Cyber Law, commonly known as IT Law, is the legal framework governing information technology, such as computers and the internet. It regulates the digital circulation of information, software, information security, and e-commerce and is connected to legal informatics. IT law encompasses components of contract, intellectual property, privacy, and data protection laws rather than being a separate field of law.

'E-commerce' is defined by the Organization for Economic Cooperation and Development (OECD) as a new form of doing business that occurs across networks that employ non-proprietary protocols developed through an open standard-setting process such as the Internet. 'E-commerce,' as defined by the FDI Policy[1], includes both digital and physical items as well as services transacted via digital and electronic networks.

E-commerce, to put it more simply, is the practice of conducting business online rather than through traditional physical channels. This includes all retail activities conducted over the internet such as purchasing goods, availing services, delivery, payment facilitation as well as supply chain and services management. Any type of transaction that takes place through the internet is referred to as e-commerce.

Cyber Law & E-Commerce

In recent years, the internet's significance in our lives has grown at an extraordinarily rapid pace. Our digital presence online has increased as have our activities with a majority of commercial transactions (buying, selling) taking place daily. New data shows that as of 2021, there are at least 2.41 billion shoppers online. E-commerce is an industry that's expanding so quickly that it's expected to make up a whopping 22.0 per cent of retail sales worldwide by 2023.

This solidifies the internet’s presence today as a vast and sprawling marketplace where people are buying and selling products in enormous numbers every day. Buying via the internet can take the form of direct purchases or purchases made through affiliates or agents. Selling on the internet might take the form of selling on your website, auction sites, or social networking sites. In terms of business technology, the expansion of E-commerce has established a platform for the buying and selling of products and services, as well as driving critical business operations within the organisation.[2]

Copyright concerns, data protection issues, and completions issues are all inherent to e-commerce. Firstly, one of the most important issues for any organization engaging in an e-contract or e-business, which includes e-commerce transactions, are intellectual property rights. Because the Internet is so immense, complicated to regulate and has such few rules addressing protection and safety, IPR (Intellectual Property Rights) protection is a major concern and a challenge in e-business.

Second, it is quite impossible to conduct an e-commerce transaction without gathering some type of personal information about the user, which is likewise a possible breach of their privacy.

Cyber Crime & E-Commerce

As evidenced above, e-commerce is not going anywhere soon. However, it’s also an industry that is extremely vulnerable to cybercrime, which is expanding as swiftly as e-commerce. Cybercrime, to put it another way, is the use of computer resources to engage in unauthorised or unlawful activities. Vast amounts of money and information are exchanged through e-commerce platforms daily and require heavy protection since consumer information is critical to the success of organizations.[3] Criminals exchange valuable stolen financial information from millions of unwitting internet users in the online black market or deploy malware or malicious software to target computer systems, gaining control of the machine and access to sensitive information stored on it without the users' knowledge.

Regulatory Framework For E-Commerce In India: Information Technology Act, 2000 (IT Act)

The Information Technology Act of 2000 was the first e-commerce law enacted by the Indian government. The primary objective of this law was to give effect to the UNCITRAL Model Law on Electronic Commerce, which was published in 1996.[4]

The core objective of this Act was to give legal legitimacy to transactions made over the internet and to allow for the transmission of electronic data through electronic methods of communication (e-commerce). The Act establishes a regulatory framework and specifies penalties for cybercrime and other offences. It allows the Centre to block public access to an intermediary in the interest of sovereignty and integrity of India, defence of India, security of the State.[5]

The Information Technology (Reasonable security practises and procedures and sensitive personal data or information) Rules, 2011[6], apply to e-commerce firms. Under the IT Act, the Intermediary Rules 2011[7] will control intermediary websites and the material they publish. The IT Act also tackles the key security challenges that are so vital to the success of electronic transactions.

The IT Act 2000 has triggered amendments to existing acts to include IT offence-related provisions. Below is the list of other main Acts which are amended by the IT Act:

Other Amendments Regarding Cyber Law & Consumer Law in Indian E-Commerce Legislation:


Distinct kinds of purposes are included in cyber legislation. Some laws regulate how companies can use internet technology to run their businesses, while others prevent people from becoming victims of crime as a result of unethical online actions.

Cybercrime has surged exponentially over the last decade. As we swerve toward a more digitalised era, there remains a dire need to come up with even more ironclad cybersecurity laws as more and more consumers turn towards the internet for unique commercial solutions.

The e-commerce business has experienced significant development over the years, prompting the creation of a regulatory framework that preserves internet safety and enhance the e-commerce sector as well as existing legal infrastructure. There have been several concerns expressed about India's lacking cybersecurity regulations, and the lack of a supervisory framework as one of the reasons why the e-commerce industry in India suffers from so many obstacles rather than offering a consumer-friendly and business-friendly environment.

The government should enhance its legislative framework to encourage both internal and foreign trade in India to flourish while also preventing fraud, consumer protection difficulties, privacy concerns, intellectual property rights concerns, and other challenges. This measured step towards guiding businesses, customers, and even the courts in a way that allows the rapidly growing trend of e-commerce to develop in a secure and consumer-friendly environment.

Contributed by Priyanka Barik, Corporate Associate and Legal Intern, D. Sumnath

King Stubb & Kasiva,
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DISCLAIMER: The article is intended for general guidance purposes only and is not intended to constitute, and should not be taken as legal advice. The readers are advised to consult competent professionals in their own judgment before acting on the basis of any information provided hereby.

DISCLAIMER: The article is intended for general guidance purposes only and is not intended to constitute, and should not be taken as legal advice. The readers are advised to consult competent professionals in their own judgment before acting on the basis of any information provided hereby.

RBI Allows Loan Restructuring: Relief to Stressed Borrowers during COVID 19

The Reserve Bank of India (“RBI”) in order to curb the effect of COVID-19 over the economy, has introduced a Resolution Framework (“Resolution”) for dealing with the stressed assets during the pandemic. It is important to assess the stress induced by the pandemic as it can hamper the ability of the borrowers to repay the loans. Therefore, RBI on August 6, 2020[1]  announced a one-time special window for lenders in order to restructure the current loans, which will further allow them to change repayment terms for their borrowers who have been hit by the COVID-19 lockdown. The intention behind bringing out the Resolution is to help borrowers who are dealing with the liquidity and repayment issues due to the pandemic.

Loan Re-Structuring

Restructuring of loans means when a moneylender alters the terms of credit in order to help the borrower when its facing financial distress. This is generally done to avoid the loan being classified as a Non-Performing Assets (“NPA”) and the borrower further being considered as a defaulter. An NPA classification brings with it the requirement for lenders to set aside some amount of funds in lieu of potential losses going forward in order to increase the “risk weighting” of that particular loan given to the borrower.

However, it has always been the concern of the lenders because NPAs are a drag on the resources of the lenders as they lose out on interests over such assets. Therefore, generally in a loan approval process, banks or lenders investigate their borrowers during the application process to know their creditworthiness and expect the borrower to periodically submit updates and reports in order to keep a check. Further, a loan whose interest and/or instalment of the principal have remained overdue for a period of 90 days is considered as an NPA.

However, due to the pandemic, the gross NPA ratio of banks increased from 8.5% to 12.5% following the sharp slowdown in the economic conditions in the country.

Since extraordinary times calls for extraordinary solutions, therefore, a first-of-its-kind one-time restructuring framework, for both personal as well as corporate loans, was introduced. The restructuring process would happen without classifying these accounts as NPAs which will be a relief to both the stressed borrower as well as the lender. Further, this framework will be available till December 31st, 2020 and must be implemented within 90 days of invocation.

Furthermore, restructuring of the terms of a loan would include rescheduling the repayment time period for the loans, lowering the interest rate, amending the repayable amount, changing the number of instalments required for the repayment of the loans, converting interests accrued into another credit facility, etc.

Eligibility Criteria

The facility of loan restructuring is only available to businesses or individuals who are suffering the COVID-induced stress. Further, only those borrower’s accounts which are not in default for more than 30 days with the lending institution as on March 1st, 2020 are eligible for the loan restructuring. Moreover, the following entities would not be included:

  1. As on March 1, 2020, the MSME borrowers whose aggregate exposure to lending institutions collectively is ₹25cr or less
  2. Loans given to the Central and State Governments, local Government bodies, Primary Agricultural Credit Societies (PACS) or Farmers' Service Societies (FSS)
  3. Loans granted by lenders to their own personnel or staff; and

Further, it is very important to note that the loans taken from non-banking organisations are also included in the Resolution framework’s ambit. Therefore, organisations whose loans are eligible for resolution would include all Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks), all Primary (Urban) Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks, all All-India Financial Institutions, all Non-Banking Financial Companies (including HFCs).

Restructuring Of Corporate Loans

Corporate restructuring could be done by converting the debt into equity or other marketable security instruments, or non-convertible debt securities issued by the borrower. During the 30 days time period for invocation of the restructuring facility, an Inter-Creditor Agreement (“ICA”) would have to be signed with the concerned corporate entity. Once a borrower avails this scheme, the RBI has prescribed a clear monitoring period till the day the borrower repays at least 10% of residual debt.

Restructuring Of Personal Loans

For personal loans, lenders would be allowed a maximum of 90 days to implement the resolution plan. If they do not abide by the prescribed timeline then they will not get any benefit under the restructuring scheme and will have to declare the loan as an NPA.

Restructuring Of MSMEs Debt

Further regarding the MSMEs, a restructuring framework has been already provided that were in default but would be considered as ‘standard’ as on January 1, 2020, subject to the restructuring being implemented up to December 31, 2020. The scheme has provided relief to a large number of MSMEs. However, the stressed assets[2]  in the MSME sector have increased due to the economic fallout because of the pandemic.

However, due to the requirement of strong support to the MSMEs, the pandemic, lending institutions may restructure the debt under the existing framework, provided the borrower’s account was classified as standard with the lender as on March 1, 2020. Further, this restructuring shall be implemented by March 31, 2021.[3] 


It is understandable why RBI has been hesitant regarding the implementation of the Resolution Framework during this time. Earlier when such levy was provided amidst the 2008 global economic crisis, the corporates and the lending institutions misused the opportunity to pool in a big number of NPAs, which lead to a severe downfall in the economy, pursuant to which the RBI had to tighten the regulations in 2015. However, the regulator now does not want to undo several years’ gains from its NPA clean-up efforts by diving straight back into the very cause for it.

As the apex regulator, RBI’s primary concern currently is to maintain the financial health of the economy. This pandemic threatens that. However, on one hand, it is a welcome step since borrowers struggling with decreased cash flow will now have more time for the repayment of the debts. Further, a six month break on the loan repayment may act like temporary solution, but it will certainly not make the problem go away. Whether it comes in the form of one-time restructuring or another financial package, a more structural solution is the need of the hour.




Contributed by - Priyanka Barik

King Stubb & Kasiva,
Advocates & Attorneys

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Insider Trading During COVID 19: Opportunity Amidst a Crisis

The novel coronavirus is moulding the securities market in unique and unprecedented ways. Currently, the corporate world is facing financial upheaval. In this time of economic uncertainty, opportunity and intention to engage in COVID-19-related insider trading has increased significantly. It poses as a profitable opportunity for traders, especially those who have insights into the impact of the prevailing state of affairs in listed companies.

Such information about key performance standards, like financial transactions, business disruptions, material contracts, mergers or acquisitions, etc., would allow an individual who is an avid part of such setup to foresee and anticipate unexpected benefits and hence plan their trading and make allocation decisions efficient.  This, in turn, will impact the investors in general who are unaware of any such developments in the market at large.

Though SEBI has recently come out with a series of relaxations on filing requirements by listed companies in light of the COVID-19 pandemic, it would be interesting to witness how the industry copes up with the strict contours of trading restrictions under the latest insider trading regime[1].

The existence of a fair, vibrant and efficient securities market is one of the essential ingredients for the economic growth of a country. To instil confidence, trust and integrity in the securities market, the market regulator needs to ensure fair market conduct and it can be ensured by prohibiting, preventing, detecting and punishing such market conduct which leads to ‘market abuse’.

Market abuse is generally understood to include market manipulation and insider trading, as such an activity which erodes investor confidence and impairs economic growth. Therefore, it is of utmost importance to have certain regulations governing the security market in order to ensure that no person gets undue profits from trading on some price-sensitive inside information of the company which has not been put into the public domain.

After the recent amendment, the SEBI (Prevention of Insider Trading) Regulations, 2015[2]  (“PIT Regulations”) was introduced to curb the peril of insider trading in India. The motive behind this is to provide a fair chance to all the investors regarding the market and its functionaries.

The primary objective of PTI Regulations is to prohibit the trading in the listed securities of a company based on its Unpublished Price Sensitive Information (“UPSI”) by those persons who are aware of the internal workings of the company, also known as “insiders”, and ensuring adequate disclosures in the market place of price sensitive information of the company and its securities.

In order to achieve such objectives, the concept of trading window norms was introduced in the code in respect of employees or connected persons or designated person and their immediate relatives, in the organization. The trading window is to be closed when such related or designated persons can reasonably be expected to possess unpublished price sensitive information. During such a closure period, no trading shall be permitted by such persons.

In accordance with the circular issued by SEBI dated June 30, 2020[3], the financial results were extended till July 31, 2020, in order to provide relaxations from the compliance requirements during Covid-19. Therefore, the problem is further aggravated by the fact that the trading window closures will be automatically get delayed for another two months unless those are specifically exempted by the regulators. Many companies would take advantage of the SEBI’s decision of extension of filling of compliances as their corporate insiders likely will have access to crucial business information and the ability to trade on such material corporate information for an extended time before that information is made available to investors.

Further, company insiders are likely to have non-public price sensitive information not only regarding how COVID-19 might impact their own companies’ financials but also regarding how the pandemic might impact other entities, including customers, vendors, merchants and other third parties with which their companies interact on a regular basis. Considering the severe impact that COVID-19 has had on virtually all industries, much of the price-sensitive information regarding its impact is likely to be material. Together, these factors create unique and unprecedented opportunities for insider trading.

In India, insider trading is a strict liability offence and the PIT Regulations prohibit selective communication of any UPSI and also penalize trading whilst in possession of such information. In furtherance to avoid such a situation, SEBI has adjured listed companies to formulate a code of conduct, blackout periods, pre-clearance mechanisms wherein any person having access to such data, and using it for profits or improper gains could be penalized. This will facilitate SEBI to keep a check on the market activities and in the protection of their financial and other sensitive information.

In recent years, the security market watchdog has also stepped up enforcement and investigations, using technology to enhance surveillance of what is often a difficult transgression to clamp down on. However, Covid-19 will undoubtedly pose unique challenges to the security market watchdog on this front. Although the listed companies are required to make disclosures of material events leading to any such situation of insider trading, it will be a practical challenge to quantify or meaningfully articulate the potential impact of such a dynamic crisis on shareholders.

Finally, the Security market regulators took all these crucial factors into consideration and an amendment vide circular No. SEBI/LAD-NRO/GN/2020/23[4] was brought under Regulation 3 of the PIT Regulations.  The regulation deals with the communication or procurement of price-sensitive information in which sub-section 5 was substituted with regulations including maintaining a structured digital database containing the nature of unpublished price sensitive information and the names of persons who have shared such crucial internal information.

Also, there are certain relaxations provided to the stakeholders through the automation of the process of filing disclosures to stock exchanges, restriction on the trading window not to be made applicable for transactions as prescribed by SEBI. Entities are required to file the non-compliances of code of conduct with the stock exchanges and amounts if any collected for such non-compliances shall be credited to the Investor Protection Education Fund administered by the Board as per the SEBI PIT Regulations.

Since the pandemic and the measures to combat it are evolving rapidly, the plausibility of investor’s communication and investments will naturally be hampered. Consequently, the assessment of whether any information actually comprises of "price sensitivity" or not, can never be a technical one. When it comes to the personal trades of the directors, key managerial personnel, or promoters trading in the company’s stocks, have to ensure they abide by the code of conduct of the company.

However, the code of conduct shall stipulate the sanctions and disciplinary actions, including a wage freeze, suspension, recovery, etc., that may be imposed, by the listed company required to formulate a code of conduct under sub-regulation (1) of regulation 9 of the Act, for the contravention of the code of conduct.

Risk in work from home set up

The concept of working from home and remote workforces is not a contemporary concept, it has always been there. However, with the unforeseen circumstances of Covid-19, wherein most of the organizations are suddenly forced to practice this work from home culture, this has certainly opened doors for the increased possibility of a hike in information leakages and breaches targeting business arena.

Now that Board meetings have gone digital due to the current pandemic, incidental persons like IT professionals involved indirectly in such meetings, are considered to be in possession of any price-sensitive information which could be discussed in such business meetings and they should be taken under the purview of the insider trading PIT regulations of SEBI. They are very much on a pedestal as they can use such information for unfair trade and gains against the public or investors in general. In such circumstances, the possibility of "accidental" tipping is bound to arise, since the work from home environment will naturally create headroom for information leakage and questionable employee conduct.

The security market regulator should come up with additional stringent guidelines, which will regulate these individuals who receive such price sensitive information of a company’s business transactions which can affect the investor’s interest in the market in general.

In an effort to stroll the tide of the pandemic and soften its impact, the government has taken appropriate measures and has issued orders placing restrictions on and providing relief for businesses and individuals. Altogether, these restrictions and relief actions have increased significantly both the opportunity and motive for individuals to trade on material non-public corporate information, thereby heightening the risk that companies might require to subject themselves to government investigations or SEBI enforcement actions related to COVID-19 insider trading.

Keeping a check on Insider Trading during COVID 19

The corporates in order to protect themselves from the threat of SEBI investigation for insider trading or any enforcement action should take all kind of precautionary measures such as evaluating their internal controls and revising the insider trading policies of the organization, and ensure that these policies are clearly demarcating the prohibition of trading on material price sensitive information, and adequately addressing the increasing possible opportunities for such trading that might have been created due to the pandemic. This would require corporates to revise their other supplemental policies in light of their current business practices.

Not only revising policies but also, the companies must ensure that the employees’ are aware and abiding by such policies strictly. Further, companies should consider disseminating to their workforce clear advisory communications to remind employees of their obligation to refrain from sharing or trading on material sensitive information which are not available to the public in general and that they received through their employment in such organization.

Considering the ease with which information may be disseminated among family members in a quarantine environment, company directors, officers, and employees and all stakeholders should be reminded of the substantial risks associated with insider trading, and best practices for protecting confidential information during the quarantine.

Also, now that the security market regulator has come up with such proactive, detailed regulations, it would be interesting to witness if that would set the standards up for expected market conduct. SEBI has considered the interest of the investors as well as the stakeholders and has cut some slack over stringent insider trading rules amidst the COVID-19 condition to make it easier for companies to raise capital from the market. However, the regulator has also instructed the companies to maintain a structured record regarding all unpublished price information and details of people who have access to it.

Contributed by - Priyanka Barik

King Stubb & Kasiva,
Advocates & Attorneys

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Bombay HC Rules That Middle Seats Can be Occupied in Flights

COVID-19 pandemic has made an adverse impact on many industries but one of the most affected sectors would be the Aviation Industry. There are a lot of disruptions with regard to the bookings and cancellation of flights due to the coronavirus forced lockdowns. The Government of India (“GOI”) acting through Directorate General of Civil Aviation (“DGCA”) directed all the airline operators engaged in the schedule, non-schedule and private aircraft to suspend the operations till May 24, 2020, vide circular dated May 21, 2020.[1]

However, recently the Bombay High Court allowed airlines to operate without leaving middle seats vacant to rescue passengers stranded amidst the COVID-19 pandemic. The Supreme Court on an urgent hearing of the Special Leave Petition (“SLP”) filed by Aviation ministry, Union of India dated 25 May 2020[2], ordered Air India to keep the middle seat vacant in flights from June 06, 2020, after granting permission to operate the booked international flights till the said date with middle seats occupied as per the normal procedure.

The court opined that this direction was issued keeping in mind the health of the citizens which is a matter of greater concern in comparison to the health of commercial airlines and further asked the Bombay HC to decide on the matter again.[3] Further, Bombay HC vides its judgment dated June 15, 2020[4] allowed passengers to occupy the middle seats in flights but the passengers and the airline authorities are further directed to strictly comply with the guidelines of DGCA on measures to prevent COVID-19.

Brief Background

The impugned case was filed before the Supreme Court vide an SLP challenging an order passed by the Bombay High court dated May 22, 2020 [5]. Bombay HC had demanded a response from the airlines on a plea claiming that they have violated the guidelines issued by the Directorate General of Civil Aviation (“DGCA”) dated March 23, 2020[6](“Circular”). The Circular mandated the middle seat between 2 passengers to be left vacant in compliance with the social distancing norms for international flights.

The petition was originally filed by an Air Indian Pilot, Deven Y Kanani. However, the respondents contented to the Bombay HC, that the Circular was meant only for scheduled domestic flights and not for unscheduled international ones. Further, the court stated that it wasn't convinced with the argument since the entire point of issuing COVID safety guidelines was defeated. Therefore, the Hon’ble HC passed the interim order mandating to keep one seat vacant between two seats in all rescue/ relief flights across the world (“Impugned Order”)[7].

Questions of law

1. Whether the impugned order mandates indiscriminate dropping of 1/3rd persons from already scheduled flights without taking note of the precautions?

2. Whether the Hon’ble HC erred in holding that the circular dated 23.03.2020 does not apply to non-scheduled rescue/relief flights for lifting stranded passengers abroad?


It was contended that the impugned order ignores the gradual strategy of the executives who are responsible for dealing with the current issues. Due to the problems faced by Indians around the world, rescue flight operations were started, which were called as non-scheduled flights, in order to bring those stranded passengers back to India under the ‘Vande Bharat Mission’. However, it was further submitted that necessary precautions and adequate care had been taken by the airline authorities by way of standard operation procedures issued by the Ministry of Home Affairs (“MHA”) dated May 05, 2020[8] in order to rescue Indian origin residents stuck in foreign countries.

It was further contended that the central authorities published another circular on May 22, 2020, that also discussed general safety and hygiene guidelines[9], but nowhere had they mentioned anything about the mandate of keeping vacant seats between passengers whilst travelling. Therefore, after reading both the circulars together, the Bombay HC directed Air India to comply with the necessary safety standards and operating procedure, while validating the supersession of the Circular by the May 22 circular so far as domestic flights were concerned. However, in the case of International flights, non-scheduled and commercial flights, the court-mandated that the middle seats be kept vacant.

The order also gave liberty to the petitioners to amend the petition and challenge the new circular issued by the DGCA dated May 22, 2020[10].  It was also contended that the real safety procedures should be maintained through testing and quarantine and not by keeping flight seats vacant, which may give rise to procedural formalities and hinder the rapid repatriation of people to and from abroad. It was also brought to notice of the court that the standard operating procedure guidelines issued by the Ministry of Home Affairs, dated May 05, 2020[11], which amidst other requirements, had not mentioned any vacant seat requirement.

In furtherance, to that, the SC also ordered the Bombay HC to take the final decision on this matter. The Bombay HC passed the order[12] after relying on the decision of the expert committee which was requested by the court to get a clarification on the stance of whether by a mere touch of a person carrying COVID-19 virus, the virus can be transmitted to the person so touched.

The committee clarified that Covid-19 virus can be transmitted by the touch only under certain circumstances like, if a surface like clothes is infected (infection takes place when the droplets from the mouth or nose of the infected person touch that surface) and the non-infected person comes in contact with that surface and then touches his/her mouth or nose, then there is a chance that the second person might get infected.

The virus cannot be transmitted merely by touching unless the condition mentioned above is fulfilled. The committee’s reply clarified that the protective gown given to the middle seat passengers will insulate the nearby passengers even if the infected person touches a surface or comes in contact with a non-infected person. 

Keeping in mind the arguments, the Hon’ble High Court passed its order not mandating middle seats to be kept vacant. Further, the airlines are advised to keep the middle seat unoccupied, and if the same is not possible due to high passenger load, then the middle seat passengers should be provided with protective equipment like wrap-around gowns, in addition to the face mask and face shield.

Brace Yourselves: An Analytical Perception

It is understandable that the temporary suspension of all commercial activities has rendered an inevitable catastrophe on most of the industries, especially on the Aviation Industry, whose services have been stopped since the onset of lockdown in March, for checking the spread of the infection. Immense losses have been incurred as a result of shutdown in business, especially considering that the cost of maintenance of aircrafts is massive.

Also, in the present petition, it was further observed that earlier the Hon’ble Bombay HC erred in passing the impugned order without realising the cascading effect over the passengers who have been stranded in various foreign countries since long. The HC vide its order prevented Air India from operating any flight without having the middle seat vacant. However, it was bound to cause a serious problem with regard to the flights that had been already booked by the passengers. It was impossible for the authority to decide which one-third of the passengers were to be disembarked.

Furthermore, in the light of the above contentions, the current plea regarding the assurance of the passenger’s safety during the travel has averred that the urgency behind moving of the SLP on a priority basis was to ensure the protection of the thousands of people stranded within the country as well as those stranded in various other countries and were being shifted to India by Air India. The legislative intent behind the Circular issued was to disembark one-third of the passengers, so as to reduce the risk of spread of the infectious disease.

Further, it was held that primary importance must be given to the protection and health of people and not to the economic health of the airlines. Therefore, the Bombay HC in the recent judgment observed that the petitioner had failed to appreciate the fact that even if the middle seat is vacant, the person(s) at the window seat whilst getting out for going to the lavatory and thereafter returning back to his seat, is likely to touch (through his clothes) the person/s sitting on the aisle seats, and hence concluded that keeping a middle seat vacant would not be effective against the spread of COVID-19.


[2] Air India vs Deven Y. Kanani, Special Leave Petition (C) No. _ of 2020, May 25, 2020.

[3] Special Leave Petition _ of 2020, Arising from an order dated 22.05.20, passed by Hon’ble HC Judicature, Writ Petition (L) No. 3/2020.

[4] Deven Yogesh Kanani vs DGCA and Ors., AD-HOC NO. WP-LD-VC-3 OF 2020

[5] Writ Petition (L) No. 3/2020.


[7] Ibid.



[10] Ibid.


[12] AD-HOC NO. WP-LD-VC-3 OF 2020

Contributed By - Priyanka Barik
Designation - Associate

King Stubb & Kasiva,
Advocates & Attorneys

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A Sketch of Competition Law Regime Amid the COVID-19 Crisis

The outbreak of COVID-19 has impacted the businesses tremendously all across the world. It has brought economies to a standstill, pushing the world into recession. While there are certain specific sectors such as tourism, aviation, automobile, entertainment, hospitality, import-export, etc. which are severely affected, sectors dealing in essential commodities such as healthcare, pharma, telecom, FMCG& retail, etc. will benefit immensely during this time of crisis as these industries will be flooded with unprecedented demand in the market.

The link between the financial growth and competition has been predominant during the times of economic recession and therefore, businesses that are facing the wrath of the pandemic are looking for any aid available in order to survive. Though the organisations would not be having competition law on their priority list of concerns right now, any kind of unethical collaboration in the current situation would have an adverse effect on the competition in the market. However, the Competition Commission of India (“CCI”) is responsible for regulating anti-competitive practices in India.

“Coming together” in the time of COVID-19

In India, competition law aims to promote and sustain competition in markets thereby protecting the interests of consumers by preventing practices that can cause an appreciable adverse effect on competition. There has been a lot of disruptions in the supply chains, including the need for substantive production of healthcare supplies and other essential commodities/ services. In order to cope up with such extreme changes in the demand and supply pattern, businesses might require helping hands to coordinate in carrying out certain activities such as manufacturing of essential goods, fair distribution of such products, etc.

This act of “coming together” by companies might attract few eyeballs as it possesses a potential threat to the competition in the market. Though the current situation might push many companies to come together and collaborate with other competitors in order to sustain their businesses in these difficult times, the provisions of the Competition Act (“Act”) will continue to apply and the CCI will be keeping a strict check over any such practices in the market especially during the time when the supply of goods is high due to the current crisis.

The collaboration agreement between corporations for distribution, supply, production, or manufacture of essential products and services requires the intervention of CCI as market players coming together, who were initially competitors but have collaborated to meet the urgent demand for certain products. This can be an issue as it might affect the market orientation and hence can have an adverse effect on the competition in the market. The suppliers and producers should be aware of the fact that there won’t be any claim addressed against the application of competition laws, even during a pandemic.

However, as per the advisory issued by the CCI[1] dated April 19, 2020 (“Advisory”), the authority will take other factors such as accrual of benefits to consumers, improvement in production or distribution of goods and services, and promotion of technical, scientific and economic development by means of production or distribution of goods, etc.[2] into consideration at the time of competition assessment. The CCI has also notified that it will only consider those businesses which are important and proportionate to address the concerns arising from the current pandemic.

Anti-competitive arrangements

As per the Advisory, certain agreements between competitors which directly determines purchase or sale prices, limits or controls the production or supplies in the market, or share markets, source of production or provision of services by way of allotment of the geographical area of the market, type of goods or services, number of consumers in the market, etc., or rig bids are presumed to cause an appreciable adverse effect on the competition and hence are considered to be anti-competitive as per Section 3(3) of the Act. However, this presumption is not applicable to joint ventures, if such agreements are increasing efficiency in production, supply, distribution, storage, acquisition, or control of goods or provision of services.

There is a high probability that businesses that are dealing with essential commodities and are witnessing a huge demand for the products or services, and in order to earn more profits, they might indulge in cartel formation, price fixation, or limiting the production or supply of products. If such businesses are in a dominant position in the market they can end up abusing such power by over-charging for such essential products.[3] Therefore, such collaborations amongst competitors in the market should be closely monitored by the antitrust authorities as such practices are strictly prohibited under the Act and may not be justified even during the pandemic.

An economic crisis like this leads to the formation of “Crisis Cartels”. It generally refers to a cartel that was formed during a severe sectoral, national, or global economic downturn without state permission or legal sanction. However, it has also been formed in situations wherein the government has permitted the formation of such cartels during severe sectoral, economic downturns.[4]

These are some of the most challenging issues for the competition authorities, as they will have to ensure a balance between antitrust considerations and governmental objectives, such as social welfare. Certain countries like the European Union recognizes this concept in such extreme conditions.[5] However, Indian law acknowledges the concept of entering into joint ventures by competitors for certain activities, but such an alliance does not consist of the industrial collaborations; it still hasn’t explored the concept of formation of Crisis Cartels yet.

Few countries have amended their antitrust laws providing certain exemptions during this time of crisis, like in the US, the collaborations between competitors with respect to research and development, sharing of technical know-how, sharing of standards of patient management and joint purchase agreements amongst healthcare providers are considered to be pro-competitive in nature.

Similarly, in the UK, the coordination of activities between the competitors will not come under the purview of the antitrust scrutiny provided that such steps are taken in order to avoid a shortage in supply of essential commodities and contribute towards the well-being of consumers during this time of crisis. However, CCI has not provided any such exemptions in any key sectors from the perspective of anti-competitive agreements except for few relaxations in the compliance requirements.

Compliance Requirements

The fair trade regulator has issued several notices and circulars with respect to digital filling or compliances. Further, vide a public notice dated 13th April 2020[6], it allowed parties to file complaints against anti-competitive practices as per Sections 3 and 4 of the Act. It also allowed for the electronic filing of all combination notices with the CCI. Further, the notice dated 20th April 2020, provided for notification of fresh dates for all other compliances up to 03rd May 2020.[7]


Since the government has not specifically come out with any exemptions with regard to certain sectors from the purview of antitrust laws, therefore it would be interesting to note how the antitrust watchdog would be handling any such collaboration between competitors such as healthcare providers for sharing technical know-how, or supermarket dealers who might indulge in deciding prices of commodities in future, or food aggregators dealing with retailers in order to provide easy services, etc.

These collaborations will be monitored closely in the light of antitrust regulations in the country. Further, most of the essential goods such as masks, ventilators, etc. are mostly used for government procurement at this time, with players in these segments being allowed, without any fear of antitrust actions of cartel later, to collaborate with government and each other to ensure public welfare.

Since the government has a monopoly in few sectors as a sole buyer, the impact over the competition seems less and such impact is yet to be covered under the Act under the concept of buyer cartel. However, the government should come up with consolidated guidelines for businesses in order to allow certain need-based collaboration without any malaise intention in order to meet the upsurge public demands of goods and services in parlance to the pandemic.

Contributed By - Priyanka Barik
Designation - Associate

King Stubb & Kasiva,
Advocates & Attorneys

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New Delhi | Mumbai | Bangalore | Chennai | Hyderabad | Kochi
Tel: +91 11 41032969 | Email:

The Emergence of Buyer's Cartel from Competition Law Bill 2020

The much-awaited Competition Law Amendment Bill 2020[1] (“the Bill”) was drafted and put up for public comments on February 22, 2020. The bill discusses a few key points that were earlier overlooked by the legislators while framing the amended Competition Act, 2002 (“the Act”). In the Bill, they have mentioned about recognizing the buyer’s cartel formation. The Bill modifies and amends the definition of ‘trade’ as the buyer’s perspective has been included in it. Buyer’s participation in forming such an arrangement can have an adverse effect on the competition. A bare reading of the Bill reveals that it seeks much more clarity and transparency in the competition regime.


The Bill broadens the horizon of the definition of ‘cartels’ to include the practice of Buyer’s cartel. It comprises such players who influence the price associated with their purchases and try to eliminate competition from the market by getting into such collusions or by controlling the behaviour of the producers in the market. Such arrangements by buyers might lead to predatory buying, where they purchase certain products at a specific rate from a particular seller in order to flush out other competitors. Therefore, such collusive arrangements have an appreciable adverse effect over the competition in the market making these types of arrangements as anti-competitive.

The mere formation of the buyer’s group in the competition arena is different from the buyer’s cartel and are prima facie not considered as illegal. There is a thin line difference between a buyer’s group and a buyer’s cartel. Buyers’ group basically uses the combined buying power to obtain volume or desired discounts on goods and services for the purchase, use or resale whereas the only objective of the formation of a cartel is to create, allocate, associate and exploit the buyer’s power to influence the market forces and hence affect the competition. 

However, on a careful perusal of the current definition of cartel given in the Act which includes, producers, distributors, traders, or service providers, the Indian Courts find it difficult to interpret “buyers” in the same footing.

However, after the introduction and substantive expansion of the Competition Law, there have been growing awareness over the exploitation of buyer’s power, which has raised few eyeballs over the effective functioning of the in Indian markets. The Act was primarily introduced in order to provide a better mechanism to deal with the ever-increasing issues of anti-competitive practices. However, the Monopolies and Restrictive Trade Policies Act, 1969, (“MRTP Act”) was amended and substituted because it became redundant with time and had a lot of loopholes where it provided various escape routes to the enterprises to hinder the market forces.

However, there was no significant attention given to the concept of buyer’s cartel and their implications over the competition in the new amended act. The buyer’s side of the market received less focus from the legislature; rather the arrangements for any anti-competitive practices are more seller-centric. Hence, it becomes really important for the legislature to recognize such arrangements and bring in provisions that will provide a robust mechanism in order to prohibit such cartels affecting the competition in the market.


When we read the provision related to Cartels in the Act, the intention of the legislature could be inferred that it has completely focused on “Seller- oriented cartels” and avoided the prospect of buyers forming a cartel. The Act defines a cartel as an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit control or attempt to control the production, distribution, sale, or price of, or, trade in goods or provision of services. This definition limits its scope to other emerging possibility of a cartel being formed by buyers.

There are various avenues where the Competition Commission of India (“CCI”) recognizes and punishes sellers for forcing cartels as it impacts the competition adversely. However, they overlooked the part where buyers can also form a cartel. Further, in case of Pandrol Rahee Technology Pvt. Ltd. vs. Delhi Metro Rail Corporation and Others[2] , the CCI dealt with the anti-competitive practices allegedly undertaken by the respondents in the purchasing process of Metro Rail Fastening System wherein they collectively selected only one proprietary system over the others, thus, eliminating the competition in the market.

The CCI observed that the aspect of the buyer will not come under the definition of “Trade” in Section 2(x) of the Act which deals with production, supply, distribution, storage or control of goods. However, the courts in the US recognizes buyer’s cartel as anti-competitive in nature. Hence, it is illegal to get into any such arrangements, where as in India the current law has limited the court to interpret the provision in such a manner that can fit well to the concept of buyer’s cartel but it is not expressly covered in the provisions. Hence, the proposal of amending the current law makes it more specific in nature.


According to Section 3(3) of the Act, the horizontal arrangements, including cartels are presumed to be anti-competitive in nature because they have a substantive Appreciable Adverse Effect on the Competition (“AAEC”) unless rebutted otherwise. The committee recognized that there exist certain other forms of arrangements as well which might have an AAEC in the market. Such arrangements may have a third party, known as ‘Hub’, which facilitates collusion between two or more competitors called ‘Spokes’.

In such a form of arrangements, the Hub interacts with one or more Spokes and shares relevant information with them. Spokes then comes into an arrangement or an agreement based on such information, which can affect the competition in the market adversely and can come under the purview of formation of cartels under the analysis of anti-competitive agreements, but the hubs may escape the liability under the contours of Section 3(3) of the Act.

In a recent judgment[3] , the CCI elaborated on the existence of such arrangements in the market and their adverse effect over the competition. It was discussed that the spokes must use a third-party platform to exchange sensitive information, including information on prices that can facilitate price-fixing.

There needs to be a conspiracy to fix prices, which requires the existence of such collusion. The committee, therefore, suggested that there should be an express provision to clarify the scope and extent of Section 3(3) of the Act. They recommended the addition of an explanation to Section 3(3) of the Act to include the definition of ‘Hubs’ and impose liabilities on such arrangements.


The existence and exploitation of buyer power is an important concern in the competition regime. There has always been speculation regarding the buyers forming such cartels which will pose a threat to the existing competitive market. Now it’s time to bring such collusions in the limelight as it would have sufficient power to compel the seller to reduce prices and increase output.

Therefore, it is of utmost importance to regulate such arrangements through amending the existing provision and including the term ‘Buyer’ in the definition of ‘cartel’ in Section 2(c) of the Act. The objective was also to regulate certain anti-competitive formation like the concept of Hubs and Spokes. The proposed amendment will help the court get a clearer perspective over the agreements and arrangements affecting the vital factors in the market and primarily to effectively promote healthy competition within the country.

Contributed By - Priyanka Barik
Designation - Associate

King Stubb & Kasiva,
Advocates & Attorneys

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New Delhi | Mumbai | Bangalore | Chennai | Hyderabad | Kochi
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As India steps into a new decade, it seems still unclear about the current economic downfall. However, certain changes and reforms might give us a somewhat long perspective to understand what we have in our hands in the coming year. As we have witnessed, the formal sector of the nation comprising of both government and corporate (“India Inc’s”) witnessed a slumping growth and the inflation has shot up, still, the debate remains narrowly focused on whether the reforms or amendments brought in will help the India Inc to make its game go strong or is it just all an effort in vain. This article focuses on two specific reforms namely, tax reforms on e-invoicing, corporate governance reforms by actually distinguishing the roles of Managing Directors and Chairman and the key compliance challenges before corporate India in 2020. However, to rectify the current situation and give the economy a push, the current government has come forward with certain reforms and amendments. There is a never-ending list of compliance requirements, which will ensure the corporate houses are indeed on their toes throughout the year.

The game-changing mechanism of e-invoicing under GST

India faced a weak response in 2019 on tax fronts, as there was a slow growth in the economy about 4.8 percent, after a sharp drop of 6.8 percent in 2018. Hence, Budget 2020 was crucial in view of the juxta positioning of contrasting viewpoints on the current economic scenario. The highlight of the recent economic survey points out the fact that due to the volume of business transactions every day and plethora of non-standardized formats used for generating invoices, e-invoicing in India will be a big and crucial move. The e-invoices can be interpreted uniformly with the help of machines and will make the cumbersome work a little easy. It is noteworthy that e-way bills have changed the way businesses are conducted in India. In January 2020, various tax reforms were introduced to taxpayers.

E-invoicing helps in reporting the transactions on a prompt ground and it also facilitates to have access to such information in common and standardized readable format across all offices and branches. Its primary objective is to prohibit frequent incidents of tax frauds and to give access to the easy flow of data on returns & e-way bills. It is widely believed that e-invoice means that it is not getting generated from a central tax department portal, however, the practical practice of invoice generation allows the seller to print the physical invoice with the company’s name and official logos on it along with other information so required. Under the recent e-invoice system, the seller will have to upload all the necessary details about the transactions and get an invoice from the Invoice Registrar Portal, which is regulated and operated by the government. After the validation of the same, it will generate a unique Invoice Registration Number (IRN) along with a QR code. Post this, the seller and buyer can have access to a digitally signed copy of the invoice. Further, such data will be auto-generated in the returns and e-way bills. This is a great step taken by the government, as after the implementation of such electronic invoicing for business to business transactions, it will be very helpful to track the tax evasions in India.

Segregation of the roles of chairperson and Managing Director

The corporate world is very well recognized for its power tussle. There have been various instances where we have witnessed clashes among the management of a company. The primary objective of corporate governance has always been to curb such a struggle between the management and stakeholders of the company. The Uday Kotak committee suggested some recommendations on corporate governance. One such important recommendation was accepted by the Securities and Exchange Board of India (“SEBI”) related to the separation of roles of Chairperson and Managing Director (“MD”).  Earlier, the role was bestowed upon one single individual. Moreover, the segregation will prevent the concentration of powers in the hands of one individual as the leader of the board should not necessarily be the leader of the management. This will not only enhance the decision-making process but will also provide a better-balanced structure of supervision and management.

It is important at this juncture to focus on the practicality of this separation of the role and the repercussion of the same on the companies. The arguments for having two separate roles emanated chiefly from the United Kingdom, which embraces this idea. This is a valid argument that the chairman is responsible for setting up the board’s agenda and to encourage debate and involvement at board meetings whereas MD is overall responsible to manage the affairs of the company, so in instances where the chairman and MD are one, it becomes hard for the board to criticize the MD or to express any independent opinions. Therefore, separating two roles essentially puts a check on the MD’s power and also it can be persuasive because it gives the board a structural base to act independently in making business decisions. Furthermore, it prevents creating any kind of confusion about accountability and moreover, anything that makes the compliance in corporate governance easy is welcomed by India Inc with open arms.

However, Security market regulator SEBI has issued a notification in the official gazette that the Listing Obligations and Disclosure Requirements[1] (“LODR”) has been amended dated 10th January 2020, now, it will come in effect from April 1, 2022, wherein it states that the top 500 listed companies will ensure that the chairperson of the board shall be a non-executive director and should not be related to the Managing Director, and there should be proper segregation of roles of chairperson and managing director in these companies. While there was no specific reason given for postponing the compliance date by two years but the extension is definitely a sigh of relief for most of the companies as they can use this time frame to plan the transition smoothly without affecting the business.


Tackling compliance challenges is the need of the hour for the corporations in India and this year there have been few more addition to the list as well. The recent instances of white-collar crimes, frauds have attracted the attention towards the major compliance challenges faced by Indian Inc. Therefore, these instances kind of put pressure on the current government to ensure that there should not be any financial irregularities and hence, such changes and amendments are a great step taken to stabilize the economic scenario of the country.


Contributed By - Priyanka Barik
Designation - Associate

King Stubb & Kasiva,
Advocates & Attorneys

Click Here to Get in Touch

New Delhi | Mumbai | Bangalore | Chennai | Hyderabad | Kochi
Tel: +91 11 41032969 | Email:

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