NLIU Journal of Business Laws
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NLIU Journal of Business Laws Volume I December, 2019 NATIONAL LAW INSTITUTE UNIVERSITY Kerwa Dam Road, Bhopal, India - 462 044 (Madhya Pradesh) NLIU JOURNAL OF BUSINESS LAWS VOLUME I The NLIU Journal of Business Laws is published by the Centre for Business and Commercial Laws (CBCL) at National Law Institute University, Bhopal. CBCL publishes material on business and commercial laws of interest to the legal profession. The NLIU Journal of Business Laws invites unsolicited manuscripts for publications. Such manuscripts should be sent in MS Word (.docx format) to [email protected]. All citations and text conform to The Bluebook: A Uniform System of Citation (20th Ed.) All rights reserved. No article or part thereof published herein may be reproduced without the prior permission of the CBCL. For all matters concerning rights and permissions, please contact us at [email protected]. The views expressed in the articles published in this Volume of NLIU Journal of Business Laws are those of the authors and in no way do they reflect the opinion of the NLIU Journal of Business Laws, its editors or National Law Institute University, Bhopal. Recommended Form of Citation 1 NLIU J. B. Law (2019) - I - NLIU JOURNAL OF BUSINESS LAWS VOLUME I PATRON-IN-CHIEF Hon’ble Justice Ravi Shankar Jha (Acting Chief Justice, Madhya Pradesh High Court) PATRON Prof. (Dr.) V. Vijayakumar (Vice Chancellor, National Law Institute University, Bhopal) EDITOR-IN-CHIEF Prof. (Dr.) Ghayur Alam (Chairperson, Centre for Business and Commercial Laws) - II - NLIU JOURNAL OF BUSINESS LAWS VOLUME I BOARD OF ADVISORS JUSTICE S.J. MUKHOPADHAYA Chairperson, National Company Law Appellate Tribunal JUSTICE G. RAGHURAM Director, National Judicial Academy MR. T.K. VISWANATHAN Chairperson, Bankruptcy Law Reforms Committee (2014) PROF. AJEET N. MATHUR Professor (Business Policy), IIM, Ahmedabad PROF. UMAKANTH VAROTTIL Associate Professor, NUS, Singapore MR. SOMASEKHAR SUNDARESAN Independent Legal Counsel MR. VIKRAM RAGHAVAN Lead Counsel, World Bank MR. VINOD KOTHARI Director, Vinod Kothari Consultants - IV - NLIU JOURNAL OF BUSINESS LAWS VOLUME I PEER REVIEW BOARD OF THE JOURNAL ADHITYA SRINIVASAN ADITYA MOHANTY (Associate, Simpson Thacher & (Associate, S&R Associates) Bartlett LLP) ANKUR KHANDELWAL ANCHIT OSWAL (Partner, Kochhar & Co) (Principal Associate, Khaitan & Co) ARPITA SETH BECTOR ARUSHI SINGH (Indepndent Legal Consultant) (Legal Officer, New India Assurance) AYUSH SHARMA BISHEN JESWANT (Senior Associate, Shardul Amarchand (Principal Associate, Cyril Amarchand Mangaldas & Co) Mangaldas) KAUSTUBH VERMA DEEKSHA MANCHANDA (Senior Associate, Jyoti Sagar (Senior Associate, Economic Laws Associates) Practice) PAVI JAIN RISHABH SINHA (Principal Associate, Khaitan & Co) (Senior Associate, Trilegal) SOURABH BHATTACHARYA SWATI SINGH BAGHEL (Principal Associate, Shardul (Assistant Vice President, Blackstone Amarchand Mangaldas & Co) Group) - V - NLIU JOURNAL OF BUSINESS LAWS VOLUME I STUDENT BODY OF THE JOURNAL ARSHIA VERMA Managing Editor ROHAN KOHLI Executive Editor SHOUNAK BANERJEE AKSHITA PANDEY MUDIT NIGAM Senior Editors Third Year Members Second Year Members ADITYA GOYAL ANOUSHKA ISHWAR ANKESH KUMAR APARAJITA MARWAH GUNJAN GARG KARTIKEY BANSAL ISHAAN CHOPRA PALAK KUMAR NIDHISHA GARG PRAKHAR KHANDELWAL SAUMYA AGARWAL RACHITA SHAH SUYASH BHAMORE RAYANA MUKHERJEE TANVI PRABHU SAAVNI KAMATH TANYA NAIR SAKSHI AJMERA SHIULI MANDLOI SPANDANA - VI - NLIU JOURNAL OF BUSINESS LAWS VOLUME I CONTENTS FOREWORD MESSAGE FROM THE PATRON-IN-CHIEF 9 MESSAGE FROM THE PATRON 10 MESSAGE FROM THE EDITOR-IN-CHIEF 12 ARTICLES THE INSOLVENCY AND BANKRUPTCY CODE, 2016 INTERPRETED- CONSTRUCTED BY THE SUPREME COURT OF INDIA........................... 19 Ghayur Alam, Abhinav Pradhan and Sayed Aqa Raza NATIONAL GUIDELINES FOR RESPONSIBLE BUSINESS CONDUCT AND THEIR IMPORTANCE IN REMODELING BUSINESS RESPONSIBILITY AND ACCOUNTABILITY ............................................................................. 127 Bhumesh Verma, Anoushka Ishwar and Sana Sarosh INCLUSION OF WOMEN IN THE BOARDROOM – A REALITY OR A MIRAGE? ........................................................................................... 155 Annapurna Sinharay DEFINING CONTOURS OF ENFORCEABILITY IN NON-COMPETE CLAUSES IN EMPLOYMENT CONTRACTS ............................................ 172 Purbasha Panda and Shambhavi Srivastava HOSTILE TAKEOVERS AND DEFENCE MECHANISMS ......................... 189 Abhinav Srivastava - VII - NLIU JOURNAL OF BUSINESS LAWS VOLUME I INNOVATION AS A YARDSTICK IN MERGER CONTROL ANALYSIS: A STUDY OF AGROCHEMICAL, TELECOMMUNICATION AND PHARMACEUTICAL SECTORS ............................................................. 209 Manal Shah and Husna Fayaz GOOD FORUM SHOPPING IN CROSS BORDER INSOLVENCY: HAMPERED BY THREE-MONTH-LOOK-BACK-PERIOD AND GIBBS PRINCIPLE ....... 254 Nitesh Jindal and Shiphali Patel THE HOT “SEAT” CONFLICT IN INDIAN DOMESTIC ARBITRATION: EXPLORING THE “PROPER COURT” RULE UNDER S. 2(1) (E) OF THE ARBITRATION ACT ............................................................................ 280 Anubhav Khamroi TEETH TO THE TRIBUNAL…IS THE CONTROVERSY SETTLED? ........ 307 Rajvansh Singh & Atif Ahmed NON-PERFORMING ASSETS AND THE INDIAN BANKING INDUSTRY, ADDRESSING CHALLENGES TO NPA REALISATION .......................... 324 Yash Mittal CONCURRENT DELAY - A LEGAL PANDEMONIUM ........................... 356 Aakash Laad & Srishti Gupta - VIII - NLIU JOURNAL OF BUSINESS LAWS VOLUME I MESSAGE FROM THE PATRON-IN-CHIEF - 9 - NLIU JOURNAL OF BUSINESS LAWS VOLUME I MESSAGE FROM THE PATRON At the outset I would like to appreciate the joint efforts taken by the faculty and students of NLIU, Bhopal, in bringing out this first volume of NLIU Journal of Business Laws. Along with the exponential increase in the trade and business in India, there has been an equally important increase in the statutes, amendments, rules, regulations, notifications and the like that directly or indirectly impact trade and business. Along with these, the judicial decisions and decisions by appropriate Tribunal in India have created a huge legal regime that needs to be constantly reviewed, updated and revised. The publication of this Journal of Business Laws is a small, yet meaningful academic contribution for the legal fraternity in India and abroad. The Journal is peer-reviewed and has experts in diverse fields on the Board of Advisors and Reviewers who would contribute to the status and contents of this journal. The journal is expected to bring the latest information to the students, researchers and the teachers alike in India. To make this journal accessible, every initiative would be taken to see its presence in all the libraries of National Law Universities and other leading institutions imparting legal education in India. This in turn is expected to prompt scholars to join hands and contribute well-articulated research articles for publication in the later publications of this journal. As the maiden effort comes to fruition, one can see a wide range of articles included in this volume. From the inclusion of women in the Boardroom to employment contract, hostile takeovers, merger control, cross-border insolvency, proper court rule under the - 10 - NLIU JOURNAL OF BUSINESS LAWS VOLUME I Arbitration Act, tribunals, non-performing assets and concurrent delay have been critically analyzed and presented by distinguished researchers. I would like to thank them for their contribution to this maiden publication and request them to contribute to this very significant area of trade and business. In the forthcoming publications, I wish that the journal would also feature two or three book reviews to make it a complete Journal of Business Laws. For any educational institution to prosper and enhance its public perception, the students’ activities play a major role. With this publication of NLIU Journal of Business Laws by the students, they have certainly contributed immensely to the public perception of NLIU among the legal fraternity. I would also like to express my sincere appreciation to the students behind this publication along with the faculty advisor, Prof. (Dr.) Ghayur Alam. I am confident that this journal would earn the status and recognition from among the legal fraternity and continue to prosper in the years to come. PROF. (DR.) V. VIJAYAKUMAR VICE CHANCELLOR NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL, INDIA - 11 - NLIU JOURNAL OF BUSINESS LAWS VOLUME I MESSAGE FROM THE EDITOR-IN-CHIEF It is a matter of great satisfaction that we have been successful in our endeavor of launching the Inaugural Issue of the NLIU Journal of Business Laws. The Centre for Business and Commercial (CBCL) has been established with the objective of generating cutting-edge quality research in the area of business laws. This Journal is a means to realize the desired objective. The main focus of the legal research till 1980s was on public law and the focus on private law was relatively limited. The fundamental changes brought about by politics, economics and technology in the 1990s ushered in disruptive changes in the nature and functions State and law. The State besides being a Police State and Welfare State also acquired the characteristics of Regulatory and Managerial State. This change, inter alia, necessitated the unprecedented changes in law and legal structure. One of the visible changes was creation of regulatory authorities. The other fundamental shift was from strict division of public law and private law to the convergence thereof. Emergence