We have always come across investors who are concerned about profits and dividends, but new age investors expect something more from the corporates i.e., they want to know the source of the profits as well. Hence, we are witnessing a sharp rise in ESG space, globally. ESG stands for Environmental, Social, and Governance. ESG investing is also known as “socially responsible investing,” “impact investing,” and “sustainable investing”. ESG refers to those parameters which are used to monitor responsible business conduct with an aim to ensure that businesses ultimately benefit all the stakeholders and not just the shareholders.

‘E’ stands for environment and broadly covers an organisation’s carbon footprint policy, waste management, energy conservation, water consumption policies etc.,

‘S’ stands for the social impact of an organisation on the community through its agendas for its customers, employees, suppliers etc. Gender diversity, safety at workplace etc., are some of the other important factors to judge social impact of an organisation; and

‘G’ stands for governance policies of the corporates which includes board composition, audit practices, disclosure compliances, bribery and corruption, executive compensation etc.


In India, sustainable reporting framework has evolved over time. However, it is still at a very nascent stage as India has still not consolidated laws relating to ESG reporting. Numerous legislations impose certain obligations and disclosure requirements related to ESG matters. These regulations are spread across various legislative frameworks such as the Factories Act, 1948, the Environment Protection Act, 1986, the Water (Prevention and Control of Pollution) Act, 1974, the Prevention of Money Laundering Act, 2002, the Prevention of Corruption Act, 1988, the Companies Act, 2013, MCA’s National Guidelines on Responsible Business Conduct and the SEBI regulations prescribing the compliance and disclosure requirements for the ESG matters.

After observing global standards and practices related to ESG such as sustainability standards published by Global Reporting Initiative (“GRI”) which requires detailed disclosures, SEBI took a step forward and came up with Business Responsibility Report (“BRR”) for top 100 listed companies in 2012. BRR was based on nine sustainability principles provided under MCA Voluntary ESG Guidelines, 2011. BRR format collected ESG data in the form of Yes/ No questionnaire. Hence, BRR was criticised for its weak design as it provided very little and meaningful ESG data. In order to become compliant with the global standards and improve disclosure quality, SEBI vide a circular dated May 10, 2021, introduced ‘Business Responsibility and Sustainability Report’ (“BRSR”) for top 1000 listed companies through amendment in SEBI (Listing and Disclosure Requirements), 2015.

From financial year 2022-23, top 1000 listed companies are mandatorily required to prepare Business Responsibility and Sustainability Report which demands detailed ESG disclosures.


Some of the key disclosures required under the BRSR Framework are given under the table below:

Sl. No.

Kind of Disclosure

Key Disclosure

Other Disclosure



An overview of the entity’s material ESG risks and opportunities, approach to mitigate or adapt to the risks along-with financial implications of the same.

Specific ESG commitments and performance. External assessment/ evaluation of ESG policies.



Essential Indicators:

a. Resource usage: Energy consumption, water withdrawal and consumption

b. Air emissions: Scope 1, Scope 2 Green-House gases (“GHG”) and air pollutant emissions

c. Waste management: Quantum of hazardous and non-hazardous waste generated, re-used and recycled alongwith waste management practices

d. Compliance with Extended Producer Responsibility (“EPR”) plan submitted to Pollution Control Boards and Performance-AchieveTrade (“PAT”) Scheme of the Bureau of Energy Efficiency.

Leadership Indicators:

a. Energy consumption mix through renewable & non-renewable sources, water discharge;

b. Water consumption in areas of water stress; c. Scope 3 GHG emissions;

d. Reclaimed products (as % of products sold);

e. Impact on biodiversity.

Business continuity and disaster management plan(s).



a. Employees / workers related:

Disclosures on gender and social diversity including measures for differently abled employees and workers, turnover rates, median wages, welfare benefits to permanent and contractual employees / workers, occupational health and safety, trainings etc.

b. Community related: disclosures on Social Impact Assessments (“SIA”), Rehabilitation and Resettlement, Corporate Social Responsibility etc.

c. Consumer related: disclosures on product labelling, product recall, consumer complaints in respect of data privacy, cyber security etc.

Framework/ policy on cyber security and data privacy risks



a. Role of the Board in sustainability: Statement from the director responsible for the report, to highlight sustainability related challenges, targets and performance.

b. Conduct related: Disclosures on fines/penalties / action taken by regulatory authorities or judicial institutions or any law enforcement agency on any of the principles.

Anti-corruption/ bribery policies.

Since, BRSR is not an industry specific reporting framework, SEBI has allowed the reporting entity to identify non-applicable parameters and provide a reason for its non-relevance (for example, certain environment related disclosures may not apply to a service industry and so on).


Although India has taken a step towards sustainability and the proliferation of international disclosure standards, there are varying caveats and limitations to be taken into consideration.


1. Challenges in data collection:

Performance is demonstrated by establishing a robust data collection process. Hence, the companies face these major issues while collecting ESG data:

a. Not knowing what needs to be collected;

b. Not knowing who needs to be involved in the process;

c. Not knowing where the data is in the business.

2. Maintaining quality of report:

Now the companies cannot afford to stick to a tick box approach. Investor satisfaction would require detailed disclosure along with follow-up actions from the respective entities. To maintain the investor trust, entities may also have to get external assessment or evaluation done. External assurance can help maintain investors’ expectations, especially of foreign investors.

3. Multiple disclosure frameworks:

As there are various frameworks available, companies often tend to choose framework which is apt to their particular business. This could lead to less meaningful and comparable ESG data. In such a scenario, gaining investor confidence becomes difficult.

To tackle these challenges posed by current ESG regime, efforts are being made to adopt a single global framework to regulate ESG data, in India. However, maintaining a global standard such as GRI or IFRS (International Financial Reporting Standards) would not be easy for companies operating in a developing economy like India.


1. Manipulated ESG ratings:

Investors who cannot afford proprietary ESG diligence, rely heavily on ESG ratings provided by the ESG rating agencies. However, the rating methodologies used by these agencies has been a topic of debate. More transparent methodologies to provide accurate ESG ratings is the need of the hour.

SEBI on January 24, 2022, released a consultation paper seeking views on proposal to provide for an accreditation framework for ESG rating providers in India. It is hoped that this step by SEBI will help bring in more transparency in the rating methodologies and protect the interest of the investors.

2. Comparability of ESG disclosures:

Availability of numerous frameworks lead to lack of comparable ESG data in the capital markets. This reduces the usefulness of the ESG information for better capital allocation decision by the investors. Hence, a common global standard is recommended to achieve reliable and comparable ESG data.


For now, ESG reporting remains a priority for large-listed companies only, but smaller companies, particularly those seeking private investments from VC or PE funds, should also deliberate upon their ESG risks and opportunities. Looking at the fast growth of ESG considerations, it is anticipated that it would soon find its way into credit assessments by banks and other private lenders. It is expected that the BRSR framework will be a milestone in achieving reliable and meaningful ESG data.

Companies should invest to build a mechanism to capture relevant data related to ESG matters, select suitable framework for reporting, and most importantly strengthen the level of assurance on such reporting. Also, it is advisable for the companies to create business specific ESG goals and plans while continuously analysing the risks, challenges and opportunities offered by the ESG regime in India.


1. SARFAESI proceedings cannot be continued against corporate debtor once CIRP is admitted and moratorium is ordered: Observes Supreme Court

The Supreme Court on May 18, 2022 in the case of Indian Overseas Bank v. RCM Infrastructure Ltd observed that the proceedings under the SARFAESI Act cannot be continued once the Corporate Insolvency Resolution Process (“CIRP”) is initiated and the moratorium is ordered.

In this case, the Indian Overseas Bank (“the Bank”) had extended certain credit facilities to the Corporate Debtor. Eventually, SARFAESI proceedings were initiated against the Corporate Debtor. The Bank took symbolic possession of two secured assets mortgaged exclusively with it in exercise of powers conferred on it under Section 13(4) of the SARFAESI Act read with Rule 8 of the Security Interest (Enforcement) Rules, 2002. An Eauction notice came to be issued by the Bank to recover the public money availed by the Corporate Debtor. At this stage, the Corporate Debtor filed a petition under Section 10 of the IBC before NCLT. NCLT admitted the petition and a moratorium was also notified. But even thereafter, the Bank continued the auction proceedings and accepted the balance 75% of the bid amount and completed the sale. NCLT, allowing the application filed by Corporate Debtor, passed an order setting aside the sale. NCLAT dismissed the appeal filed by the Bank and therefore it approached the Apex Court.

The Court referred to Section 14 and 238 of the IBC and court observed-

“In view of the provisions of Section 14(1)(c) of the IBC, which have overriding effect over any other law, any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the SARFAESI Act is prohibited. We are of the view that the appellant Bank could not have continued the proceedings under the SARFAESI Act once the CIRP was initiated and the moratorium was ordered.”

2. Section 18 of the Limitation Act Is Applicable To IBC Proceedings: Reiterates Supreme Court

The Supreme Court on May 18, 2022 in the case of State Bank of India v. Krishidhan Seeds Private Limited observed that the provisions of Section 18 of the Limitation Act are applicable to proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC”).

In the instant case, the NCLT rejected the application filed by the State Bank of India under Section 7 of the IBC for initiation of the Corporate Insolvency Resolution Process (“CIRP”) on the ground of limitation. It held that a statement contained in the balance sheet cannot be treated as an acknowledgement of liability under Section 18 of the Limitation Act, 1963. While upholding this order, the NCLAT held that recourse to Section 18 of the Limitation Act (effect of acknowledgment in writing) was not available. While considering the appeals filed against these orders, the Apex court bench noted that the judgments relied on by the NCLT and NCLAT has been specifically overruled by the Supreme Court.

Referring to Laxmi Pat Surana v. Union Bank of India (2021) 8 SCC 481, Asset Reconstruction Company (India) Limited v. Bishal Jaiswal (2021) 6 SCC 366, Sesh Nath Singh v. Baidyabati Sheoraphuli Coop. Bank Ltd. (2021) 7 SCC 313 and other judgments, the bench observed-

“(i) The provisions of Section 18 of the Limitation Act are not alien to and are applicable to proceedings under the IBC; and (ii) An acknowledgement in a balance sheet without a qualification can furnish a legitimate basis for determining as to whether the period of limitation would stand extended, so long as the acknowledgement was within a period of three years from the original date of default.”

Therefore, the bench allowed the appeal and restored the proceedings back to the NCLT for fresh adjudication.

3. Mere suppression of information about criminal complaint filed against the employee before submission of employment application form, does not mean that employer can arbitrarily terminate employee from service- Observes Supreme Court

The Supreme Court on May 02, 2022 in the matter of Pawan Kumar v. Union of India observed that mere suppression of material/false information in a given case does not mean that the employer can arbitrarily discharge/terminate the employee from service.

In this case, the appellant was selected to the post of Constable in the Railway Protection Force (RPF). While he was undergoing training, he was discharged from service on the ground that he did not disclose that an FIR under Sections 148/149/323/506/356 IPC was registered against him and he was prosecuted in the said case. It was found that there was suppression of information/false declaration in the verification form. The High Court dismissed the writ petition filed by the appellant, and therefore he approached the Apex Court.

The Apex Court Bench noted –

“The criminal complaint/FIR in the present case was registered post submission of the application form. We have also taken into account the nature of the allegations made in the criminal case and that the matter was of trivial nature not involving moral turpitude. Further, the proceedings had ended in a clean acquittal.”

The Bench referring to the judgment in Avtar Singh v. Union of India and others, observed-

“The person who has suppressed the material information or has made false declaration indeed has no unfettered right of seeking appointment or continuity in service, but at least has a right not to be dealt with arbitrarily and power has to be judiciously exercised by the competent authority in a reasonable manner with objectivity having due regard to the facts of the case on hand.”

Observing this, the Bench directed to reinstate the appellant in service on the post of Constable.

4. Wages/ Salaries of only those workmen/ employees who actually worked during Corporate Insolvency Resolution Process (“CIRP”) are to be included in CIRP Costs- Supreme Court

The Supreme Court on April 19, 2022 in the matter of Sunil Kumar Jain v. Sundaresh Bhatt held that the dues towards the wages/salaries of only those workmen/employees who actually worked during the CIRP are to be included in the CIRP costs.

In this case, National Company Law Appellate Tribunal dismissed the appeal preferred by the workmen/employees of M/s ABG Shipyard Limited (“Corporate Debtor”) against National Company Law Tribunal order denying any relief to them with regard to their claim relating to salary, which they claimed for the period involving ‘Corporate Insolvency Resolution Process’ (”CIRP”) and the prior period. The workmen/employees therefore approached the Apex Court in appeal.

The Court observed-

“Even if it is found that the Corporate Debtor was not a going concern during the CIRP despite best efforts by the resolution professional, it cannot be presumed that still the Corporate Debtor was a going concern during the CIRP period. It depends on the facts of each case”

The bench therefore partly allowed the appeal by concluding as follows:

  • That the wages/salaries of the workmen/employees of the Corporate Debtor for the period during CIRP can be included in the CIRP costs the same shall be payable in full first as per Section 53(1)(a) of the IBC, provided it is established and proved that the Interim Resolution Professional/Resolution Professional managed the operations of the corporate debtor as a going concern during the CIRP and that the concerned workmen/employees of the corporate debtor actually worked during the CIRP.
  • Considering Section 36(4) of the IBC and when the provident fund, gratuity fund and pension fund are kept out of the liquidation estate assets, the share of the workmen dues shall be kept outside the liquidation process and the concerned workmen/employees shall have to be paid the same out of such provident fund, gratuity fund and pension fund, if any, available and the Liquidator shall not have any claim over such funds.

1. MCA amends the Companies (Appointment and Qualification of Directors) Rules, 2014 in case of an individual who is a national of a country that shares a land border with India.

MCA vide its notification dated June 01, 2022 amends the Companies (Appointment and Qualification of Directors) Rules, 2014, and called it the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022, which mandated an individual who is a national of a country that shares a land border with India, to seek security clearance from the Ministry of Home Affairs, before making an application for Director Identification Number.

  • In rule 8, after the proviso, the following proviso is inserted:
    • “Provided further that in case the person seeking appointment is a national of a country which shares land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall also be attached along with the consent”
  • In rule 10, in sub-rule (1), the following proviso is inserted:
    • “Provided that no application number shall be generated in case of the person applying for Director Identification Number is a national of a country which shares land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached along with application for Director Identification Number.”
  • In the Annexure, in Form DIR-2, under the heading Declaration, the existing paragraph, shall be numbered as paragraph (i) thereof and after the paragraph (i) as so numbered, the following is inserted:
    • “(ii) I further declare that – I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director
    • or
    • I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached.”
  • In FORM NO. DIR-3, under the heading Verification, after serial number 3, the following serial number is inserted:
  • “3A. I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number; or I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number and the same has been obtained and is attached.”

2. MCA amends Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in case of merger or demerger between an Indian company and a company or a body corporate incorporated in a country sharing a land border with India

MCA vide its notification dated May 30, 2022 amends the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“the said rules”) and called it the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2022:

  • In rule 25A of the said rules, after sub-rule (3), the following sub-rule is inserted:
  • “(4) Notwithstanding anything contained in subrule (3), in case of a compromise or an arrangement or merger or demerger between an Indian company and a company or body corporate which has been incorporated in a country which shares land border with India, a declaration in Form No. CAA-16 shall be required at the stage of submission of application under section 230 of the Act.”
  • In the said rules, in Annexure A, after Form No. CAA-15, Form No. CAA-16 is inserted.

3. Ministry of Corporate Affairs (“MCA”) amends Companies (Share Capital and Debentures) Rules, 2014 to modify the format of Form SH – 4 (the Share Transfer Form).

MCA vide its notification dated May 04, 2022 bearing no: G.S.R. 335(E), issued an amendment in Companies (Share Capital and Debentures) Rules, 2014 for insertion of a declaration to be furnished while filing Form SH-4 in terms of whether there is a requirement of government approval by transferee under Foreign Exchange Management Act, 1999 (“FEMA”) before the transfer of shares. The new declaration inserted is as follows:


  • Transferee is not required to obtain the Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to transfer of shares; or
  • Transferee is required to obtain the Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to transfer of shares and the same has been obtained and is enclosed herewith.”

4. Subsequent to this, MCA vide its notification dated May 05, 2022 bearing no G.S.R. 338(E) amended the following: –

  • Rule 14, sub-rule (1) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and after the fourth proviso, inserted a proviso namely:
  • “Provided also that no offer or invitation of any securities under this rule shall be made to a body corporate incorporated in, or a national of, a country which shares a land border with India, unless such body corporate or the national, as the case may be, have obtained Government approval under the Foreign Exchange Management (Nondebt Instruments) Rules, 2019 and attached the same with the private placement offer cum application letter.”
  • Form PAS-4, wherein Part-B, after serial number (vii) the following was inserted :
  • “(viii) Tick whichever is applicable :-
  • (a) The applicant is not required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares.
  • (b) The applicant is required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares and the same has been obtained, and is enclosed herewith.- .”

K&A Law Offices is an NCR based boutique law firm. Based on the core values of “Accountability & Integrity”, at K&A Law Offices, lawyers are committed to nurturing a highperformance culture founded on robust ethical standards, professional integrity and accountability. We pride ourselves on our approachable, collegial, collaborative and teambased way of working.

The areas of practice of the Firm are as follows:

Corporate Law & Foreign Investment

Real Estate Acquisition & Investments

1) General Corporate Advisory (including corporate governance and directors’ responsibilities);

1) Acquisition/ transfer of immovable property;

2) Drafting, Vetting & Negotiation of day-to-day corporate commercial contracts;

2) Drafting, vetting & negotiating of real estate transaction documents;

3) Entry/ Exit Strategy;

3) Due Diligence & Title Investigations;

4) Mergers/Acquisition/Joint Ventures (both in-bound & out-bound);

4) Advising on transactions pertaining to development/ re-development;

5) Due Diligence & Transaction Structuring;

5) Foreign Direct Investment in Real Estate Sector;

6) Drafting, vetting & negotiation of Memorandum of understanding/ Term Sheet;

6) Closing and post-closing assistance;

7) Advising on Shareholders' Rights & drafting, vetting and negotiation of associated transaction documents;

7) Real Estate Regulatory & Compliance advisory.

8) Closing and post-closing assistance;

9) Regulatory & Compliance advisory.

Employment Advisory

Dispute Resolution

1) Drafting, vetting, and finalising employment contracts;

1) IBC Litigation & Advisory;

2) Drafting, vetting, and finalising employee handbook/ company policies;

2) Drafting/ Settling Briefs;

3) Drafting, vetting, and finalising termination related documentation;

3) Shareholders’ Dispute & Investors’ Exit Disputes;

4) Day-to-day advisory on employee welfare legislations;

4) Oppression & Mismanagement Matters;

5) Undertaking human resources due diligence for companies.

5) Appearing before Courts/ Tribunals including Supreme Court, High Courts Across India/ NCLT/ NCLAT (Delhi & Chennai)/ RoC.


This Newsletter has been drafted, compiled and edited by the following members of the Firm.

Kamalika Bhattacharjee

Corporate Commercial Lawyer,

Founder – K&A Law Offices

Unnati Goel

Corporate Commercial Lawyer

Associate – K&A Law Offices

(General Corporate & Real Estate practice)

Rishi Singh

Law Student – Campus Law Centre, University of Delhi

Legal Trainee – K&A Law Offices

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