DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

COURSE OUTLINE
Corporate Law II
Semester VIII
Academic Year 2022-23
January to April 2023 Total: 75 classes
Faculty: Dr. Dayananda Murthy C. P.
Associate Professor of Law

INTRODUCTION
Corporate Law – I dealt with basic principles of Company from its incorporation,
understanding of the fundamental documents like MOA, AOA and prospectus of the Co. The
chapters dealt with the share capital and debentures including the kinds and its effect on the
investors. The management of the Co., analyzing the role of the Board of Directors and
procedures for the BOD to act on behalf of the Co. The rights and obligation of the
shareholders, including the declaration of dividends. The Annual General Meetings and
Extraordinary General Meeting of the shareholders and the process of approval granted have
been referred.

Corporate Law II offers study of various statutes that have direct bearing on corporate sector
and capital market including Corporate Restructuring - Mergers – Amalgamation –
Demergers – Corporate Debt Restructuring (CDR) - Compromises – Acquisition of Shares
and Takeovers and regulation of securities market, with an objective of investor protection.

The Securities Exchange Board of India Act, 1992 (SEBI) is enacted with its objective to
protect the interest of the investor and regulation of securities market will have a direct
impact on functioning of the companies. It has become indispensable part of the curriculum
and expects student to have knowledge of the law and Regulations (Reg’s) framed
thereunder. This objective has directed the SEBI to pilot the Reg’s prohibiting Insider trading
and fraudulent and unfair trade practices and manipulation in the securities’ market and
regulation of the acquisition of shares and takeover of companies. Takeover Code, 2011 is a
significant legislation, which regulates the acquisition and takeover of companies.

The Reg. of “issue of capital” and the “listing obligations” are important for the students to
understand the way companies will raise money and the obligations when they get listed on
the stock exchanges. The corporate governance norms have been laid down under the Reg’s.
These Reg’s have gained importance and its impact is felt in the corporate field day in and
day out. The legal framework also provides protection to the investors and regulating the
companies under various other statutes like the Securities Contract (Reg.) Act 1956 and the
Depositories Act, 1996 that will have a bearing on the companies.

The students are expected the learn

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 b. Securities Laws including the role of SEBI and relevance of the SCRA and
Depositories Law.
c. Listing of securities in the stock market and corporate governance
d. Reg’s for Acquisition and Takeover of companies
e. Law relating to the Prohibition of Insider Trading and Fraudulent and unfair trade
practices

# UNIT No. of
Classes
UNIT I
INTRODUCTION
1.1 Fundamentals of Corporate 2
Restructuring and Securities
Market Role of RSE and
Regulation of transactions in
Securities Market
Jurisdiction Issues - NCLT and
SEBI v High Court - Role of
NCLT and SEBI in regulating
Securities Market
Listed Companies v Unlisted
and Private Companies
UNIT 2
CORPORATE RESTRUCTURING
2.1 Corporate Restructuring or  Pramod Jain & Others v. SEBI, 2016 4
Scheme – Objective and scope Indlaw SC 793, (2016) 10 SCC 243
- impact of the Restructuring /  Nirma Industries Ltd. & Anr. v. SEBI,
Scheme 2013 Indlaw SC 319; (2013) 8 SCC 20
Planning – Importance of Due  SEBI & others v. Gaurav Varshney &
Diligence others, [2016] 198 Comp Cas 86
 In re, Dow Chemical Co. Deriv.
Litigation (2010) (Rohm & Haas Co.)
 Ash v. McCall, 2000 WL 1370341
(Del. Ch. Sept. 15, 2000)
 Cede & Co. v. Technicolor Inc. 634 A.
2d 345 (Del. 1993)
 County of York Employees Retirement
Plan v. Merrill Lynch, 2008 WL
4824053 (Del. Ch. Oct. 28, 2008)
 eLandia acquisition of Latin Node,
Dept. of Justice, 2009 Press Release
 Pfizer H.C.P. – Settlement, Dept. of
Justice, 2012, Press Release
2.2.1 Mergers, Amalgamation, & 4
Acquisition (M&A)
Formulation – objects - reasons
and advantages of M&A
Sale of Undertaking by Sale of

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 Shares – Information to
Creditors and Members
2.2.2 Statutory Compliances -  Mafatlal Industries Ltd., Re 1995 84 10
Regulation and Control of C/C 230 (Guj)
Schemes – SS. 230 – 240,  Miheer H. Mafatlal v Mafatlal
Industries Ltd., AIR 1997 SC 506
Companies Act 2013
 Hindustan Lever Employees’ Union v
(SS. 390–394A, CA, 1956) Hindustan Lever Ltd., AIR 1995 SC
470
 J. K. (Bombay) Private Ltd., M/s. v
M/s. New Kaiser-I-Hind Spinning and
Weaving Co., Ltd., AIR 1970 SC 1041
 Sidhpur Mills Co Ltd., Re AIR 1962
Guj 305
 Indiabulls Financial Services Ltd. v
Indiabulls Housing Finance Ltd.,
(2013) 177 Comp Cas 261
 Ranbaxy Laboratories Ltd. v Sun
Pharmaceutical Industries Ltd, (2015)
190 Comp Cas 547
 Administrator, U.T.I. v Garware
Polyster Ltd., AIR 2005 SC 2520
 Ansys Software Corp Ltd, Re, 2005 25
SCL 187 (Cal DB)
 Dharani Sugars and Chemicals Ltd. v
Union of India & others, 2019 Indlaw
SC 371
 Raheja Universal Limited v NRC
Limited & Ors, (2012) 4 SCC 148
2.2.3 Corporate Debt Restructuring  In Re, Arvind Mills Ltd., (2002) 111 3
(CDR) v Insolvency and Comp Cases 118 (Guj)
Bankruptcy Code, 2016  Kirloskar Electric Co. v. Unknown,
Cases 2003 116 Comp Cas 413 (Kar)
2.3 Cross Border M&A Activities  In Re, Mindtree Ltd., 2018 Indlaw 2
Foreign Exchange NCLT 2061
Management (Cross Border  In Re, Sun Pharmaceutical Industries
Merger) Regulations 2018 Ltd., 2018 Indlaw NCLT 389
Foreign Collaborations; Joint  In Re, Asian Paints Ltd., 2017 Indlaw
Ventures and Franchise NCLT 1956
Agreements
2.4 Demerger or Splits –  In re, ICICI Bank, [2002] 112 Comp 4
Divestiture - Spin off – Slump Cas 291
Sale - Transfer of Assets and  Reliance Natural Resources Ltd. v
Reconstruction of Companies Reliance Industries Ltd., (2010) 7 SCC
1
2.5 Competition Issues in M&A –  CCI v. Thomas Cook (India) Ltd. and 2
Threshold Limit – Regulation another, 2018 Indlaw SC 395
by Competition Commission of  In Re, Tailwinds Ltd., Naresh Goyal,
India (CCI) - Issues acquisition Anita Naresh Goyal, Etihad Airways

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 of shares and takeover – Sec 5 PJSC, 2014 Indlaw SEBI 51
& 6, Competition Act, 2002  Eli Lilly and Company, Indiana v. CCI,
2020 Indlaw NCLAT 117
 Vodafone Acquisition of Hutchinson
Essar India Ltd.
 Merger of Idea with Vodafone
2.6 Pre & Post M&A and Re-  S.K. Gupta v. K. P. Jain, AIR 1979 SC 2
organization - Valuation of 734
Shares and Business - Post  RNRL v. RIL, (2010) 7 SCC 1
M&A Re-organization -
Economic, Financial & Legal
implications - Taxation,
Intellectual Property Rights,
Employee issues (White and
Blue Collared employees),
Stamp duty and allied matters
2.7 Amalgamation of Companies  63 Moons Technologies Ltd. & others 2
in Public Interest - Special v. UOI and others, 2019 Indlaw SC
provisions for merger or 498
amalgamation of Certain types  In Re, HBN Dairies & Allied Limited,
of Companies 2016 Indlaw SEBI 263
UNIT 3
SECURITIES EXCHANGE BOARD OF INDIA ACT, 1992 (SEBI)
3.1 SEBI - Establishment of the  Prakash Gupta v. SEBI, Lnind 2021 8
Board – Objective - Protection SC 249
of the investor - Development  SEBI v. Opee Stock-link Ltd. &
& regulation of securities another, 2016 Indlaw SC 492; [2016]
market. Powers & Functions; 197 Comp Cas 435
Collective Investment  (1) G.L. Sultania and Another; (2)
Schemes; investigations; power H.L. Somany and Others; (3) R.K.
to issue directions; malpractice, Somany and Others v. SEBI and
deception & SEBI; Penalties; Others, (2007) 5 SCC 133
Securities Appellate Tribunal  Adjudicating Officer, SEBI v. Bhavesh
(SAT) Pabari, 2019 Indlaw SC 255
 Sterlite Industries Ltd v. SEBI, 2003
113 Comp Cas 273
 Swedish Match AB v. SEBI, AIR 2004
SC 4219
 Technip Sa v. SMS Holding Private
Ltd. and Others, (2005) 5 SCC 465
 Vinay Bubna v. RSE, Mumbai, AIR
1999 SC 2517
 B. P. Kanani v. SEBI, 2000 Indlaw
SAT 10
 BSE Brokers Forum, Bom. v. SEBI,
AIR 2001 SC 1010.
 Bank of Baroda v. SEBI & Union Bank
of India v SEBI, 2000 Indlaw SAT 21
 Bombay RSE v. Jaya I. Shah, AIR
2004 SC 55

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  BPL v. SEBI, Appeal No.15/2001, June
20, 2002 
 Clariant International Ltd. v. SEBI,
AIR 2004 SC 4236.
 Daiichi Sankyo Co. Ltd. v. Jayaram
Chigurupati and another, (2010) 7
SCC 449
 Kwality Ice creams v. SEBI & Others,
2001 Indlaw SAT 25
 RBI v. Peerless General Finance and
Investment Co. Ltd., AIR 1996 SC 646
3.2 SEBI Regulation on Prospectus  Subrata Roy Sahara v. Union of India 6
- SEBI (Issue of Capital and and others, (2014) 8 SCC 470
Disclosure Requirements)  Sahara India Real Estate Corp. Ltd. &
Regulations, 2009, (ICDR); Ors v. SEBI & Anr, (2013) 1 SCC 1
Stockbrokers - SEBI  Kotak Mahindra Capital Co. Ltd. &
(Stockbrokers…) Regulations, others v. SEBI, 2016 Indlaw SAT 117
1992  Derry v. Peek, [1889] UKHL 1
 Peek v. Gurney, [1873] LR 6 HL 377
 Possfund Custodian Trustee Ltd. v.
Diamond; Parr v Diamond, [1996] 1
WLR 1351 r/w Hall v. Cable &
Wireless PLC, [2009] EWHC 1793
(Comm)
3.3 SEBI (Substantial Acquisition  Cabot International v. AO, SEBI, 2001 5
and Transfer of Shares) Indlaw SAT 48; 2001 (2) CLC 549
Regulation. 2011 – Takeover  Fascinating Leasing & Finance Pvt.
Code – Acquirer - persons Ltd. v. SEBI, 1998 (17) SCL 204
acting in concert - Substantial  HDFC v SEBI, 2000 Indlaw SAT 22
acquisition of shares or voting  Laurel Energetics Pvt. Ltd. v. SEBI,
rights and control - General (2017) 8 SCC 541
exemptions – disclosures of  Nirma Industries Ltd. & Anr. v. SEBI,
shareholding and control -Open (2013) 8 SCC 20
offer process - PA – obligations  Pramod Jain & others v. SEBI, (2016)
of directors of the target 10 SCC 243
company, acquirer, target  SEBI v. Akshya Infrastructure Pvt.
company & manager to the Ltd., (2014) 11 SCC 112
open offer  Therm Flow Engineers Pvt. Ltd.,
Ahmedabad v. SEBI, 2019 Indlaw SAT
74
3.4 SEBI (Insider Trading)  In Re, Cady Roberts & Co., 40 SAEC 5
Regulation, 2015 - connected 907 (1961)
person; person deemed to be a  Chiarella v. US, 445 U.S. 222 (1980) -
connected person; Insider; price (SC)
sensitive information -  Driks v. SEC, 463 U S 646 (1983), 653
Prohibition on dealing, n. 10
communicating or counselling  SEC v. Dorozhko, 574 F.3d 42 (2nd
on matters relating to insider Cir. 2009).
trading – Exemptions –  SEC v. Texas Gulf Sulphur Co., 401
Investigations - Policy on F.2d 833 (2d Cir. 1968), cert.

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 disclosures and Code of denied, 394 U.S. 976 (1969)
internal procedures and conduct  United States v. Carpenter, 791 F.2d
for listed companies - Model 1024 (2d Cir. 1986), aff'd 484 U.S. 19
code of conduct for prevention (1987).
of insider trading for listed  US v. O’Hagan, 117 S. Ct. 2199
companies; Code of corporate (1997)
disclosure practices for  US v. Rajaratnam, No. 622 F.3d 159
prevention of insider trading. (2d Cir. 2010)
 US v. Rajat K. Gupta, 11 Cr. 907 (JSR)
 Anil Harish v. SEBI, 2012 Indlaw SAT
89
 Chintalapati Srinivasa Raju & others
v. SEBI, AIR 2017 SC 2411; 2018 (7)
SCALE 721 (Satyam Scam)
 Dr. Anjali Beke v SEBI, 2006 Indlaw
SAT 112
 Gujarat NRE Mineral Resources Ltd.
v. SEBI, no. 207 of 2010 (18/11/2011)
 Hindustan Lever Ltd. v. SEBI, (1998)
18 S.C.L. 311
 Dilip S. Pendse v. SEBI, 2009 Indlaw
SAT 36
 V.K. Kaul v. AO, SEBI, 2012 Indlaw
SAT 129; 2013 (2) Comp LJ 583
 Kemefs Specialties Pvt. Ltd. v. SEBI,
Appeal No. 54/2011, SAT
(21/07/2011)
 Rajiv B. Gandhi, Sandhya R. Gandhi,
Amishi B. Gandhi v. SEBI, (2008) 84
SCL 192 (SAT)
 Rakesh Agarwal v. SEBI, (2004) 1
CompLJ 193 SAT, 2004 49 SCL 351
SAT
3.5 SEBI (Prohibition of  Anand Rathi v. SEBI, 2002 Indlaw 5
Fraudulent and Unfair Trade SAT 6; 2002 (2) Comp LJ 100
Practices Relating to Securities  Angel Broking Pvt. Ltd. v. SEBI, 2013
Markets) Regulations, 2003 Indlaw SAT 56
PFUTP - Prohibition of  Ashesh Agarwal & others v. SEBI &
Manipulative Practices; Another, 2013 Indlaw SAT 61
Investigation  DLF Ltd., New Delhi & others v.
CASES SEBI, 2015 Indlaw SAT 1
  HB Stockholdings Ltd. Gurgaon &
Others v. SEBI, 2013 Indlaw SAT 22
 Ketan Parekh v. SEBI, 2006 Indlaw
SAT 136
 Kosha Investments Ltd. v. SEBI &
Another, [2015] 193 Comp Cas 1
 N. Narayanan v. AO, SEBI, (2013) 12
SCC 152
 Nirmal Bang Securities Pvt. Ltd. v.

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 SEBI, [2004] 49 SCL 421
 Ritesh Agarwal & Another v. SEBI &
Others, (2008) 8 SCC 205
 S. P. J. Stock Brokers Pvt. Ltd.,
Mumbai v. SEBI, 2013 Indlaw SAT 30
 SEBI & others v. Kanaiyalal
Baldevbhai Patel & others, 2017
Indlaw SC 734
 SEBI v. Kishore R. Ajmera, 2016
Indlaw SC 151; (2016) 6 SCC 368
 SEBI v. Rakhi Trading Pvt. Ltd, 2018
Indlaw SC 212
 Sterlite Industries (India) Ltd v. SEBI
[Interim order],  2013 Indlaw SAT 22
UNIT 4
SECURITIES CONTRACT (REGULATION) ACT 1956
4.1 Regulation of certain  Rusoday Securities Ltd. v. NSE India 4
transaction in the securities Ltd. & others, 2020 Indlaw SC 555
market. Corporatization,  Brooke Bond India Ltd v. UB Ltd &
demutualization Other, 1994 79 Comp Cas 346 Bom.
Future Trading - Options in  Satish Nayak v. Cochin RSE, AIR 1995
securities - buying and selling Ker 373
in RSEs  Seijal Rikeeen Dalal v. RSE, Bombay,
BSE & NSE - RSEs - AIR 1991 Bom 30
Functions and Significance –  Jagdish Kumar v. P Srinivasan, AIR
OTCEI - SENSEX Nifty Index 1995 Kant 420
Conditions of Listing and  Vinay Babna v. RSE, AIR 1999 SC
Delisting 2517
4.2 Credit Rating and Evaluation 1
of Risk - Concept, scope and
significance- benefit to
investors- regulatory
framework. Referring to legal
issues. CRISIL & Credit
Analysis & Research Ltd.
(CARE)

UNIT - 5
CORPORATE GOVERNANCE
Principles of Corporate  Arthur Andersen, LLP v. United 2
Governance – SEBI (Listing States, 544 U.S. 696 (2005)
Obligation and Disclosure  Chintalapati Srinivasa Raju & others v
Requirement) Regulation, 2015 SEBI, AIR 2017 SC 2411; 2018 (7)
R/W Schedule II SCALE 721 (Satyam Scam)
Kumara Mangalam Birla and
Narayana Murthy Committee
Report on Corporate
Governance.
Cadbury, Greenbury & Henkel

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Committee (UK)
Rights of Shareholder –
Equitable Treatment – Role
and Responsibility of Board of
Directors - Role of
Stakeholders in Governance –
Audit Committee – Nomination
and Remuneration Committee
– Stakeholders Relationship
Committee – Compliance
Committee
UNIT - 6
WINDING UP, LIQUIDATION & DISSOLUTION OF COMPANIES
Chapter XX – SS- 270 – 365
Winding up - Liquidation &  Allahabad Bank v. Canara Bank, 4
Dissolution of Companies - (2000) 4 SCC 406
Defunct Companies;  Andhra Bank v. OL, (2005) 5 SCC 75
Modes of Winding Up -  ICICI v. Vanjinad Leather Ltd.,
Compulsory Winding Up – ((1998) 91 CC 625 Ker, (Recovery
Winding up under Just & under DRT)
Equitable Clause - Official  Jitendra Nath Singh v. OL, Civil
Liquidator – Role, Powers & Appeal No. 6755/ 2012, 21/8/12
Functions - Preferential  Kudremukh Iron Ore Co. Ltd v. Kooky
Payments – Workmen’s Rights Roadways P Ltd., (1990) 69 CC 178
and Payments during Winding (Karn) (DB)
up - Final meeting of  National Textile Workers Union v.
shareholders and Dissolution of Ramakrishnan, (1983) 54 CC 184
Company (SC))
 Pawan Kumar K v. Kaushal Leather
Board Ltd., (1996) 87 CC 130 (AP)

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 REFERENCE BOOKS
# Title of the Book Name of the Author
1. Shishir Vayttaden, SEBI’s Takeover Reg’s Shishir Vayttaden
2. Sridharan and Pandian Guide to Takeovers and Sridharan and Pandian
Mergers
3. S M. Dugar's Guide to Competition Law 2 S M. Dugar & U. P. Mathur
Volumes
4. Foreign Direct Investment and Trade in India Anil Kumar / Sandilya
5. S Ramanujam, Mergers et al Issues, Implications S Ramanujam
and Case Law in Corporate Restructuring
6. Sekhar Guide to SEBI, Capital Issues, Sekhar
Debentures and Listing (2 Vols.)
7. Joint Ventures and Mergers and Acquisitions in Seth Dua & Associates
India: Legal and Tax Aspects
8. The structure and Reg. of Financial Markets Spencer
9. Financial Institutions & Markets L M Bhala
10. Indian Capital Market Avadhani
11. Law and Procedure for Mergers, Amalgamations, K.R. Sampath
Takeovers & Corporate Restructure. Mumbai
12. Mergers, Restructuring and Corporate Control J. Fred Weston, Chung,
Kwang S. and Hoag, Susan
E.,
13. Cases and Materials in Co. Law. Oxford Len Sealy & Sarah
University Press Worthington
14. Master Guide to Mergers & Acquisitions in India Ernst & Young
– Tax and Reg.

Websites: Official Website of SEBI, BSE, NSE, Ministry of Corporate Affairs