Legal Commentary

Rule 3 of the Security Interest (Enforcement) Rules 2002 governs service of the demand notice under Section 13(2) of the SARFAESI Act. Rule 3(1) permits the notice to be delivered or transmitted at the place where the borrower resides or carries on business, by registered post with acknowledgment due, by speed post or courier, or by any other means of transmission of documents such as fax or electronic mail. Where the notice cannot be served in the ordinary way, the Rules provide for service by affixation and publication in newspapers.

Because the sixty-day period under Section 13(2) is counted from the date of the notice, and the borrower's representation under Section 13(3A) is made on receipt of it, the mode and date of service matter. A secured creditor relying on electronic service should keep the transmission record; a borrower should record when and how the notice was received.

On receiving the notice, the borrower may make a representation or raise an objection under Section 13(3A). The secured creditor must consider it and, if it does not accept it, communicate its reasons within fifteen days. The proviso to Section 13(3A) states that those reasons, or the likely action of the secured creditor at that stage, do not give the borrower a right to apply to the Debts Recovery Tribunal under Section 17.

An application under Section 17 lies once a measure under Section 13(4) has been taken, and must be filed within forty-five days from the date of that measure. Defects in the content or service of the Section 13(2) notice, or a failure to deal with the Section 13(3A) representation, can be raised in that application, and the DRT may declare measures that do not comply with the Act and the Rules invalid (Section 17(3)).

The Insolvency and Bankruptcy Code (Amendment) Act 2026 received the President's assent on 6 April 2026, and most of its provisions were brought into force from 26 May 2026. Among them is a substituted Section 7(5), which governs how the National Company Law Tribunal deals with an application by a financial creditor.

Under the substituted provision, the NCLT is to pass an order within fourteen days of receiving the application. It is to admit the application if it is satisfied that a default has occurred, the application is complete, and no disciplinary proceeding is pending against the proposed resolution professional; and it is to reject the application if any of those conditions is not met. Before rejecting an application, it must give the applicant notice to rectify the defect within seven days of receiving the notice. If no order is passed within fourteen days, the NCLT must record its reasons for the delay.

Two Explanations accompany the provision. The first states that where the conditions for admission are met, no other ground is to be considered to reject the application. The second provides that where a financial institution files, with its application, a record of default in respect of a financial debt owed to it, recorded with an information utility, that record is sufficient for the NCLT to ascertain the default.

For a corporate debtor facing a Section 7 application, the questions at admission are therefore the statutory ones: whether the debt is a financial debt within Section 5(8), whether a default of at least the threshold under Section 4 (currently ₹1 crore) has occurred, and whether the application is complete. Section 238A separately applies the Limitation Act 1963 to applications under the Code. The test of a 'pre-existing dispute' belongs to applications by operational creditors under Section 9; it is not a ground for resisting a Section 7 application.

For a financial creditor, the amendment places weight on the completeness of the application: the record of default, the particulars of the financial debt, and the details of a proposed resolution professional against whom no disciplinary proceeding is pending. The substituted Section 7(5) and its Explanations came into force on 26 May 2026 under notification S.O. 2625(E) dated 22 May 2026.

Territorial jurisdiction over complaints under Section 138 of the Negotiable Instruments Act 1881 is governed by Section 142(2), inserted by the Negotiable Instruments (Amendment) Act 2015. The amendment settled the question by statute; earlier positions on the point are no longer the governing law.

Under Section 142(2)(a), where the cheque is delivered for collection through an account, the complaint is to be inquired into and tried only by a court within whose local limits the branch of the bank where the payee (or holder in due course) maintains the account is situated. Under Section 142(2)(b), where the cheque is presented for payment otherwise than through an account, the competent court is the one within whose local limits the branch of the drawee bank where the drawer maintains the account is situated.

An Explanation to Section 142(2) adds that where a cheque is delivered for collection at any branch of the payee's bank, it is deemed to have been delivered to the branch where the payee maintains the account. The place where the cheque happens to be deposited does not, by itself, change the court.

Section 142A deals with multiple complaints. Where a payee has filed a complaint against a drawer that is pending before a court with jurisdiction under Section 142(2), all later complaints under Section 138 against the same drawer are to be filed before the same court, whether or not those cheques were presented within its territorial jurisdiction (Section 142A(2)). Section 142A(1) and (3) dealt with the transition: transfers of cases to the court having jurisdiction under Section 142(2) were validated as if that sub-section had always been in force, and where several prosecutions by the same payee against the same drawer were pending in different courts when the 2015 amendment came into force, they were to be transferred to the court with jurisdiction under Section 142(2) before which the first case was filed.

For a complainant whose cheque is collected through an account, the practical point is that the competent court is fixed by the branch where the payee's account is maintained. For an accused, any objection to jurisdiction is tested against Section 142(2); the substantive defences remain those on the merits — rebutting the presumption under Section 139, defects in the statutory notice or in the timing of the complaint, and, for directors and officers of a company drawer, the conditions of Section 141.

Section 19 of the Micro, Small and Medium Enterprises Development Act 2006 provides that no application to set aside a decree, award or other order of a Micro and Small Enterprises Facilitation Council — or of an institution or centre to which the Council refers a dispute — is to be entertained by a court unless the applicant, if it is not the supplier, has deposited seventy-five per cent of the amount awarded.

While the application is pending, the court is to order that such percentage of the deposit as it considers reasonable be paid to the supplier, subject to such conditions as it thinks necessary (proviso to Section 19). The requirement applies to a buyer; it does not apply to a supplier that challenges an award.

The position differs from an ordinary arbitration under the Arbitration and Conciliation Act 1996. There, an application under Section 34 to set aside an award can be filed without a deposit, although filing it does not by itself stay enforcement (Section 36(2)). The court may stay the award on a separate application, subject to such conditions as it thinks fit, and in the case of an award for the payment of money it must have due regard to the Code of Civil Procedure's provisions for stay of a money decree (Section 36(3)).

Section 19 operates within the wider scheme of Chapter V of the Act. The protections are available to a 'supplier' as defined in Section 2(n) — a micro or small enterprise that has filed the memorandum referred to in Section 8(1), now made through Udyam Registration. Payment is due within the agreed period, which cannot exceed forty-five days from acceptance or deemed acceptance (Section 15); late payment carries compound interest with monthly rests at three times the bank rate (Section 16); and a reference to the Council is to be decided within ninety days (Section 18(5)).

For a buyer, the practical consequence is that objections about quality, quantity or timing should be raised in writing when they arise — an objection made within fifteen days of delivery affects the day of acceptance under the Explanation to Section 2(b) — and contested before the Council, since a later challenge to the award requires the deposit first.

The Digital Personal Data Protection Act 2023 was passed by Parliament in August 2023. The Digital Personal Data Protection Rules 2025 were notified in November 2025, and the provisions of the Act establishing the Data Protection Board of India were brought into force at the same time. The provisions of the Rules concerning the Board took effect on notification; the rule on Consent Managers takes effect one year after notification, and the main obligations of Data Fiduciaries eighteen months after it, in May 2027.

The obligations that Data Fiduciaries need to prepare for include: a clear, standalone consent notice that sets out the specific purpose for which personal data is collected; reasonable security safeguards to prevent personal data breaches; notice of a breach to the Board and to each affected Data Principal; a published point of contact for questions about personal data; responses to requests from Data Principals to access, correct or erase their data; verifiable parental consent before processing children's personal data (Section 9); and, for Significant Data Fiduciaries, the additional duties in Section 10, including data protection impact assessments and independent audits.

The Schedule to the Act fixes the maximum penalties the Board may impose: up to ₹250 crore for failure to take reasonable security safeguards; up to ₹200 crore each for failure to notify a breach and for breach of the additional obligations relating to children; up to ₹150 crore for breach of the additional obligations of a Significant Data Fiduciary; up to ₹10,000 for breach of a Data Principal's duties; and up to ₹50 crore for any other breach of the Act or the Rules. Appeals against the Board's orders lie to the Telecom Disputes Settlement and Appellate Tribunal.

For businesses, practical preparation during the phased period involves: (i) mapping what personal data is collected, for what purpose, and where it is stored and sent; (ii) redrafting consent notices and consent flows to meet the Act and the Rules; (iii) putting in place a documented procedure for detecting and reporting breaches; (iv) setting up a procedure for handling requests from Data Principals within the time the Rules allow; and (v) reviewing contracts with Data Processors so that they reflect the Data Fiduciary's obligations.

Outbound investment by persons resident in India is governed by the Foreign Exchange Management (Overseas Investment) Rules 2022 made by the Central Government, the Foreign Exchange Management (Overseas Investment) Regulations 2022 made by the Reserve Bank of India, and the RBI's Overseas Investment Directions, all issued in August 2022. They replaced the earlier regulations on the transfer or issue of foreign securities and on the acquisition of immovable property outside India.

The framework distinguishes Overseas Direct Investment (ODI) from Overseas Portfolio Investment (OPI). Broadly, ODI covers investment in the unlisted equity capital of a foreign entity, investment of ten per cent or more in the equity of a listed foreign entity, and investment that carries control; OPI covers other investment in foreign securities. The classification determines the limits, the routes and the reporting that apply.

Other points that commonly require attention are the conditions on financial commitments by Indian entities (including the overall limit linked to net worth), the restrictions on structures in which a foreign entity invests back into India beyond the layers of subsidiaries the Rules permit, the valuation norms for acquisitions and disinvestments, and the treatment of investments by resident individuals within the Liberalised Remittance Scheme.

Reporting is made through the Authorised Dealer bank, including the Annual Performance Report for each foreign entity in which an ODI is held. The Regulations allow certain delays in reporting to be regularised on payment of a late submission fee, subject to their conditions; contraventions otherwise fall to be dealt with under FEMA's compounding and adjudication provisions.

For residents and Indian entities planning outbound investment, the practical steps are to classify the investment correctly as ODI or OPI, document the basis for any control determination, check the financial-commitment limits and valuation requirements, and diarise the reporting obligations from the outset.