The Venture Intelligence Blog

‘ORDINARY COURSE OF BUSINESS’ IN INVESTMENT AGREEMENTS: IS IT USEFUL DEFINING THE PHRASE? It is quite common to notice the phrase ‘ordinary course of business’, used across various investment and acquisition agreements. The phrase is used in VC/PE shareholder agreements to allow promoters/founders of investee companies the flexibility to operate without obtaining investors’ consent. Activities or business decisions that are in the ‘ordinary course’ are usually exempt from the requirements of obtaining investors’ permission. In acquisition and subscription agreements, the phrase is used across warranties to provide generic exemptions to the warrantors. Depending on the language of the warranty used, it could either be beneficial for the warrantors or the investor seeking the warranty. Often the phrase is defined with such subjectivity that it defeats the purpose of having a definition in the first place. In this context, it may be useful to understand the legal connotation of the...

Supreme Court of India Clarifies Retrospective Applicability of Amended Section 148 of Negotiable Instruments Act, 1881 The Negotiable Instruments Act, 1881 (“ NI Act ”) was amended last year and two new provisions, section 143A and section 148, were inserted  in  the NI Act, which were necessitated to deal with the delay tactics of drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, leading to frustration  in enforcement of section 138 of the NI Act. The amendments came into force with effect from September 1, 2018 vide the Negotiable Instruments (Amendment) Act, 2018 (“ NI Amendment Act ”). In  accordance with the new section 143A, the trial court may direct the drawer of the cheque to pay an interim compensation to the payee/complainant, which shall not exceed 20% of the cheque amount  in  dispute. Further, as per section 148, the appellate court may direct the drawer  in  an appeal agains...