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Top 50 Landmark Case Laws for CA & CMA Final Students: The Ultimate Guide
Published on CMA Knowledge | Essential Reading for Corporate and Economic Laws & Direct Taxation
Welcome back to CMA Knowledge. If you are preparing for your CA or CMA Final exams, you already know that quoting the bare acts isn’t enough. The examiners want to see application, analysis, and an understanding of how the judiciary interprets complex statutes. Whether it is a tricky Direct Tax adjustment, a corporate battle under the Companies Act, or stringent PMLA regulations, judicial precedents form the backbone of your answers.
In this comprehensive guide, we are breaking down the Top 50 Landmark Case Laws. We have stripped away the complex legal jargon to provide you with a structured framework for each case: a clear summary, the final verdict, and exactly how to apply it in your exam case studies.
1. Engineering Analysis Centre of Excellence Pvt. Ltd. vs. CIT (2021)
Case Summary
This is arguably the most significant Supreme Court ruling on software taxation in India. The core dispute was whether payments made by resident Indian end-users or distributors to non-resident computer software manufacturers/suppliers for the resale or use of computer software should be classified as “Royalty” under Section 9(1)(vi) of the Income Tax Act, 1961, and relevant DTAAs (Double Taxation Avoidance Agreements).
The Revenue Department argued that buying software was essentially paying for the “copyright,” making it a royalty subject to TDS under Section 195. The taxpayers argued they were merely buying a “copyrighted article” (like a book), not the copyright itself.
Verdict & Conclusion
Supreme Court Verdict: The Court ruled in favor of the taxpayers. It concluded that the amount paid by resident Indian end-users/distributors to non-resident computer software manufacturers is NOT the payment of royalty for the use of copyright. The end-user only gets a non-exclusive, non-transferable license to use the product, not the right to exploit the underlying copyright. Therefore, no TDS is required to be deducted under Section 195.
Application in Exam Case Studies
How to use this: If a case study presents an Indian company remitting money abroad for buying off-the-shelf software, shrink-wrapped software, or software licenses without the right to reverse-engineer or sub-license the core code, quote this case. Conclude that Section 195 TDS on royalty does not apply because the payment is for a “copyrighted article,” not a “copyright.”
2. Tata Consultancy Services Ltd. v. Cyrus Investments Pvt. Ltd. (2021)
Case Summary
A corporate battle that shook the Indian business world. Cyrus Mistry was removed as the Executive Chairman of Tata Sons. Mistry’s family firms (minority shareholders) filed a petition under Sections 241 and 242 of the Companies Act, alleging “oppression and mismanagement” by Tata Trusts and Ratan Tata. The NCLAT initially ruled in favor of Mistry, reinstating him and concluding that Tata Sons’ affairs were conducted in a manner prejudicial to minority shareholders.
Verdict & Conclusion
Supreme Court Verdict: The Supreme Court overturned the NCLAT order, ruling entirely in favor of Tata Group. The Court held that mere removal of a Chairman or Director does not amount to oppression or mismanagement under Section 241. A company’s board has the right to remove a Chairman if they lose confidence in their leadership, provided procedural requirements are met. “Just and equitable” winding up cannot be invoked merely due to a breakdown of relations between majority and minority shareholders.
Application in Exam Case Studies
How to use this: Use this case when evaluating questions on Sections 241/242. If a scenario describes a minority shareholder crying foul simply because their representative was voted off the board by the majority, cite this case to prove that without evidence of systematic, burdensome, and wrongful conduct (probity), mere removal does not trigger “oppression.”
3. Sahara India Real Estate Corporation Ltd. v. SEBI (2012)
Case Summary
Two Sahara group companies raised thousands of crores from over 30 million investors through Optionally Fully Convertible Debentures (OFCDs). They claimed this was a “private placement” to friends, associates, and group employees, and thus fell outside SEBI’s jurisdiction, arguing it was regulated solely by the Ministry of Corporate Affairs (MCA).
Verdict & Conclusion
Supreme Court Verdict: The Supreme Court pierced the veil of “private placement.” It ruled that any offer made to 50 or more persons (now 200 under the 2013 Act) automatically becomes a “public issue” under the law, regardless of what the company calls it. Therefore, SEBI had absolute jurisdiction. The Court ordered Sahara to refund the entire collected amount with 15% interest to the investors.
Application in Exam Case Studies
How to use this: Crucial for SEBI and Companies Act questions dealing with Prospectus and Allotment. If a company tries to disguise a public issue as a private placement by manipulating the definition of “associates” but exceeds the statutory limit of allottees, invoke Sahara. It cements SEBI’s overriding power to protect investors in unlisted public companies raising public money.
4. Vijay Madanlal Choudhary & Ors. v. Union of India (2022)
Case Summary
Over 200 petitions were filed challenging the sweeping powers of the Enforcement Directorate (ED) under the PMLA. The petitioners argued that the ED’s powers regarding arrest, search, seizure, and the twin conditions for bail were unconstitutional and violated fundamental rights. Furthermore, they questioned whether the mere possession of proceeds of crime amounts to money laundering.
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the constitutional validity of the stringent provisions of the PMLA. It affirmed the ED’s powers of arrest, attachment of property, and search/seizure. Crucially, it ruled that the “twin conditions” for bail under Section 45 are legal. Furthermore, it established that the offense of money laundering is a standalone, continuing offense; even passive possession of the “proceeds of crime” is sufficient to attract PMLA provisions.
Application in Exam Case Studies
How to use this: In Economic Laws, if an accused argues that they only “possessed” the money and didn’t actively try to integrate it into the formal economy, use this case. It proves that projection of tainted property as untainted is not strictly required if concealment, possession, or use is established.
5. Google LLC v. Competition Commission of India (NCLAT – 2023)
Case Summary
The CCI imposed a massive penalty of ₹1,337.76 crore on Google for abusing its dominant position in multiple markets regarding the Android mobile device ecosystem. Google forced Original Equipment Manufacturers (OEMs) to pre-install its entire suite of apps (MADA agreement) to get access to the Play Store, restricting competition. Google appealed to the NCLAT.
Verdict & Conclusion
NCLAT Verdict: The NCLAT largely upheld the CCI’s order and the ₹1,337.76 crore penalty. It confirmed that Google’s mandatory pre-installation requirements amounted to the imposition of unfair conditions, stifling competitor apps. However, NCLAT did set aside a few of CCI’s directives (like allowing third-party app stores within the Play Store), but the core finding of “abuse of dominance” under Section 4 of the Competition Act was affirmed.
Application in Exam Case Studies
How to use this: Highly relevant for Competition Act scenarios. If a dominant tech or manufacturing firm forces downstream buyers (like phone makers) to accept supplementary obligations (bundling) that have no connection to the main contract, it is a textbook violation of Section 4. Quote Google v. CCI to validate the penalty for anti-competitive tie-in arrangements.
6. Vodafone International Holdings B.V. v. Union of India (2012)
Case Summary
A watershed moment in Indian taxation. Vodafone (Netherlands) acquired a 67% stake in Hutchison Essar Limited (an Indian company) by purchasing shares of a Cayman Islands-based holding company from Hutchison Telecommunications (Hong Kong). The Indian Income Tax Department slapped a ₹11,000 crore tax demand on Vodafone, arguing that the transaction involved the indirect transfer of Indian assets, hence attracting capital gains tax in India under Section 9(1)(i).
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of Vodafone, stating that the transfer of shares between two non-resident entities outside India does not attract Indian tax, even if the underlying assets are situated in India. The Court emphasized that the “look at” principle must be applied to see the transaction as a whole, rather than “looking through” it to find tax evasion. (Note: This led to the controversial retrospective amendment of Section 9 by the Finance Act 2012).
Application in Exam Case Studies
How to use this: Use this case when analyzing the “Indirect Transfer” provisions under Section 9. If a case study asks about the historical context or the difference between legitimate tax planning and tax evasion, contrast Vodafone with the subsequent retrospective legislative amendments.
7. Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2019)
Case Summary
During the insolvency resolution of Essar Steel, the NCLAT modified the resolution plan submitted by ArcelorMittal, deciding to distribute the recovery amount equally between financial creditors (FCs) and operational creditors (OCs). This sparked a massive debate: Does the NCLAT or NCLT have the power to alter the commercial wisdom of the Committee of Creditors (CoC)?
Verdict & Conclusion
Supreme Court Verdict: The Supreme Court struck down the NCLAT order, establishing the absolute supremacy of the CoC’s “commercial wisdom.” The Court ruled that the Adjudicating Authority (NCLT/NCLAT) cannot interfere with the merits of a resolution plan approved by the CoC, provided it meets the parameters of Section 30(2) of the IBC. Furthermore, it affirmed that treating secured FCs and unsecured OCs differently is legally valid and not discriminatory.
Application in Exam Case Studies
How to use this: This is the golden rule of IBC case studies. If an exam question features the NCLT rejecting a CoC-approved resolution plan simply because operational creditors are getting a smaller haircut than financial creditors, cite Essar Steel to prove the NCLT has exceeded its jurisdiction.
8. PCIT v. Maruti Suzuki India Ltd. (2019)
Case Summary
Suzuki Powertrain India Ltd. (SPIL) amalgamated with Maruti Suzuki India Ltd. (MSIL). The Income Tax Department subsequently issued an assessment notice under Section 143(2) in the name of SPIL, which was technically a non-existent entity post-amalgamation. MSIL participated in the assessment proceedings but later challenged the final order, arguing it was void ab initio because it was issued against a dead company.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled that issuing a jurisdictional notice to a non-existent company is a substantive illegality, not a mere procedural defect curable under Section 292B. Even though the amalgamating company (MSIL) participated in the proceedings, it does not act as an estoppel against challenging the jurisdiction. The assessment order was quashed.
Application in Exam Case Studies
How to use this: Whenever an exam scenario involves notices issued or assessments framed against an amalgamated/merged entity in its old name, use this case. It proves that a notice to a “dead” corporate entity makes the entire tax assessment null and void.
9. Union of India v. Gautam Khaitan (2019)
Case Summary
Gautam Khaitan challenged a notification issued by the Central Government that made the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 applicable retroactively from July 1, 2015, instead of the originally stated April 1, 2016. Khaitan argued this violated Article 20(1) of the Constitution (protection against ex post facto penal laws).
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the government’s notification. It ruled that the notification merely removed a difficulty regarding the declaration window and did not retrospectively create a new penal offense. Therefore, the authorities could validly issue notices under the Black Money Act for undisclosed foreign assets held prior to April 1, 2016, if they continued to be held when the Act came into force.
Application in Exam Case Studies
How to use this: Crucial for Black Money Act questions. If an assessee argues that a foreign bank account closed in 2014 cannot be scrutinized under the 2015 Act, invoke this case to demonstrate the scope and temporal application of the statute concerning continuing offenses.
10. SEBI v. Abhijit Rajan (2022)
Case Summary
Abhijit Rajan, Chairman of Gammon Infrastructure Projects Ltd. (GIPL), sold shares of his company just before GIPL terminated a major shareholders’ agreement. SEBI penalized him for Insider Trading, classifying the termination as Unpublished Price Sensitive Information (UPSI). Rajan argued he sold the shares strictly out of necessity to fund a corporate debt restructuring, not to exploit UPSI.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of Rajan. It established that for insider trading charges to stick, there must be a motive to make a gain or avoid a loss. In this specific factual matrix, the termination of the agreement was actually *beneficial* for the company. By selling shares before this “positive” UPSI was made public, Rajan actually suffered a loss. The court held that a person cannot be convicted of insider trading if their action is contrary to the natural profit-making logic of the UPSI.
Application in Exam Case Studies
How to use this: If a SEBI PIT (Prohibition of Insider Trading) question shows a promoter selling shares during a trading window closure, but the facts clearly show the UPSI was positive and the promoter sold at a disadvantage out of financial distress, use this case to argue the absence of mens rea or profit motive.
11. Excel Crop Care Ltd. v. Competition Commission of India (2017)
Case Summary
Several manufacturers of Aluminium Phosphide tablets (used for grain preservation) were accused of bid-rigging and forming a cartel to fix prices for tenders issued by the Food Corporation of India (FCI). The CCI found them guilty and levied a penalty based on their “total turnover.” The companies appealed, arguing the penalty should be restricted to the “relevant turnover” (i.e., turnover derived only from the specific product under investigation, not their entire multi-product business).
Verdict & Conclusion
Supreme Court Verdict: The SC introduced the doctrine of “Relevant Turnover” in Indian competition jurisprudence. It ruled that imposing penalties on a company’s total turnover (including unrelated products) would be disproportionate and unfair. The penalty under Section 27 of the Act must be calculated based strictly on the turnover derived from the specific product or service affected by the anti-competitive practice.
Application in Exam Case Studies
How to use this: Essential for CCI penalty calculation questions. If the CCI slaps a fine of 10% on a multi-conglomerate’s total global revenue for a cartel violation in just one minor division, quote Excel Crop Care to restrict the penalty base to the affected division’s revenue.
12. Balwant Rai Saluja v. Air India Ltd. (2014)
Case Summary
Workers of a statutory canteen run by a subsidiary company of Air India claimed they should be treated as direct employees of the parent company (Air India). They argued that since Air India completely controlled the subsidiary and funded the canteen, the corporate veil should be pierced to establish an employer-employee relationship with the parent entity.
Verdict & Conclusion
Supreme Court Verdict: The SC declined to pierce the corporate veil. It held that the subsidiary was a separate legal entity. The veil can only be lifted in cases of fraud, sham transactions, or where a company is formed primarily to evade legal obligations. Mere financial control or 100% shareholding by the parent company does not automatically make the subsidiary’s employees the direct employees of the parent company.
Application in Exam Case Studies
How to use this: Use this in Holding-Subsidiary relationship questions. If creditors or employees of a subsidiary try to sue the parent company solely based on majority shareholding control, cite this case to defend the principle of separate corporate personality.
13. Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. (2017)
Case Summary
Kirusa (Operational Creditor) filed an application under Section 9 of the IBC to initiate CIRP against Mobilox (Corporate Debtor) for unpaid dues. Mobilox argued that the application should be rejected because there was a “pre-existing dispute” regarding the quality of services, which they had communicated via an email *before* the Section 8 demand notice was issued.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the Corporate Debtor, establishing a wide definition of “existence of a dispute.” The Court held that the NCLT only needs to see if there is a plausible, genuine dispute (a “patently feeble legal argument” doesn’t count) that existed prior to the demand notice. The NCLT is not required to examine the merits of the dispute. Since Mobilox raised the quality issue prior to the notice, the CIRP cannot be initiated.
Application in Exam Case Studies
How to use this: The ultimate defense for Corporate Debtors against Operational Creditors. If an exam scenario shows a vendor trying to force a company into insolvency, but the company had previously sent an email complaining about defective goods, use Mobilox to strike down the Section 9 application.
14. CIT v. S. Ajit Kumar (2018)
Case Summary
During a search and seizure operation, certain materials were found, and block assessment proceedings were initiated. The assessee argued that the Assessing Officer heavily relied on statements recorded under Section 132(4) without giving the assessee the right to cross-examine the witnesses whose statements were being used against him, thereby violating the principles of natural justice.
Verdict & Conclusion
Supreme Court Verdict: The SC held that though the strict rules of the Indian Evidence Act do not apply to income tax proceedings, the principles of natural justice must be respected. If the Revenue intends to rely on the statement of a third party to make additions to the assessee’s income, the assessee has a fundamental right to cross-examine that person. Failure to provide this opportunity makes the assessment legally unsustainable.
Application in Exam Case Studies
How to use this: If a Direct Tax case study involves a Section 153A/153C assessment where additions are made purely based on an angadia’s (courier’s) confession without allowing the taxpayer to question them, invoke this case to invalidate the AO’s order.
15. Union of India v. Premier Ltd. (2019)
Case Summary
Premier Ltd. faced proceedings under the repealed Foreign Exchange Regulation Act (FERA). The issue was whether proceedings initiated under the old draconian FERA could be continued, and if penalties could be levied after the sunset clause period provided in Section 49 of the new Foreign Exchange Management Act (FEMA, 1999) had expired.
Verdict & Conclusion
Supreme Court Verdict: The SC clarified the transition mechanics between FERA and FEMA. It held that the sunset clause (which allowed FERA proceedings to continue for a two-year window) was strict. If the Adjudicating Authority failed to issue a show-cause notice within that specific sunset period, they completely lost jurisdiction, and the proceedings under the repealed Act must be dropped.
Application in Exam Case Studies
How to use this: Use this for FEMA administrative framework questions. It reinforces the sanctity of limitation periods and transition clauses between repealed and newly enacted economic statutes.
16. Deputy Director, Directorate of Enforcement v. Axis Bank (Delhi HC – 2019)
Case Summary
The ED attached properties of a corporate debtor under the PMLA. However, Axis Bank and other banks argued that these properties were heavily mortgaged to them long before the commission of the scheduled offense. The banks claimed that their rights as secured creditors under the SARFAESI Act should override the ED’s attachment orders under the PMLA.
Verdict & Conclusion
Delhi High Court Verdict: The HC struck a crucial balance. It ruled that the objective of PMLA is not to deprive bona fide third parties (like banks) of their legitimate dues. If a bank can prove it had no knowledge of the money laundering and took the property as collateral in good faith, the bank’s claim takes precedence over the ED’s attachment. The ED can attach the “value” of the property but cannot confiscate the physical asset to the detriment of an innocent secured creditor.
Application in Exam Case Studies
How to use this: Highly testable intersection of Banking Law and PMLA. If the ED tries to seize a factory that a bank holds a clean, pre-existing mortgage over, use this case to defend the bank’s right to liquidate the asset to recover its loans.
17. CIT v. Smifs Securities Ltd. (2012)
Case Summary
Smifs Securities amalgamated with another firm and claimed depreciation under Section 32 on the “Goodwill” generated during the amalgamation (the difference between the price paid and the net asset value). The assessing officer disallowed the depreciation, claiming goodwill is not an intangible asset under the Income Tax Act.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the taxpayer. It held that the principle of ejusdem generis applies to the expression “any other business or commercial rights of similar nature” found in Section 32(1)(ii). Therefore, “Goodwill” acquired on amalgamation constitutes an intangible asset, and the assessee is legally entitled to claim depreciation on it.
Application in Exam Case Studies
How to use this: A staple for corporate restructuring questions in Direct Tax. *(Note: While Finance Act 2021 amended the law to explicitly exclude goodwill from depreciation, this case remains historically critical for understanding intangible asset classifications in older assessments).*
18. Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad (2005)
Case Summary
A dispute arose within a family-owned company regarding the fiduciary duties of directors and the allotment of additional shares. The minority shareholders alleged that the directors breached their fiduciary duties by issuing shares strictly to consolidate their own control, rather than for the genuine benefit of the company.
Verdict & Conclusion
Supreme Court Verdict: The SC laid down exhaustive principles on directors’ fiduciary duties. It ruled that directors are not strict trustees for individual shareholders, but they owe a fiduciary duty to the company as a whole. While directors can issue shares, if the *primary motive* of issuing shares is simply to dilute the minority and maintain control (rather than a genuine need for corporate capital), it constitutes a breach of fiduciary duty and amounts to oppression.
Application in Exam Case Studies
How to use this: Use this in Section 166 (Duties of Directors) and Section 241 (Oppression) questions. If a board issues a rights issue at a severe discount solely to bankrupt the minority’s voting power without any real business need, cite this case to invalidate the allotment.
19. Lalit Kumar Jain v. Union of India (2021)
Case Summary
Promoters and directors who had given personal guarantees for corporate loans challenged a government notification that brought Part III of the IBC (Insolvency of Personal Guarantors to Corporate Debtors) into effect. They argued that once a Corporate Debtor’s resolution plan is approved and the company is discharged from its debts, the liability of the personal guarantors should also automatically extinguish under the Indian Contract Act.
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the notification and ruled against the promoters. It clarified that the approval of a resolution plan for the Corporate Debtor does NOT automatically discharge the Personal Guarantor. Creditors can proceed independently against the personal assets of the promoters/guarantors under the IBC to recover the remaining haircut/shortfall.
Application in Exam Case Studies
How to use this: Extremely critical for IBC. If a promoter argues in an exam that “the CoC approved the plan, so you can’t touch my personal house which I pledged,” use Lalit Kumar Jain to prove that personal guarantor liabilities survive the corporate insolvency process.
20. CIT v. Wipro Ltd. (2022)
Case Summary
Wipro submitted its original income tax return and claimed exemption under Section 10B. Later, during the assessment proceedings, it filed a revised computation withdrawing the Section 10B claim and instead opting to carry forward its losses under Section 72. The Revenue rejected this, arguing that the declaration to opt-out of Section 10B must be filed strictly *before* the due date of the original return under Section 139(1).
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the Revenue. The Court held that statutory exemptions and deductions come with mandatory conditions. The requirement to file a declaration opting out of Section 10B before the due date of the original return is a mandatory, substantive requirement, not a mere procedural one. A revised return cannot be used to introduce an entirely new claim that required prior statutory compliance.
Application in Exam Case Studies
How to use this: Use this case to emphasize the rigidity of tax timelines. If a company forgets to file an opt-out declaration or an audit report before the 139(1) deadline and tries to fix it via a revised return, quote Wipro to confirm the Assessing Officer’s rejection.
21. Maxopp Investment Ltd. v. CIT (2018)
Case Summary
The core issue revolved around Section 14A of the Income Tax Act, which disallows expenses incurred to earn exempt income (like dividends). Maxopp Investment held shares primarily to gain controlling interest in group companies, treating them as “stock-in-trade” or strategic investments, rather than just to earn tax-free dividends. The company argued that since the dominant intention was business control, the interest paid on loans used to buy these shares should not be disallowed under Section 14A.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the Revenue, rejecting the “dominant purpose” theory. The Court held that Section 14A is triggered the moment there is exempt income, regardless of the taxpayer’s original motive for the investment. If shares yield tax-free dividends, a proportional amount of expenditure (like interest on borrowed capital) must be disallowed, even if the shares are held as stock-in-trade.
Application in Exam Case Studies
How to use this: In Corporate Tax computations, if an assessee claims that interest expenditure shouldn’t be added back because they bought shares “only to acquire voting rights,” cite Maxopp to mandate the Section 14A disallowance.
22. Swiss Ribbons Pvt. Ltd. v. Union of India (2019)
Case Summary
Various corporate debtors filed petitions challenging the constitutional validity of the IBC in its entirety. They argued that the Code was heavily skewed in favor of financial creditors, violated Article 14 (Equality before Law) by treating operational creditors differently, and granted excessive powers to the Committee of Creditors (CoC) and Resolution Professionals.
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the constitutional validity of the IBC in its entirety. The Court clarified that the intelligible differentia between Financial Creditors (who inject capital and assess viability) and Operational Creditors (who supply goods/services) is valid and justified. The Court firmly established that the primary objective of the IBC is corporate reorganization and value maximization, not mere debt recovery.
Application in Exam Case Studies
How to use this: This is the foundational defense of the IBC. Use Swiss Ribbons whenever a question questions the classification of creditors, the powers of the Resolution Professional, or the legislative intent of the Code versus traditional recovery laws.
23. Union of India v. Ashish Agarwal (2022)
Case Summary
Following the Finance Act 2021, the reassessment regime (Sections 147-151) underwent a massive overhaul, replacing the old system with a new procedure under Section 148A. However, the Revenue issued over 90,000 reassessment notices between April and June 2021 under the *old* law, relying on COVID-19 extension notifications. Taxpayers challenged these notices in High Courts across India, arguing they were invalid under the new law, and most High Courts ruled in favor of the taxpayers.
Verdict & Conclusion
Supreme Court Verdict: In a landmark use of Article 142 of the Constitution, the SC struck a balance. It upheld the High Courts’ view that the old notices were invalid. However, to protect the Revenue’s interests, the SC deemed all 90,000+ invalid notices issued under the old Section 148 to be “show-cause notices” issued under the new Section 148A(b). The tax department was ordered to provide the underlying material to the assessees and proceed under the new legal framework.
Application in Exam Case Studies
How to use this: Extremely critical for Assessment Procedure questions. If a case study mentions a notice issued under the old regime after April 1, 2021, use Ashish Agarwal to explain the transition mechanism and the legal fiction created by the Supreme Court to validate the proceedings under Section 148A.
24. Union of India v. Deloitte Haskins & Sells LLP (2023)
Case Summary
During the IL&FS financial fraud scandal, the government sought to ban the former statutory auditors (Deloitte and BSR) for 5 years under Section 140(5) of the Companies Act, alleging they colluded in the fraud. The auditors argued that since they had already resigned from their position before the NCLT passed any order, Section 140(5)—which talks about “directing the company to change its auditors”—could no longer apply to them.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the Government. It held that Section 140(5) is not merely for removing an auditor, but it is a substantive penal provision to punish fraudulent auditors. Resigning from the post does not extinguish the NCLT’s jurisdiction to debar them. If auditors were allowed to escape the 5-year ban simply by resigning when they sniff an investigation, the legislative intent of combating corporate fraud would be defeated.
Application in Exam Case Studies
How to use this: Essential for Audit and Ethics questions. If a fraudulent auditor abruptly resigns to avoid an NCLT ban, invoke this case to prove that past actions trigger Section 140(5) regardless of their current employment status with the company.
25. Pioneer Urban Land and Infrastructure Ltd. v. Union of India (2019)
Case Summary
Over 100 real estate developers challenged an amendment to the IBC that legally classified real estate allottees (homebuyers) as “Financial Creditors.” The builders argued that treating homebuyers on par with banks was arbitrary, violated Article 14, and would lead to frivolous insolvency filings against healthy real estate companies over minor project delays.
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the amendment, cementing the status of homebuyers as Financial Creditors. The Court reasoned that the advance amounts paid by flat purchasers are heavily relied upon by builders to fund the project, effectively giving these advances the “commercial effect of a borrowing.” Therefore, homebuyers have the right to initiate CIRP under Section 7 and hold voting rights in the CoC.
Application in Exam Case Studies
How to use this: Use in any real estate insolvency scenario. It validates why a group of disgruntled allottees can drag a massive builder to the NCLT, establishing their legal parity with institutional lenders.
26. Competition Commission of India v. Steel Authority of India Ltd. (SAIL) (2010)
Case Summary
Jindal Steel filed information with the CCI alleging anti-competitive practices by SAIL. The CCI, upon finding a *prima facie* case, ordered the Director General (DG) to investigate under Section 26(1). SAIL appealed against this order. The core issue was whether an order directing the DG to investigate is an appealable “final order” or merely an administrative, internal step.
Verdict & Conclusion
Supreme Court Verdict: The SC held that an order passed under Section 26(1) directing the DG to investigate is merely administrative and preparatory in nature. It does not determine the rights or liabilities of the parties. Therefore, it is NOT an appealable order under the Competition Act. A company cannot halt an investigation simply by appealing a Section 26(1) direction.
Application in Exam Case Studies
How to use this: If a corporate case study shows a company rushing to the NCLAT or High Court to squash a DG investigation notice from the CCI, use SAIL to conclude that preliminary investigation orders cannot be appealed; the company must face the DG.
27. SEBI v. Kanaiyalal Baldevbhai Patel (2017)
Case Summary
Kanaiyalal was heavily penalized by SEBI under the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations for “front-running” (buying shares in his personal account just before placing a massive buy order on behalf of a corporate client, causing a price surge, and then selling for a profit). He argued that individual investors, unlike intermediaries/brokers, were not explicitly prohibited from front-running under the exact text of the PFUTP regulations at the time.
Verdict & Conclusion
Supreme Court Verdict: The SC expanded the scope of what constitutes fraud in securities markets. It ruled that front-running by *anyone* (whether an intermediary or an individual trader with inside knowledge of a large impending trade) is fundamentally fraudulent and manipulative. It breaches the market’s integrity. The penalty imposed by SEBI was upheld.
Application in Exam Case Studies
How to use this: Crucial for PFUTP and Market Manipulation questions. Quote this case to establish that “front-running” is an unfair trade practice regardless of the official designation or job title of the person executing the trade.
28. PCIT v. Swati Bajaj (Calcutta HC – 2022)
Case Summary
A major crackdown on the “Penny Stock” scam. Thousands of taxpayers claimed Section 10(38) exemptions on massive Long-Term Capital Gains (LTCG) arising from shares of unknown shell companies. The Revenue treated these gains as bogus and added them under Section 68 (Unexplained Cash Credits). Taxpayers argued the Revenue had no direct evidence against them individually, and the transactions were executed via recognized stock exchanges with paid STT.
Verdict & Conclusion
Calcutta High Court Verdict: The HC ruled in favor of the Income Tax Department. It held that the “preponderance of probability” must be applied. The astronomical rise in the share prices of companies with zero financial fundamentals, backed by SEBI/Directorate of Investigation reports of price rigging, is sufficient to treat the LTCG as a sham. The Department does not need to prove a direct, physical cash-trail linking the specific taxpayer to the market manipulator.
Application in Exam Case Studies
How to use this: In Section 68 case studies, if an assessee claims LTCG exemption solely based on “bank statements and contract notes” of a suspicious penny stock, use Swati Bajaj to validate the AO’s addition of the amount as unexplained income based on circumstantial evidence.
29. Directorate of Enforcement v. Padmanabhan Kishore (2022)
Case Summary
The respondent offered a massive bribe to a public servant. The ED registered a case under the PMLA, treating the bribe money itself as the “proceeds of crime.” The accused argued that since the bribe money was withdrawn from his own legitimate, tax-paid bank accounts, it could not possibly be categorized as “proceeds of crime.”
Verdict & Conclusion
Supreme Court Verdict: The SC delivered a critical judgment defining the scope of tainted money. It ruled that the moment clean money is handed over as a bribe in relation to a scheduled offense (Prevention of Corruption Act), it loses its legitimate character and becomes tainted. Therefore, the bribe money in the hands of the public servant, or even the money used by the briber, constitutes “proceeds of crime” actionable under the PMLA.
Application in Exam Case Studies
How to use this: Use this to counter the defense that “white money” cannot be money laundered. If white money is used to facilitate a scheduled crime, it becomes liable for attachment under PMLA.
30. Japan Airlines Co. Ltd. v. CIT (2015)
Case Summary
The core dispute was whether landing and parking charges paid by foreign airlines to the Airports Authority of India (AAI) are in the nature of “rent” for land under Section 194-I (subject to a higher TDS rate) or payment for “work/services” under Section 194C (lower TDS rate). The tax authorities demanded TDS under 194-I.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the airlines. It held that landing and parking charges are not merely for the lease or use of a specific plot of land. They are comprehensive charges for the utilization of complex airport infrastructure and services provided by the AAI (air traffic control, safety services, etc.). Therefore, these payments attract TDS under Section 194C (contract for work), not Section 194-I (rent).
Application in Exam Case Studies
How to use this: Highly relevant for TDS chapter calculations. When dealing with facility management, warehousing, or aviation fees where “land” is incidental to the “service,” quote Japan Airlines to apply the lower 194C rate.
31. Shashi Prakash Khemka v. NEPC Micon (2019)
Case Summary
A dispute arose regarding the transfer of shares. The appellants approached the civil court, but the question was whether civil courts have jurisdiction over corporate disputes concerning share transfers and rectification of registers, given the establishment of the NCLT and the explicit bar under Section 430 of the Companies Act, 2013.
Verdict & Conclusion
Supreme Court Verdict: The SC firmly established the exclusive jurisdiction of the NCLT. It ruled that Section 430 of the Companies Act creates a complete bar on civil courts from entertaining any suit or proceeding regarding matters over which the NCLT or NCLAT is empowered to determine. Disputes relating to share transfers must be exclusively resolved by the NCLT.
Application in Exam Case Studies
How to use this: Whenever a case study features a disgruntled shareholder filing a civil suit in a regular District Court for a company law matter (like oppression or share transfer), cite Section 430 and this judgment to prove the suit must be dismissed for lack of jurisdiction.
32. Standard Chartered Bank v. Directorate of Enforcement (2005)
Case Summary
The bank faced prosecution for violations of the Foreign Exchange Regulation Act (FERA). The statute prescribed a mandatory punishment of both “imprisonment AND fine” for the specific offense. The bank argued that since a corporation is a juristic person and cannot be physically sent to prison, it cannot be prosecuted under a statute that mandates imprisonment as part of the sentence.
Verdict & Conclusion
Supreme Court Verdict: The SC rejected the bank’s defense. The Court ruled that corporate immunity from imprisonment does not grant them immunity from prosecution. Where a statute mandates both imprisonment and fine, a corporate entity can still be prosecuted and, upon conviction, be punished with the imposition of the fine alone. The legislative intent to punish white-collar crimes cannot be defeated by a strict literal interpretation.
Application in Exam Case Studies
How to use this: The ultimate case for Corporate Criminal Liability in Economic Laws. If a company claims immunity from a PMLA or FEMA prosecution because the offense carries mandatory jail time, use this case to impose corporate fines.
33. Miheer H. Mafatlal v. Mafatlal Industries Ltd. (1996)
Case Summary
A classic corporate law case. A minority shareholder objected to a scheme of amalgamation approved by the overwhelming majority of shareholders and creditors. He argued before the Court that the share exchange ratio was unfair to the minority and urged the Court to rewrite or reject the scheme on financial merits.
Verdict & Conclusion
Supreme Court Verdict: The SC laid down the “broad contours of jurisdiction” for courts (now NCLT) in sanctioning mergers. The Court held that it does not act as an appellate authority over the commercial wisdom of the shareholders. As long as statutory procedures are met, the scheme is not against public interest, and the valuation is done by independent experts without fraud, the Court will not interfere with the share exchange ratio, even if a minority shareholder dislikes it.
Application in Exam Case Studies
How to use this: Crucial for Sections 230-232 questions. If the NCLT rejects a legally sound, majority-approved merger just because they think the valuation “could be better,” cite Mafatlal to prove the NCLT overstepped its bounds.
34. Manish Kumar v. Union of India (2021)
Case Summary
Homebuyers challenged an amendment to Section 7 of the IBC. The amendment introduced a threshold requiring that an application by real estate allottees against a builder must be filed jointly by at least 100 allottees or 10% of the total allottees in a project, whichever is less. Petitioners argued this violated their individual right as financial creditors to trigger insolvency.
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the constitutional validity of the minimum threshold amendment. The Court reasoned that real estate projects involve thousands of allottees, and allowing a single disgruntled homebuyer to drag an entire housing project into insolvency could stall construction and jeopardize the interests of all other homebuyers. The threshold acts as a valid filter against frivolous litigations.
Application in Exam Case Studies
How to use this: Use this when testing the prerequisites for filing a CIRP application. If an exam question mentions 5 flat owners out of a 200-flat complex filing for IBC against the builder, apply Manish Kumar to reject their application for failing to meet the 10%/100 threshold.
35. Manish Kumar v. Union of India (Validation of Sec 32A) / Prakash Industries v. UoI (Delhi HC)
Case Summary
A major legal friction point: If a Corporate Debtor is acquired by a new, innocent management (Resolution Applicant) under the IBC, can the Enforcement Directorate (ED) still attach the company’s properties under the PMLA for frauds committed by the old management? Section 32A was introduced in the IBC to provide a “clean slate” to the new management, but the ED frequently challenged it.
Verdict & Conclusion
Judicial Consensus (SC & High Courts): The courts have cemented the “Clean Slate” theory. Under Section 32A of the IBC, once a resolution plan is approved, the Corporate Debtor is entirely discharged from prior offenses. Properties of the CD cannot be attached by the ED under the PMLA for crimes committed by the erstwhile promoters, provided the new management is completely independent and had no part in the prior fraud.
Application in Exam Case Studies
How to use this: The ultimate integration question for Corporate Laws. If Reliance buys an insolvent company through NCLT, and the next day the ED arrives to seize the factory because the old promoters laundered money, cite Section 32A and the Clean Slate doctrine to shield the new resolution applicant.
36. Malabar Industrial Co. Ltd. v. CIT (2000)
Case Summary
The Assessing Officer (AO) accepted the assessee’s claim for a business loss without conducting any inquiry or investigation into the underlying facts. The Commissioner of Income Tax (CIT) invoked Section 263 to revise the AO’s order, arguing that the order was “erroneous and prejudicial to the interests of the revenue.” The assessee challenged this, stating the AO simply took one of two possible legal views.
Verdict & Conclusion
Supreme Court Verdict: The SC upheld the CIT’s revision. It laid down a fundamental rule: an order is “erroneous” if it is passed on an incorrect assumption of facts or an incorrect application of law, OR if it is passed *without applying the mind or conducting necessary inquiries*. Since the AO accepted the loss blindly without verification, the order was both erroneous and prejudicial to the revenue.
Application in Exam Case Studies
How to use this: Essential for Section 263 Assessment questions. If an AO passes an order simply by stamping “accepted” without asking for supporting documents for a massive deduction, cite Malabar Industrial to validate the Commissioner’s power to tear up that assessment.
37. Shanti Prasad Jain v. Kalinga Tubes Ltd. (1965)
Case Summary
A classic and foundational case in Indian corporate law. Two rival groups of shareholders were fighting for control. The majority group, through board resolutions, issued new shares to their own friends and associates, effectively diluting the minority shareholder (S.P. Jain) to a powerless position. Jain sued for oppression.
Verdict & Conclusion
Supreme Court Verdict: The SC established the legal threshold for “oppression.” It ruled that oppression must involve continuous, harsh, and burdensome conduct by the majority that lacks probity and fair dealing. A mere loss of confidence or a single act of issuing shares (unless strictly proven to be a fraudulent deprivation of rights) does not automatically amount to oppression justifying winding up.
Application in Exam Case Studies
How to use this: Use this as the bedrock for Section 241/242 questions. If minority shareholders complain about a single business decision they disagreed with, cite this case to show that the conduct must be *continuous* and objectively *burdensome* to succeed in court.
38. B.K. Educational Services Pvt. Ltd. v. Parag Gupta and Associates (2018)
Case Summary
The core dispute was whether the Limitation Act, 1963 applies to applications filed under Section 7 and Section 9 of the IBC. Several creditors were digging up 10-year-old “time-barred” debts and filing for insolvency against companies, arguing that the IBC was a complete code and did not explicitly incorporate the Limitation Act initially.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled definitively that the Limitation Act, 1963 applies to the IBC from its inception. Specifically, Article 137 of the Limitation Act applies, meaning an insolvency application must be filed within 3 years from the date of default. A debt that is dead and time-barred under general law cannot be miraculously revived simply by filing an IBC petition.
Application in Exam Case Studies
How to use this: The ultimate defense for old debts. If a case study features a bank trying to initiate CIRP in 2026 for a loan that defaulted with no acknowledgment since 2018, use this case to throw out the application as time-barred.
39. Rajasthan Cylinders and Containers Ltd. v. UoI (2018)
Case Summary
The CCI penalized 45 LPG cylinder manufacturers for allegedly forming a cartel and quoting identical prices in a massive tender issued by Indian Oil Corporation (IOCL). The manufacturers appealed, arguing that IOCL is a monopoly buyer (monopsony/oligopsony), dictates the prices, and leaves no room for independent pricing, which inevitably leads to “price parallelism.”
Verdict & Conclusion
Supreme Court Verdict: The SC overturned the CCI’s penalty. It ruled that mere “price parallelism” (everyone quoting the same price) does not automatically prove a cartel, especially in a market with only one mega-buyer (IOCL) who strictly controls the tender conditions and historically negotiates everyone down to a single L-1 rate. Context matters; market conditions dictated the identical pricing, not a secret agreement.
Application in Exam Case Studies
How to use this: Highly testable in Competition Law. If multiple suppliers quote the exact same price to the Railways or Defence Ministry, use this case to argue that in a “buyers’ market,” price parallelism is a natural economic outcome, not an illegal cartel.
40. Mak Data P. Ltd. v. CIT (2013)
Case Summary
During a tax scrutiny/search, incriminating documents regarding hidden income were found. To buy peace and avoid litigation, the assessee “voluntarily” surrendered the income and paid the tax, but argued that since the surrender was voluntary and conditional upon no penalties being levied, the AO could not impose a penalty for concealment of income.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the Revenue. It held that there is no concept of a “conditional surrender” in the Income Tax Act. Surrendering hidden income only *after* being caught during a search or scrutiny does not absolve the taxpayer from the penalty for concealment. The intention to evade tax is established the moment the original return is filed hiding that income.
Application in Exam Case Studies
How to use this: If a taxpayer in an exam case study gets caught hiding ₹5 Crores in a search and says, “Okay, I surrender it, but don’t charge penalties,” quote Mak Data to authorize the AO to levy full penalties regardless of the “surrender.”
41. N. Narayanan v. Adjudicating Officer, SEBI (2013)
Case Summary
The Promoters and Directors of a company artificially inflated the company’s profits and revenues in their published financial statements to pump up the share price. When SEBI penalized them, the directors argued that they relied completely on the statutory auditors and the accounts department, and thus had no personal knowledge of the falsification.
Verdict & Conclusion
Supreme Court Verdict: The SC categorically rejected the “ignorance” defense. It ruled that Directors have a statutory duty to ensure that financial statements represent a true and fair view of the company. They cannot simply pass the buck to auditors or employees. Deliberately publishing false financials to mislead investors is a severe fraud under SEBI’s PFUTP Regulations, and directors are personally liable.
Application in Exam Case Studies
How to use this: Essential for Director’s Duties (Sec 134/166) and SEBI fraud cases. Whenever a director tries the “I’m not an accountant, I just signed what they gave me” excuse after a massive accounting scam, use this case to hold them guilty.
42. Directorate of Enforcement v. MCTM Corporation Pvt. Ltd. (1996)
Case Summary
A corporation was penalized for failing to repatriate foreign exchange back to India within the stipulated time under the foreign exchange laws. The company defended itself by arguing there was no *mens rea* (criminal intent or guilty mind) to violate the law; it was merely a circumstantial delay.
Verdict & Conclusion
Supreme Court Verdict: The SC established a fundamental rule for economic offenses. It ruled that *mens rea* is a requirement for criminal convictions, but it is NOT required for imposing civil penalties under statutes like FERA/FEMA or the Income Tax Act. A breach of a civil, statutory obligation automatically attracts the penalty, regardless of the person’s innocent or guilty intentions.
Application in Exam Case Studies
How to use this: Highly relevant for FEMA adjudication questions. If a company inadvertently violates an RBI master direction and pleads “no bad intentions,” cite this case to confirm that the Adjudicating Authority can still levy heavy financial penalties.
43. Y. Balaji v. Karthik Desari (2023)
Case Summary
An accused in a “cash-for-jobs” scam reached a compromise with the victims, returned the money, and got the primary criminal case (the Scheduled Offense under the IPC/Prevention of Corruption Act) quashed by the High Court. They then argued that since the primary offense was gone, the ED must immediately drop the PMLA (money laundering) proceedings.
Verdict & Conclusion
Supreme Court Verdict: The SC gave a massive boost to the ED’s powers. It ruled that reaching a private “compromise” or refunding the bribe money does not magically wipe away the fact that corruption and money laundering occurred. Unlike civil disputes, corruption is a crime against society. The SC overturned the quashing of the scheduled offense and allowed the ED to proceed with the PMLA investigation.
Application in Exam Case Studies
How to use this: If a case study involves a fraudster paying off victims to drop the police FIR, and then demanding the ED release their attached properties, quote Y. Balaji to prove that money laundering offenses cannot be “settled” out of court.
44. Empire Jute Co. Ltd. v. CIT (1980)
Case Summary
To prevent overproduction and price drops in the jute industry, mills formed an association and allotted “working hour looms” to each member. Empire Jute bought extra loom hours from another mill to run its machines longer. The tax department disallowed the expense, calling it a Capital Expenditure since it granted an enduring benefit. The assessee argued it was a Revenue Expenditure to facilitate day-to-day business.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the assessee. It established the “Advantage of Enduring Benefit” test. If an expenditure merely facilitates the carrying on of a business more efficiently or profitably while leaving the fixed capital untouched, it is a Revenue Expenditure. Since buying loom hours didn’t add a physical machine but just allowed them to work longer, it was fully deductible as a revenue expense.
Application in Exam Case Studies
How to use this: The ultimate test for PGBP expenses. When evaluating payments for software licenses, commercial rights, or quotas that don’t result in a tangible fixed asset but just maximize daily profits, use this case to categorize them as revenue expenditure.
45. Brilliant Alloys Pvt. Ltd. v. Mr. S. Rajagopal (2018)
Case Summary
Under Section 12A of the IBC, a CIRP application can be withdrawn if 90% of the Committee of Creditors agrees. However, an IBBI Regulation stated that this withdrawal application must be filed *before* the public issue of the Invitation for Expression of Interest (EOI). In this case, the promoters reached a settlement with creditors *after* the EOI was published. The NCLT rejected the withdrawal based on the regulation’s timeline.
Verdict & Conclusion
Supreme Court Verdict: The SC overruled the NCLT and allowed the withdrawal. The Court held that the IBBI regulation imposing the timeline (before EOI) is merely “directory” in nature, not mandatory. If 90% of the CoC genuinely agrees to a settlement and wants to withdraw the company from insolvency, a rigid procedural regulation cannot override the commercial wisdom and statutory right provided under Section 12A.
Application in Exam Case Studies
How to use this: Use this when testing IBC timelines. If the NCLT blocks a completely valid, CoC-approved 12A settlement purely because it was filed a week late according to IBBI regulations, cite this case to show the regulation is flexible.
46. Maruti Suzuki India Ltd. v. CIT (Delhi High Court – 2015)
Case Summary
A massive Transfer Pricing dispute. The Income Tax Department argued that Maruti India was spending excessively on Advertising, Marketing, and Promotion (AMP) in India. The Revenue claimed this excessive spending was secretly building the “Suzuki” brand (a foreign intangible asset owned by its Japanese parent) and demanded a transfer pricing adjustment, arguing the foreign parent should compensate the Indian subsidiary.
Verdict & Conclusion
Delhi High Court Verdict: The HC ruled in favor of Maruti Suzuki. It held that the mere fact that an Indian subsidiary spends heavily on AMP, which incidentally benefits the foreign parent’s brand, does not create an “international transaction.” Without an explicit agreement or arrangement between the parent and subsidiary to incur such costs specifically for brand building, the Transfer Pricing Officer (TPO) cannot arbitrarily make additions.
Application in Exam Case Studies
How to use this: Essential for International Taxation and Transfer Pricing. If a TPO makes an adjustment simply by comparing a company’s marketing budget to an industry average (the Bright Line Test), use this case to invalidate the adjustment.
47. Hind Overseas Pvt. Ltd. v. Raghunath Prasad Jhunjhunwalla (1976)
Case Summary
A private company was formed by members of a family. Factions developed, and one group sought to wind up the company under the “just and equitable” clause, arguing that the company was essentially a partnership disguised as a corporation, and since there was a deadlock and loss of trust (as in a partnership), it should be dissolved.
Verdict & Conclusion
Supreme Court Verdict: The SC held that while the principles of dissolving a partnership can sometimes apply to small, family-owned “quasi-partnership” private companies, it is not an automatic right. To order a winding up on just and equitable grounds, there must be a complete deadlock in management or a complete loss of the company’s substratum. The Court will not wind up a profitable company merely because two family members had a falling out.
Application in Exam Case Studies
How to use this: Use for Section 271 Winding Up questions. It proves that the “just and equitable” clause is a remedy of last resort. Courts prioritize the survival of the corporate entity over resolving petty family squabbles.
48. MCX Stock Exchange Ltd. v. National Stock Exchange of India (CCI – 2011)
Case Summary
When the Currency Derivatives (CD) segment was launched in India, the National Stock Exchange (NSE) offered these trading services completely free of cost (zero transaction fees, zero data feed fees). MCX-SX, a newer rival, complained to the CCI that NSE, leveraging its massive dominance in other equity markets, was using “predatory pricing” (pricing below cost) in the CD segment to financially bleed and kill MCX-SX.
Verdict & Conclusion
CCI Verdict: The CCI delivered a landmark ruling against the NSE. It held that while introductory zero-pricing is sometimes acceptable for new entrants, a dominant player doing it indefinitely constitutes an abuse of dominant position (predatory pricing) under Section 4. The CCI ordered the NSE to stop its zero-pricing policy and imposed a heavy penalty for distorting the market.
Application in Exam Case Studies
How to use this: Highly relevant for Section 4 Abuse of Dominance. If a massive tech or finance giant offers a new service for ₹0 specifically to bankrupt a smaller competitor, invoke MCX v. NSE to prove predatory pricing.
49. Bangalore Club v. CIT (2013)
Case Summary
The Bangalore Club (a mutual association) deposited surplus funds in fixed deposits with four banks that happened to be corporate members of the club. The club earned interest on these FDs and claimed it was exempt from income tax under the “Doctrine of Mutuality” (the principle that one cannot make a profit from oneself). The Revenue taxed the interest.
Verdict & Conclusion
Supreme Court Verdict: The SC ruled in favor of the Revenue. For the doctrine of mutuality to apply, there must be a complete identity between the contributors to the fund and the participators in the fund. When the club put money in the bank, the funds entered the commercial banking system and lost their mutual character. The bank paid interest as a commercial entity, not as a club member. Therefore, the interest is fully taxable.
Application in Exam Case Studies
How to use this: A guaranteed test item for Assessment of AOP/BOI/Clubs. If a housing society or a sports club claims tax exemption on FD interest earned from a bank, use Bangalore Club to deny the exemption and tax it under “Income from Other Sources.”
50. Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt Ltd (2021)
Case Summary
To protect businesses during the COVID-19 pandemic, the Government inserted Section 10A into the IBC, suspending the filing of new insolvency applications for any default arising on or after March 25, 2020. An Operational Creditor filed a Section 9 application in May 2020 for a default that occurred on April 30, 2020. They argued that Section 10A was officially enacted via ordinance in June 2020, so it shouldn’t apply retrospectively to an application filed in May.
Verdict & Conclusion
Supreme Court Verdict: The SC rejected the creditor’s argument and upheld the absolute nature of Section 10A. The Court ruled that the date of the default is the sole deciding factor. Since the default occurred after March 25, 2020, the prohibition on filing CIRP is absolute and permanent for that specific default, regardless of when the application was actually filed or when the ordinance was published. The CIRP application was dismissed.
Application in Exam Case Studies
How to use this: Crucial for understanding the permanent shield of Section 10A. If a case study shows a creditor trying to sue a company today for a debt that explicitly defaulted during the COVID blackout period (Mar 2020 – Mar 2021), cite this case to prove that specific default can *never* be the basis for an IBC petition.
