This week in Indian law: The Supreme Court resumed from summer vacation and held that the second extension of the ED Director's tenure was illegal. SEBI issued comprehensive master circulars consolidating LODR and ICDR compliance norms. The first half of 2023 concluded with significant constitutional, regulatory, and market developments setting the stage for a busy second half. 2 significant legal developments this week across constitutional-rights and securities-market.
Top story
SC Holds ED Director Tenure Extensions Illegal
Category: constitutional-rights | Date: 11 July 2023 | Source: Supreme Court of India
The Supreme Court, in Jaya Thakur v. Union of India, held that the second extension of Enforcement Directorate Director Sanjay Kumar Mishra's tenure was illegal. The Bench observed that the Central Vigilance Commission (Amendment) Ordinance, 2021 and the subsequent CVC (Amendment) Act, 2021 — which permitted extension of the ED Director's tenure beyond two years up to a maximum of five years — were enacted with the specific objective of benefiting a single individual. The Court directed that the ED Director's tenure would not be extended further and ordered a transition within the specified timeframe.
Why it matters: This judgment raises fundamental questions about the use of legislative power to benefit specific individuals holding statutory positions, and reinforces the principle that extensions of tenure for law enforcement heads must comply with established institutional norms.
Read more: Veritect analysis
Regulatory updates
SEBI Issues Master Circulars Consolidating LODR and ICDR Norms
Date: 7 July 2023
SEBI issued two comprehensive master circulars consolidating all existing circulars, guidelines, and clarifications under the LODR (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the ICDR (Issue of Capital and Disclosure Requirements) Regulations, 2018 into single reference documents. The LODR master circular covers continuous disclosures, corporate governance, related party transactions, board composition, and material events. The ICDR master circular covers public issues, rights issues, preferential allotments, and qualified institutional placements.
Key point: Listed entities and merchant bankers now have unified compliance references for both LODR and ICDR obligations, significantly reducing the risk of inadvertent non-compliance arising from provisions scattered across multiple circulars.
H1 2023 in review
The first half of 2023 was one of the most constitutionally significant periods in Indian legal history:
- Constitution Bench verdicts: Demonetisation (4:1 upheld), horizontal fundamental rights (Kaushal Kishor), Election Commission appointments (Anoop Baranwal), Maharashtra political crisis (Subhash Desai), Delhi governance (GNCTD v. UoI), Article 142 divorce (Shilpa Sailesh), Jallikattu (PCA Act amendments upheld)
- Securities market crisis: Hindenburg-Adani episode — report, SC petitions, expert committee, SEBI investigation
- Regulatory action: RBI repo rate cycle (sixth hike in Feb, pause in April), Rs 2,000 note withdrawal, green deposits framework, SEBI AML master circular, SEBI LODR/ICDR consolidation
- Legislative milestones: Finance Act 2023, Competition Amendment Act 2023, Delhi NCT Ordinance
- IBC developments: MCA amendment proposals, NCLAT on PF dues, NCLT moratorium enforcement
Looking ahead
- July 20: Parliament Monsoon session expected to commence — Digital Personal Data Protection Bill and Delhi NCT Act on the agenda.
- Mid-July: SC to hear Article 370 matter; same-sex marriage judgment pending.
- August: RBI MPC meeting; SEBI expected to issue additional governance circulars.
- October: SC to deliver same-sex marriage verdict; Article 370 judgment expected before year-end.
This is the Veritect Weekly Legal Roundup for Week 26 of 2023. For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.