India

DMD Advocates acted as legal counsel to Maschinenfabrik Reinhausen and Sukrut Electric Company Pvt. Ltd. in connection with the sale of 100% of the equity share capital of Sukrut Electric to Quality Power Electrical Equipments Ltd. and Yash Highvoltage Ltd., both listed entities. The transaction was completed following the fulfilment of all conditions precedent on December 16, 2025. Sukrut Electric, a Pune-based manufacturer of transformer components with a long-standing presence in the industry, will continue its operations under the new ownership, with a focus on preserving its engineering expertise, customer relationships, and long-term value creation. DMD Advocates was engaged to provide comprehensive legal support to the German sellers on this matter, including structuring, negotiation of the definitive agreements and ancillary documentation, and assistance with closing-related matters. The transaction was led by Monika Deshmukh (Partner) along with Vanshikha Choraria (Associate) and Nardeep Chawla (Associate). Read more: https://transformers-magazine.com/tm-news/sukrut-electric-completes-ownership-transition/

By Aparajita H Mannava (Associate, Real Estate and Corporate Practice) Despite the legal requirement to register Agreements to sell (“ATS(s)”), it is often seen in practice that ATSs are left unregistered for various reasons, including but not limited to (a) avoiding stamp and registration charges, (b) being unaware of the requirement to register ATSs or the significance thereof. Nonetheless, can such an unregistered ATS still confer some rights to the purchaser akin to contractual obligations? WHY REGISTER AN ATS? As per section 53A of the Transfer of Property Act, 1882 (“TOPA”), where transfer has not been completed in the manner prescribed by law under an instrument, and the transferee has performed or is willing to perform his part of the contract, then the transferor is debarred from enforcing against the transferee any right in respect of the immoveable property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract. In turn, contracts referred to in section 53A of TOPA are required to be registered under the Registration Act, 1908 (“Registration Act”)[1]. The Supreme Court has upheld this principle.[2], and as such, unregistered ATSs do not validly transfer the intended rights or title pertaining to the property. However, having paid the agreed consideration to the vendor, purchaser is at the risk of not being able to exercise their rights effectively. ADMISSIBILITY OF AN UNREGISTERED ATS AS EVIDENCE As per the Indian Stamp Act, 1899 (“Stamp Act”)[3], instruments not duly stamped cannot be admitted in evidence until proper stamp duty and penalties are paid. Although an unregistered ATS is inadmissible in evidence under the Stamp Act[4], it is not void[5]. Penalties for insufficient stamp duty can be up to ten times the duty payable on the consideration or market value, whichever is higher. Documents requiring both stamp duty and registration must meet these requirements to be admissible as evidence. An instrument, when certified by endorsement that proper duty and penalty have been levied and paid under the Stamp Act[6], such ATS is capable of being acted upon as if duly stamped[7]. SPECIFIC RELIEF Registration Act[8] provides that while a document that requires to be registered cannot be received in evidence unless it is registered, an unregistered document affecting the transfer of immovable property and required to be registered may be received as evidence of a contract in a suit for specific performance under the Specific Relief Act, 1877 or 1963 or as evidence of any collateral transaction not required to be effected by a registered instrument[9]. Further, the Supreme Court has held that once ATS is executed and the payment/receipt of advance sale consideration was admitted by the vendor, nothing further was necessary to prove by purchaser.[10]. The Supreme Court has held that.[11], [12], [13]: Subsistence of the contract is an essential precondition; (Note: This is also provided under the Contract Act[14], wherein: In contracts where time is of essence, and a party has failed to perform its obligations in the stipulated timeline, the contract, or such portion thereof, becomes voidable at the opinion of the promisee; and Vendors are responsible to notify the Purchaser their intent, if any, to discontinue the ATS. Subject to the limitation period prescribed under the Limitation Act[15], which mandates that a suit for specific performance must be filed within three years from the date fixed for performance or from the time when the performance is refused.) Relief of specific performance cannot be granted in case of failure to comply with the stipulated timelines of the contract, and termination of the said contract. Readiness and willingness to perform the plaintiff’s part of the essential terms of the agreement are essential[16], When ATS is terminated for non-performance on part of the purchaser, they are no longer a bona fide purchaser. CONCLUSION An unregistered ATS cannot legally transfer any property, and cannot be enforced to the fullest extent. However, the Purchaser can sue the vendor for specific performance, and is entitled to a refund of the monies paid to the vendor. Purchaser must, however, (a) be mindful of the limitation period, and (b) must demonstrate willingness and ability to pay and perform his obligations in a timely manner. [1] Section 17 (1A) of the Registration Act. [2] As held by the Supreme Court in Shakeel Ahmed v. Syed Akhlaq Hussain [2023 SCC OnLine SC 1526]. [3] Sections 33 and 35 of the Stamp Act. [4] Section 35 of the Stamp Act. [5] As held by the Supreme Court in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao and others [1971 AIR 1070]. [6] Sections 35, 40 or 41 of the Stamp Act. [7] This principle has been upheld by (a) the High Court of (United) Andhra Pradesh in Linkwell Electronics Limited v. AP Electronics Development Corporation Limited [1997(3) ALD 336], and (b) by the Supreme Court In RE: Interplay Between Arbitration Agreements Under The Arbitration and Conciliation Act 1996 and The Indian Stamp Act 1899, in Curative Petition (C) No. 44 of 2023 in Review Petition (C) No. 704 of 2021 in Civil Appeal No. 1599 of 2020, and with Arbitration Petition No. 25 of 2023. [8] Section 49 of the Registration Act. [9]As also held by the Supreme Court of India on April 10, 2023 in R. Hemalatha v. Kashthuri [(2023) 10 SCC 725].    [10] Section 49 of the Registration Act. [11] P. Ramasubbamma v. V. Vijayalakshmi [(2022) 7 SCC 384]. [12] As held by the Supreme Court on August 10, 2023 in Alagammal and others. v. Ganesan and another [2024 SCC Online SC 30]. [13] As held by the Supreme Court in I.S. Sikandar (deceased) (represented by legal representatives). & others v. K. Subramani & others [AIRONLINE 2013 SC 32]; As also held by the Supreme Court of India in Sabbir (deceased) (through legal representatives) v. Anjuman (since deceased) (through legal representatives) [2023 SCC Online SC 1292]. [14] Section 55 of the Contract Act. [15] Article 54 of the Schedule of the Limitation Act. [16] As also provided under (a) section 16 of the Specific Relief Act, 1963 and (b) section 53A of TOPA

By Midakanti Sai Keerthana, Intern Introduction: The Insolvency and Bankruptcy Code, 2016 (IBC) is a single law that lays down clear, time-bound rules for how companies, partnerships and even individuals in India can deal with financial stress (When they can’t pay debts). It replaced the earlier system where the person who owed money (debtor) stayed in control, with a creditor-in-control system – meaning lenders/creditors decide the company’s fate during insolvency. The IBC, 2016, aims to address the problems of distressed assets in a time-bound manner by maximising the value of assets and balancing the interests of the creditors. But the journey from paper to practice wasn’t smooth. The promise of speed and predictability was diluted by repeated litigation, inconsistent judicial interpretations, and procedural bottlenecks. Instead of a creditor-driven framework, delays and uncertainty began creeping in. The wide judicial discretion of NCLT in admission and rejection of CIRP, even when both the debt and default are established, has added to the prolonged delay. The discretion was expanded by the Vidarbha Industries Judgment, allowing the NCLT to consider matters other than the debt and default in deciding the CIRP applications, which, in a way, enabled the debtors to delay the insolvency proceedings through unnecessary litigation, diluting the code’s objective. The IBC Amendment Bill, 2025, introduced in the Lok Sabha on 12th August 2025, aims to resolve these ambiguities, streamline and expedite the resolution in a time-bound manner, reducing any frivolous and vexatious litigation and align the Indian insolvency with the International best practices. The bill aims to restore the IBC’s original goal of efficient, transparent, and time-bound resolution of insolvency. Pre-Amendment Challenges in Insolvency Initiation: Prior to the 2025 amendment, IBC 2016 was hampered by frequent delays in case admission, conflicting judicial rulings, and heavy backlogs at NCLT, all of which led to unpredictable and slow insolvency resolutions. The code originally required NCLT to admit a financial creditor’s application once debt and default were proven. However, the Supreme Court’s judicial interpretations in the case of Vidarbha Industries Power Ltd. vs. Axis Bank Ltd. vested excessive judicial discretion in the NCLT regarding the admission or rejection of the CIRP application, even if a default was proven. This meant companies could delay insolvency proceedings by showing possible future inflows or awards. The mechanical, time-bound admission process turned into a subjective evaluation, undermining creditor rights. Section 7(5)(a) of the Code has used the word “may” instead of “shall”, which provides NCLT with the discretion to reject an application even if the twin conditional requirement of a debt and default on the part of the corporate debtor (CD) is established by the financial creditor (FC). Though the Court has specifically held in this judgement that “Even though Section 7 (5)(a) of the IBC may confer discretionary power on the Adjudicating Authority, such discretionary power cannot be exercised arbitrarily”. In the Rainbow Paper case - Upsetting the Waterfall Section 53 of the IBC clearly placed secured financial creditors at the top of the repayment waterfall, while government dues ranked much lower. But in State Tax Office vs Rainbow Papers Ltd., the Supreme Court held that government tax claims could be treated as “secured” if state laws created a first charge. This elevated statutory dues to the level of secured banks, creating massive uncertainty for lenders and threatening credit flow to businesses. Videocon Group Insolvency – No Framework for Group Resolution The IBC did not have well-defined provisions and processes for dealing with complicated insolvency situations, like group insolvency and cross-border insolvency. Large business groups often operate through multiple interlinked entities. In the Videocon case, NCLT had to consolidate 13 companies under one process for the resolution to work. While practical, this was done in the absence of a framework for group insolvency. This legal vacuum raised concerns for investors and buyers about the predictability of outcomes.    

By Madala Bindu, Associate, Litigation & Sapavat Teja, Intern, DNLU, Madhya Pradesh. Introduction: The fundamental objective of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (From here referred to as “SARFAESI Act”), 2002, is to empower banks and financial institutions to recover their dues while ensuring that the borrower’s right to fair procedure is not infringed. Broadly, the redemption of mortgaged property is governed under Section 60 of the Transfer of Property Act, 1882[1], read with Section 13(8) of the SARFAESI Act, 2002[2], whereby the borrower is entitled to redeem the secured asset by paying the outstanding dues. In recent times, the Hon’ble Supreme Court of India in the case of M. Rajendran and Ors. v. KPK Oils and Protiens India Pvt. Ltd. and Ors.[3], has reaffirmed that the right of redemption under section 13(8) of the SARFAESI Act, 2002, stands ceased upon the publication of Auction Notice under Rule 9(1) of the Security Interest (Enforcement) Rules, 2002[4]. Whereas the Amendment to the SARFAESI Act, 2016, clarified that the right of redemption of a secured asset stands extinguished upon the publication of the auction notice, and not at the stage of execution of the sale, such clarification shall apply mutatis mutandis to loans availed prior to the said amendment. Analysis of Judgement: KPK Oils and Proteins India Pvt. Ltd. and others availed loan facilities comprising a cash credit limit of approximately Rs. 5 crores along with a term loan of Rs. 30 lakhs, secured by an equitable mortgage, from the bank on 6th January, 2016. On 31st December 2019, the borrower’s loan account was classified by the Bank as a Non-Performing Asset (NPA) due to the borrower's failure to repay the outstanding dues. The Bank issued a demand notice under Section 13(2) of the SARFAESI Act as well as a possession notice under Section 13(4) of the Act on 28th October, 2020. Subsequently, an auction sale notice was published in newspapers on 31st October, 2020. During the auction, the Appellants placed as the highest bidder and deposited the full amount, which resulted in the issuance of a sale certificate. After the sale was confirmed, the borrowers deposited a significant portion of the dues. Thereafter, litigation arose before the Debts Recovery Tribunal (DRT), followed by a writ petition filed by the borrowers before the Hon’ble High Court of Madras seeking redemption of the mortgage. Pursuant to which an appeal before the Hon’ble Supreme Court has been filed regarding a discrepancy between the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002, upon procedural steps under Rules 8 and 9 of the Rules. The Hon’ble Supreme Court held that the expression ‘notice of sale’ must be construed as a composite concept, encompassing service to the borrower, publication in a newspaper, affixation, and uploading, as mandated under the provisions, Rule 8(6), its Proviso, Rule 8(7), and Rule 9(1) of Security Interest (Enforcement) Rules, and elucidated that these are not separate or distinct notices but parts of a single composite process required for a valid sale under Rule 8(5) Security Interest (Enforcement) Rules. The Court harmonised Rule 9(1) of the Security Interest (Enforcement) Rules, which mandates a 30-day gap from publication to sale, read with Section 13(8) SARFAESI Act, 2002, by clarifying that the thirty-day period begins from the latest date of publication, service, or affixation, depending on the applicable mode of sale. However, the Court rejected the contention that the auction sale notice and the notice to the borrower are separate, emphasising that Appendix IV-A to the Rules underscores their unified character within the same procedural framework. In conclusion, the Hon’ble Supreme Court has reaffirmed that the principal object of the SARFAESI Act to facilitate swift and effective enforcement of secured interests must not be compromised by procedural inconsistencies. At the same time, it preserves the borrower’s legitimate right to redemption within the statutory limits. The Court’s pronouncement conclusively clarifies that the mortgagor’s right of redemption stands extinguished prior to the publication of the sale notice, irrespective of the mode of sale undertaken. By declaring that a single composite notice suffices to meet the statutory requirement, the judgment harmonises conflicting judicial views previously adopted by various High Courts. Furthermore, it ensures certainty for auction purchasers by upholding that their acquired rights, arising from a valid and duly conducted auction process, remain unaffected by any subsequent borrower payments. [1] Transfer of Property Act, § 60, Act 4 of 1882. [2] Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, § 13, cl. 8. [3] (2025) ibclaw.in 367 SC [4] Security Interest (Enforcement) Rules, § 9, cl. 1.