This week in Indian law: The Supreme Court set aside the UAPA arrest of NewsClick editor Purkayastha for procedural violations. SEBI liberalised NRI investment in GIFT City FPIs. The RBI tightened compromise settlement norms. Five significant developments in the highest-output week of May despite the election period.
Top story
SC Sets Aside UAPA Arrest of NewsClick Editor Purkayastha
Category: criminal-law | Date: 15 May 2024 | Source: Supreme Court of India
A Bench of Justice B.R. Gavai and Justice Sandeep Mehta, in Prabir Purkayastha v. State (NCT of Delhi), set aside the UAPA arrest of the NewsClick editor-in-chief, holding that the failure to supply written grounds of arrest as mandated by Section 43D(2) of the UAPA rendered the detention unlawful. The Court held that the procedural requirement under Section 43D(2), read with Article 22(1) of the Constitution, is mandatory and not directory. The failure to communicate written grounds of arrest to the accused vitiates the entire detention, irrespective of the merits of the underlying investigation.
Why it matters: This ruling establishes that UAPA procedural safeguards are non-negotiable. Investigating agencies must ensure strict compliance with Section 43D(2) in every UAPA arrest. Defence counsel should audit existing UAPA detentions for compliance — non-communication of written grounds may provide an independent ground for challenge even in otherwise strong prosecution cases.
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Regulatory updates
SEBI Allows 100% NRI Investment in GIFT City-Based FPIs
Date: 17 May 2024 | Source: SEBI
SEBI amended the FPI regulatory framework to allow 100% NRI/OCI investment in foreign portfolio investors based at GIFT City International Financial Services Centre (IFSC), removing the previous 50% cap on NRI contributions. The liberalisation is designed to attract greater diaspora capital flows through the regulated GIFT City framework and strengthen India's international financial centre.
Key point: Securities law practitioners advising NRI clients should note that the GIFT City route now offers full investment access through FPI structures. This creates a regulated channel for concentrated NRI investment in Indian markets, subject to SEBI and IFSCA compliance requirements.
RBI Tightens Compromise Settlement Norms for Defaulters
Date: 20 May 2024 | Source: RBI
The Reserve Bank of India issued revised norms governing compromise settlements and technical write-offs by banks and NBFCs, restricting the ability to settle with wilful defaulters, fraud-classified borrowers, and certain categories of defaulters. The framework introduces a mandatory cooling-off period before such borrowers can access fresh credit following a settlement.
Key point: Banking law practitioners advising on NPA resolution should note that one-time settlements with wilful defaulters and fraud borrowers now face additional restrictions and cooling-off periods. Alternative resolution strategies may need to be explored.
Also this week
- Lok Sabha Phase 5 on 20 May — Fifth phase covering 49 constituencies. Election process entering its final stretch.
- SC summer vacation imminent — The Supreme Court is in its last regular sitting days before summer vacation. Vacation benches will hear only urgent matters.
Looking ahead
- Phase 5 on 20 May: Fifth phase of Lok Sabha elections.
- Phase 6 on 25 May: Sixth phase follows.
- SC summer vacation: Commences shortly; only vacation bench activity until July.
- NCLAT IBC rulings: Appellate tribunal continues operating through the vacation period.
This is the Veritect Weekly Legal Roundup for Week 20 of 2024. 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.