THE LAW OF MITIGATION
Introduction “In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account.” (emphasis supplied) What does taking reasonable steps mean in the context of mitigation of losses? Duty to mitigate : a statutory mandate or not? Conclusion Nikhilesh Koundinya, Senior Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Copyright © 2026 Solomon & Co., All rights reserved.
Practical Implications of Interim Compensation in Negotiable Instruments Act Proceedings
Introduction The Negotiable Instruments Act, 1881 (“NI Act”) was enacted to regulate the law governing promissory notes, bills of exchange, cheques, and similar negotiable instruments. Over time, these instruments, particularly cheques, have become integral to business transactions, offering a convenient and reliable method for transferring funds. With the growth of the banking system, cheques evolved into an essential tool for monetary exchange, not only between individuals but also in the broader commercial sphere. However, the widespread use of cheques also led to certain challenges, particularly the practice of dishonouring cheques. This situation became grim when drawers issued cheques without maintaining sufficient funds in their accounts, leading to distrust in the banking system and the negotiable instruments themselves. In response, to safeguard the interests of the creditors and maintain confidence in the banking system, Sections 138 to 142 of the NI Act were introduced. In 1988, the Banking, Public Financial Institutions, and Negotiable Instruments (Amendment) Act was passed, incorporating Chapter XVII to the NI Act, thereby introducing penalties for the dishonour of cheques. This amendment aimed to address the issue of dishonoured cheques due to insufficient funds, ensuring that creditors could have legal recourse to recover amounts due. This was further strengthened by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, which introduced Sections 143 to 147 to expedite the resolution of such cases and help in boosting the confidence of the creditor. Issue of prolonged litigation Despite these legislative provisions, increase in the number of cheque dishonour cases under Section 138 of the NI Act, coupled with the backlog of pending cases, created a significant issue for creditors. As of 2024, approximately 43 Lakh cases related to cheque dishonour under Section 138 were pending in courts, contributing to the huge backlog of criminal cases. This delay in resolving disputes implied that creditors often had to endure long periods before receiving the fine or compensation imposed upon the accused, even in cases where cheques had been issued in payment of legitimate dues. The legislature, therefore, sought to address this issue by introducing provisions for interim compensation during the pendency of Section 138 proceedings. Introduction of Sections 143A and 148 of the NI Act In response to the aforementioned challenges, the Negotiable Instruments (Amendment) Act, 2018 introduced two important provisions: Applicability of Sections 143A and 148: Prospective vs Retrospective The Supreme Court of India has discussed and explained the applicability of these provisions, specifically addressing whether they should apply prospectively or retrospectively. In G.J. Raja vs. Tejraj Surana, the Court held that Section 143A, due to its provision for interim compensation before the accused is found guilty, should apply prospectively. The Court reasoned that applying it to offences committed before the amendment could unfairly penalize the accused for actions predating the legislative change. However, in Surinder Singh Deshwal vs. Virender Gandhi, the Supreme Court interpreted Section 148 to be retrospective. The court noted that, unlike Section 143A, which applies at the trial stage, Section 148 applies at the appellate stage after the accused is found guilty under Section 138 of the Act. Judicial Interpretation of “May” vs “Shall” The discretionary nature of interim compensation under Section 143A and Section 148 has been a subject of judicial interpretation. In Surinder Singh Deshwal vs. Virender Gandhi (supra), the Supreme Court interpreted the word “may” in Section 148 to mean “shall”, thus making interim compensation mandatory unless specific reasons for non-deposit are recorded by the appellate court. Conversely, in Jamboo Bhandari vs. M.P. State Industrial Development & Ors , the Supreme Court clarified that Section 143A remained discretionary. Since this provision applies before the conviction of the accused, trial courts must assess the prima facie merits of the complainant’s case, the defence raised by the accused, and factors such as the financial condition of the parties before awarding interim compensation. Ultimately, the Hon’ble Supreme Court cleared the ambiguity related to the mandatory or discretionary nature of S. 143 in its judgement in the case of Rakesh Ranjan Shrivastava vs. The State of Jharkhand & Anr and held that power to grant interim compensation in cheque bounce cases under sub-section (1) of Section 143A of the Negotiable Instruments Act, 1881 (N.I. Act) is discretionary and not mandatory. Conclusion The 2018 amendments to the Negotiable Instruments Act represent a significant shift in the way cheque dishonour cases are handled in India. By introducing provisions for interim compensation under Section 143A and appellate relief under Section 148, the legislature aims to protect creditors from the prolonged delays in judicial proceedings and restore faith in the use of negotiable instruments, especially cheques. Through these reforms, the NI Act remains a crucial element in fostering a trustworthy, efficient, and secure business environment in India, thereby strengthening the country’s commercial landscape and ensuring that business transactions are fair, transparent, and timely.
When Development Meets Mumbai’s Salt-Pan Lands: A Legal Perspective
Introduction: Mumbai’s salt pans are no longer just remnants of its salt making industry, they now stand at the centre of the city’s land use debate. With severe scarcity of buildable land and escalating property prices, these tracts are viewed as potential reserves for housing, slum rehabilitation, and infrastructure. The Maharashtra Government, under pressure to execute ambitious housing and rehabilitation initiatives including large scale projects such as the Dharavi Redevelopment Scheme, has repeatedly looked towards these lands as a possible solution. Yet, their development is entangled in legal, environmental, and social complexities that make them far more than vacant plots awaiting construction. Ownership and Transfer: The starting point lies in ownership. Salt-pan lands are formally vested in the Union Government and managed through the office of the Salt Commissioner. Leasehold rights were historically granted to private salt manufacturers, giving rise to a dual ownership structure that often leads to jurisdictional conflicts between the Centre and the State. This tension between central control and state level planning has long shaped the narrative of how Mumbai can or cannot access these lands. To address such conflicts, the Internal Policy Guidelines on Transfer of Salt Lands, 2024 now provide a mechanism for transfer, primarily for public purposes such as affordable housing or rehabilitation. Yet, in Mumbai and its suburban districts, Cabinet approval remains a mandatory safeguard before any transfer can take effect. This insistence on higher scrutiny reflects the delicate balance between public interest and private speculation in a city where every acre of land carries outsized stakes. For developers, rights accrue only after a valid transfer, typically through a 99 year lease carrying strict restrictions. Any diversion of land use invites cancellation and reversion to the Government. For citizens, these transfers are more than bureaucratic transactions, they represent either the promise of housing and rehabilitation, or, if mishandled, the risk of being sidelined in favour of private profit. Against this backdrop, the legacy of leasehold arrangements further complicates matters. Leasehold Disputes: Even where ownership is clear, questions of possession remain fraught. Many of the leases granted decades ago for salt production have expired or remain pending renewal, yet lessees often continue to claim rights and occupation. The Government maintains that such rights lapse automatically upon expiry, while lessees assert continuity, leading to disputes over renewal, compensation, and reversion. These disagreements do not exist in a vacuum, they feed directly into the city’s development logjam. For developers, unclear title makes investment risky and renders projects vulnerable to litigation. For the State, unresolved disputes delay the execution of large scale housing and rehabilitation schemes. And for citizens, the consequences are immediate, families promised resettlement remain in limbo while technical lease battles drag on in courts. Unsurprisingly, judicial precedents have underlined that unless such disputes are conclusively resolved, no redevelopment can lawfully proceed. But even when these hurdles are cleared, another challenge looms the environment itself. Environmental Safeguards: Even when ownership and leasehold questions are addressed, environmental restrictions present another formidable layer of complexity. Salt-pan lands lie in coastal and low lying zones, making them ecologically sensitive and subject to overlapping statutory regimes. The Coastal Regulation Zone (CRZ) Notification, 2011 (as amended in 2019) places strict limits on construction along coastal stretches, while the Wetlands (Conservation and Management) Rules, 2017 prohibit reclamation and development in notified wetlands. Although the 2024 Guidelines exclude salt pans from the definition of wetlands for housing and rehabilitation purposes, CRZ restrictions remain firmly applicable. For developers, this means navigating multiple clearances from the Ministry of Environment, Forest and Climate Change, the Maharashtra Coastal Zone Management Authority, and the municipal planning authorities under the Development Control and Promotion Regulations. Obtaining these clearances not only delays projects but also risks cancellation and prolonged litigation. For citizens, environmental safeguards represent both protection and delay. On one hand, they preserve the city’s fragile drainage systems and prevent unregulated construction that could worsen flooding and ecological degradation. On the other, they can slow or halt projects that promise much needed affordable housing and rehabilitation. This tension has made public participation through environmental hearings and Public Interest Litigations. For instance, in Vaamika Island v. Union of India, the Supreme Court reaffirmed the primacy of environmental law by holding that no construction could be permitted in ecologically sensitive areas, even if the land was privately owned, unless clearances under applicable environmental statutes were obtained. The Court emphasized that sustainable development must not be at the cost of environmental degradation, and where there is uncertainty, the precautionary principle must apply. Permissions and Regulatory Approvals For Construction: Perhaps the most tedious element in the utilisation of salt-pan lands for urban development is the labyrinth of approvals required from multiple regulatory bodies. Any construction proposal must first secure no objection certificates (NOCs) from the Salt Commissioner’s Office, since these lands fall under central ownership. Additionally, environmental clearances under the Environmental Impact Assessment (EIA) Notification are mandatory, requiring project specific studies on ecological impact, flood risks, and drainage patterns. CRZ clearance from the Ministry of Environment, Forest and Climate Change is essential, along with permissions under the Wetlands Rules where applicable. Local authorities such as the Municipal Corporation of Greater Mumbai (MCGM) must also grant building approvals, land use conversions, and development permissions in accordance with the Development Control and Promotion Regulations (DCPR). Furthermore, the Maharashtra Coastal Zone Management Authority (MCZMA) must evaluate and recommend projects before final approval by the central ministry. The overlapping jurisdiction of these bodies, coupled with the possibility of objections by citizens or NGOs at public hearing stages, makes the process highly time consuming and uncertain. This web of procedural obligations illustrates why, despite repeated announcements, actual construction on salt-pan lands has rarely materialised. Judicial Oversight and Public Rights: The judiciary has played a decisive role in shaping the legal landscape around salt-pan lands in Mumbai. In Sagar Kantilal Deore v. State of Maharashtra (2024), the Bombay High Court upheld the transfer of over 250 acres of salt-pan land for rehabilitation linked to the Dharavi
PAGDI SYSTEM IN INDIA – A RELIC ON ITS WAY OUT
INTRODUCTION The Pagdi System is a unique and deeply rooted form of tenancy in India, particularly prominent in older parts of cities like Mumbai, Delhi and Kolkata. Unlike conventional rental arrangements, this system offers tenants more than mere occupancy, it grants them semi-ownership rights, and the ability to sublet the premises or sell the property to another person. This arrangement blurs traditional roles, fostering a shared stake between landlord and tenant in the property’s management. At its core, the Pagdi system ensures long-term security for tenants, which frequently extends across generations. ORIGIN Also known as the ‘Pagdi-Kirayedar’ system, the Pagdi system has diminished to a few parts of India but is still widely prevalent in Mumbai, Delhi and Kolkata especially the older areas. Originating in the pre-independence era to navigate the heavy taxation policies imposed by the British, the Pagdi system has stood the test of time and continues to serve a crucial role in the modern real estate sector. The system was practically designed to be a workaround to reduce the burden of taxes on both sides and this clever adaptation not only ensured that tenants could live affordably but also provided landlords with a steady source of income, thus stabilizing the local economy while subtly challenging the financial constraints imposed during the colonial rule. Up until 1999, there was no statutory provision that supported this system. However, the Maharashtra Rent Control Act of 1999 legalized this system under Section 56 of the Act which provides that the Tenant can receive money or other considerations when relinquishing, transferring, or assigning their tenancy rights and the Landlords are also to receive money for granting or renewing a lease, or for consenting to a lease transfer according to the agreement between the two. FUNCTIONING At its core, the Pagdi system is like the conventional rental system that prevails. The only difference is that the Tenant also owns a part of the property and has the ability to sublet or sell it. Under this system, the tenant pays a lump sum amount known as ‘Pagdi’ to the landlord, usually a multiple of the monthly rent. In exchange, the landlord ensures that the tenant pays a minimal amount of rent which is lower than the existing market rates while still being a co-owner of the property. It is important to note that while the Pagdi Tenant might be considered a co-owner of the house, they don’t own the land it stands on. For tax purposes, it’s crucial to understand that Pagdi tenants do not own the property itself. What they possess is the right to occupy it. Therefore, when they receive compensation for leaving the premises, this amount is not treated as the sale proceeds of a house. Rather, it represents payment for the transfer of their right to reside in the property. TRANSFER OF OWNERSHIP As a part-owner of the property, the tenant also possesses the ability to sell their interest. Unlike conventional property transactions, transferring ownership within the Pagdi system is a complex process. It necessitates a three-party agreement involving the landlord, the current tenant, and the incoming tenant or prospective buyer. This crucial agreement ensures mutual consent on all conditions, including the “Pagdi” (or premium) payment to the landlord. Should a tenant choose to transfer their rights, a portion of the sale proceeds, typically ranging from 30% to 50%, must be paid to the landlord. This exact percentage isn’t fixed, and it depends on the property’s location and any mutual agreements between the parties. Additionally, for transfer to non-blood relatives, a No-objection Certificate is required which prevents any future claims in respect to the property. Normally, the Tenant is the sole occupier of the flat meaning he cannot sub-let it to another person but in this system, things are a little different. Here, the Tenant has the right to further sub-let it to another person which is after the consent of the Landlord. The sub-letting, however, does carry a cost for the Tenant. In case of sub-letting, the rental income is usually divided in a ratio of 35:65. This means that out of the total rental income, only 35% goes to the Tenant whereas the rest goes to the Landlord. The consent of the Landlord is necessary, and it is advisable for the Tenant that the consent be taken in writing to avoid any future discrepancies. INHERITANCE AND SUCCESSION: Section 7 (15) (d) of the Maharashtra Rent Control Act, 1999, states that a tenant’s family member who has been living with the deceased tenant at the time of his/her death shall be eligible first from the family as the successor to succeed the tenancy. Under the Pagdi system, testamentary succession is not possible as the tenancy rights are not transferable through a Will because they are inherently specific to the individual tenant and thus fall outside the scope of testamentary disposition. To assert a claim to the deceased tenant’s rights, a family member is required to furnish proof of continuous cohabitation with the tenant up to the point of their demise. This stipulation ensures that succession to the tenancy is limited to those who shared an intimate familial bond and maintained a shared residence with the original tenant. Upon successful establishment as the legitimate heir and successor, the new tenant is then entitled to request the landlord to issue a fresh rent receipt bearing their name. CURRENT TIMES AND WHY ITS FADING: The Pagdi system traces its origins to the British era, initially devised as a mechanism to avoid excessive property taxation. Over time, it became an entrenched tenancy practice, particularly in metropolitan cities such as Mumbai, Delhi, and Kolkata. Even today, it continues to survive despite sweeping reforms in property and tenancy laws. In cities like Mumbai, where real estate prices have escalated steeply, a significant portion of the population, often estimated at around 30–35% is migratory or “floating.” For such groups, the Pagdi system offered a relatively uncomplicated and affordable form of tenancy, with the additional advantage that
Navigating Indian Regulatory Landscape for Offshore Fund Restructuring: Key Compliance Considerations
Introduction The increasing sophistication of offshore investment structures has brought with it complex regulatory considerations when restructuring involves Indian assets or entities. Foreign investors utilizing offshore funds to invest in Indian markets must navigate a intricate web of foreign exchange regulations, corporate law requirements, and sector-specific approvals. This article examines the critical compliance aspects that arise during offshore fund restructuring transactions involving Indian investments. Foreign Exchange Management Act (FEMA) Implications Offshore Share Transfers vs. Downstream Investment Rules Under the Foreign Exchange Management Act, 1999, and the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, purely offshore transfers between non-resident entities typically fall outside direct Indian regulatory purview. However, the downstream investment provisions under Rule 23 of the NDI Rules create significant compliance obligations where such transfers impact the classification of Indian subsidiaries as Foreign Owned or Controlled Companies (FOCCs). When offshore restructuring triggers FOCC status changes, mandatory Form DI filings with the Reserve Bank of India and intimation to the Department for Promotion of Industry and Internal Trade must be completed within thirty days. This post-facto reporting requirement, while not requiring prior approval, carries strict compliance timelines with potential penalties for delays. Press Note 3 (2020) Considerations A critical trap for offshore restructuring involves incoming investors from countries sharing land borders with India. Press Note 3 of 2020 mandates government approval for any investment, direct or indirect, by entities from such jurisdictions, even for purely offshore transactions. This requirement extends to beneficial ownership analysis, making thorough due diligence on investor backgrounds essential before transaction completion. Corporate Law and Beneficial Ownership Disclosure Section 90 and SBO Rules Compliance The Companies Act, 2013, particularly Section 90 read with the Companies (Significant Beneficial Ownership) Rules, 2018, creates extensive disclosure obligations for Indian entities. The definition of “significant beneficial owner” under Rule 2(h) captures individuals holding indirect stakes through various structures, including pooled investment vehicles. Notably, the SBO Rules specifically identify investment managers and general partners of pooled investment vehicles as potentially reportable beneficial owners, regardless of their direct shareholding. This provision requires careful consideration when restructuring involves changes in fund management or control structures. Indian reporting companies must proactively identify beneficial ownership changes and ensure Form BEN-1 filings within thirty days. The rules mandate notices to members holding ten percent or more stakes, creating cascading disclosure obligations throughout complex holding structures. Sectoral Regulatory Approvals Industry-Specific Considerations Offshore restructuring becomes significantly more complex when Indian portfolio companies operate in regulated sectors. Financial services entities require Reserve Bank of India approvals, telecommunications companies need Department of Telecommunications clearances, and infrastructure projects may require multiple sectoral permissions. The concept of “change of control” varies across sectors but generally triggers when ownership or voting control exceeds fifty percent thresholds. Competition Law Thresholds The Competition Act, 2002, applies combination thresholds based on asset values and turnover metrics. Transactions crossing these thresholds require Competition Commission of India pre-merger notification. Tax Implications and Anti-Avoidance Measures Indirect Transfer Provisions Section 9(1)(i) of the Income Tax Act, 1961, particularly Explanation 5 introduced by the Finance Act, 2012, subjects offshore share transfers to Indian capital gains taxation where underlying Indian assets comprise substantial value (exceeding fifty percent) and fair market values exceed ₹10 crores. The interaction between indirect transfer provisions and tax treaty benefits requires careful analysis, as the introduction of General Anti-Avoidance Rules (GAAR) and Limitation of Benefits provisions demands substantive economic presence and beneficial ownership analysis. Contractual and Commercial Considerations Joint Venture and Shareholders’ Agreement Compliance Beyond statutory requirements, offshore restructuring frequently triggers contractual approval mechanisms. Joint venture agreements, shareholders’ agreements, and financing documents commonly contain change of control provisions requiring counterparty consents or offering rights of first refusal. Investment management agreements may define manager changes as key-person events or material adverse changes, potentially affecting fund operations or investor rights. Comprehensive contract review prior to restructuring would prevent inadvertent breaches and operational disruptions. Conclusion Offshore fund restructuring involving Indian assets demands a comprehensive understanding of interconnected regulatory requirements spanning foreign exchange law, corporate governance, sector-specific regulations, and taxation. The evolving regulatory landscape, particularly regarding beneficial ownership disclosure and anti-avoidance measures, requires proactive legal planning and coordinated compliance strategies. Legal practitioners and fund managers must appreciate that offshore transactions can trigger substantial Indian regulatory obligations through downstream investment rules, indirect transfer taxation, and beneficial ownership reporting requirements. Early identification of applicable requirements and systematic compliance planning remain essential for successful restructuring transactions while maintaining regulatory integrity and operational continuity. – Ankita Mishra, Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Copyright © 2026 Solomon & Co., All rights reserved.
Non-Disclosure Agreements: Enforcement & Challenges
Non-Disclosure Agreements (NDAs) have become indispensable tools for protecting confidential information in India’s rapidly evolving business landscape. From safeguarding trade secrets to protecting proprietary technologies, NDAs serve as the first line of defense against unauthorized disclosure of sensitive information. However, despite their widespread use, the enforcement of NDAs presents unique challenges that require careful navigation through complex legal frameworks and evolving jurisprudence. Legal Framework and Enforceability NDAs in India are governed primarily under the Indian Contract Act, 1872, which requires all essential elements of a valid contract to be satisfied for enforceability. For an NDA to be legally binding, it must demonstrate clear offer and acceptance, lawful consideration, free consent of all parties, and a legal purpose. To maximize enforceability, NDAs must include several critical components. First, there must be a clear definition of confidential information to avoid ambiguity that could render the agreement unenforceable. The obligations of receiving parties must be explicitly specified, along with reasonable duration limits that avoid perpetual obligations for non-trade secret information. Essential elements would include acknowledgments of information value and potential irreparable harm from disclosure, established procedures for identifying confidential information through labels and notices, and detailed obligations regarding return or destruction of confidential information upon agreement termination. Additionally, NDAs should specify required safeguards for maintaining confidentiality and include appropriate dispute resolution mechanisms. Common Enforcement Challenges Despite careful drafting, several systemic challenges undermine NDA enforceability in India. Overbroad definitions and scope represent a primary concern, where courts may refuse to enforce NDAs that define confidential information too broadly, attempt to protect publicly available information, or impose blanket restrictions without reasonable limitations. Evidentiary challenges pose significant practical enforcement difficulties, including proving the source of information leaks, establishing actual damage from disclosure, demonstrating that reasonable precautions were taken to maintain confidentiality, and tracking unauthorized use of information. The burden of proof lies with the party claiming breach, necessitating concrete evidence of violation. Jurisdictional and cross-border issues have become increasingly complex in globalized business environments. Enforcing Indian judgments abroad can be complicated, conflicts of law may arise with international parties, and different jurisdictions maintain varying standards for NDA enforcement. Specific Complications Ambiguity in contractual terms represents the primary enforcement obstacle. Vague language in NDAs can result in disputes due to misinterpretation of clauses, making it challenging for parties to grasp the contract’s true intent. Courts consistently emphasize that NDAs with overly broad or vague clauses may be deemed unenforceable, with clauses such as “indefinite confidentiality for all types of information” likely to be rejected. Inappropriate duration poses another enforcement challenge. Courts scrutinize unreasonably long confidentiality periods, perpetual obligations for non-trade secret information, and failure to differentiate duration based on information type. The reasonableness standard requires that such restrictions be proportionate to the legitimate protection needs of the disclosing party. Inadequate remedies can hamper enforcement through difficulty quantifying damages from breaches, courts’ reluctance to enforce excessive liquidated damages, and procedural delays in obtaining timely injunctive relief. The challenge of proving actual harm from information disclosure often complicates damage quantification in NDA breach cases. Solutions and Best Practices In order to overcome enforcement challenges, organizations should adopt several strategic approaches. Tailored drafting is essential; avoiding template agreements and customizing NDAs for specific relationships and information types, with precise definitions of confidential information including examples and categories. Agreements should explicitly exclude public information, previously known information, and independently developed information while ensuring restrictions are proportionate to legitimate protection needs. There should be an acknowledgment with respect to the value of the information and potential irreparable harm, established procedures for identifying confidential information, detailed return/destruction obligations, and specified security measures for maintaining confidentiality. Robust dispute resolution mechanisms should include arbitration clauses for faster resolution and confidential proceedings, mandatory mediation before arbitration or litigation, clearly specified jurisdictions, and explicit governing law provisions. For remedies and enforcement, NDAs should explicitly state rights to seek injunctive relief without proving monetary damages, include reasonable and defensible liquidated damages provisions, emphasize rights to specific performance, and consider audit rights or certification requirements. When NDA breaches occur, organizations should follow systematic enforcement procedures. The first step involves identifying the breach through employee monitoring, document review, or investigations. This should be followed by sending cease and desist letters outlining the breach, demanding cessation of further disclosures, and providing compliance deadlines. If breaches continue, organizations may need to seek injunctive relief from courts by filing lawsuits and requesting temporary restraining orders or preliminary injunctions to prevent further disclosures. Where breaches result in quantifiable damages such as lost profits or reputation damage, organizations should pursue monetary damages through lawsuits. In appropriate cases, alternative dispute resolution through arbitration or mediation may be more efficient and cost-effective than litigation. Conclusion The enforcement landscape for NDAs in India continues to evolve as courts develop more comprehensive jurisprudence around confidentiality agreements. The evolving nature of Indian trade secret jurisprudence means that while courts have issued some rulings on misappropriation, the legal framework remains in development, leaving uncertainty regarding protection scope, available remedies, and damages. Organizations should focus on creating context-specific NDAs i.e. different agreements for different relationships such as employee NDAs focusing on post-employment restrictions, business transaction NDAs addressing due diligence disclosures, vendor/supplier NDAs including data security requirements, and investor NDAs addressing financial information and regulatory compliance. The key to effective NDA enforcement lies in striking the appropriate balance between protecting legitimate business interests and respecting individual rights and public policy considerations. Organizations that invest in properly drafted, contextually appropriate NDAs supported by robust procedural safeguards and enforcement mechanisms will be better positioned to protect their confidential information in India’s dynamic business environment. – Ankita Mishra, Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts
Consumer Justice: Legislative Mandate versus Ground Reality
Introduction The Consumer Protection Act, 2019 was introduced as a beacon of legislative intent to provide consumers with “simple, inexpensive and speedy remedy” for their grievances. Yet, despite robust legal frameworks and explicit executive directives, the adjudication of consumer disputes continues to be plagued by systemic delays that fundamentally undermine the Act’s protective purpose. This article examines the stark disconnect between legislative mandates and enforcement realities, particularly focusing on the underutilized provisions of Section 38(7) and the persistent failure to adhere to prescribed timelines. Legislative Framework and Guiding Directives Section 38(7) of the Consumer Protection Act, 2019, mandates that every complaint shall be disposed of “as expeditiously as possible” with endeavours to decide complaints within three months from the date of receipt of notice by the opposite party, or within five months if analysis or testing of commodities is required. This statutory mandate is unambiguous in its intent to prevent the very delays that currently characterize consumer dispute resolution. The Department of Consumer Affairs (DoCA) has repeatedly emphasized strict adherence to these timelines through comprehensive executive directions. In a Press Release dated 20 May 2022, the Department directed all Commissions not to grant adjournments beyond one month, stipulating that repeated adjournments should attract costs. This was reinforced by Union Minister Shri Piyush Goyal’s statement on 20 June 2022, where he stressed that consumer cases must be disposed of within 3-5 months, emphasizing that “justice delayed is justice denied“.[] Recently, in 2022, Union Minister Shri Piyush Goyal emphasized the urgent need for expeditious consumer dispute resolution at a National Workshop on ‘Effective and Speedy Consumer Disputes Redressal‘. He stressed that Consumer Commissions should “religiously follow the timelines as per the Consumer Protection Act, 2019” and be able to dispose of cases within 3-5 months of filing to provide speedy justice to consumers. Highlighting the principle that “justice delayed is justice denied,” he urged extensive use of digital media including WhatsApp and e-mail for issuing notices, replies and other documents, and emphasized the importance of e-filing and e-disposal mechanisms.[] Ground Reality Despite these clear mandates, empirical data reveals a troubling reality. At the National Consumer Disputes Redressal Commission (NCDRC), pending cases doubled from 9,106 in 2017 to 18,273 in 2019.[] The situation has been compounded by an prevalent culture of adjournments that directly contravenes both statutory provisions and executive directives. According to official sources, the average period between two hearings in the NCDRC is close to three months, while the Consumer Protection Act mandates that appeals should be disposed of within 90 days. The report reveals that 459 consumer cases, revision petitions and appeals have been pending with the NCDRC for more than a decade. Though there has been some improvement, with average adjournment days reducing from 112 days in 2019 to 88 days, this still falls far short of the statutory mandate.[] A comprehensive study by the Indian Institute of Public Administration highlighted that in 71.8% of cases filed before district commissions, adjournments, often granted for frivolous reasons, delayed proceedings. More alarmingly, in 25.6% of cases, such adjournments exceeded seven in number.[] Another source reports that while the Act requires decisions within three months, based on complexities, matters typically take anywhere from 3 months to over 1 year. The actual timelines show significant deviation from statutory requirements: (i) District Consumer Forums: Judgment takes 6 months to 2 years; (ii) State Consumer Commissions: Judgment takes 1 to 3 years: (iii) National Consumer Commission: Judgment takes 1 to 5 years.[] The Supreme Court has also provided crucial clarifications on timeline adherence in consumer disputes. The Constitution Bench in New India Assurance Company Limited v. Hilli Multipurpose Cold Storage Private Limited[] categorically held that consumer fora have no power to extend the time for filing responses beyond the statutorily prescribed period of 45 days. This decision established that the limitation periods under the Consumer Protection Act cannot be extended beyond statutory prescriptions. The Supreme Court has further clarified the application of this principle in subsequent decisions[] as well. Systemic Challenges and Enforcement Gaps The persistent delay problem stems from multiple systemic issues. Vacancy in consumer commissions significantly contributes to backlogs. Furthermore, delays under the guise of “adjournments” further compound this problem. According to a report, former NCDRC members have identified that beyond staffing issues, “in many cases, the advocates seek adjournment. Ideally, there shouldn’t be more than one adjournment. We can’t let the consumer suffer for delay in decisions“[]. Such observations highlight the disconnect between legal practice and statutory mandate. The Way Forward The disconnect between legislative intent and ground reality requires immediate systemic reform. The statistics clearly demonstrate that despite executive directives from the Department of Consumer Affairs and constitutional principles established by the Supreme Court, consumer justice continues to be delayed at alarming rates. Consumer commissions must be held accountable for compliance with Section 38(7) timelines through regular monitoring and reporting mechanisms. The promise of the Consumer Protection Act, 2019, to provide “simple, inexpensive and speedy remedy” remains largely unfulfilled due to systemic delays in adjudication. While Section 38(7) provides clear mandates for expeditious disposal, and executive directives from the Department of Consumer Affairs establish specific timeline requirements, ground reality shows persistent non-compliance. Until enforcement of Section 38(7) becomes the norm rather than the exception, and until the adjournment culture is replaced by a disposal-oriented approach backed by strict accountability measures, consumer justice will continue to be delayed and, in many cases, effectively denied. The legislative framework exists, executive directives are clear, and judicial pronouncements have established a mandate for expeditious disposal. What remains to be done is to execute the legislative intent and convert these mandates into ground reality through consistent enforcement and accountability mechanisms. – Ankita Mishra, Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information
A Curious Case of Withdrawal
I. Introduction: II. Factual Matrix S. No. Dates Events 1 September 2009 Mr. Shah opened a trading and demat account with Anuragh. [Funds and securities came to be transferred to Anuragh from time to time] 2 15.09.2023 Mr. Shah addressed a notice calling upon the Petitioner to indemnify him towards the loss caused to him by the Petitioner and Anuragh along with interest and expenses incurred by him. The said notice also invoked arbitration and hence could be construed as the date of commencement of arbitration. 3 – Mr. Shah filed his Statement of Claim (“SOC”). 4 27.10.2023 The Petitioner filed its Statement of Defense. 5 – Multiple other pleadings were filed by parties including rejoinder, sur rejoinder and sur sur rejoinder. 6 12.02.2024 Oral arguments concluded in the arbitration proceedings. 7 – Pursuant to the hearing, post hearing clarifications were submitted by both parties to the Arbitral Tribunal wherein, Mr. Shah indicated that he had engaged a chartered accountant (“CA”) to analyse shares in his demat account and accordingly sought for a weeks’ time to place on record the CA’s certificate. The said request for placing on record new documents was opposed by the Petitioner. 8 20.03.2024 During the hearing before the Arbitral Tribunal, Mr. Shah sought to amend the prayers iterated in his SOC including the claim amount. The said amendment was challenged by the Petitioner. 9 21.03.2024 Due to the mandate of the Arbitral Tribunal expiring in May 2024, two options were given to Mr. Shah and the other Respondents, i.e., to either withdraw the arbitration cases with liberty to file afresh or continue with the present claim. In light of the options presented, Mr. Shah vide letter addressed to the Arbitral Tribunal chose to withdraw his claim with liberty to file afresh. 10 29.03.2024 The Petitioner in response vide its letter addressed to the Arbitral Tribunal opposed the liberty sought by Mr. Shah to file a fresh claim on the grounds that; (i) such liberty could not be granted by the Arbitral Tribunal; (ii) Mr. Shah had made out no grounds for filing fresh proceedings; and (iii) the Petitioner would be severally prejudiced in the event liberty to grant fresh proceedings is given. 11 18.04.2024 The Arbitral Tribunal dismissed basis the aforesaid letters dismissed the arbitration proceedings giving Mr. Shah and other Respondents the liberty to file fresh proceedings by giving a fresh notice for invocation of arbitration. III. Issues at Hand IV. Arguments advanced by the Petitioner V. Arguments advanced by the Respondents VI. Observations by the Hon’ble Court VII. Conclusion Nikhilesh Koundinya, Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Copyright © 2026 Solomon & Co., All rights reserved.
Amendment of Pleadings in Civil Suits Under Order VI Rule 17 of the CPC
I. OVERVIEW: Order VI Rules 17 of the Code of Civil Procedure, 1908 (the ‘Civil Procedure Code’) forms the cornerstone of the law on the amendment of pleadings. The said rule is reproduced below for your reference: Amendment of pleadings. The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties : Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial The Hon’ble Supreme Court, in the landmark case of Salem Advocate Bar Association, T.N. v. Union of India1, has noted the history and object of Order VI Rule 17 as follows: “Order 6 Rule 17 of the Code deals with amendment of pleadings. By Amendment Act 46 of 1999, this provision was deleted. It has again been restored by Amendment Act 22 of 2002 but with an added proviso to prevent application for amendment being allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. The proviso, to some extent, curtails absolute discretion to allow amendment at any stage. Now, if an application is filed after commencement of trial, it has to be shown that in spite of due diligence, such amendment could not have been sought earlier. The object is to prevent frivolous applications which are filed to delay the trial.” The instant article explores the position of Indian law on when pleadings can be amended and the extent to which Courts would permit such amendment, as evolved and expounded by judicial precedents. II. GENERAL PRINCIPLES ON AMENDMENT OF PLEAINGS: It is fairly settled law that amendment of pleadings under Order VI Rule 17 is to be allowed if such an amendment is required for proper and effective adjudication of controversy between the parties and to avoid multiplicity of judicial proceedings, subject to certain conditions such as allowing the amendment should not result in injustice to the other side. Further, in normal circumstances, an admission made by the defendant, conferring certain rights on Plaintiff is not allowed to be withdrawn, resulting in prejudice to such right of the Plaintiff, depending on the facts and circumstances of a given case. In certain situations, a time barred claim cannot be allowed to be raised by proposing an amendment to take away the valuable accrued right of a party. However, mere delay in making an amendment application itself is not enough to refuse amendment as the delay can be compensated in terms of money. The Hon’ble Supreme Court has held that the purpose and object of Order VI Rule 17, is to allow either party to alter or amend his pleadings in such manner and on such terms as may be just.2 The power to allow amendment is wide and can be exercised at any stage of the proceedings in the interests of justice on the basis of guidelines laid down by various High Courts and the Hon’ble Supreme Court. Amendment of Pleadings cannot be claimed as a matter of right and under all circumstances. However, the Courts, while deciding such prayers, should not adopt a hyper-technical approach. A liberal approach should be the general rule, particularly in cases where the other side can be compensated with costs.3 It has also been held by the Hon’ble Supreme Court4 that a party is not allowed by amendment to set up a new case or a new cause of action, particularly when a suit on a new case or cause of action is barred.5 But it is well recognized that where the amendment does not constitute the addition of a new cause of action or raise a different case, but amounts to no more than a different or an additional approach to the same facts, the amendment will be allowed, even after the expiry of the statutory period of limitation.6 The Hon’ble Supreme Court has also held that it is well settled law that delay in filing the application for amendment of the written statement is not a ground for refusal of prayer for amendment. Further, the Court cannot go into the merit of such amendment. The only question at the time of considering amendment of the pleadings would be whether such amendment would be necessary for decision of the real controversy between parties in the suit.7 In the landmark case of Reevajeetu Builders and Developers v. Narayanaswamy and Sons & Ors.8, it has been held that, on an analysis of English and Indian cases, some of the basic principles which ought to be taken into consideration while allowing or rejecting an application for amendment of pleadings are: III. AMENDMENT TO A PLAINT VIS-À-VIS A WRITTEN STATEMENT: The Hon’ble Supreme Court has held that the amendment of a plaint and amendment of a written statement are not exactly governed by the same principle. While some general principles are common to both, but the rules that the plaintiff cannot be allowed to amend his pleadings so as to alter materially or substitute his cause of action or the nature of his claim has necessarily no counterpart in the law relating to the amendment of the written statement, since adding a new ground of defense or substituting or altering a defense does not raise the same problem as adding, altering, or substituting a new cause of action.9 The Court has thus held that inconsistent pleas can be raised by defendants in the written statement, although the same may not be permissible in case of plaint.10 IV. WHEN DOES TRIAL COMMENCE: The proviso of Order VI Rule 17 states that ”… no application for amendment shall be allowed after the trial
An Overview of Real Estate Laws and Regulations Applicable in India
1. Overview A transaction in real estate in India must take into consideration: The Republic of India is a federation of 28 States and 8 Union Territories, and is governed by laws enacted and rules and regulations framed by: and Many Central legislations on subjects in the Concurrent List (e.g. registration of documents) have State amendments. Customary laws are applicable to the extent not inconsistent with the Constitution of India (e.g. Islamic Law is applicable to succession in the case of Mohammedans). For our responses, Central laws and laws applicable in the state of Maharashtra (of which the capital city is Mumbai) have been taken into consideration. Note that some laws differ from state to state and that local laws may also apply depending upon the type of transaction. 2. What is the main legislation relating to real estate ownership? 3. How is ownership of real estate proved? Any transaction for transfer of interest in immovable property is required to be in writing and registered in the office of the “Sub-Registrar of Assurances”, subject to a few exceptions. A document of transfer of interest in immovable property which is compulsorily registrable but has not been registered is not admissible in evidence in civil proceedings. Registration of instruments which are required to be registered will constitute deemed notice to the public of the immovable property transactions which have been effected by such instruments. Most land holdings have been surveyed by government authorities and allotted a revenue survey number and issued a “Record of Right” (in case of agricultural lands in Maharashtra) or “Property Register Card” (in case of non-agricultural lands in Maharashtra) and similar documents in other parts of India. These revenue documents record the name of the original owner (at the time of first survey of the land by the government) and subsequent transfers as may have been notified to the authorities. The revenue documents provide prima facie evidence of ownership and devolution of title. Documents registered in respect of the property in the office of the Sub-Registrar of Assurances and documents issued by the revenue authorities are necessary steps for establishing the ownership of real estate. However, barring exceptions, an agreement for the transfer of immovable property or an interest therein (which does not itself operate to transfer any interest in land) is not required to be in writing or registered but a suit for specific performance of an unregistered agreement for sale of immovable property may be maintainable. Also, devolution of title on the demise of the owner and whether the names of all heirs of the deceased have been recorded in the revenue records, require consideration. 4. Are there any restrictions on who can own real estate? Persons resident outside India fall into the following three categories: (i) non-resident Indians; (ii) foreign nationals of Indian origin; and (iii) foreign nationals of non-Indian origin. (i) and (ii) can purchase or be gifted residential and commercial property (not agricultural land/plantation property/farm houses/private forest land which may only be inherited by (i) and (ii)). (iii) cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. (iii) can, however, acquire or transfer immovable property in India, on lease, for a period not exceeding 5 years. A foreign company cannot acquire immovable property in India. However, a foreign company which has established a branch office in India may acquire immovable property in India which is necessary or incidental to its activity, subject to certain conditions. A foreign company which has established a liaison office in India cannot acquire immovable property in India, but can acquire property by way of lease, for a period not exceeding 5 years. A branch office is subject to taxation in India; a liaison office is not, because it cannot earn revenue in India. Foreign direct investment (“FDI”) into India is governed by the Consolidated FDI Policy. Investment can be made into an Indian company by subscribing to or acquiring instruments which are permitted, including equity shares, compulsorily convertible debentures, preference shares and certain other products available to foreign portfolio investors. External Commercial Borrowing is not permitted for investment in real estate or purchase of land, unless used for affordable housing, construction and development of Special Economic Zones and industrial parks/integrated townships. Under Indian law, a minor is not competent to enter into a contract. However, property can be acquired by a minor by inheritance or by the guardian for the minor or out of funds gifted to the minor. Transfer of immovable property during the minority of the holder can be effected with Court sanction. 5. What types of proprietary interests in real estate can be created? Freehold: Where the owners are dominant owners of the property in perpetuity with no obligation to make any payment to or seek consent from any other person and all other rights and interests in the property emanate from the owner. The absolute ownership of the owner is subject to some statutory restrictions e.g. on excavation and mining and extent of construction. Leasehold/Tenancy: Where the lessee/tenant has possession and use and income of the property for a fixed term or even in perpetuity, on condition that he pays rent and observes and performs the terms and conditions of the lease/tenancy, and the lessor/landlord has the right to terminate the lease/tenancy and take back possession, unless the lessee/tenant can claim protection from eviction under rent control legislation or the Transfer of Property Act. Licensee/Occupancy Rights: Where a person is permitted by the owner or by the lessee/tenant (provided the terms of lease/tenancy permit the lessee/tenant to do so) to carry on a specified activity on the property of the owner/lessee on specified conditions. Common Ownership: Where a building is owned by a Co-operative Society or Limited Company or Association of Apartment Owners/Condominium and individual apartments/offices/premises are acquired and used by Members/Shareholders/Apartment Owners on certain conditions. 6. Is ownership of real estate and the buildings on it separate?
