Legal News


The Insolvency and Bankruptcy Board of India, in the exercise of its powers under the Insolvency and Bankruptcy Code 2016, has notified the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.

Ayush Singh

The said Regulations has been made by the Board in exercise of the powers conferred by sections 196, 217, 218, 219,220 read with section 240 of the Insolvency and Bankruptcy code, 2016.


These regulations shall come into force on the date of their publication in the Official Gazette.


These regulations shall apply to inspection and investigation of service providers.


The regulations are as follows:-



  1. Under these regulations the board shall have the power to conduct inspections of records of such service providers as may be decided by it.


  1. In order to ensure that records are being maintained by the service provider and to ascertain that the services are not unfit or ineligible and fulfil all obligations under the regulations.


  1. The regulations also lay down the procedure of inspection, such as the requirement of a notice at least 10 days prior to the commencement of the inspection.


However, this requirement can be done away with in certain circumstances like when the notice would cause undue delay, or would lead to alteration, falsification, etc of records.


  1. The regulations also have provisions for the submission of an interim and a final report of inspection.


  1. Further, the regulations also provide for investigation of a service provider under Section 218 of the code. The board can direct the investigating authority to conduct investigation of the affairs of the service provider.


  1. Procedure for conducting the investigation, such as requirement of a notice 10 days prior to the commencement of the investigation, has been provided for in the Regulations. However, this too can be done away with in certain circumstances.


Provisions for the submission of an interim and final investigation report also find mention in the Regulations.


  1. The Regulations also provides for the issuance of a show-cause notice and the requirements for a valid show-cause notice.


The requirements for valid Show-cause notice are:-


(1) The show-cause notice shall be in writing and shall state-

(a) the provisions of the Code under which it has been issued;

(b) the details of the alleged facts;

(c) the details of the evidence in support of the alleged facts;

(d) the provisions of the Code, or the rules, regulations or guidelines made thereunder, allegedly violated;

(e) the actions or directions that the Board proposes to take or issue, if the allegations are established; and

(f) The time within which the noticee may make written submission.


(2) For the purposes of clause (e) of sub-regulation (1), the Board shall take into account, but not limited to, the following factors:-

(a) the nature and seriousness of the alleged contraventions, including whether it was deliberate, reckless or negligent on the part of the noticee;

(b) the consequences and impact of the alleged contravention, including-

(i) unfair advantage gained by the noticee as a result of the alleged contravention;

(ii) loss caused, or likely to be caused, to clients or any other person as a result of the alleged contravention; and

(iii) The conduct of the noticee after the occurrence of the alleged contravention, and prior to the alleged contraventions.


(3) The show-cause notice shall provide at least 21 days to the noticee to make a written submission.


(4) The show-cause notice shall state, if a noticee fails to respond under sub-regulation (3) within the given time, it shall be disposed of based on the material available on record.


(5) The show-cause notice shall enclose copies of relevant documents and extracts of relevant portions from the report of investigation or inspection, or other records.


(6) A show-cause notice issued shall be served on the noticee-

(a) by sending it to the noticee at its registered office, by registered post with acknowledgement due; and

(b) By an appropriate electronic form to the email address provided by the service provider to the Board.


(7) The Board shall refer the show-cause notice to the Disciplinary Committee along with all the relevant records including the written submissions, if any, made by the noticee in the matter.


Government clarifies on the fake and mischievous letter going round of linking Aadhar with land record

Nidhi Chandra

A fake letter was being circulated claiming that the Centre is working on a proposal to link Aadhaar with land records. The government  then  issued a clarification saying that the letter in circulation was not issued by it.


The Centre has clarified that the letter attributed to the Cabinet Secretariat, regarding linking land records to Aadhaar, is “fake and mischievous”.


Mr. Frank Noronha, the Principal Spokesperson of Government of India and Principal Director General of Press Information Bureau, rubbished such claims.


Taking notice of the purported letter from the Cabinet Secretariat dated June 15, 2017, complete with a signature of an under-Secretary, Mr. Noronha said that a police complaint has been lodged and the matter is under investigation.


The statement was issued by the Government after reports doing the rounds that the Centre was planning to link all land records with the Aadhaar number under the Digital India Land Records Modernization Program (DILRMP).


When the office of commissioner was contacted for land administration here, it came to light that that no such communication had been received from the Centre.


“We have never seen any missive from the union government regarding this. If at all the cabinet secretariat from the national capital writes to state government, it will be addressed to chief secretary and not as mentioned in the communication,” a top official said.



The letter, with the subject of ‘digitization of land records since 1950’ had claimed that the Centre  is planning to bring a law making it mandatory for such linkage, and that the properties not linked shall be considered for ‘appropriate action’ under the Benami Transactions (Amended) Act.


The fake letter claimed that the Centre shot off letters to all the states and Union Territories asking them to digitise “land records, mutation records, sale and purchase records from year 1950- of any immovable property (see section 2 of the Income Tax Act 1961 and subsequently amended) including land (agricultural and non agricultural), houses (independent or Society) etc by 14 August 2017.”


It was issued on June 15, and was addressed to Chief Secretaries of States and UTs, Additional Chief Secretaries of State and UTs, Lt Governor Delhi, NITI Aayog and a copy was also sent to the Prime Minister’s Office for record.




Discrepancies prevalent earlier

In the absence of any effective land records maintenance system, one of the biggest challenges that gripped India was about land ownership issue. Here, one was only presumed to be an owner and not a conclusive owner of land unless proved otherwise.

Apart from this, inaccurate physical records and security issues of sharing land records publicly were some areas of concern.


The government too, faced difficulties. Many a times, land acquisition for development projects were done but the 7/12 land extract (an extract from the land register maintained by the revenue department) did not reflect these changes.


Thus, the land was acquired fraudulently sold to another person by taking advantage of this loophole.

In some cases, people had mortgaged acquired properties for obtaining bank loans, stated a revenue official.

All these incongruities forced to bring forward the Land Management system but the Government had no intentions of linking it with aadhar neither earlier nor in present time.


JUSTICE C.V. Nagararjuna Reddy: Saga of the Jurist who faces Impeachment Proceedings twice

Written by- Vishad Srivastava

Justice C.V. Nagararjuna Reddy of Hyderabad High Court is the man who shot the limelight  as because his impeachment proceeding was once again started in the Rajya Sabha which later on canceled as 54 signatories who have started his impeachment process out of which 9 have withdraw their names in the signed petition.

Starting from his first attempt of initiation of impeachment proceedings

Justice C.V. Nagarjun Reddy is the Judge of Andhra Pradesh and Telangana High Court . First petition of impeachment proceedings was started on 6 December 2016 in which 61 members of Rajya Sabha had signed the petition on the basis of following allegations:

  1. First allegation was of Mr. Rama Krishna, former Principal Junior Civil Judge, Rayachoti, Kadappa District who is under suspension. Mr. Krishna alleged that he was forced by Justice Reddy to remove the name of Mr. Pawan Kumar Reddy who is the brother of justice Reddy from a dying declaration recorded by Mr. Krishna when he was Magistrate. Mr. Pawan is Additional Public Prosecutor at Rayachoti Court. The dying declaration had incriminated Pawan Reddy that he had doused him with fire for not signing on blank paper.
  2. Another allegation was that Justice Reddy had abused and threatened Mr. Krishna of not removing his brother name from dying declaration
  3. Third allegation, Magistrate was summoned to Justice Reddy house and there he was beaten up.
  4. Series of unexplained transfers and finally suspension shows sign of results complaining against Justice Reddy.
  5. Appointment of Pawan Reddy as Additional Public Prosecutor is contravention of section 24 Criminal Procedure Code.
  6. Disproportionate income of Justice Reddy. Petition alleges that Justice had  misused his position for several movable and immovable properties which is disproportionate to his income source.
  7. Justice had not declared his assets and liabilities of which is violation of Code of Conduct of Judges.
  8. I.R against Justice Reddy by his ‘Dalit’ tenant who accused him for their misbehavior against them.

To sum up main reason was Dalit atrocity where Dalit Magistrate is victimized and Justice Reddy had used his position for protection of his brother Pawan Reddy.

After the signature of 61 M.P’s within 10 days 19 M.P.’s withdrew their move and that’s why the motion failed.

Fresh motion impeachment again started on 24 May on 2017 in which 54 members signed the petition but on 16 June 2017 9 members again withdrew their names. This time the motion was forwarded to CJI Justice Kehar by Vice President Hamid Ansari.


Constitutional process for impeachment is a 3 step process which is as follows:

  1. As per Article 124(4) of Constitution says that minimum 50 members or double the number from Lok Sabha are required for signatories as initiation for impeachment proceedings.
  2. In this step Vice President will constitute a three member committee under 1968 Judiciary Act which consist of Supreme Court Judge, Chief Justice of High Court and eminent jurist it will be under consulation of CJI and will work as a trial court.
  3. Then Committee decision will put forward in both the houses and which is to be passed by two third majority in both the houses and then it will be pass to the President.

  Justice Reddy is the Fifth judge to face impeachment first was Justice V. Ramaswami of Supreme Court faced in 1993.

Mountains are beautiful from far” this proverb is fitting to present scenario as this is second attack on our independent judiciary which will have to be seriously checked first on is recent example Justice Karnan if this type of allegation is continued and there should be the check on the M.P’s who withdraw their names. There is serious  probe required into this type of matters otherwise our judiciary will not be independent anymore.





Advocates Exempted from GST Registration

As the Government is all set to roll out the Goods and Services Tax Act from 1st July, the 16th Meeting of the GST Council held at New Delhi decided to exempt Advocates, including Senior Advocates from obtaining CGST Registration under section 23(2) of the Central Goods and Services Tax Act, 2017.

Services provided by the Senior Advocates, which were brought under the tax net in the year 2016 was continued to be taxed under the GST regime. However, the services provided to any person other than a business entity and a business entity having a turnover of below 20 lakhs are out of the ambit of GST.

1. Under  GST  services  provided  by advocates are  exempt as  follows.


Services provided by


(a) a  partnership firm of  advocates or an individual as an advocate other than a  senior  advocate, by  way  of legal services to-

(i)  an advocate or  partnership firm of advocates providing  legal services;

(ii) any  person other than  a  business entity; or

(iii) a  business entity  with a  turnover up to rupees  twenty  lakh  (ten lakh rupees in a special category  state)  in the  preceding  financial  year; or


(b) a  senior  advocate by  way  of legal services to-

(i)  any  person other than  a  business entity; or

(ii) a  business entity  up to rupees twenty  lakh  (ten  lakh rupees in a special  category  state)  in the preceding  financial  year. Therefore, legal services  provided to a  business entity  having  turnover  exceeding  Rs 20 lakhs is not exempt.


  1. Under  GST  advocates providing legal service  to any business entity  having turnover exceeding 20 lakhs  are  not  liable to pay GST  but GST  will  be  payable  by business entity under  RCM. under


  1. It  means legal services provided  by Advocates  to  any business entity  having turnover exceeding 20 lakhs    is a  taxable  supply.


  1. Now  we  consider  case of  non-senior advocate. He has  receipts from  legal services as

(a) From  individual advocates/  advocate  firms  Rs 1000000  [Exempt supply]

(b) From  business entities having turnover  below  20 Lakhs Rs 500000  [Exempt supply] (c  )  From  business entities having turnover  above  20 Lakhs  Rs. 1000000  [ Taxable supply but tax payable under  RCM  by business entity]


  1. By  definition  “aggregate turnover”  means the  aggregate value of  all  taxable supplies (excluding  the value of inward supplies on which  tax  is payable by  a  person on reverse  charge  basis),  exempt  supplies, exports of goods or services or both and inter-State  supplies  of  persons having the same Permanent Account Number, to be computed on all  India basis  but excludes central tax, State  tax, Union territory  tax, integrated tax  and cess. So in this case  aggregate  turnover of  advocate  will  be  2500000 which is above  the threshold of Rs. 2000000 provided in section 22.


  1. Now  as per  section 22  every  supplier  shall  be  liable to be  registered under theAct in the State or  Union territory, other  than special category  States, from where  he makes a taxable supply  of goods or services or both, if his aggregate turnover in a financial  year exceeds twenty  lakh  rupees.


  1. Since  in the  given  case   advocate is having  aggregate  turnover of  Rs 2500000 and he  makes taxable supply  which is chargeable  under RCM  hence  advocate will be required to take registration under the  Act.


  1. Since  they become  registered  person  by virtue  of  section 9(4)  they will be  required  to pay tax under  RCM  on  goods or services procured  from  unregistered  persons.




Partial Stay on Aadhar-PAN linkage due to Violation of Privacy Issue

In a Writ Petition filed by Binoy Viswan, the Division Bench of Supreme Court held that those who have already enrolled themselves would comply with the requirements of section 139AA (2) of the Income Tax Act, 1961. Those who still want to enrol are free to do at their will. However, those assesses who are not Aadhar Card holders and do not comply with the provision of Section 139(2), their PAN cards be not treated as invalid for the time being.

The bench of Dr. A.K. Sikri and Ashok Bhushan, JJ, upholding the validity of Section 139AA of Income Tax Act, 1961 that makes the linking of Aadhaar Card to the Permanent Account Number (PAN) mandatory, said that the provision is neither discriminatory nor it offends equality clause enshrined in Article 14 of the Constitution. The bench also said that Section 139AA is also not violative of Article 19(1)(g) of the Constitution insofar as it mandates giving of Aadhaar enrolment number for applying PAN cards in the income tax returns or notified Aadhaar enrolment number to the designated authorities.

The Court, however, clarified that the validity of the provision is upheld subject to the decision of the Constitution bench where the issue relating to Right to Privacy and data leakage due to Aadhaar-PAN linkage is under consideration. The Court said that till the said issue is decided there will be a partial stay on the operation of proviso to sub-section (2) of Section 139AA of the Act, that says that the PAN allotted to the person will be deemed to be invalid in case of failure to intimate the Aadhaar number.

The Court has made it mandatory for Aadhaar number to be linked with PAN card but only for those who already possess an Aadhaar card. While those who do not have an Aadhaar card yet will face no consequences, those who have already been assigned an Aadhaar ID must use it for their income tax return (ITR) filing and link it to their PAN card. The Income Tax department has stepped up its efforts to encourage assesses to link their PAN or Permanent Account Number with Aadhaar.





Breaking: Preventive Detention cannot be resorted to when sufficient remedies are available: Supreme Court


V. Shantha v. State of Telangana and Ors 2017 SCC OnLine SC 623


The appellant assails the order of preventive detention of her husband dated 17.10.2016, passed by Respondent No. 2, under the Telangana Prevention of Dangerous Activities of Bootleggers, Dacoits, Drug Offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986 (Act No. 1 of 1986) (Telangana Adaptation) Order, 2015, (G.O.Ms. No. 124, Dated17.03.2015) (hereinafter referred to as the ‘Act’).


Ms. Prerna Singh, learned counsel for the appellant, submits that an order of preventive detention is a serious matter affecting the liberty of the citizen. It cannot be resorted to when sufficient remedies are available under the general laws of the land for any omission or commission under such laws. The detenu was already being prosecuted under the penal code and the Seeds Act. Reliance was placed on Rekha v. State of Tamil Nadu, (2011) 5 SCC 244.

It was next submitted that the detenu was already in custody in two other cases. The order of detention does not consider the same, setting out special reasons for an order of preventive detention, with regard to a person already in custody. The reasoning that there was every likelihood of his being released on bail, in view of an earlier bail order in a similar case, is flawed, as the detenu has not even filed any application for bail in these two cases.

Ms. Bina Madhavan, learned counsel for the respondents, opposing the application, submits that the grounds of detention cannot be seen simpliciter as individual wrongs amenable to ordinary laws. It has the potential to disturb maintenance of public order. More than one farmer had lodged complaints with regard to the spurious seeds sold to them. Wrongful loss had been caused to the poor farmers, and the detenu had acquired illegal gains at their expense.

The Judgment of the Court was delivered by

Navin Sinha, J.— Leave granted.

The Apex Court observed that the offences alleged to have been committed by the appellant are such as to attract punishment under the Andhra Pradesh Prohibition Act, but that in our view has to be done under the said laws and taking recourse to preventive detention laws would not be warranted. Preventive detention involves detaining of a person without trial in order to prevent him/her from committing certain types of offences. But such detention cannot be made a substitute for the ordinary law and absolve the investigating authorities of their normal functions of investigating crimes which the detenu may have committed. After all, preventive detention in most cases is for a year only and cannot be used as an instrument to keep a person in perpetual custody without trial.

In view of the aforesaid discussion, it is not necessary to consider the second submission on behalf of the petitioner with regard to the lack of justification for an order of preventive detention with regard to a detenu already in custody.

The appeal is allowed, and the order of preventive detention dated 17.10.2016 is held to be unsustainable and is set aside. The detenu is ordered to be set at liberty forthwith unless wanted in any other case. This order shall be without prejudice to the prosecution of the detenu under the ordinary laws of the land.




Kerala HC v Madras HC on Cow Slaughter

The Ministry of Environment and Forests on 26th May’2017 notified new rules under the Prevention of Cruelty to Animals Act, 1960, banning the sale of cows and buffaloes for slaughter at animal markets across India. This unprecedented move of Govt. through notification rose to several controversies. Prominent amongst them were that the ban is contrary to parent Act, 1960, and that it violates Article 19 (1) (g) and 21 of the Constitution. It has been held in in Hinsa Virodhak Sangh vs Mirzapur Moti Kuresh Jamat (2008) 5 SCC 33, and In Re Ramlila Incident (2012) 5 SCC 1 that what one eats is one’s personal affair and forms part of right to privacy under Article 21.

Ms. S. Selvagomathy, an activist-cum-lawyer based in Madurai, filed a PIL in High Court of Madras under Article 226, which was granted an urgent hearing by the Division Bench comprised of M.V. Muralidaran. J. and C.V. Karthikeyan. J., on request of Senior Counsel M. Ajmal Khan. Based on the argument of Ms. S. Selvagomathy that the notification is repugnant to section 26 of the parent Act, 1960, the Madurai Bench of the High Court of Madras on 30th may’2017 granted a four weeks stay on the operation of the recently notified Prevention of Cruelty to Animals (Regulation of Livestock Market) Rules, 2017.

On contrary to this, A Division Bench of Kerala High Court comprising Chief Justice Navniti Prasad Singh and Justice Raja Vijayaraghava dismissed the PIL challenging the Prevention of Cruelty to Animals (Regulation of Livestock Market) Rules, 2017. The Petition, filed by MLA Hibi Eden and meat shop owner P.U. Kunju Muhammed, contends that the Rules violate Articles 14, 19 & 21 of the Constitution of India, and that they amount to a colorable exercise of the power, encroaching upon legislative domain of state legislature.

The Bench observed that the new notification does not impose any restrictions on the sale of beef or slaughter of cattle. It said the restrictions were on the sale of cattle used for agriculture purpose at animal markets. The rule did prevent anyone from buying or selling cattle outside the market, however, these preparations mediated terrestrial and cosmic forces into the soil. Following the Court interpretation of the notification, the petitioner withdrew the PIL but the situation is still in dilemma for the territory outside the jurisdiction of Kerala High Court and Madras High Court. Both the court with conflicting order have created yet another issue which shall be taken into consideration by apex Court.

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