court also refused to interfere with the contractual rate of pre-award interest and observed that such matters generally fall within the arbitral tribunal’s domain. Most importantly, the Court criticised the prolonged litigation that had delayed enforcement of the award for nearly two decades. The Bench observed that arbitration is intended to facilitate expeditious dispute resolution and warned against repeated judicial interventions that frustrate this objective. In a particularly significant observation, the Court remarked that while arbitration has not failed in India, judicial interference has, on occasion, undermined its effectiveness. Implications for Commercial Parties and Investors The judgment carries important implications for businesses, investors and public authorities. First, it reinforces the principle that arbitral awards are intended to be final and binding, subject only to limited statutory review. Secondly, it discourages repetitive jurisdictional objections and procedural challenges designed primarily to delay enforcement. Thirdly, it provides greater certainty for investors involved in infrastructure, construction and public-private partnership projects where arbitration clauses are routinely used. The decision also strengthens India’s position as an arbitration-friendly jurisdiction by aligning domestic jurisprudence with internationally recognised principles of minimal judicial intervention. For government bodies and public sector entities, the ruling serves as a reminder that arbitration should not be treated as the starting point for prolonged court proceedings but as a legitimate and binding dispute resolution mechanism. Conclusion The principle of finality lies at the heart of every successful arbitration regime. While judicial oversight remains necessary to safeguard procedural fairness and legal legitimacy, courts must avoid transforming arbitral challenges into de facto appeals on merits. The Supreme Court’s decision in Madhya Pradesh Road Development Corporation Ltd. v. Jabalpur Corridor Pvt. Ltd. reinforces this philosophy by reaffirming that issues which have attained finality cannot be repeatedly reopened and that courts must exercise restraint when reviewing arbitral awards. As India continues its efforts to establish itself as a leading global arbitration hub, decisions such as Jabalpur Corridor play a vital role in promoting commercial certainty, investor confidence and effective dispute resolution. The judgment serves as a strong reminder that arbitration can succeed only when courts respect its fundamental promise: finality, efficiency and minimal judicial interference. https://indiankanoon.org/doc/95431872/ ↑ https://indiankanoon.org/doc/919241/ ↑ https://api.sci.gov.in/jonew/judis/42114.pdf ↑ https://indiankanoon.org/doc/95111828/ ↑ https://api.sci.gov.in/pdfdate/index1.php?filename=supremecourt/2019/3712/3712_2019_35_1501_29929_Judgement_09-Sep-2021.pdf&dno=37122019&dt=2021-09-09 ↑ https://indiankanoon.org/doc/95431872/ ↑  By Navod Prasannan, Partner https://ksandk.com/people/navod-prasannan/    

Introduction The Goods and Services Tax Appellate Tribunal (GSTAT) represents one of the most significant developments in India’s indirect tax dispute resolution framework since the introduction of the Goods and Services Tax regime in July 2017. Established under Section 109 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) and backed by the constitutional framework under Article 323B, the GSTAT serves as the second appellate forum in the GST hierarchy and functions as the primary fact-finding appellate authority under the GST regime.1 For several years following the introduction of GST, taxpayers faced considerable challenges due to the absence of an operational appellate tribunal, often compelling them to approach High Courts through writ petitions for relief. With the establishment and operationalisation of GSTAT benches, taxpayers now have access to a specialised forum designed to adjudicate GST disputes efficiently through a technology-driven and largely digital process. Understanding the GSTAT appeal procedure in India is therefore essential for businesses, tax professionals and litigants seeking to challenge adverse GST orders.2 Who Can Appeal and What Orders Can Be Challenged? Section 112 of the CGST Act permits any person aggrieved by an order passed by the First Appellate Authority under Section 107 or by a Revisional Authority under Section 108 to file an appeal before the GST Appellate Tribunal. This includes: Registered taxpayers challenging tax demands confirmed in first appeal. Businesses whose Input Tax Credit (ITC) claims have been denied, reduced or reversed. Taxpayers facing penalties under the CGST Act. Persons whose GST registration cancellation has been upheld in appeal. Exporters and businesses whose refund claims have been rejected or reduced. The tax department may also file appeals before GSTAT where it believes that an order passed by the First Appellate Authority is legally or factually erroneous. Orders Outside the Tribunal’s Jurisdiction However, certain categories of orders remain outside the Tribunal’s appellate jurisdiction. Section 121 of the CGST Act excludes appeals relating to transfer of proceedings, seizure or retention of books and documents, sanction of prosecution and payment of tax in instalments under Section 80. Importantly, orders passed by adjudicating authorities must ordinarily first be challenged before the First Appellate Authority under Section 107 before a further appeal can be filed before GSTAT. Pre-Deposit: The Most Critical Requirement One of the most important conditions for filing a GSTAT appeal is compliance with the mandatory pre-deposit requirement prescribed under Section 112(8) of the CGST Act. The purpose of the pre-deposit mechanism is twofold: To discourage frivolous litigation. To protect government revenue during the pendency of appellate proceedings. Currently, an appellant is generally required to: Pay 100% of the admitted tax liability; and Deposit a prescribed percentage of the disputed tax amount, subject to the applicable statutory limits. Taxpayers should carefully verify the latest statutory requirements and notifications applicable at the time of filing, as amendments relating to pre-deposit requirements have evolved over time. A particularly important procedural aspect is that the mandatory pre-deposit must be discharged in the manner prescribed under GST law. Taxpayers should also review applicable CBIC circulars governing adjustment of amounts already deposited pursuant to court orders or interim directions.3 Failure to comply with pre-deposit requirements can render the appeal defective and prevent it from being entertained by the Tribunal. Documents Required for Filing a GSTAT Appeal A complete appeal package is essential for ensuring that the appeal is admitted without procedural objections. Typically, the following documents are required: Show Cause Notice issued by the adjudicating authority. Order-in-Original. Order-in-Appeal being challenged before GSTAT. Statement of Facts. Grounds of Appeal. Proof of payment of mandatory pre-deposit. Authorisation letter, Vakalatnama or Power of Attorney, where applicable. Supporting documents relied upon by the appellant. For departmental appeals, the authorisation issued by the competent authority directing the filing of the appeal must also be enclosed. Proper indexing, pagination and document organisation are critical, particularly given the digital filing requirements under the GSTAT framework. Step-by-Step GSTAT Filing Procedure The GSTAT (Procedure) Rules, 2025 provide the procedural framework governing appeals before the Tribunal. Step 1: Verify Appeal Eligibility Before initiating the filing process, taxpayers should confirm: That the impugned order is appealable under Section 112. That no statutory bar under Section 121 applies. That limitation requirements have been satisfied. A careful review of jurisdictional and procedural requirements at this stage can prevent unnecessary filing defects. Step 2: Compute and Pay the Pre-Deposit The appellant should calculate the applicable pre-deposit requirement and ensure that payment is made in accordance with the prescribed procedure. Supporting challans and payment confirmations should be retained as these form an essential part of the appeal record. Step 3: Prepare Appeal Documents The appeal should include a well-drafted Statement of Facts and Grounds of Appeal. The Grounds of Appeal should clearly identify: Errors of fact. Errors of law. Procedural irregularities. Jurisdictional defects, if any. Supporting evidence should be properly organised and cross-referenced. Step 4: Register on the GSTAT Portal The GSTAT filing process is designed to operate through the designated online portal. Appellants, advocates and authorised representatives must register using valid credentials and complete authentication through Digital Signature Certificates (DSC) or other approved methods. Step 5: Upload and Submit the Appeal After selecting the appropriate appeal form, taxpayers must upload all supporting documents and complete the electronic filing process. Accuracy at this stage is critical because errors in uploaded documents may delay admission of the appeal. Step 6: Scrutiny and Acknowledgement The Registry reviews the appeal for procedural compliance and may issue deficiency notices where defects are identified. Taxpayers should closely monitor portal communications and promptly rectify any defects to avoid delays. Step 7: Service, Replies and Hearing Following admission, notices are issued electronically. The respondent is given an opportunity to file replies, after which the matter proceeds to hearing. Depending on the circumstances, hearings may be conducted physically, virtually or through hybrid modes. After completion of arguments, the Tribunal proceeds to pronounce its order in accordance with the applicable procedural framework. Practical Challenges and Emerging Issues Legacy Backlog of GST Disputes The absence of an operational GSTAT for several years resulted in a significant accumulation of pending GST disputes across the country. Many taxpayers were compelled to pursue writ remedies before High Courts, increasing both litigation costs and procedural complexity. Although GSTAT is expected to ease this burden, managing the volume of legacy disputes remains a substantial challenge. Technical Issues in E-Filing As with any large-scale digital platform, technical glitches and filing disruptions remain practical concerns. Taxpayers should maintain screenshots, filing logs and records of attempted submissions in case technical failures affect limitation compliance. Such records may prove useful if procedural disputes arise later. Acknowledgement and Filing Compliance Practitioners should carefully monitor the status of filings and ensure that all procedural requirements are completed successfully. Merely initiating the filing process may not be sufficient; appellants must ensure that the filing is duly processed and accepted in accordance with the applicable rules. Pre-Deposit Disputes Questions continue to arise regarding the computation of pre-deposit amounts, particularly where disputes involve interest, penalties or mixed demands. Judicial precedents on the scope of mandatory pre-deposit requirements continue to evolve and may significantly impact litigation strategy. Jurisdiction and Bench Allocation Given the multi-bench structure of GSTAT, determining the appropriate forum remains an important procedural consideration. Filing before an incorrect bench may lead to avoidable delays, even where transfer mechanisms are available. Constitutional Challenges Various aspects of the GSTAT framework, including issues relating to tribunal composition and appointments, have been the subject of constitutional scrutiny before courts. Although the Tribunal is now operational, taxpayers should remain attentive to future judicial developments that may influence the functioning of the appellate system. Conclusion The establishment of GSTAT marks a transformative step in India’s GST dispute resolution architecture. By providing a specialised appellate forum dedicated to indirect tax disputes, the Tribunal is expected to improve consistency, reduce reliance on writ proceedings and strengthen taxpayer access to justice. However, successfully navigating the GSTAT appeal process requires careful attention to statutory timelines, documentation requirements, pre-deposit obligations and procedural compliance. Even minor procedural lapses can result in delays or jeopardise the maintainability of an appeal. For taxpayers and practitioners alike, a thorough understanding of the GSTAT appeal procedure, filing requirements and emerging jurisprudence will be essential to effectively pursuing appellate remedies under the GST regime. As the Tribunal develops its body of decisions, it is likely to become the cornerstone of GST litigation and dispute resolution in India. By Vipin Upadhyay, Partner  https://ksandk.com/people/vipin-upadhyay/

Introduction India has emerged as one of the world’s leading destinations for Global Capability Centres (GCCs), with multinational corporations increasingly establishing captive centres to manage global operations, technology development, research and development, finance, legal support, data analytics and business process management functions. Over the years, GCCs have evolved from cost-focused back-office operations into strategic hubs that drive innovation, digital transformation and enterprise growth. Government initiatives aimed at improving ease of doing business, strengthening digital infrastructure, fostering a skilled workforce and liberalising foreign investment have further accelerated GCC growth across major cities such as Bengaluru, Hyderabad, Pune, Chennai, Gurugram and Mumbai. However, setting up a Global Capability Centre in India requires careful navigation of a complex legal and regulatory landscape. Businesses must address corporate structuring, foreign investment regulations, employment laws, taxation, intellectual property protection and data privacy compliance before commencing operations. Choosing the Appropriate Business Structure One of the first decisions in establishing a GCC is selecting the appropriate legal structure. Most multinational corporations establish GCCs in India through a wholly owned subsidiary incorporated as a private limited company under the Companies Act, 2013. This structure offers a separate legal identity, limited liability protection, operational flexibility and greater ease in scaling operations. In certain cases, businesses may also consider forming a Limited Liability Partnership (LLP), depending on operational requirements and regulatory considerations. Other structures such as branch offices, liaison offices and project offices may be available for specific business purposes, subject to Reserve Bank of India (RBI) regulations. A private limited company remains the preferred model for most GCCs due to its flexibility, governance framework and ability to support long-term growth and expansion. Incorporation requires registration with the Registrar of Companies (RoC), obtaining a Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), Goods and Services Tax (GST) registration where applicable and compliance with ongoing corporate governance requirements. Foreign Investment and FEMA Compliance Foreign investment in GCCs is principally governed by the Foreign Exchange Management Act, 1999 (FEMA), rules and regulations issued thereunder, and India’s Foreign Direct Investment (FDI) Policy. Most sectors commonly associated with GCC operations including information technology services, software development, business process management, consulting, research and development and shared services, permit up to 100% foreign investment under the automatic route, subject to applicable conditions. Where investment is made under the automatic route, prior government approval is generally not required. However, businesses must comply with mandatory reporting requirements prescribed by the Reserve Bank of India, including reporting of foreign investment through prescribed forms and filings. If the proposed GCC undertakes activities within regulated sectors, additional approvals or sector-specific conditions may apply. Accordingly, foreign investment structuring should be evaluated at an early stage to ensure compliance with applicable FEMA regulations and sectoral requirements. Data Protection, Cybersecurity and Cross-Border Data Transfers Data protection has become one of the most significant legal considerations for GCCs, particularly because many centres process large volumes of employee, customer and business data originating from multiple jurisdictions. The Digital Personal Data Protection Act, 2023 (DPDP Act) establishes India’s data protection framework and introduces obligations relating to consent management, lawful processing, data security safeguards, grievance redressal and breach notification. GCCs processing personal data should implement robust privacy governance frameworks, internal policies and compliance mechanisms aligned with applicable legal requirements. Given the global nature of GCC operations, organisations must also carefully assess cross-border data transfer requirements and ensure compliance with both Indian and foreign regulatory obligations. In addition, businesses must comply with cybersecurity directions issued by the Indian Computer Emergency Response Team (CERT-In) and any sector-specific cybersecurity requirements applicable to their operations. As regulatory expectations continue to evolve, data governance and cybersecurity compliance should form an integral part of GCC planning and operational strategy. Employment and Labour Law Compliance Human capital is the foundation of any successful GCC. Consequently, compliance with India’s employment and labour laws is a critical aspect of establishing and operating a GCC. Relevant legislation includes: Code on Wages, 2019; Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; Employees’ State Insurance Act, 1948; Payment of Gratuity Act, 1972; and Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. While the Labour Codes have been enacted, businesses should monitor their phased implementation across jurisdictions and sectors. GCCs should also ensure that employment agreements contain appropriate provisions relating to confidentiality, intellectual property ownership, non-disclosure obligations, data protection, restrictive covenants (where enforceable) and dispute resolution mechanisms. Workplace policies relating to anti-harassment, employee conduct, whistleblower protections and information security should also be implemented to ensure legal compliance and organisational governance. Intellectual Property Protection and Technology Ownership Intellectual property considerations are particularly important for GCCs involved in technology development, software engineering, research and development, artificial intelligence and product innovation. Businesses should ensure that intellectual property created by employees, contractors and consultants is appropriately assigned to the GCC or its parent entity through legally enforceable contractual arrangements. Clear documentation regarding ownership of patents, copyrights, software code, trade secrets, databases and proprietary technology is essential to avoid future disputes. Cross-border technology transfer arrangements should also be reviewed to ensure compliance with applicable tax, foreign exchange and intellectual property laws. Given that many GCCs serve as innovation centres rather than purely operational support functions, a robust intellectual property strategy is often a key component of risk management. Taxation and Transfer Pricing Considerations Tax compliance remains one of the most critical aspects of GCC operations in India. GCCs are generally subject to the Income-tax Act, 1961 and the Goods and Services Tax regime, depending upon the nature of services provided. Because GCCs frequently provide services exclusively or predominantly to overseas group entities, transfer pricing compliance assumes particular significance. Transactions between the GCC and its foreign affiliates must satisfy the arm’s length principle and be supported by appropriate transfer pricing documentation. Another important consideration is Permanent Establishment (PE) risk. Multinational corporations must carefully structure GCC operations to avoid inadvertently creating a taxable presence for overseas entities in India beyond the intended operational framework. Businesses should therefore evaluate transfer pricing policies, inter-company arrangements, service agreements and operational control structures at the planning stage. While traditional tax incentives have reduced over time, organisations may still evaluate Special Economic Zone (SEZ) opportunities and state-level incentive schemes depending on their business objectives and location strategy. Conclusion India continues to strengthen its position as a preferred destination for Global Capability Centres due to its deep talent pool, mature technology ecosystem, strong digital infrastructure and business-friendly environment. However, successfully establishing a GCC in India requires more than operational planning. Businesses must carefully navigate corporate structuring, foreign investment regulations, employment laws, intellectual property protection, tax considerations, data privacy obligations and cybersecurity requirements. As regulatory expectations evolve, particularly in areas such as data protection, cross-border data transfers, labour compliance and transfer pricing, legal and regulatory compliance has become an essential component of GCC strategy. A well-structured legal and compliance framework not only reduces regulatory risk but also enables multinational corporations to fully leverage India’s rapidly expanding GCC ecosystem in a sustainable and commercially efficient manner. By Prithiviraj Senthil Nathan, Partner https://ksandk.com/people/prithiviraj-senthil-nathan-2/

Introduction One of the defining features of arbitration is the finality of the arbitral award. Parties choose arbitration as an alternative to conventional litigation largely because it offers efficiency, autonomy and a conclusive resolution of disputes. However, like any adjudicatory process, arbitral awards may occasionally contain clerical mistakes, computational inaccuracies or typographical errors that require correction after the award has been rendered. Recognising this practical reality, Section 33 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) provides a limited mechanism for correcting certain categories of errors in arbitral awards. At the same time, the provision carefully preserves the finality of awards by preventing parties from using post-award correction proceedings as a means to reopen or modify substantive findings. The Supreme Court’s recent decision in Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd.[1] provides important guidance on the scope of Section 33 and reinforces a principle that has consistently shaped Indian arbitration law: a correction is not the same as a modification. The Legislative Framework of Section 33 Section 33 of the Arbitration Act permits parties, within the prescribed period, to request the arbitral tribunal to correct specific categories of mistakes appearing in an award. Under Section 33(1)(a), a party may request correction of: Computational errors; Clerical errors; Typographical errors; or Other errors of a similar nature. The provision reflects internationally recognised principles contained in the UNCITRAL Model Law and is designed to address accidental or mechanical mistakes without undermining the finality of the award itself. Importantly, Section 33 does not confer a power of review. Unlike appellate proceedings, the provision does not permit reconsideration of factual findings, legal conclusions, quantification methodologies or substantive reasoning adopted by the tribunal. The distinction between correcting an error and modifying an award is central to understanding the scope of Section 33. Why Finality Matters in Arbitration The effectiveness of arbitration depends upon certainty and enforceability. If parties were permitted to repeatedly revisit arbitral awards through correction applications, arbitration would lose many of the advantages that distinguish it from traditional litigation. The Arbitration Act therefore creates a carefully balanced framework: Section 33 permits limited corrections; Section 34 permits challenges on specific statutory grounds; Section 37 provides limited appellate remedies. Beyond these mechanisms, courts and arbitral tribunals are generally expected to respect the finality of the award. The Supreme Court has repeatedly emphasised that arbitral awards are not intended to become subject to endless review proceedings. Judicial intervention must remain confined to the circumstances expressly contemplated by the statute. The Distinction Between Correction and Modification A recurring issue in arbitration jurisprudence is determining whether a particular change constitutes a permissible correction or an impermissible modification. A correction generally involves mechanical errors that do not alter the substantive rights and obligations of the parties. Examples include: Mathematical mistakes in calculations; Incorrect dates; Typographical mistakes; Accidental omissions; Errors in names or references. By contrast, a modification alters the substantive outcome of the dispute. Examples may include: Changing the quantum of damages; Revising the basis of liability; Altering contractual interpretations; Modifying the rate or nature of interest; Reassessing evidence or findings of fact. The latter category falls outside the scope of Section 33 because it effectively amounts to a review of the award rather than a correction of an accidental error. Judicial Approach to Post-Award Corrections Indian courts have consistently adopted a restrictive interpretation of Section 33. The rationale is straightforward that is permitting substantive modifications under the guise of correction would undermine both arbitral autonomy and the legislative framework governing challenges to awards. The Supreme Court has repeatedly held that arbitral tribunals become functus officio once they have rendered their final award, subject only to limited powers expressly preserved by statute. Section 33 therefore represents an exception to the principle of finality and must be interpreted narrowly. This approach aligns with international arbitration practice, where correction mechanisms are intended to remedy accidental errors rather than facilitate reconsideration of the merits. The Supreme Court’s Decision in Gujarat Water Supply v. Saryu Plastics The Supreme Court’s recent judgment in Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd. provides a significant illustration of these principles. The dispute arose from a contract involving the supply of PVC pipes. Following arbitration proceedings, the sole arbitrator awarded approximately ₹1.01 crore to Saryu Plastics. The arbitral award granted: Simple interest for the pendente lite period; and Compound interest from the date of the award until realisation. Subsequently, Saryu Plastics sought to invoke Section 33, contending that the award of simple interest constituted an error and that compound interest should have been awarded for the entire period. The arbitrator rejected the request. However, the Commercial Court later modified the award and substituted compound interest in place of simple interest. The Gujarat High Court affirmed that approach. The Supreme Court overturned both decisions. The Court held that the distinction between simple interest and compound interest is not a clerical, computational or typographical matter. Rather, it forms part of the substantive adjudication undertaken by the arbitral tribunal. The rate and nature of interest directly affect the financial liabilities of the parties and therefore constitute an integral component of the award itself. Accordingly, the Court held that Section 33 cannot be used to alter substantive findings merely because a party believes a different outcome was intended or would be more appropriate. The judgment restored the original arbitral award and reaffirmed the limited scope of post-award correction powers. The Importance of the Judgment The significance of the decision extends beyond the specific dispute. First, it reinforces the distinction between correction and review. Secondly, it prevents parties from using Section 33 as a back-door mechanism to secure substantive modifications that could not otherwise be obtained under the Arbitration Act. Thirdly, it strengthens the principle of finality by confirming that arbitral awards cannot be rewritten through correction proceedings. The decision is particularly important because the modification approved by the lower courts reportedly increased the financial exposure of one party by several multiples. The Supreme Court rightly observed that such a substantial change cannot be characterised as a mere correction of an accidental error. The ruling also aligns with the broader pro-arbitration trend visible in recent Indian jurisprudence, where courts have consistently sought to minimise intervention and preserve arbitral autonomy. Practical Implications for Parties and Arbitrators The judgment offers several practical lessons. For parties: Section 33 should be invoked only for genuine clerical or computational errors. Dissatisfaction with substantive findings must be addressed through the statutory challenge mechanisms provided under the Arbitration Act. Correction applications should not be viewed as an opportunity to improve the outcome of an award. For arbitrators: Awards should clearly distinguish between different categories of interest. Careful drafting reduces the likelihood of post-award disputes. Reasons supporting the grant of interest should be expressly recorded wherever possible. For courts: The decision reinforces the need for judicial restraint when examining post-award correction proceedings. Courts must ensure that correction powers are not transformed into powers of modification. Conclusion Section 33 of the Arbitration and Conciliation Act, 1996 serves an important but limited purpose. It allows accidental mistakes in arbitral awards to be corrected without undermining the finality of the arbitral process. However, the provision was never intended to operate as a mechanism for reviewing, revising or rewriting awards. The Supreme Court’s decision in Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd. provides a clear reaffirmation of this principle. By holding that the substitution of simple interest with compound interest constitutes a substantive modification rather than a permissible correction, the Court has drawn an important boundary between procedural rectification and substantive adjudication. As India continues to strengthen its arbitration ecosystem, the judgment serves as a valuable reminder that arbitration can remain effective only when the finality of arbitral awards is respected and post-award correction mechanisms are confined to their intended purpose. https://indiankanoon.org/doc/104892256/ ↑  Authored by Deepika Kumari, Partner https://ksandk.com/people/deepika-kumari/

Introduction In a landmark policy reset spanning six years of careful deliberation, diplomatic repair, and economic pragmatism, India has opened the door to investment from China and its other land-border neighbours, not in a single sweeping act, but in a measured, security-conscious, and phased manner that reflects the sophistication of India’s evolving role in the global economic order. Three instruments, issued between March and June 2026, together constitute the most consequential reform of India’s foreign investment framework since the original liberalisation of the 1990s: Press Note 2, 2026 (March 10); the FEMA (Non-Debt Instruments) (First and Second Amendment) Rules, 2026 (May 1-2); and the FEMA (Non-Debt Instruments) (Third Amendment) Rules, 2026 (June 12). Each builds on the last. Together, they transform what was a near-total prohibition on Chinese capital into a sophisticated, PMLA-anchored, control-sensitive framework, one that welcomes minority participation and technology partnerships while preserving India’s sovereign right to screen controlling investments. This article traces the full arc of India’s land-border country (LBC) investment policy from the origins of Press Note 3 in 2020 through to the Third Amendment of June 2026 and explains, with practical specificity, what is now open, what remains screened, and what the phased trajectory ahead looks like for Chinese investors, their Indian partners, and the broader investment community. Table of contents Introduction The Genesis: Why Press Note 3 (2020) Was Born The Diplomatic Road Back: From Galwan to Kazan to New Delhi Press Note 2, 2026: The Policy Reset (March 10, 2026) The Three Pillars of Press Note 2, 2026 Pillar 1: The Automatic Route for Minority Non-Controlling Stakes Pillar 2: The 60-Day Expedited Approval for Priority Manufacturing Sectors Pillar 3: PMLA-Aligned Beneficial Ownership Definition FEMA Codification: Three Amendments in Seven Weeks (May-June 2026) A. First Amendment – May 1, 2026 (S.O. 2174(E)) B. Second Amendment – May 2, 2026 (S.O. 2186(E)) C. Third Amendment – June 12, 2026 (S.O. 3030(E)) – The Portfolio Investment Dimension What Is Now Open to Chinese Investors: A Practical Guide Phase 1: What Requires Government Approval (But Now Within 60 Days for Priority Sectors) What Remains Restricted The Priority Sectors: Where Chinese Investment Is Most Welcome The Road Ahead: Phased Deepening of India-China Investment Ties What Phase 2 Could Look Like (2026-2027) The Conditions for Phase 3 (2027-2030) Beneficial Ownership: The Gating Mechanism The Three Overlapping BO Tests in the LBC Framework India’s ‘Securonomics’: A New Template for Investment Governance Conclusion: The Door Is Open. The Architecture Is Strong. The Genesis: Why Press Note 3 (2020) Was Born Press Note 3 of 2020 notified on April 17, 2020, one month before the Galwan Valley border clash of June 2020, is widely but inaccurately remembered as a response to the India-China military confrontation. In fact, it was a prophylactic measure, introduced when global markets were in freefall and India’s Ministry of Finance feared opportunistic acquisitions of distressed Indian companies by Chinese state-linked entities during the COVID-19 pandemic. The trigger was precisely the European playbook: watching Chinese entities snap up stakes in European companies at pandemic-distressed valuations, India’s policymakers decided to pre-empt a similar scenario. Press Note 3 placed all FDI from entities incorporated in, or with beneficial owners in countries sharing a land border with India under mandatory prior government approval. The seven countries affected were China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan. Contrary to popular narrative, Press Note 3 was not issued because of China specifically – its text applied equally to all seven land-border countries. But its practical effect was felt almost exclusively in relation to China, because Chinese companies were the most commercially active in seeking Indian FDI routes. The result was a near-complete freeze on new Chinese FDI into India, which had already been modest: total Chinese FDI since April 2000 to December 2025 stood at just USD 2.51 billion, representing 0.32% of India’s cumulative FDI inflows. WHAT PRESS NOTE 3 (2020) DID Trigger: Any FDI from an entity incorporated in, or with a beneficial owner resident in, any land-border country regardless of investment size, sector, or nature. Effect: Mandatory prior government approval for all such investments. In practice, approval was slow (typically 6-12+ months), unpredictable, and rarely granted for Chinese applicants. The framework had no prescribed timeline, no fast-track mechanism, and no defined beneficial ownership threshold. The paradox it created: India continued to import heavily from China – the trade deficit reached USD 99 billion in FY2024-25 and crossed USD 112 billion in FY2025-26. Chinese goods flowed into India in vast quantities, but Chinese capital was blocked. The result was a structural dependency without the technology transfer and localisation benefits that investment would have brought.         The Diplomatic Road Back: From Galwan to Kazan to New Delhi The path from Press Note 3 to Press Note 2 was not a legal journey, it was a geopolitical one. Four years of diplomatic repair were required before India felt confident enough to revisit its LBC investment framework. The October 2024 Modi-Xi summit on the sidelines of the BRICS meeting in Kazan, Russia, proved to be the inflection point. Both leaders agreed to work toward ‘a fair, reasonable and mutually-acceptable solution’ to the border issue, and pledged to expand trade and investment ties acknowledging the role of both economies in stabilising global trade. Commerce and Industry Minister Piyush Goyal declared that India-China relations were ‘gradually moving towards normalcy.’ By January 2026, DPIIT had commenced inter-ministerial consultations on easing the PN3 restrictions. The Economic Survey 2023-24 had already proposed a rethink. NITI Aayog had recommended automatic clearance for Chinese investments of up to 24% in Indian ventures. The macroeconomic case was compelling: India’s dependence on Chinese electronics components, solar manufacturing inputs, capital goods, and APIs made the continuation of the blanket investment prohibition increasingly difficult to justify from an economic standpoint. Factor The Case for Easing Trade dependency paradox India imported USD 108 billion from China in FY2025-26 while keeping Chinese FDI at USD 2.51 billion total since 2000. Blocking capital while accepting goods was an economically incoherent position. Technology localisation Joint ventures and minority investments by Chinese electronics, EV, and solar companies could help India build domestic component ecosystems – critical for PLI scheme success and reducing import dependency. Global supply chain dynamics US-China trade tensions and tariff escalation post-2024 created a window for India to attract China+1 manufacturing investment. Restricting Chinese capital risked losing these flows to Vietnam, Thailand, and Malaysia. Diplomatic momentum The 2024 Kazan summit and subsequent bilateral restoration created the political space for investment easing – China being India’s second-largest trading partner despite five years of strained relations. Atmanirbhar Bharat alignment Selectively inviting Chinese capital into manufacturing sectors aligns with, rather than contradicts, the self-reliance mission: it builds Indian productive capacity using foreign investment, rather than relying on Chinese imports.   Press Note 2, 2026: The Policy Reset (March 10, 2026) On March 10, 2026, following a Union Cabinet meeting chaired by Prime Minister Narendra Modi, the Department for Promotion of Industry and Internal Trade notified Press Note 2, 2026 (PN2). This Press Note does not repeal Press Note 3. It amends it and the distinction is deliberate and important. India has not abandoned its security-sensitive approach to LBC investment. It has refined it. The Three Pillars of Press Note 2, 2026 Pillar 1: The Automatic Route for Minority Non-Controlling Stakes The most commercially significant change in PN2 is the creation of an automatic route for investments of up to 10% by land-border country entities provided the investment does not result in the LBC entity acquiring control or a beneficial ownership (as defined under PMLA Rule 9(3)) above 10%. For the first time since 2020, Chinese investors can make minority, passive, portfolio-type investments in Indian listed and unlisted companies without requiring prior government approval. This is not a trivial opening. Many forms of strategic minority investment – a 7% stake in a listed technology company, a 9% equity position in a manufacturing JV, a seed-stage investment in an Indian deeptech startup now qualify for the automatic route. The approval process that previously consumed 6-12 months and delivered uncertain outcomes is, for these investments, simply eliminated. Pillar 2: The 60-Day Expedited Approval for Priority Manufacturing Sectors Where government approval is still required because the investment exceeds 10%, involves control, or falls in a sensitive sector – PN2 introduces India’s most investor-friendly procedural improvement in a generation: a committed 60-day approval timeline for investments in priority manufacturing sectors. These sectors are electronics, capital goods, and solar cells, precisely the areas where Chinese technology, capital, and supply-chain expertise are most urgently needed by India’s manufacturing ecosystem. This 60-day commitment transforms the investment landscape for Chinese manufacturers and their Indian partners. The previous framework offered no prescribed timeline. Investors faced open-ended waits of 6-12 months or more, which made business planning, financing, and JV negotiations effectively impossible. The 60-day window provides the predictability that serious investors require. Pillar 3: PMLA-Aligned Beneficial Ownership Definition PN2 formally aligns the beneficial ownership definition for LBC investment screening with the Prevention of Money Laundering Act, 2002, specifically clause (fa) of Section 2(1) and Rule 9(3) of the PML (Maintenance of Records) Rules, 2005. This means an LBC entity is a ‘beneficial owner’ triggering the approval requirement only when it owns 10% or more of the shares, capital, or profits of the investing vehicle – or when it exercises control. This clarification is profoundly important for global fund structures. Prior to PN2, the beneficial ownership definition was unclear and contested. A Chinese limited partner holding even 1 share in an offshore fund investing in India could theoretically be characterised as triggering PN3. The PMLA-aligned 10% threshold provides a commercially workable and legally precise boundary. THE CORE PRINCIPLE OF PRESS NOTE 2, 2026 PN2 reframes the 2020-era national security cordon from a blanket quarantine to a calibrated filter that distinguishes control from mere capital. The question is no longer ‘Is there any LBC connection?’ but rather ‘Does this investment result in LBC control?’ It is a pivotal move in India’s ‘securonomics’ embedding geopolitical risk assessment into investment policy without choking legitimate commercial investment.     Parameter Press Note 3, 2020 (Old) Press Note 2, 2026 (Current) Automatic Route Not available for any LBC-linked investment Available for ≤10% non-controlling investment from LBC entity Government Approval Trigger Any investment with any LBC connection Investment resulting in LBC control, or LBC beneficial ownership >10% Approval Timeline No prescribed timeline – typically 6-12+ months 60-day commitment for priority manufacturing sectors Priority Sectors No special treatment Electronics, capital goods, solar cells expedited 60-day approval BO Definition Undefined – blanket application PMLA Rule 9(3): ≥10% shares/capital/profits, or control, or effective control Hong Kong Treated as China – no automatic route Treated as China – same PN2 framework (unchanged) Policy Logic Blanket quarantine – opportunistic acquisition prevention Calibrated filter – control vs. capital distinction Pakistani Investment Required approval – same as all LBC countries Retained as restricted, explicitly preserved in FEMA NDI Rules   FEMA Codification: Three Amendments in Seven Weeks (May-June 2026) Press Notes are executive policy instruments. They acquire full legal force only when codified into the operative FEMA instrument – the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. The codification of PN2 into FEMA law came in three stages between May 1 and June 12, 2026, each adding a new layer of legal precision. First Amendment – May 1, 2026 (S.O. 2174(E)) The First Amendment operationalised Press Note 2 by substituting Rule 6(a) of the NDI Rules. For the first time, the beneficial owner definition for LBC investment screening was formally enshrined in FEMA’s primary instrument, with explicit cross-reference to PMLA Section 2(1)(fa) and PML Rules Rule 9(3). A new reporting obligation was also introduced: investments below the government approval threshold but with any LBC ownership linkage must still be reported to RBI through the Authorised Dealer bank. This ensures the government retains visibility over all LBC-connected capital flows, even where approval is not required. Second Amendment – May 2, 2026 (S.O. 2186(E)) The Second Amendment made targeted sectoral clarifications, including an important liberalisation for insurance sector joint venture structures. It clarified that standard affirmative rights in JV governance frameworks do not automatically constitute ‘control’ under the FDI Policy – providing relief to foreign investors in regulated sectors where minority governance protections are commercially essential. Third Amendment – June 12, 2026 (S.O. 3030(E)) – The Portfolio Investment Dimension The Third Amendment i.e. the subject of the Gazette of India notification S.O. 3030(E) dated June 12, 2026 is the most far-reaching in its structural implications, extending the LBC framework into the portfolio investment dimension and simultaneously expanding India’s capital markets access for all foreign individuals. Third Amendment Change Legal Effect Significance for China-India Investment Rule 9(1): ‘NRI/OCI’ → ‘an individual’ Portfolio Investment Scheme (PIS) extended from NRIs and OCIs to any individual person resident outside India Chinese individual investors previously excluded from the PIS route can now directly hold listed Indian equities up to 10% individual cap without FPI registration Rule 12(1) new proviso: LBC outcome trigger Investment by individual ROPI resulting in transfer of ownership or CONTROL of listed Indian company to LBC entities/citizens requires prior government approval; BO per PMLA S.2(1) (fa) + PML Rules 9(3) Outcome-based, not percentage-based distinct from PN2’s 10% FDI threshold. Small holding transfer that tips LBC control still requires approval. Control remains the decisive criterion. Rule 13(1) second proviso: LBC transfer trigger Transfer of listed equity by individual ROPI resulting in LBC control acquisition requires prior government approval Individual sellers of listed company shares to Chinese-connected acquirers must screen Rule 13 LBC proviso new condition precedent in M&A transactions Schedule II: investor group aggregation Total FPI investor group holdings (SEBI FPI Regs 2019 definition) across all schedules in any listed Indian company must be <10% Prevents Chinese-linked FPI groups from aggregating stakes across multiple FPI entities to cross the 10% threshold and avoid FDI reclassification Schedule III: cross-schedule aggregation Individual ROPI aggregate holdings across all schedules in one listed company must be <10%; breach = 5-day divestment or FDI reclassification Ensures the newly expanded individual ROPI access does not become a route to build controlling positions in Indian listed companies below the FPI radar   What Is Now Open to Chinese Investors: A Practical Guide The cumulative effect of PN2 and the three FEMA amendments is a framework that is genuinely open for Chinese minority capital participation while maintaining sovereign screening of control-seeking investment. Here is what is now accessible: Phase 1: What Is Open NOW (Automatic Route – No Approval Required) Investment Type Conditions Sectors Available Practical Example Minority FDI stake in Indian company (≤10%) No controlling interest; LBC BO <10% (PMLA Rule 9(3)); non-sensitive sector All sectors open on automatic route except defence, sensitive media, nuclear, space – same as general FDI automatic route Chinese electronics component maker takes 8% equity stake in Indian EV battery startup; no government approval needed; FC-GPR within 30 days Portfolio Investment via PIS route (individual) – NEW June 12, 2026 Individual Chinese ROPI; <10% in any listed Indian company; total individual ROPI aggregate across all schedules <10% All listed Indian companies subject to individual cap Chinese individual investor directly purchases 6% of Infosys shares on NSE through AD bank-designated branch; repatriation basis FPI investment by Chinese-linked fund (<10% per investor group) Chinese LP holding <10% in offshore fund (per PMLA); fund’s investor group aggregate holdings in any listed Indian company <10% Listed equity, G-Secs, corporate bonds, REITs, InvITs US/Singapore PE fund with 8% passive Chinese LP invests in Indian listed equities; investor group cross-schedule aggregate <10% per company Technology licensing and IP transfer agreements Not equity investment – no FDI cap constraints; governed by FEMA current account and IT Act transfer pricing All sectors Chinese technology company licenses solar cell manufacturing IP to Indian JV partner; payment via royalty under FEMA current account Export-linked collaboration and supply chain partnerships Supply agreements are current account transactions; not FDI All manufacturing sectors Chinese component supplier establishes India office and supply arrangement with Indian electronics manufacturer under PLI scheme   Phase 1: What Requires Government Approval (But Now Within 60 Days for Priority Sectors) Investment Type Approval Timeline Priority 60-Day Track? Notes Chinese entity acquiring >10% stake in Indian company Standard: 3-6 months; priority sectors: 60 days YES electronics, capital goods, solar cells Government retains right to impose conditions on approval (e.g. technology transfer commitments, Indian workforce requirements) Chinese entity acquiring controlling interest in Indian company (any size) Standard: 3-6 months; priority sectors: 60 days YES for priority sectors Controlling interest means right to appoint majority of board, veto key decisions, or own majority equity, Rule 23 NDI Rules definition Investment in sensitive sectors – defence, space, nuclear, sensitive media Sector-specific approval; no expedited timeline NO These sectors have independent sectoral restrictions applying to all foreign investors; LBC investors face additional LBC screening on top Investment where Chinese entity BO >10% in investing vehicle (PMLA Rule 9(3)) Standard: 3-6 months; priority sectors: 60 days YES, for priority sectors Key: BO is computed at every layer of the structure; layered offshore funds must ensure no LBC entity holds >10% at any layer Hong Kong-incorporated entity investing in India Same as Chinese entity – Hong Kong treated identically YES, for priority sectors (HK entity investing in electronics, capital goods, solar) HK vehicles are not grandfathered or exempt; Third Amendment reinforces this – HK applies same cross-schedule aggregation rules   What Remains Restricted Three categories of investment from land-border countries remain entirely or practically restricted regardless of the PN2 framework: Pakistan: Investment from Pakistani entities remains effectively prohibited. The FEMA NDI Rules 2026 explicitly preserve Pakistan’s restricted status. Government approval is required but extremely rarely granted given bilateral security considerations. Afghanistan: Investment remains restricted given security, sanctions, and AML/FATF considerations. No meaningful opening is contemplated in the near term. Sensitive strategic sectors: Defence (above 74%), nuclear, space, and certain sensitive media sub-segments require government approval for all foreign investors – LBC investors face the additional LBC screening on top of these baseline sector restrictions. The 60-day expedited track does not apply to sensitive strategic sectors. The Priority Sectors: Where Chinese Investment Is Most Welcome The identification of electronics, capital goods, and solar cells as priority manufacturing sectors for the 60-day expedited approval track is a deliberate signal. These are precisely the sectors where India’s dependency on Chinese imports is most acute, where Chinese manufacturing expertise is globally dominant, and where the transfer of technology and investment to Indian operations would most directly serve Atmanirbhar Bharat objectives. Priority Sector India’s Import Dependency on China PN2 Opportunity Expected Investment Forms Electronics & Components India imported ~$40B in electronics/components from China in FY2025-26. Chinese companies control critical component supply chains for smartphones, laptops, telecom equipment, and consumer electronics manufactured in India under PLI scheme. Chinese electronics manufacturers can now invest up to 10% without approval; controlling JVs via 60-day process; technology licensing agreements freely permitted Minority equity stakes in Indian electronics manufacturers; JVs for component production; technology licensing and know-how transfer agreements Capital Goods India remains dependent on Chinese machinery, manufacturing equipment, and industrial tools. Domestic capital goods production has been a long-standing weakness. 60-day expedited approval for controlling JVs; Chinese capital goods manufacturers can co-invest with Indian partners to produce locally what India currently imports Manufacturing JVs; controlled investment in Indian capital goods manufacturers; equity stakes in Indian industrial equipment companies Solar Cells & Renewable Energy China controls over 80% of global solar manufacturing, including polysilicon, ingots, wafers, cells, and modules. India’s PLI solar scheme has created domestic manufacturing capacity but upstream components still heavily import-dependent. 60-day approval for Chinese solar investment; Chinese solar technology partners can form controlling JVs with Indian manufacturers; minority stakes in listed Indian solar companies on automatic route JVs for upstream solar component manufacturing (polysilicon, wafers, cells); minority FDI in Indian listed solar companies; technology licensing for advanced solar cell manufacturing Electric Vehicles & Battery Technology India’s EV transition is progressing rapidly under PLI scheme, but battery cell manufacturing and advanced powertrain components are largely imported from China. While EV is not a named priority sector in PN2, it benefits indirectly – capital goods for battery manufacturing fall within the priority category Battery JVs; minority investment in Indian EV manufacturers; cell chemistry technology licensing   The Road Ahead: Phased Deepening of India-China Investment Ties Press Note 2, 2026 and the three FEMA amendments are not the end of India’s investment policy evolution – they are the beginning of a new phase. The framework is explicitly designed for incremental deepening, contingent on bilateral progress and investor behaviour under the new rules. What Phase 2 Could Look Like (2026-2027) Several policy proposals are in active discussion and could form the basis of Phase 2 liberalisation if PN2 operates smoothly: Proposal Source Potential Impact Raise automatic route threshold from 10% to 24% NITI Aayog recommendation; Economic Survey 2023-24 signals Would align LBC automatic route threshold with the aggregate FPI cap under Schedule III and the general DPIIT FDI policy framework creating a more commercially significant opening for strategic minority positions Sectoral expansion of 60-day expedited track Industry representations from ICEA (electronics), CII, FICCI Extending the 60-day approval commitment beyond electronics, capital goods, and solar cells to pharmaceuticals, EVs, and specialty chemicals would accelerate investment in sectors with the highest technology transfer potential Green channel for JV applications with technology transfer commitments DPIIT consultation process Chinese companies committing to technology transfer, Indian R&D investment, and workforce training could qualify for streamlined approval aligning investment with Atmanirbhar Bharat manufacturing targets Formal bilateral investment treaty revival Ministry of External Affairs discussion track India-China BIT negotiations, suspended since 2020, could resume as bilateral relations normalise. A BIT would provide Chinese investors with treaty-level protection and dispute resolution access, significantly improving investor confidence   The Conditions for Phase 3 (2027-2030) Further substantive deepening towards a more open bilateral investment environment, will be contingent on a set of conditions that are as much diplomatic and security-related as they are economic: Sustained border peace and confidence-building measures along the Line of Actual Control. Track record of PN2 investments proceeding smoothly, without national security concerns being raised over approved minority investments. Bilateral progress on the trade deficit if Chinese investment in Indian manufacturing begins to reduce import dependency and contribute to exports, the political economy for further opening becomes far more favourable. FATF and AML credibility – India’s implementation of its AML/PMLA obligations will continue to shape how Chinese investment is screened, and international peer review of both India’s and China’s FATF compliance will influence the bilateral investment framework. US-India-China strategic triangulation – India’s investment policy toward China is inevitably influenced by the broader India-US strategic partnership. Further opening is more likely if framed as attracting manufacturing FDI that strengthens Indian industrial capacity rather than transferring strategic technology. India’s phased approach is not timidity, it is strategy. Each phase builds investor confidence, generates data on actual investment behaviour, and creates political space for the next opening. – ISAS Brief 1335, January 2026 (adapted) Beneficial Ownership: The Gating Mechanism At the heart of the entire LBC framework across Press Note 2, the FEMA NDI amendments, and the Third Amendment is the concept of beneficial ownership (BO). Understanding the BO framework is not optional for Chinese investors or their advisers: it is the gating mechanism that determines whether a given investment is on the automatic route, requires government approval, or is restricted entirely. The Three Overlapping BO Tests in the LBC Framework Beneficial Ownership Thresholds Across Investment Routes The June 2026 amendments have introduced a harmonized approach to determining beneficial ownership across different foreign investment routes. At the core of these changes is the adoption of the Prevention of Money Laundering Act, 2002 (“PMLA”) framework, which generally treats a person holding 10% or more ownership, economic interest, or control in an investing entity as a Beneficial Owner (“BO”). Foreign Direct Investment (FDI): For FDI transactions, government approval is required where a beneficial owner from a land-bordering country (“LBC”) holds more than 10% ownership or exercises control over the investing entity. Approval may also be required where an LBC entity acquires control of the investment vehicle. Retail Portfolio Investments (ROPI): The amendments extend the same beneficial ownership test to portfolio investments in listed Indian companies. Government approval will be necessary if the investment or transfer results in ownership or control being acquired by an LBC entity or citizen, or where the beneficial owner of the investment is an LBC citizen. Foreign Portfolio Investors (FPIs): For FPIs, the focus shifts to the concept of an “investor group” under the SEBI FPI Regulations. Holdings of all entities within the investor group are aggregated, and once the group's stake in a listed Indian company reaches 10% or more, the investment is reclassified as FDI. Where any member of the investor group has links to an LBC, the Press Note 2 approval framework may also be triggered. Taken together, these amendments reflect a clear regulatory objective: ensuring that investments with significant ownership or control links to land-bordering countries are subject to enhanced scrutiny, irrespective of the investment route adopted. The common thread across all four tests is the PMLA Rule 9(3) definition and specifically the 10% ownership threshold. This consistency is deliberate. By anchoring the entire LBC framework in a single, well-understood statutory definition that already applies to PMLA compliance, the government has made the analysis replicable, auditable, and legally precise. PRACTICAL NOTE FOR CHINESE INVESTORS AND THEIR ADVISERS The key question at every layer of an investment structure is: does any entity from China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, Afghanistan or any Hong Kong-incorporated entity, own ≥10% of shares, capital, or profits of the investing vehicle? If yes at any layer, government approval is required. If no LBC entity has ≥10% and no LBC entity has control: automatic route is available (with the new RBI reporting obligation still applying). Conduct this analysis at every holding vehicle, fund entity, and SPV in the chain before any investment is made or any transfer of shares is effected. India’s ‘Securonomics’: A New Template for Investment Governance The framework that has emerged from Press Note 2 and the three FEMA amendments of 2026 represents something genuinely novel in global investment governance: a security-conscious, legally precise, PMLA-anchored framework that enables commercial investment from geopolitical rivals while protecting against control-seeking capital. It is India’s contribution to the global debate on investment screening that has been raging in the US (CFIUS), Europe (EU FDI screening regulation), and the UK (National Security and Investment Act) since 2017. What makes the Indian model distinctive is its emphasis on beneficial ownership rather than country of incorporation. The framework does not ask: ‘Is this company Chinese?’ It asks: ‘Is there a Chinese beneficial owner above the 10% threshold, and does this investment result in Chinese control?’ This sophistication allows genuinely multinational capital – global PE funds with minority Chinese LP participation, Cayman structures with Hong Kong feeder vehicles containing LBC sub-threshold stakes, to participate in India’s economy, while keeping the screening mechanism focused on what actually matters: who controls the investment and where that control resides. India is not unique in navigating this challenge. Australia’s Foreign Investment Review Board, Japan’s Committee on Foreign Investment, and the European Commission’s FDI screening mechanism all grapple with the same fundamental tension: how to remain open to the world’s largest source of outward FDI (China) while protecting national security interests. India’s PN2 framework, with its PMLA-anchored BO definition and 60-day priority sector track, compares favourably with the best international practice. Conclusion: The Door Is Open. The Architecture Is Strong. Six years after the blanket restrictions of Press Note 3, India has opened a door to Chinese and land-border country investment that is purposeful, legally rigorous, commercially workable, and strategically calibrated. The framework is simultaneously more open and more sophisticated than what it replaced. For Chinese investors, the message is clear: minority, non-controlling capital in Indian manufacturing, technology, and listed equity is now welcome. The automatic route is available. The 60-day approval track for priority manufacturing sectors is a genuine procedural advance. The PMLA-anchored beneficial ownership definition provides legal certainty that the old framework conspicuously lacked. And the Third Amendment’s expansion of the portfolio investment route to all individuals resident outside India including Chinese nationals completes the picture with an accessible, low-friction entry point for individual investors. For Indian companies seeking Chinese partnerships, the framework enables what the economy requires: technology transfer, capital formation in component manufacturing, and supply chain integration – all without surrendering control of strategic assets to foreign entities. The PLI scheme and the PN2 framework are now aligned: both seek to build Indian manufacturing capability using global capital and expertise, with Indian entities remaining in the driver’s seat. The road ahead will be navigated in phases. Phase 1 now fully operative delivers the automatic route, the 60-day track, and the individual PIS access. Phase 2, if political conditions permit, may extend the automatic route threshold to 24% and broaden the expedited approval track to more sectors. Phase 3: medium-term, subject to sustained bilateral progress could see India and China arrive at a bilateral investment framework that reflects their status as two of the world’s largest and most complementary economies. India’s door is open. The architecture of the framework ensures it will remain open on India’s terms – measured, sovereign, and in service of India’s long-term economic ambitions. Authored by Aurelia Menezes, Partner and Co-authored by Prithiviraj Senthil Nathan, Partner https://ksandk.com/people/prithiviraj-senthil-nathan-2/

Introduction The principle of free consent is one of the cornerstones of contract law and plays a fundamental role in determining whether an agreement qualifies as a valid and enforceable contract under the Indian Contract Act, 1872. A contract becomes legally binding only when the parties enter into it voluntarily and with a clear understanding of its essential terms. Sections 13 and 14 of the Indian Contract Act establish the legal framework governing consent and free consent. The law recognises that consent is not truly free where it is obtained through coercion, undue influence, fraud, misrepresentation or mistake. These safeguards are intended to preserve fairness, autonomy and genuine agreement in contractual relationships. However, the modern commercial landscape has significantly altered the way contracts are formed. Digital contracts, click-wrap agreements, standard form contracts and platform-based transactions have raised new questions regarding whether consent is truly voluntary or merely formal. As a result, the doctrine of free consent must increasingly be examined not only through the lens of contractual autonomy but also through considerations of fairness, bargaining power and informed choice. Understanding Consent and Free Consent The concept of consent is rooted in the principle of consensus ad idem, meaning a “meeting of the minds.” Under Section 13 of the Indian Contract Act, parties are said to consent when they agree upon the same thing in the same sense. This requirement ensures that both parties possess a common understanding of the subject matter and essential terms of the contract. Without such agreement, no enforceable contract can arise. The Supreme Court in Tarsem Singh v. Sukhminder Singh[1] observed that where parties are fundamentally mistaken about the nature or subject matter of the agreement and there is no true meeting of minds, the contract may be rendered void. Similarly, in Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas, the Supreme Court emphasised the importance of communication and acceptance in contract formation, particularly where parties negotiate from different locations. Section 14 further clarifies that consent is considered “free” when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake. The doctrine seeks to ensure that contractual obligations arise from genuine and voluntary agreement rather than manipulation or pressure. Factors Vitiating Free Consent Coercion Section 15 of the Indian Contract Act defines coercion as committing or threatening to commit any act forbidden by the Indian Penal Code, or unlawfully detaining or threatening to detain property, with the intention of causing a person to enter into an agreement. The essence of coercion lies in the absence of free will. In Chikkam Ammiraju v. Chikkam Seshamma[2], a threat to commit suicide was held to constitute coercion because it was used to compel consent. Contracts induced through coercion are voidable at the option of the aggrieved party. Undue Influence Undue influence, governed by Section 16, arises when one party is in a position to dominate the will of another and uses that position to obtain an unfair advantage. The doctrine is particularly relevant in fiduciary and confidential relationships such as those involving doctors, lawyers, trustees and guardians. In Subhash Chandra Das Mushib v. Ganga Prasad Das Mushib[3], the Supreme Court clarified that the existence of a relationship alone is insufficient; it must also be shown that domination of will resulted in an unfair advantage. Likewise, in Raghunath Prasad v. Sarju Prasad[4], the Court held that the burden of proving undue influence generally rests upon the party alleging it, unless circumstances indicate a fiduciary relationship warranting a different approach. Fraud Fraud is defined under Section 17 as intentional deception designed to induce another person to enter into a contract. Fraud may take the form of false statements, active concealment of material facts, promises made without intention to perform them, or other deceptive conduct intended to mislead. The Supreme Court in S.P. Chengalvaraya Naidu v. Jagannath[5] famously observed that fraud vitiates all judicial acts and transactions. Similarly, in A. Ayyasamy v. A. Paramasivam[6], the Court reiterated that allegations of serious fraud may affect the validity of contractual and arbitral proceedings. Because fraud strikes at the very foundation of consent, contracts induced by fraud are voidable at the option of the affected party. Misrepresentation Misrepresentation, governed by Section 18, occurs when a party makes an untrue statement that induces another party to enter into a contract, despite lacking any intention to deceive. Unlike fraud, misrepresentation does not require dishonest intent. It may arise through innocent misstatements, negligent assertions or misleading conduct. The law recognises that parties should be able to rely upon representations made during contractual negotiations. Consequently, where a contract is induced by misrepresentation, the aggrieved party may rescind the agreement and, in certain circumstances, seek additional remedies. The doctrine promotes honesty and reasonable care in commercial dealings while distinguishing between deliberate deception and genuine mistakes. Mistake Mistake constitutes another factor that may affect the validity of consent. Sections 20 to 22 distinguish between bilateral and unilateral mistakes. A bilateral mistake relating to a fundamental fact essential to the agreement generally renders the contract void because there is no true consensus between the parties. In contrast, a unilateral mistake ordinarily does not affect contractual validity unless exceptional circumstances exist. The Act further distinguishes between mistakes of fact and mistakes of law. While a mistake of Indian law generally affords no relief, a mistake concerning foreign law is treated as a mistake of fact. These distinctions seek to balance commercial certainty with fairness in contractual relationships. Comparative Perspectives on Free Consent The doctrine of free consent exists across legal systems, although different jurisdictions approach the concept in distinct ways. English contract law has historically developed the doctrine through judicial decisions. For example, North Ocean Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. recognised the concept of economic pressure in contractual negotiations, while Allcard v. Skinner[7] expanded the doctrine of undue influence within fiduciary relationships. In the United States, courts frequently rely on the doctrine of unconscionability to assess whether a contract is fundamentally unfair due to unequal bargaining power. The landmark decision in Williams v. Walker-Thomas Furniture Co.[8] demonstrated the willingness of courts to intervene where contractual terms result in significant substantive unfairness. Civil law jurisdictions such as France and Germany adopt codified approaches that expressly address contracts affected by fraud, mistake or duress. Similarly, Islamic contract law recognises that agreements obtained through coercion or deception are inconsistent with principles of justice and fairness. These comparative developments demonstrate a broader global shift from strict contractual freedom towards balancing autonomy with protection of vulnerable parties. Contemporary Challenges and the Need for Reform Although the doctrine of free consent remains central to contract law, several contemporary challenges have emerged. One significant concern is the increasing prevalence of standard form contracts and “take-it-or-leave-it” agreements. Such contracts are common in employment arrangements, consumer transactions, online services and e-commerce platforms. In many cases, one party has little or no meaningful opportunity to negotiate contractual terms. Digital contracts further complicate the analysis of consent. Click-wrap and browse-wrap agreements frequently require users to accept lengthy terms and conditions without reading or understanding them. While courts generally recognise such agreements as enforceable, questions remain regarding whether users genuinely provide informed consent. Another challenge involves proving undue influence, fraud and misrepresentation. These concepts often involve subtle conduct that can be difficult to establish through evidence, particularly where power imbalances exist. Indian law also does not currently recognise economic duress as a distinct ground for invalidating consent. However, economic pressure and unequal bargaining power are increasingly common features of modern commercial relationships. To address these concerns, several reforms merit consideration: · Recognition of economic duress as an independent ground affecting free consent. · Enhanced protection against unfair terms in digital and standard form contracts. · Greater judicial scrutiny of contracts involving significant inequality of bargaining power. · Improved consumer awareness regarding contractual rights and obligations. · Stronger safeguards for vulnerable parties in fiduciary and digital transactions. Such reforms would strengthen the doctrine’s ability to respond to contemporary commercial realities while preserving contractual certainty. Conclusion Free consent remains one of the foundational principles of the Indian Contract Act, 1872, ensuring that contractual obligations arise from genuine and voluntary agreement between parties. While the traditional grounds that vitiate consent i.e. coercion, undue influence, fraud, misrepresentation and mistake, continue to provide important safeguards, modern commercial realities present challenges that were not contemplated when the legislation was enacted. The growth of digital commerce, click-wrap agreements, standard form contracts and platform-based transactions has raised new questions regarding the quality of consent and the extent to which parties truly exercise meaningful choice. Similarly, issues such as economic pressure, information asymmetry and unequal bargaining power increasingly test the limits of traditional contractual doctrines. As commercial relationships become more complex and technology-driven, Indian contract law may need to evolve through judicial interpretation and legislative reform. Ultimately, the doctrine of free consent must protect not only the formal act of agreement but also the broader values of fairness, dignity and informed choice. In the modern contracting landscape, free consent should function as a substantive safeguard that ensures contractual relationships remain both legally valid and commercially just. 1. Tarsem Singh v. Sukhminder Singh, MANU/SC/0158/1998. [Para 2] ↑ 2. Chikkam Ammiraju v. Chikkam Seshamma, MANU/TN/0599/1916. [Para 3] ↑ 3. Subhash Chandra Das Mushib v. Ganga Prasad Das Mushib, MANU/SC/0069/1969. [Para 3] ↑ 4. Raghunath Prasad v. Sarju Prasad, MANU/PR/0018/1923. [Para 3] ↑ 5. S.P. Chengalvaraya Naidu v. Jagannath, MANU/SC/0192/1994. [Para 3] ↑ 6. A. Ayyasamy v. A. Paramasivam, MANU/SC/1179/2016. [Para 3] ↑ 7. Allcard v. Skinner (1887) 36 Ch D 145. [Para 4] ↑ 8. Williams v. Walker-Thomas Furniture Co., MANU/UDCC/0035/1965. [Para 4] ↑ By Abhishek Paliwal, Partner https://ksandk.com/people/abhishek-paliwal/

The validity of an arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996 (Act) ultimately boils down to consent. At its core, an arbitration clause is nothing more than a contractual promise by the parties to resolve their disputes outside the regular court system. But consent isn’t always straightforward. Sometimes parties sign a contract containing a clause that is too weak or tentative to create any real obligation to arbitrate. In other situations, a party may perform extensively under a contract it never signed, leaving the question open whether it is bound by the arbitration clause contained in it. These are two quite different problems, and both come up fairly often in practice.   The Hon’ble Supreme Court has addressed these two pertinent issues in two distinct judgments which together mark the outer scope of what Section 7 of the Act requires. In Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. (2026 INSC 384) (Nagreeka), the Court held that a clause providing that disputes “can” be settled by arbitration does not create a binding arbitration agreement. On the other hand, in Glencore International AG v. Shree Ganesh Metals and Another (2025 INSC 1036) (Glencore), the Court ruled that an unsigned but clearly mandatory arbitration clause is enforceable if the non-signing party’s conduct shows unequivocal acceptance of the contract. When these two decisions are read together, a clear principle on the scope of Section 7 is established that conduct can fill the gap left by an unsigned agreement, but it cannot fix a clause that, by its own wording, does not create a binding obligation on the parties. I. WHEN THE CLAUSE ITSELF IS NOT ENOUGH: NAGREEKA While Section 7 of the Act requires an arbitration agreement to be in writing, it does not specify what language is sufficient to create one. That question has been settled by a consistent line of decisions of the Supreme Court. The Court had earlier identified the essential attributes of a valid arbitration agreement in K.K. Modi v. K.N. Modi (1998) 3 SCC 573), which required, inter alia, that the agreement contemplate a binding decision by the tribunal deriving from the consent of the parties, and that the agreement to refer disputes to the tribunal be intended to be enforceable in law. More recently, the Supreme Court in Jagdish Chander v. Ramesh Chander ((2007) 5 SCC 719) (Jagdish Chander), has authoritatively held that the words of an arbitration clause must disclose a determination and obligation to go to arbitration, not merely the possibility of doing so. A clause that provides that parties "can, if they so desire" refer disputes to arbitration is not an arbitration agreement; it is an agreement to consider entering into one, contingent on fresh consent when a dispute actually arises. It has also made clear that mere use of the word "arbitration" or "arbitrator" will not make a clause a valid arbitration agreement if it requires or contemplates fresh consent at the time of a dispute. The decision in Nagreeka is a direct application of this principle laid down by the Supreme Court in Jagdish Chander. The dispute arose from a bill of lading wherein the Clause 25 provided that differences between the parties "can be settled by arbitration in India or a place mutually agreed with each party appointing an arbitrator." Subsequent thereto, when a payment dispute arose, the appellant invoked this clause and sought appointment of an arbitrator under Section 11 of the Act. when a dispute with respect to payments arose and the appellant sought appointment of an arbitrator under Section 11 of the Act. The respondent, however, refused to participate in arbitration, contending that the clause imposed no binding obligation to do so. Both the Bombay High Court and the Supreme Court agreed. The Bombay High Court dismissed the Section 11 application, and the Supreme Court upheld that dismissal. The Court's reasoning was based on a careful reading of the word "can". Examining its ordinary dictionary meaning across multiple sources, the Court held that "can" denotes capacity or factual possibility, not obligation. It contrasted the word "can" with "shall," which signals a mandate, and noted that even "may" carries a stronger obligatory weight in judicial interpretation than "can" does. The Court then applied this understanding to Clause 25 and held that the clause indicated merely the future possibility of referring disputes to arbitration. For disputes to actually be settled by arbitration, a further agreement between the parties would be required, and such an agreement could only come into existence if both parties consented to it. Since the respondent had refused to refer the matter to arbitration, no such further agreement existed. The Court also dealt with several arguments advanced by the Appellants. The first argument was that the heading of the clause read "Arbitration," which the Appellant argued demonstrated the parties' intention. The Court rejected this, holding that a heading cannot supply a mandatory obligation that the body of the clause does not contain. The second argument was that the Section 11 stage requires only a prima facie examination of whether an arbitration agreement exists, and that doubts should be resolved in favour of referral. The Court clearly dealt with this argument by placing reliance on SBI General Insurance Co. Ltd. v. Krish Spg. ((2024) 12 SCC 1), it acknowledged this limitation but held that it did not assist the appellant, because the absence of a binding arbitration clause was "manifestly and ex facie certain" on the face of Clause 25 itself. The prima facie threshold does not require courts to refer parties to arbitration where the non-existence of the arbitration agreement is plain on the document. This reading aligns with the caution expressed in Goqii Technologies (P) Ltd. v. Sokrati Technologies (P) Ltd. ((2025) 2 SCC 192), that the limited jurisdiction of referral courts must not be misused to compel participation in arbitration on the basis of non-existent agreements. The significance of Nagreeka: Nagreeka adds to the existing line of judgments in two respects. First, it extends the mandatory obligation analysis to the word "can," in the arbitration context. The Court's close textual analysis of ordinary dictionary usage and its comparison with "shall" and "may" provides a useful linguistic framework for evaluating dispute resolution clauses going forward. Second, the decision confirms that no combination of contextual factors will cure a fundamentally permissive clause. The presence of the word "Arbitration" as a heading, the commercial context of the transaction, and the general judicial preference for referring commercial disputes to arbitration were all considered and all found insufficient. The clause itself is dispositive. What makes Nagreeka useful for practitioners is its specificity. A clause using "can" or "may" will ordinarily be treated as permissive and, absent a clear contextual correction, will not constitute a valid arbitration agreement. II. WHEN THE SIGNATURE IS MISSING BUT THE CONSENT IS NOT: GLENCORE The second problem is structurally the inverse of the first. Where Nagreeka concerned a clause whose language was deficient, Glencore concerned a clause whose language was unambiguously mandatory but which had not been signed by one of the parties. The question was whether extensive performance under the contract could supply the missing assent. Section 7(3) of the Act requires an arbitration agreement to be in writing. It does not specifically require a signature. Moreover, Section 7(4)(b) of the Act expressly provides that an exchange of communications providing a record of the agreement is sufficient. This much has been settled since Jugal Kishore Rameshwardas v. Goolbai Hormusji (AIR 1955 SC 812), which established that formal execution is not a prerequisite for a valid arbitration agreement. The essential ingredients of a valid arbitration agreement as identified in Bihar State Mineral Development Corporation v. Encon Builders (I) (P) Ltd. ((2003) 7 SCC 418) include, relevantly, that the parties must intend to settle their disputes by a private tribunal and must agree in writing to be bound by its decision. The requirement of intention and agreement in writing does not, however, require that the writing take the specific form of a document signed by all parties. Section 7(4)(b) expressly recognises that an exchange of communications establishing a record of the agreement is sufficient. The principle was further developed in Great Offshore Ltd. v. Iranian Offshore Engineering and Construction Co. ((2008) 14 SCC 240), where the Court held that procedural formalities such as signatures, stamps, seals are red tape and not conclusive if the parties can demonstrate their intention to arbitrate through other justiciable means. Glencore applies this framework in a factual scenario where the conduct evidence was exceptionally strong. The Respondent, Shree Ganesh Metals had never signed the contract containing the arbitration clause, which designated London as the seat. However, it accepted delivery of zinc metal against invoices that each specifically referenced the contract by its unique number. It instructed its bank to issue standby letters of credit that also expressly referenced the same contract. And it sent a direct written communication to Glencore confirming that it would not default in performance under the contract. The Bombay High Court nonetheless refused to refer the parties to arbitration, holding that no concluded contract existed in the absence of a signature. The Supreme Court reversed the concurrent findings of the Single Judge and Division Bench of the Bombay High Court, holding that the court had failed to give proper weightage to the conduct evidence. It held that Shree Ganesh's consistent engagement with the specific contract document demonstrated unequivocal acceptance of its terms, including the arbitration clause. The Court confirmed that signatures are not required under Sections 7(4)(b), 7(4)(c), or 7(5) of the Act, and directed referral to arbitration under Section 45. It is to be considered that the conduct evidence in Glencore was notable for being referential rather than merely consistent. Shree Ganesh did not simply perform obligations that the contract, it did so against documentation that specifically referred the underlying contract by its reference number across multiple independent transactions. This is a pertinent and a material distinction. Conduct that is merely consistent with a contract (for example, accepting delivery of goods without specifically acknowledging the underlying contract document) raises a different evidentiary question from conduct that specifically references the contract and thereby demonstrates that the non-signing party has engaged with its terms. The strength of Glencore as a precedent lies precisely in this specificity, and courts applying the conduct-based framework in future cases will need to attend to the quality of the conduct evidence, not merely its existence. The Significance of Glencore: Glencore clearly settles two pertinent questions that frequently arise. First, it confirms that a non-signing party which has specifically engaged with a contract document across multiple independent transactions cannot resist arbitration on the basis of non-signature alone. The Court's emphasis on referential conduct draws a workable evidentiary line, one where documentation that identifies the contract by name or number carries greater probative weight than performance that is merely consistent with the contract's existence. Second, the decision reinforces that the conduct-based inquiry under Section 7(4)(b) is not a low threshold. A party seeking to establish an arbitration agreement through conduct must demonstrate that the other party engaged with the specific contract, not merely that it behaved in a manner the contract contemplated. For practitioners, the practical lesson cuts in both directions. A party relying on an unsigned contract should ensure that all downstream documentation, including invoices, letters of credit, and written communications, specifically references the contract by its identifier. Conversely, a party that has performed under a contract it did not intend to be bound by must raise that objection early and clearly, since consistent performance against specific contractual references will be treated as unequivocal acceptance of all the contract's terms, including its arbitration clause. III. THE COMMON PRINCIPLE BETWEEN NAGREEKA AND GLENCORE: Nagreeka and Glencore address different facets of failures of consent, but the principle underlying both decisions is the same. An arbitration agreement requires genuine consent to arbitrate, and courts will look to the substance of the parties' relationship rather than the form of their documentation to determine whether that consent exists. In the mandatory obligation line, the inquiry is whether the parties' chosen language reflects a present agreement to be bound by arbitration, or merely a tentative arrangement to consider it. Where the clause is permissive, no amount of subsequent conduct can transform it into a binding agreement. The parties have, by their own words, reserved the right to choose arbitration afresh when a dispute arises. That reservation cannot be overridden by a court. In the conduct and communications line, the inquiry is whether the parties' dealings, taken as a whole, reflect a genuine agreement to arbitrate. Where the arbitration clause is itself mandatory, the absence of a signature is a problem of form rather than substance, and conduct that clearly demonstrates acceptance of the clause will cure it, particularly where that conduct specifically references the contract rather than merely being consistent with its existence. The order in which courts approach these questions also matters. A court must first satisfy itself that the clause in question actually imposes an obligation to arbitrate. If it does not, the question of whether a party is bound through conduct simply does not arise. Nagreeka confirms that this threshold inquiry remains available even at the Section 11 stage. A clause that is plainly permissive on its face can be identified and rejected at that stage itself, without sending the parties through the time and expense of constituting an arbitral tribunal. IV. CONCLUSION: Section 7 of the Act ultimately turns on whether the parties genuinely agreed to resolve their disputes by arbitration. The form of that agreement is quite flexible. It can take the shape of a signed document, an exchange of communications, or clear conduct showing acceptance of a mandatory arbitration clause. What it cannot be is a permissive clause that merely leaves the option of arbitration open for a future decision, or conduct that tries to create an obligation which the parties’ own wording did not establish. When read together, Nagreeka and Glencore mark the two ends of the spectrum. For practitioners, the practical takeaway is clear. The strength of any dispute resolution clause depends on the obligation it actually creates. A clause using “can” or “may” does not amount to a binding arbitration agreement. It is only an invitation that either party can decline. By contrast, when the clause uses clear mandatory language such as “shall”, a party who has performed under the contract cannot easily escape arbitration merely by pointing to the absence of its signature. In the end, there are no shortcuts. Careful drafting that leaves no room for ambiguity, along with proper documentation of performance and acceptance, remains the safest safeguard on both sides. AUTHORED BY – PRAGALBH BHARDWAJ, ASSOCIATE PARTNER, KING STUBB AND KASIVA https://ksandk.com/people/pragalbh-bhardwaj/  

India’s green hydrogen sector is no longer being discussed as a futuristic climate ambition. It is rapidly becoming one of the most commercially significant infrastructure and energy transition opportunities in the country. As governments and industries worldwide intensify decarbonisation efforts, green hydrogen is emerging as a strategic solution for sectors where electrification alone cannot achieve net-zero objectives. From steel manufacturing and fertilisers to shipping, refining and heavy industrial operations, businesses are increasingly exploring hydrogen-based energy systems to reduce carbon intensity while maintaining industrial scale and operational efficiency. For India, the opportunity is larger than domestic decarbonisation. The country is positioning itself as a future global hub for green hydrogen production, export-oriented hydrogen infrastructure and renewable-powered industrial manufacturing. This transition is creating substantial opportunities for infrastructure developers, renewable energy companies, sovereign wealth funds, institutional investors, lenders and multinational industrial groups. At the same time, green hydrogen projects in India are introducing a new generation of legal, regulatory and financing complexities that differ significantly from conventional infrastructure or renewable energy projects. Unlike mature sectors with established project finance models and predictable operational benchmarks, green hydrogen projects continue to evolve technologically, commercially and regulatorily. The success of these projects increasingly depends on sophisticated structuring, integrated renewable energy strategies, ESG compliance, cross-border financing capability and carefully negotiated risk allocation mechanisms. India’s National Green Hydrogen Mission and the Rise of a Hydrogen Economy India’s policy framework has evolved rapidly through the National Green Hydrogen Mission, which seeks to establish the country as a leading producer and exporter of green hydrogen and hydrogen derivatives. The policy ecosystem surrounding the sector now extends beyond simple renewable energy incentives and includes electrolyser manufacturing support, renewable energy integration mechanisms, infrastructure facilitation measures and industrial decarbonisation initiatives. The broader objective is not merely energy diversification. India’s hydrogen strategy is tied directly to long-term energy security, reduced fossil fuel dependence, export competitiveness and industrial transformation. Policymakers increasingly view green hydrogen as a strategic industrial input capable of reshaping sectors that have historically remained carbon-intensive and difficult to transition. This evolving framework is also creating a new category of long-term infrastructure assets. Large-scale hydrogen projects are expected to involve integrated renewable power generation, electrolysis facilities, storage infrastructure, transportation systems, export terminals and industrial offtake arrangements. As a result, green hydrogen infrastructure in India is beginning to resemble an ecosystem-driven investment model rather than a standalone energy project. Why Global Investors Are Aggressively Entering India’s Green Hydrogen Market Institutional capital is increasingly flowing toward green hydrogen projects because investors view the sector as a long-duration energy transition opportunity with strong alignment to ESG and sustainability mandates. Sovereign wealth funds, pension funds, climate-focused investment platforms, export credit agencies and multilateral financial institutions are actively evaluating hydrogen infrastructure investments in India due to several structural advantages: India’s rapidly expanding renewable energy capacity Competitive solar and wind power costs Industrial-scale domestic demand potential Export-oriented infrastructure opportunities Government-backed policy support Long-term carbon reduction commitments For many investors, the sector also presents a significant first-mover advantage. Businesses capable of securing renewable energy integration, industrial offtake arrangements and strategic port connectivity at an early stage may become dominant participants in India’s future hydrogen economy. However, unlike traditional infrastructure sectors where revenue visibility and operational performance are relatively established, hydrogen projects remain highly sensitive to policy evolution, technology advancement and future demand certainty. This continues to influence financing appetite and investment structuring strategies. Renewable Energy Integration Is the Foundation of Hydrogen Project Viability One of the most critical aspects of green hydrogen project development is access to low-cost renewable energy. Electricity pricing directly affects hydrogen production economics, making renewable integration one of the most important determinants of project bankability. Developers are therefore increasingly pursuing integrated renewable infrastructure models involving: Captive renewable energy projects Hybrid solar and wind arrangements Energy storage-backed supply systems Dedicated renewable transmission infrastructure Long-term renewable power procurement strategies This creates significant legal and regulatory overlap between renewable energy law, power sector regulation and hydrogen infrastructure development. From a financing perspective, lenders are placing substantial emphasis on long-term energy cost certainty, operational uptime and renewable supply reliability. Hydrogen projects that lack stable renewable integration may face material financing constraints due to concerns surrounding production economics and operational continuity. Electrolyser Manufacturing and Technology Risk Remain Central Concerns Electrolysers form the core technological infrastructure of hydrogen production systems. India is actively encouraging domestic electrolyser manufacturing and supply chain localisation through incentive-driven policy measures designed to reduce import dependence and build domestic industrial capability. Despite strong policy support, technology risk continues to remain one of the most significant challenges in green hydrogen project financing. Investors and lenders continue to evaluate concerns involving: Technology obsolescence Equipment degradation risk Efficiency uncertainty Vendor reliability Performance guarantees Long-term maintenance capability Unlike conventional renewable energy assets that benefit from relatively mature technologies and predictable operational models, hydrogen infrastructure continues to evolve rapidly. This creates substantial diligence requirements for project finance participants, particularly where projects rely on emerging electrolyser technologies or large-scale industrial deployment models. Technology-related contractual protections are therefore becoming increasingly important in EPC agreements, supply contracts, insurance frameworks and financing documentation. Why Financing Green Hydrogen Projects Is More Complex Than Traditional Infrastructure Finance Green hydrogen projects are fundamentally different from conventional infrastructure financing transactions because the sector lacks fully mature commercial benchmarks. Traditional project finance structures typically rely on predictable cash flows, established operational histories and stable demand patterns. Hydrogen projects, however, often involve evolving technologies, uncertain demand trajectories and regulatory frameworks that continue to develop. As a result, financing structures for hydrogen infrastructure in India increasingly involve: SPV-based project finance models Blended financing structures Strategic industrial partnerships Sustainability-linked financing arrangements Cross-border investment platforms Government-supported viability mechanisms Large hydrogen developments may simultaneously incorporate renewable generation assets, electrolysis infrastructure, industrial integration facilities, storage systems and export logistics networks. This significantly increases structuring complexity and risk allocation requirements. Lenders continue to focus heavily on several key bankability concerns: Long-term offtake certainty Industrial demand visibility Creditworthiness of purchasers Regulatory stability Technology performance assurance Carbon market evolution Export competitiveness Until the sector achieves greater commercial maturity, many projects are likely to remain dependent on strategic partnerships, policy support and innovative financing structures. Offtake Agreements Will Shape Hydrogen Project Bankability Long-term offtake arrangements are expected to become one of the most important drivers of hydrogen project financing in India. Industrial demand is likely to emerge first from sectors already dependent on hydrogen or carbon-intensive industrial processes, including: Fertiliser manufacturing Refineries Steel production Industrial energy users Heavy manufacturing operations For lenders, revenue certainty will increasingly depend on the quality and enforceability of long-term supply arrangements. Hydrogen projects with credible industrial counterparties and stable pricing mechanisms are expected to attract stronger financing interest compared to projects dependent solely on speculative future export demand. As export markets mature, international hydrogen supply agreements and cross-border commercial frameworks are also likely to become increasingly significant. ESG, Water Sourcing and Environmental Regulation Are Becoming Critical Investment Factors Although green hydrogen is promoted as a low-carbon fuel solution, the sector remains highly sensitive from an environmental and ESG perspective. Hydrogen production requires substantial water resources, creating growing scrutiny around: Water sourcing rights Environmental sustainability Community impact Land usage patterns Biodiversity implications Renewable energy sourcing integrity Institutional investors and multilateral lenders are increasingly evaluating hydrogen projects through broader ESG compliance frameworks rather than merely assessing carbon reduction potential. Projects located in water-stressed regions or areas involving significant land acquisition challenges may face heightened regulatory scrutiny, financing challenges and stakeholder opposition. Consequently, ESG preparedness is no longer a secondary compliance exercise. It is becoming central to project finance viability, institutional investment participation and long-term operational sustainability. Land Acquisition, Port Connectivity and Industrial Infrastructure Will Determine Strategic Advantage Green hydrogen projects are infrastructure-intensive developments that require extensive industrial integration. Developers are increasingly prioritising project locations offering: Access to low-cost renewable energy Industrial demand clusters Port infrastructure proximity Export logistics capability Transmission connectivity Industrial zoning compatibility India’s future hydrogen ecosystem is expected to evolve around integrated industrial corridors and port-linked hydrogen hubs capable of supporting both domestic industrial consumption and export-oriented production. This creates substantial opportunities in infrastructure development involving: Hydrogen storage systems Port terminals Transportation infrastructure Pipeline networks Renewable energy corridors Industrial processing facilities However, land acquisition, environmental approvals and infrastructure connectivity continue to remain significant implementation challenges. Cross-Border Financing and FEMA Structuring Are Becoming Increasingly Important International participation in India’s hydrogen sector is accelerating rapidly. Sovereign wealth funds, strategic industrial groups, infrastructure investors, export credit agencies and climate finance institutions are increasingly exploring Indian hydrogen investments. This creates substantial legal and regulatory considerations involving: FEMA compliance External Commercial Borrowing (ECB) regulations Offshore investment structuring Tax optimisation Repatriation mechanisms Cross-border security structures Large-scale hydrogen infrastructure platforms may involve complex multi-jurisdictional financing arrangements combining domestic lending, offshore debt, sustainability-linked financing and strategic equity participation. As global hydrogen markets evolve, international regulatory alignment and cross-border contractual frameworks are also expected to become increasingly important for export-oriented projects. Carbon Markets, Green Bonds and Sustainability Financing Could Transform Project Economics Green hydrogen projects are closely connected to the broader evolution of carbon markets and ESG-driven capital allocation. Future project economics may increasingly benefit from: Carbon credit monetisation Sustainability-linked loans Green bonds Climate finance frameworks Transition finance mechanisms ESG-focused institutional investment Over time, these mechanisms could materially improve financing viability by lowering capital costs and strengthening investor participation. However, carbon market regulation and sustainability disclosure standards continue to evolve globally. Businesses participating in hydrogen infrastructure projects must therefore remain prepared for increasingly sophisticated compliance and reporting obligations. Safety Regulation and Hydrogen Infrastructure Standards Will Continue Evolving Hydrogen infrastructure involves complex operational and industrial safety considerations that remain comparatively underdeveloped from a regulatory perspective. Projects must currently navigate multiple overlapping compliance frameworks involving: Industrial safety regulations Hazardous materials handling Environmental approvals Transportation compliance Operational standards Infrastructure licensing requirements As India’s hydrogen economy expands, regulatory frameworks are expected to become increasingly specialised and technically sophisticated. Insurance markets are also likely to evolve significantly to address sector-specific risks involving equipment malfunction, industrial accidents, supply chain disruption, environmental liability and operational failure. The Future of Green Hydrogen Infrastructure in India India’s green hydrogen ecosystem is entering a decisive growth phase. Over the next decade, the sector is expected to witness the emergence of: Integrated renewable-hydrogen infrastructure platforms Export-oriented hydrogen hubs Port-linked hydrogen ecosystems Industrial decarbonisation clusters Hydrogen transportation infrastructure ESG-driven institutional financing models Carbon market-linked hydrogen projects The sector’s long-term trajectory will likely depend on the successful integration of renewable energy, industrial demand creation, financing innovation and regulatory certainty. For businesses, investors and lenders, green hydrogen is no longer merely an energy sector opportunity. It is becoming a large-scale industrial infrastructure transformation with implications across manufacturing, logistics, exports, climate finance and international trade. Conclusion Green hydrogen is expected to become one of the defining pillars of India’s long-term energy transition and industrial decarbonisation strategy. Strong policy support, growing renewable energy capacity, increasing ESG-focused investment and rising global demand for low-carbon industrial solutions are collectively accelerating the sector’s growth. At the same time, green hydrogen projects involve highly sophisticated legal, commercial, operational and financing considerations that require multidisciplinary planning and carefully structured execution. Successful projects will increasingly depend on: Integrated renewable energy strategies Technology diligence and risk allocation ESG and sustainability preparedness Long-term industrial offtake certainty Cross-border financing capability Regulatory compliance and infrastructure planning As India moves toward a lower-carbon economy, businesses participating in green hydrogen infrastructure development will need to navigate an evolving legal and commercial landscape that combines energy transition policy with large-scale industrial infrastructure financing. By Surbhi Kapoor, Partner, King Stubb and Kasiva https://ksandk.com/people/surbhi-kapoor/

India’s infrastructure story has long been associated with ambition, mega highways, renewable energy parks, airports, logistics corridors, smart cities, data centres and urban transformation projects. Over the last two decades, billions of dollars have flowed into the sector from banks, institutional lenders, sovereign wealth funds, infrastructure funds and global investors eager to participate in India’s growth trajectory. Yet beneath this expansion lies a parallel reality: a rising volume of stressed infrastructure assets, financially distressed projects and complex insolvency-driven restructurings. As India enters 2026, the market for distressed infrastructure acquisitions has evolved into one of the country’s most sophisticated investment and restructuring ecosystems. Today, infrastructure insolvency is no longer viewed merely as a lender recovery mechanism. It has become a strategic route for acquiring operational assets, consolidating market positions and unlocking long-term yield opportunities across sectors such as renewable energy, roads, airports, logistics, warehousing and digital infrastructure. The growing maturity of India’s insolvency regime under the Insolvency and Bankruptcy Code, 2016 (“IBC”) has fundamentally reshaped how infrastructure distress is managed. Investors are increasingly evaluating distressed infrastructure platforms in India not simply for recovery value, but for future scalability, ESG alignment, operational resilience and long-term cashflow generation. At the same time, infrastructure insolvencies remain among the most legally and operationally complex transactions in the market. Unlike ordinary corporate distress, infrastructure restructuring involves concession agreements, public utility obligations, regulatory approvals, operational continuity concerns, multi-layered financing structures and cross-border investment considerations. This article examines the evolving legal and commercial landscape governing stressed infrastructure assets in India and explores the major insolvency, restructuring and investment trends shaping the sector in 2026. Why Infrastructure Assets Become Financially Distressed Infrastructure projects are uniquely vulnerable to financial stress because they are capital intensive, highly leveraged and dependent on long-term regulatory and operational stability. Even relatively minor disruptions can significantly affect project cashflows, debt servicing capability and investor confidence. In many large projects, revenues begin years after substantial capital expenditure has already been incurred. Delays in land acquisition, environmental approvals, construction timelines or regulatory clearances can therefore create immediate pressure on financing structures. Some of the most common causes of infrastructure distress in India include: Land acquisition and rehabilitation delays Construction overruns and EPC disputes Tariff and regulatory conflicts Counterparty payment defaults Aggressive leverage structures Demand volatility and traffic shortfalls Technology underperformance Foreign exchange exposure Financing mismatches and refinancing constraints As infrastructure financing structures become more sophisticated, stress events increasingly involve multiple stakeholders, layered security structures and competing recovery expectations. How the IBC Transformed Infrastructure Resolution in India Before the introduction of the IBC, distressed infrastructure projects often remained trapped in prolonged litigation, fragmented restructuring frameworks and inefficient enforcement proceedings. Recovery timelines were uncertain, project values deteriorated rapidly and lenders faced significant difficulties in monetising distressed assets. The IBC fundamentally altered this landscape by introducing a structured, creditor-driven and time-bound insolvency framework. More importantly, it transformed distressed infrastructure from a purely recovery-oriented process into a viable investment and acquisition opportunity. For infrastructure investors, the IBC has improved: Transparency in distressed asset resolution Institutional creditor coordination Recovery discipline among borrowers Access to operational infrastructure assets Market-driven restructuring outcomes Platform consolidation opportunities In sectors such as renewable energy and roads, insolvency proceedings are increasingly being used as strategic entry routes by institutional investors seeking scalable infrastructure portfolios in India. Why Distressed Infrastructure Assets Are Attracting Institutional Capital One of the defining trends of 2026 is the growing participation of sovereign wealth funds, infrastructure investment platforms, private credit funds and global institutional investors in distressed infrastructure acquisitions in India. Operational infrastructure assets often continue to possess substantial long-term value despite sponsor-level distress. For sophisticated investors, financial distress may create opportunities to acquire strategically important assets at discounted valuations while retaining access to long-duration cashflows. This is particularly attractive in sectors where underlying demand remains structurally strong, including: Renewable energy projects Roads and highways Warehousing and logistics parks Urban infrastructure platforms Digital infrastructure and data centres Transmission and utility assets Infrastructure is increasingly being viewed as a long-term yield-generating asset class capable of delivering stable and predictable returns over extended investment horizons. Renewable Energy Insolvencies and Market Consolidation Renewable energy has emerged as one of the most active sectors for distressed infrastructure acquisitions in India. Solar and wind platforms continue attracting strong investor interest despite operational and regulatory challenges affecting several projects. Common causes of stress in renewable projects include: Delayed payments under power purchase agreements (PPAs) Curtailment disputes Aggressive debt financing Module performance issues Regulatory uncertainty Transmission connectivity challenges Despite these risks, distressed renewable energy assets remain highly attractive because they are often supported by long-term PPAs, government-backed procurement frameworks and strong ESG investment demand. Large renewable energy developers and infrastructure funds are increasingly using insolvency-led acquisitions as a route for portfolio expansion and market consolidation. The result is a rapidly evolving market for distressed renewable energy asset acquisition in India. Roads and Highway Projects: Continuing Stress Despite Structural Reforms Road and highway projects historically accounted for a major share of infrastructure stress in India. Earlier BOT-based concession models often relied on aggressive traffic projections and highly leveraged financing structures that became difficult to sustain. Although the transition toward Hybrid Annuity Models (HAM) and EPC-based structures has reduced certain categories of project risk, financial stress remains a continuing concern in several operational projects. Key stress triggers continue to include: Traffic and revenue underperformance Construction disputes Delayed annuity payments Land acquisition issues Refinancing pressure Concession-related disputes For lenders and investors, road sector insolvencies require careful evaluation of concession rights, termination compensation frameworks and operational continuity obligations. Airport and Aviation Infrastructure Insolvencies Airport restructuring transactions remain exceptionally sensitive because airports are strategically important national infrastructure assets subject to extensive regulatory oversight. Unlike conventional corporate insolvencies, airport distress scenarios frequently involve: Passenger service continuity concerns Government oversight obligations National security considerations Multi-party concession arrangements Regulatory transfer approvals Operational dependency risks Successful airport insolvency resolution in India requires coordination among lenders, regulators, concessioning authorities, operators and infrastructure investors. Operational continuity remains central to preserving both enterprise value and public confidence. Digital Infrastructure and Data Centre Restructuring India’s rapidly expanding digital economy is creating significant investment activity in data centres and digital infrastructure. However, as the sector matures, digital infrastructure restructuring and distress scenarios are expected to become increasingly relevant. Potential stress factors may include: Technology obsolescence High capital expenditure burdens Energy cost volatility Customer concentration risks Operational disruption exposure Cybersecurity liabilities Despite these concerns, digital infrastructure remains highly attractive to investors because of AI-driven demand growth, cloud expansion and long-term digital adoption trends. Data centres are increasingly being treated as infrastructure-like assets with stable recurring revenue characteristics. Concession Agreements and Insolvency Risks One of the most critical legal issues in infrastructure insolvency relates to concession agreements, licences and regulatory approvals. Many infrastructure projects derive their economic value directly from government concessions or regulated operating rights. Accordingly, insolvency proceedings often raise complex questions such as: Whether concession rights survive insolvency Whether approvals can be transferred to new investors Whether lenders can exercise substitution rights Whether termination risks arise during restructuring For lenders, direct agreements and step-in rights have become essential risk mitigation tools. These mechanisms help preserve project continuity while facilitating restructuring or sponsor substitution during distress. In heavily regulated sectors, the enforceability and practical implementation of these protections often become central to successful resolution outcomes. Security Enforcement Challenges in Infrastructure Projects Infrastructure financing structures typically involve extensive security packages including: Mortgage over project assets Assignment of receivables Charge over project accounts Assignment of concession rights Pledge over project company shares However, enforcement in infrastructure projects is rarely straightforward. Public utility obligations, regulatory approvals, concession restrictions and insolvency moratoriums frequently complicate pure enforcement strategies. As a result, consensual restructuring and resolution planning are often commercially more viable than aggressive enforcement proceedings. Why Operational Continuity Matters During Infrastructure Insolvency Unlike ordinary commercial businesses, infrastructure assets frequently provide essential public services. Power generation projects, toll roads, airports and urban utility assets cannot simply cease operations during insolvency proceedings without broader economic and public consequences. Operational disruption may materially affect: Public service delivery Regulatory compliance Asset valuation Revenue stability Recovery outcomes for creditors For this reason, infrastructure insolvency strategies increasingly prioritise stabilisation measures, interim funding arrangements and business continuity planning. Investors and resolution applicants are expected to demonstrate operational capability alongside financial strength. The Growing Role of Infrastructure Funds and Private Credit Alternative capital providers are becoming increasingly influential in India’s infrastructure restructuring market. Private credit funds, distressed asset investors and infrastructure investment platforms are actively participating in: Rescue financing transactions Stressed infrastructure acquisitions Refinancing of operational assets Resolution plan funding Sponsor replacement structures Traditional banks often face provisioning pressure, sectoral exposure limits and regulatory constraints when dealing with stressed infrastructure projects. Alternative capital providers are therefore filling a critical financing gap within the distressed infrastructure ecosystem. This trend is expected to accelerate further in 2026 as institutional investors seek exposure to operational infrastructure assets with long-term yield potential. RBI Project Finance Directions 2025 and Early Stress Recognition The RBI Project Finance Directions, 2025 are expected to significantly influence future infrastructure stress and restructuring trends in India. The framework places greater emphasis on project monitoring, milestone-linked disbursements and early identification of implementation risks. The regulatory focus on: Delay recognition Project monitoring discipline Cost overrun controls Enhanced lender oversight may improve project governance and financing discipline across the sector. At the same time, stricter monitoring mechanisms may also accelerate stress recognition and trigger restructuring discussions much earlier in the project lifecycle. This could reshape how lenders and sponsors approach infrastructure risk management in India. Inter-Creditor Complexity in Large Infrastructure Insolvencies Modern infrastructure projects frequently involve consortium financing structures, offshore lenders, institutional investors, bondholders and multilayered security arrangements. As a result, infrastructure insolvencies often become highly complex inter-creditor exercises involving competing recovery priorities and divergent restructuring expectations. Different creditor groups may hold: Different security rights Different enforcement strategies Different recovery assumptions Different regulatory considerations Successful resolution strategies therefore depend heavily on stakeholder coordination, commercial negotiation and carefully structured inter-creditor arrangements. Cross-Border Infrastructure Distress and Foreign Investment Issues Many infrastructure projects in India involve foreign investment, offshore financing arrangements and international dispute resolution frameworks. Distress scenarios can therefore trigger complex cross-border legal issues involving: FEMA compliance Offshore enforcement rights Bilateral investment treaty protections Multi-jurisdictional restructuring International arbitration proceedings For global investors evaluating distressed infrastructure opportunities in India, legal due diligence must extend beyond domestic insolvency considerations and address broader cross-border enforcement and regulatory risks. ESG Considerations in Distressed Infrastructure Transactions Environmental, social and governance (ESG) considerations are increasingly influencing distressed infrastructure investment decisions. Institutional investors are now evaluating sustainability exposure and governance risk alongside traditional financial metrics. Key ESG considerations frequently include: Environmental liabilities Sustainability compliance Community impact exposure Governance failures Carbon transition risk Climate resilience considerations Assets with strong ESG alignment often attract better refinancing opportunities, enhanced institutional interest and stronger long-term valuations. Renewable and sustainable infrastructure platforms remain particularly attractive within this evolving investment landscape. Litigation, Arbitration and Contingent Liability Risks Infrastructure insolvencies rarely exist in isolation. Distressed projects are frequently accompanied by ongoing disputes involving EPC contractors, concessioning authorities, regulators and financing counterparties. Resolution applicants must therefore carefully evaluate: Pending arbitration claims Regulatory proceedings Enforcement litigation Contingent liabilities Contractual termination risks Insurance-related disputes Effective dispute management has become a critical component of infrastructure restructuring and distressed asset acquisition strategy in India. Key Risks in Distressed Infrastructure Investing Despite strong acquisition opportunities, distressed infrastructure investments continue to involve substantial legal, operational and regulatory risk. Some of the most significant risks include: Regulatory uncertainty Concession instability Technology failures Environmental liabilities Legacy litigation exposure Political and policy risk Operational disruption Enforcement complexity Accordingly, comprehensive legal, technical, financial and regulatory due diligence remains indispensable in any infrastructure distress transaction. The Future of Infrastructure Restructuring in India India’s stressed infrastructure market is expected to become increasingly sophisticated over the next several years. Distressed infrastructure is now viewed as strategic investment category within India’s broader infrastructure financing ecosystem. Key trends likely to shape the market in 2026 and beyond include: Greater infrastructure platform consolidation Increased participation by institutional capital Expansion of digital infrastructure restructuring ESG-linked refinancing models Growth of private credit and rescue financing More sophisticated turnaround and restructuring strategies As India continues expanding its infrastructure footprint, financial stress and restructuring activity will remain an inevitable part of the sector’s evolution. The key differentiator will increasingly lie in how effectively stakeholders manage operational continuity, regulatory complexity, dispute exposure and long-term value creation. Conclusion Infrastructure insolvency and distressed asset restructuring have become central components of India’s infrastructure and project finance ecosystem. The combination of rapid infrastructure growth, financing sophistication, institutional investor participation and regulatory complexity continues to create both significant risk and substantial acquisition opportunity. At the same time, infrastructure distress transactions require far more than conventional insolvency expertise. Successful outcomes increasingly depend on multidisciplinary execution involving restructuring strategy, regulatory planning, operational continuity management, dispute resolution, financing coordination and ESG assessment. For lenders, investors, developers and infrastructure funds, the Indian distressed infrastructure market in 2026 represents not merely a recovery environment, but a rapidly evolving platform for long-term strategic investment and consolidation. By Atul N. Menon, Partner – King Stubb and Kasiva https://ksandk.com/people/atul-n-menon/  

New Delhi, 1st June, 2026 - King Stubb & Kasiva (KSK), one of India's fastest-growing full-service law firms, is pleased to announce the appointment of Dhruv Kaushal as Partner.  Dhruv will lead the Firm's Data Privacy Practice, further strengthening KSK's capabilities in technology law, artificial intelligence, data privacy, cybersecurity, telecommunications, and digital regulatory compliance. Dhruv joins KSK with over a decade of experience advising global corporations, technology companies, and emerging businesses on complex technology and data protection matters. Prior to joining KSK, he served as Associate Director in Deloitte India's Legal and Regulatory Practice, where he advised clients on data privacy, artificial intelligence, telecom regulations, intermediary guidelines, and other critical regulatory frameworks shaping the digital economy. A Certified Information Privacy Professional (Europe) [CIPP(E)], Dhruv has been at the forefront of India's rapidly evolving privacy landscape, advising Fortune 50 companies and leading enterprises on compliance with the Digital Personal Data Protection Act, 2023 (DPDP Act), the EU General Data Protection Regulation (GDPR), and other global privacy frameworks. Over the course of his career, Dhruv has advised more than 110 organizations on DPDP readiness and implementation, conducted over 250 privacy awareness and compliance training sessions, and guided businesses through complex data breach response scenarios across multiple jurisdictions, including India, the United Kingdom, and Europe. Commenting on the appointment, Jidesh Kumar, Managing Partner at King Stubb & Kasiva, said: "India's digital economy is entering a defining phase, driven by the implementation of the DPDP Act, the rapid adoption of artificial intelligence, and increased regulatory scrutiny across sectors. Dhruv's deep expertise in technology regulation and data privacy perfectly complements our growth strategy. His leadership will further enhance our ability to provide forward-looking, business-centric advice to clients navigating this dynamic environment." Speaking on his joining, Dhruv Kaushal said: "The intersection of technology, data, and regulation is becoming increasingly critical for businesses. KSK's entrepreneurial culture, strong pan-India presence, and commitment to innovation make it an exciting platform to build a market-leading technology and data protection practice. I look forward to working with the Firm's talented teams and helping clients navigate the opportunities and challenges of the digital economy." Dhruv’s appointment underscores KSK's continued investment in future-focused practice areas and reinforces the Firm's commitment to delivering sophisticated legal solutions for businesses operating in an increasingly technology-driven world. About King Stubb & Kasiva King Stubb & Kasiva (KSK) is a leading full-service law firm with offices across India and a strong presence across key sectors including corporate and commercial, disputes, employment, real estate, infrastructure, technology, data privacy, regulatory, and cross-border transactions. The Firm advises domestic and international clients across industries, combining legal excellence with practical business insight. For additional information, please contact: Shruti Thapa, Corporate Communications Executive, King Stubb and Kasiva Email – [email protected]  

King Stubb & Kasiva (KSK) has successfully secured an ad interim ex parte temporary injunction on behalf of its client, Clap Entertainment (represented by its Proprietor, Pedamallu Chiranjeevi), before the Hon'ble CCH8 XI Additional City Civil and Sessions Judge, Bengaluru, in a significant matter concerning protection against defamatory and malicious content relating to the upcoming film Jetlee (Case No. O.S./0003098/2026, CNR No. KABC010121302026). The Hon'ble Court, after hearing the Plaintiff and carefully perusing the pleadings and documents on record, was pleased to grant an ad interim ex parte temporary injunction restraining the defendants, including X Corp and other platforms, from publishing, circulating, sharing, hosting, streaming, or in any other manner communicating any false, defamatory, derogatory, malicious, unverified or harmful content, including challenging feedback, trolling, false narratives, personal attacks, reaction videos, community polls, boycott campaigns or similar material - relating to the Plaintiff's film Jetlee. The Court further directed the defendants to de-index, de-reference and render non-searchable all existing defamatory content and any substantially similar future links/URLs across search engines and internal platform searches, thereby ensuring the permanent suppression of such material. The defendants were additionally directed to block defamatory or orchestrated negative responses and manipulated ratings on social media platforms, websites, and movie booking/rating portals, and were restrained from exploiting any photographs, clips, or footage from the film for defamatory, malicious or similar improper purposes. The Court observed that the Plaintiff had established a prima facie case, that the balance of convenience lay in its favour, and that in the absence of interim protection, the Plaintiff would suffer irreparable harm - thereby justifying the grant of urgent relief. The Court further directed the Plaintiff to comply with the provisions of Order XXXIX Rule 3(a) of the CPC. This order reinforces the critical need to protect creative works, particularly in the digital ecosystem, from orchestrated rating manipulation, artificial bulk-based ticket feedback, coordinated down-ranking campaigns, and other activities intended to distort, diminish, or misrepresent the public perception and reception of a film prior to its release. The KSK Team The matter was led and argued by Mr. Navod Prasannan (Partner), who helmed the proceedings on behalf of the Plaintiff. The KSK team advising on the matter comprised: Navod Prasannan (Partner) Rahul Mehta (Partner) Arpit Choudhury (Partner) Krunal Mehta (Associate Partner) Mehak Chaichani (Associate) Akalya Ravichandran (Associate) Karen Koya (Associate) This order marks an important milestone in safeguarding the creative and commercial interests of film producers and distributors against the growing menace of coordinated digital defamation campaigns. The matter is next listed before the Hon'ble Court on 07-08-2026 for return of summons issued to defendants For media inquiries, please contact: King Stubb & Kasiva | Advocates & Attorneys www.ksandk.com

King Stubb & Kasiva (KSK) is pleased to announce a positive development in the personality rights suit filed on behalf of Shri Pawan Kalyan, Hon’ble Deputy Chief Minister of Andhra Pradesh and celebrated actor. On December 12, 2025, the Delhi High Court, presided over by Justice Manmeet Pritam Singh Arora, directed major social media intermediaries, Meta, Google and X, to examine and act on complaints relating to unauthorised commercial use of Shri Kalyan’s persona within one week, and to communicate any reservations they may have directly to him. The matter has been listed for further consideration on December 22, 2025. The suit underscores the growing importance of safeguarding personality rights in a rapidly expanding digital landscape. The Court’s directions reflect an encouraging emphasis on accountability and responsible content management across online platforms, helping to ensure meaningful protection of an individual’s name, likeness and identity. King Stubb & Kasiva welcomes the Court’s proactive stance and remains committed to advancing the protection of personality rights and digital identities for public figures and private individuals alike. The firm remains committed to championing personality rights and safeguarding digital identities for public figures and private individuals, as part of its broader focus on technology law, digital rights, and intellectual property protection.   For media enquiries, please contact: Shruti Thapa Contact No – 9101333234, [email protected] For more information visit https://ksandk.com/contact-us/ / [email protected]

Bengaluru, March 18, 2026: King Stubb & Kasiva (KSK) has successfully secured an ex parte interim injunction on behalf of its client, Mythri Movie Makers, before the Hon’ble City Civil and Sessions Court, Bengaluru, in a significant matter concerning protection against defamatory and malicious content relating to the upcoming film Ustaad Bhagat Singh. The Hon’ble Court, after hearing the Plaintiff and perusing the pleadings and documents on record, was pleased to grant an ex parte temporary injunction restraining the defendants, including X Corp, YouTube LLC, Google India Private Limited, BigTree Entertainment Pvt Ltd, IMDb.com Inc., and Meta Platforms Inc., from telecasting, transmitting, publishing, or distributing any false, malicious, defamatory, or derogatory content concerning the film. The Court observed that the Plaintiff had established a prima facie case, and that the balance of convenience lay in its favour. It further held that in the absence of interim protection, the Plaintiff would suffer irreparable harm, thereby justifying urgent relief. The Court also recognized the applicability of “John Doe” principles against unknown parties, reinforcing the Plaintiff’s right to safeguard its interests against anonymous or unidentified actors. The matter was argued by Mr. Navod Prasannan (Partner), who led the proceedings on behalf of the Plaintiff. The KSK team advising on the matter comprised Mr. Navod Prasannan (Partner), Mr. Rahul Mehta (Partner), Mr. Arpit Choudhury (Partner), Mr. Atul Menon (Partner), Mr. Krunal Mehta (Associate Partner), Mr. Naren Shetty (Senior Associate), Ms. Mehak Chaichani (Associate), and Ms. Akalya Ravichandran (Associate). This order marks an important step in protecting creative works from premature and potentially damaging content dissemination, particularly in the digital ecosystem. The matter is next listed for further hearing on April 27, 2026.

New Delhi, February 25, 2026: King Stubb & Kasiva (KSK) successfully represented Hamdard (Wakf) Laboratories before the Supreme Court of India in a significant VAT classification dispute concerning its flagship product, Sharbat Rooh Afza, under the Uttar Pradesh Value Added Tax Act, 2008. In a reportable judgment (2026 INSC 195), a Bench comprising Hon’ble Justices B.V. Nagarathna and R. Mahadevan set aside the decision of the Allahabad High Court and held that Rooh Afza is classifiable as a “fruit drink” under Entry 103 of Schedule II (Part A), attracting VAT at the concessional rate of 4% instead of 12.5% under the residuary entry for the period 2008-2012. The Court ruled that regulatory or licensing classification cannot control or curtail the interpretation of a fiscal entry. It further held that the Revenue has failed to discharge further held that the burden lies on the Revenue to justify classification under a residuary entry, which was not discharged in the present case. Lastly, the Court held that resort to the residuary entry is impermissible where classification under a specific entry is reasonably and sustainably possible. Senior Advocate Arvind Datar appeared for Hamdard, briefed by the KSK team comprising Aditya Bhattacharya (Partner), Vipin Upadhyay (Partner), Simran Tandon (Associate Partner), Ritwik Tyagi (Associate), and Akriti Sharma (Associate). The ruling is an important precedent on VAT/GST classification of traditional beverage concentrates and limits on the use of residuary entries by tax authorities. About King Stubb & Kasiva (KSK) King Stubb & Kasiva is a full-service Indian law firm with a pan-India presence and a team of over 200 legal professionals. The firm advises multinational corporations, financial institutions, government bodies, and emerging businesses across key practice areas including corporate and M&A, dispute resolution, taxation, intellectual property, regulatory, media and entertainment, employment and technology laws.

New Delhi, February 25, 2026: King Stubb & Kasiva (KSK) successfully represented Hamdard (Wakf) Laboratories before the Supreme Court of India in a significant VAT classification dispute concerning its flagship product, Sharbat Rooh Afza, under the Uttar Pradesh Value Added Tax Act, 2008. In a reportable judgment (2026 INSC 195), a Bench comprising Hon’ble Justices B.V. Nagarathna and R. Mahadevan set aside the decision of the Allahabad High Court and held that Rooh Afza is classifiable as a “fruit drink” under Entry 103 of Schedule II (Part A), attracting VAT at the concessional rate of 4% instead of 12.5% under the residuary entry for the period 2008–2012. The Court ruled that regulatory or licensing classification cannot control or curtail the interpretation of a fiscal entry. It further held that the Revenue has failed to discharge further held that the burden lies on the Revenue to justify classification under a residuary entry, which was not discharged in the present case. Lastly, the Court held that resort to the residuary entry is impermissible where classification under a specific entry is reasonably and sustainably possible. Senior Advocate Arvind Datar appeared for Hamdard, briefed by the KSK team comprising Aditya Bhattacharya (Partner), Vipin Upadhyay (Partner), Simran Tandon (Associate Partner), Ritwik Tyagi (Associate), and Akriti Sharma (Associate). The ruling is an important precedent on VAT/GST classification of traditional beverage concentrates and limits on the use of residuary entries by tax authorities. About King Stubb & Kasiva (KSK) King Stubb & Kasiva is a full-service Indian law firm with a pan-India presence and a team of over 200 legal professionals. The firm advises multinational corporations, financial institutions, government bodies, and emerging businesses across key practice areas including corporate and M&A, dispute resolution, taxation, intellectual property, regulatory, media and entertainment, employment and technology laws.

King Stubb & Kasiva has appointed Abhishek Paliwal as a Partner in its Corporate practice, further strengthening the Firm’s capabilities across M&A, capital markets, corporate governance, and regulatory advisory. Abhishek brings with him over 12 years of experience in corporate and capital markets law, with deep expertise in SEBI regulations, Companies Act, FEMA advisory, IPOs, corporate governance, and compliance advisory. He has advised listed companies, startups, capital market intermediaries, and multinational corporations on complex regulatory and transactional matters. Prior to joining King Stubb & Kasiva, Abhishek, he was a Practice Head at law firms and was a member of the Brand Building Committee of the Institute of Company Secretaries of India (ICSI). Commenting on Abhishek’s joining, Mr. Jidesh Kumar, Managing Partner, King Stubb & Kasiva, said: “Abhishek’s induction as Partner reflects our focus on strengthening key practice areas. His experience in corporate, capital markets, and regulatory advisory will further solidify our corporate practice and will add significant value to our corporate and transactional practice. Abhishek Paliwal added: “I am pleased to join King Stubb & Kasiva and be part of a Firm that has built a strong reputation across corporate and regulatory advisory. I look forward to working closely with the team to support clients on their corporate, governance, and compliance requirements.”

King Stubb & Kasiva has appointed Atul N Menon as a Partner in its Litigation and Dispute Resolution practice. Atul joins the Firm after being a Partner at SAGA Legal, and prior to that, he was Counsel at AZB & Partners, where he advised and represented clients in complex commercial and regulatory disputes. He holds a B.A. LL.B. (Hons.) from the National University of Advanced Legal Studies (NUALS), Kochi, and an LL.M. in International Dispute Resolution  from Queen Mary University of London. With over 13 years of experience, Atul has represented clients before the Supreme Court of India, several High Courts, and key regulatory and investigative forums, advising on a wide range of white-collar, financial, and audit-related criminal matters, in addition to arbitrations, civil suits, and shareholder disputes. He has advised and represented leading Indian and multinational corporations in high-stakes criminal investigations involving white-collar offences, financial irregularities, and auditing issues, appearing before courts as well as enforcement and investigation agencies. As a key member of litigation teams, Atul has been involved in some of the country’s most high-profile and transformative litigations, with notable successes in insider trading cases, money laundering investigations, and proceedings under foreign exchange laws. His experience also includes representing Chartered Accountants and Company Secretaries in sensitive regulatory and criminal matters. He has also acted for banks and financial institutions in recovery proceedings and has advised corporates on oppression and mismanagement, mergers, capital reductions, and restructuring matters. He also serves on the Advisory Council of the Indian Society of Artificial Intelligence and Law and is a member of the youth wings of leading international arbitration institutions, including YIAG, YICCA, and YMCIA. His work has been recognised through his inclusion in BW LegalWorld’s “40 Under 40” list of legal elites (2024) and his recognition as a “Future Star” for White-Collar Crime by Benchmark Litigation (2025). Commenting on Atul’s joining, Mr. Jidesh Kumar, Managing Partner of King Stubb & Kasiva, said: “We are delighted to welcome Atul to the partnership. His sharp litigation acumen, deep expertise in white-collar and regulatory matters, and extensive experience across courts and investigative forums bring immense value to our clients. At KSK, we continue to strengthen a future-ready disputes practice capable of handling complex, high-stakes, and evolving legal challenges.” Atul added, “I am pleased to join King Stubb & Kasiva at an important inflection point in the Firm’s growth. KSK’s strong credentials in complex litigation, white-collar, and regulatory matters, coupled with its progressive and collaborative culture, make it a compelling platform. I look forward to working with the team to further strengthen the disputes practice and to advising clients on high-stakes, strategically critical matters.”

The Delhi High Court has granted ex parte ad-interim relief in favour of Akira Desai alias Akira Nandan, restraining the unauthorised AI-generated misuse of his identity and infringement of his personality, publicity and privacy rights. The suit challenged large-scale creation and circulation of AI-generated and deepfake content, including fake accounts and misleading posts across digital platforms, falsely portraying the plaintiff as being associated with various cinematic and commercial projects. This included a full-length AI-generated film depicting him as a lead actor, resulting in public deception and unauthorised commercial exploitation. By an order dated January 23, 2026, Justice Tushar Rao Gedela restrained the defendants and unidentified John Doe parties from creating, publishing or disseminating the impugned AI-generated film “AI LOVE STORY (Telugu) 4K”, or from using the plaintiff’s name, image, likeness, voice or other personality attributes through AI, generative AI, machine learning or deepfake technologies. The Court also directed the immediate takedown of infringing links. The Court observed that the creation of an AI-generated film itself demonstrated the commercial value of the plaintiff’s identity, and that continued circulation would cause irreparable harm. The Court further directed Meta Platforms Inc. to notify users responsible for the infringing URLs within 72 hours, failing which the content was to be removed, and to disclose BSI and IP login details of the account holders within three weeks. The Court relied on DM Entertainment Pvt. Ltd. v. Baby Gift House & Ors. and a recent order in Ranganathan Madhawan v. G Filmz Studioz & Ors. Senior Advocate J. Sai Deepak was briefed by advocates Himanshu Deora (Partner), Rahul Mehta (Partner), Arpit Choudhary (Partner), Krunal Mehta, Karen Koya, Dhwani Vora, B. Sidhi Pramodh Rayudu, Anupriya Alok, Shambhavi Sharma, Sanat Saswadkar, Shambhavi Bharadwaj and Divya Bhushan, of King Stubb & Kasiva (KSK).

In CS (COMM) 1113/2025, the Delhi High Court has granted an interim injunction in favour of Allcargo Logistics Limited, restraining the defendants from using the mark “VRS ALLCARGO” or any other mark deceptively similar to “ALLCARGO” in relation to logistics and allied services King Stubb & Kasiva (KSK), through its Intellectual Property practice led by Himanshu Deora, Partner - IP, has successfully represented Allcargo Logistics Limited, a leading Indian multinational logistics company, in a significant trademark enforcement matter before the Delhi High Court, securing robust judicial protection for the globally recognised ALLCARGO brand. Founded in India and operating across 180 jurisdictions worldwide, Allcargo has emerged as a global logistics powerhouse, delivering integrated supply chain solutions spanning multimodal transport, contract logistics, express distribution, and logistics infrastructure. The ALLCARGO brand has, over decades, come to represent scale, reliability, and trust in the international logistics ecosystem. The Delhi High Court recognised the long-standing reputation, extensive use, and goodwill associated with the ALLCARGO mark and restrained the unauthorised use of deceptively similar marks by infringing entities, reinforcing the importance of strong trademark enforcement for Indian companies with global operations. The matter was argued by Ms. Swathi Sukumar, Senior Advocate, Delhi High Court, with Himanshu Deora and KSK’s Intellectual Property team playing a pivotal role in developing the enforcement strategy, managing filings, and steering the litigation to a successful outcome.

King Stubb & Kasiva (KSK) is pleased to share a significant tax litigation update arising from proceedings involving Miles Education Pvt. Ltd. before the Hon’ble High Court of Telangana. In its order, the Court issued important directions to the investigating authorities, underscoring that inquiries must be conducted strictly during working hours, statements must be recorded voluntarily, and established judicial safeguards must be adhered to at all times. In a subsequent proceeding, the Court further emphasised the need for discretion during investigations, particularly to ensure protection of client confidentiality. These orders reaffirm the judiciary’s continued focus on procedural fairness, protection of individual rights, and responsible conduct by regulatory authorities. The observations serve as a timely reminder that investigative powers must be exercised within the bounds of law and due process. KSK welcomes the Court’s intervention and remains committed to safeguarding constitutional and procedural protections in regulatory and enforcement proceedings. The matters were handled by KSK’s team comprising Vipin Upadhyay - Partner, K. Vidya – Partner Designate, and Sai Charan B. V. N – Principal Associate who briefed Senior Advocate Avinash Desai in both writ petitions.

King Stubb & Kasiva (KSK) is pleased to announce that the firm served as the lead counsel for IGT Solutions, an EQT Group portfolio company renowned for its digital and data-driven transformation solutions, in its acquisition of Yexle Limited, a UK-headquartered IT services company with operations across the United States, India, and Australia. Yexle specialises exclusively in the design, development, and delivery of digital solutions built on the Appian low-code automation platform. This cross-border transaction strengthens IGT Solutions’ technology services capabilities and reinforces its strategic focus on expanding expertise in automation-led digital transformation. The transaction was led by KSK’s Senior Partner Rajesh Sivaswamy and Associate Partner Surbhi Kapoor, who acted as lead counsel, supported by Udita Arya, Ashok Neelakandhan, Akriti Sharma, Mona Rawat, and Hariom Bajpai. Their combined expertise ensured the seamless execution of this complex, multi-jurisdictional acquisition. This successful outcome was further enabled by the dedicated support of Yogeshwar Dutt (Senior Vice President & Head - Corporate Development at IGT Solutions), Radha Papinani (GGC at IGT Solutions), and Megha Grewal (Senior Legal Counsel at IGT Solutions).

King Stubb & Kasiva is extremely proud to announce the addition of two distinguished legal professionals, Adnan Siddiqui and Nivedita Bhardwaj, as Partners. Their wealth of expertise and versatile experience shall immensely enhance KSK's Real Estate and Corporate Practices. Adnan Siddiqui – Partner, Real Estate Practice: Adnan Siddiqui joins KSK with expertise in advising startup firms, manufacturing units, and leading real estate developers. His well-rounded portfolio includes contributions to the World Health Organization (WHO) Development Program, where he was instrumental in shaping amendments to the Motor Vehicle Act and enhancing road safety measures in the country. Adnan’s proficiency also extends to real estate litigation and IT laws, making him a versatile asset to the firm. His legal acumen promises to further strengthen KSK's Real Estate Practice. Nivedita Bhardwaj – Partner, Corporate Practice Nivedita Bhardwaj joins KSK as a Corporate Partner, bringing with her a distinguished track record in venture capital and private equity transactions, mergers and acquisitions, and general corporate commercial practice matters. Advising clients across industries including fintech, e-commerce, FMCG, and gaming, Nivedita is well-positioned to contribute transformative strategies to KSK's Corporate Practice. The addition of Adnan Siddiqui and Nivedita Bhardwaj to KSK’s team marks yet another significant milestone in our journey toward enhancing our service offerings. Our newest Partners’ arrival reinforces our commitment to delivering tailored and impactful legal solutions, ensuring clients benefit from a blend of deep expertise.