The Election Commissioners Law Goes to a Constitution Bench

Welcome to this week’s issue of the Indian Legal Brief (ILB). Here are the judgments, orders, regulatory changes, and developments that matter to your practice — without the noise.

A full five-day week, and the Election Commission was in the building every day of it: a two-judge bench split on whether to refer the 2023 Election Commissioners appointments law to a larger bench, then jointly sent it to the Chief Justice for a Constitution Bench — with Justice Datta’s prima facie finding that the selection panel gives the executive a veto on the record; the Chief Justice’s bench told the Commission to fix a timeline on the Trinamool symbol, found its Delhi revision notices going out “almost mechanically,” and called three months of silence on twenty defection petitions “a red flag.” Seven judges reserved a 27-year-old reference on States’ sales-tax surcharges. Justices Bhuyan and Chandurkar put re-arrest after an Article 22 breach in the Magistrate’s hands; Justices Pardiwala and Viswanathan wrote pre-arrest safeguards for POCSO complaints that surface mid-custody fight; a Pardiwala bench sent the trade-mark jurisdiction of Civil Judge Commercial Courts to a larger bench, and Justices Sanjay Kumar and Sachdeva reopened the 2012 Dharmasthala case. Punjab & Haryana named CGST officers personally for an overnight arrest made under a court-ordered appearance, and SEBI rewrote its settlement code. Here’s what happened.

Supreme Court Highlights

Election Commission: A Split Bench Sends the 2023 Appointments Law to a Constitution Bench

Bench: Justices Dipankar Datta and Satish Chandra Sharma — September 23, 2026

In Anoop Baranwal (2023), a Constitution Bench filled the gap in Article 324 with a pro tem selection committee of the Prime Minister, the Leader of the Opposition and the Chief Justice of India. Parliament answered within the year: the Chief Election Commissioner and other Election Commissioners (Appointment, Conditions of Service and Term of Office) Act, 2023 put a Union Cabinet Minister nominated by the Prime Minister in the Chief Justice’s seat. Six Article 32 petitions — Dr Jaya Thakur, the Association for Democratic Reforms and Lok Prahari among the petitioners — challenged Sections 6, 7 and 8(2) as violating Articles 14 and 324. After roughly two years’ pendency and five days of hearing on the merits, the Attorney General and Solicitor General asked for a reference to a bench of at least five judges under Article 145(3). In Dr. Jaya Thakur v. Union of India, 2026 INSC 1040, the two judges split on that request — and agreed on where the papers should go.

Justice Datta would have refused the reference: the governing principle, that appointments to the Commission must be insulated from exclusive executive control, was settled by the five judges in Anoop Baranwal, and a division bench could apply it. His prima facie reading of Section 7 was unsparing. The Minister nominated by the Prime Minister “cannot be expected to defy his own nominator and risk his continuation as such nominated member on the committee, for all practical purposes,” leaving the executive, in effect, with a veto. To the Union’s plea that constitutional trust be reposed in the Prime Minister, he answered with the record of public life:

“One is forced to ask whether the constitutional trust reposed by Dr. Ambedkar during the CA Debates and this Court in Manoj Narula (supra) has been betrayed in practice?”

He also dismantled the Union’s analogy to judicial appointments — “judges appoint judges” is a myth, he wrote, because the last word rests with an executive that implements collegium resolutions selectively — and asked why, “even after the judiciary has been relegated to playing second fiddle to the executive in the matter of appointment of Judges, is there still a clamour to induct an outsider at the stage of selection?” Whether the Act protects the Commission or merely recalibrates executive control is for the merits; but “it is not enough for the ECI to be independent; it must appear to be independent.”

Justice Sharma held that a substantial question of interpretation of the Constitution had arisen and that Article 145(3) required a Constitution Bench to answer it authoritatively. The bench therefore directed that the papers be placed before the Chief Justice “for considering the desirability of constituting a Constitution Bench of such number of Judges” to decide the vires of Section 7 and the other provisions — and, in a joint plea, urged the Chief Justice to consider a permanent five-judge Constitution Bench, citing Anoop Baranwal itself (eight years from filing to judgment) and Jai Bir Singh (a reference pending since 2002 that took fifteen years to reach nine judges). “Pendency of references for far too long,” they wrote, “does not reflect well on the institution.”

Why it matters: The law under which the current Chief Election Commissioner and both Election Commissioners were appointed now carries a sitting judge’s prima facie finding that its selection committee hands the executive a veto — in a week when the same Commission was told to fix a timeline for the Trinamool symbol dispute, was questioned over Special Intensive Revision notices in Delhi and West Bengal, and faced a fresh petition seeking contempt action against the Chief Election Commissioner. The Constitution Bench will decide the Act; the permanent-bench proposal, if the Chief Justice takes it up, would change how every reference in the building is heard.

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Arrest: After an Article 22 Breach, Re-Arrest Needs a Magistrate’s Leave — and the Officer Faces Inquiry

Bench: Justices Ujjal Bhuyan and Atul S. Chandurkar — September 21, 2026

A Mohali FIR under Sections 64, 65(1) and 351 of the BNS and Section 6 of the POCSO Act alleged that the appellant had sexually abused his minor step-daughter. He was arrested at 7:54 on the morning of 17 May 2026, produced before the Magistrate only around noon the next day, and given no written grounds of arrest. Released for the breach of Article 22(1) and (2), he then faced the police’s stock answer to Vihaan Kumar and Mihir Rajesh Shah: arrest him again, properly this time. In Jaskaran Jeet Singh Deol v. State of Punjab, 2026 INSC 1022, the Court held that re-arrest is not barred — but it is no longer the arresting agency’s call.

“Once there is a breach of Article 22(1) of the Constitution, the power to re-arrest the accused must not be left to the discretion of the very same authority who had violated the said provision of the Constitution. It must have the judicial imprimatur.”

Building on paragraph 65 of Mihir Rajesh Shah, the Bench laid down the route. The agency must first furnish written grounds. It must then apply to the Magistrate, stating why re-arrest and custodial interrogation are necessary and explaining the original failure, with the application endorsed by the arresting officer’s immediate superior. The Magistrate decides expeditiously — preferably within a week — after hearing the accused. And the consequence runs the other way too: the superior officer “shall hand over the investigation of the case to another officer, further directing departmental enquiry,” with adverse findings entered in the officer’s service record. The High Court’s order and the Magistrate’s observations were set aside; the judgment goes to every State Judicial Academy.

Why it matters: Every arrest since Vihaan Kumar is open to an Article 22(1) challenge, and until now a successful one bought the accused a few hours before the same officers arrested him again. Defence counsel now have a checklist to test any re-arrest; investigating officers have a mandatory detour through the Magistrate with a superior’s signature — and a personal stake, since every unexplained failure to furnish grounds now triggers a departmental inquiry.

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POCSO: No Automatic Arrest of a Parent Accused Mid-Custody Fight — Expert Consultation First

Bench: Justices J.B. Pardiwala and K.V. Viswanathan — September 24, 2026

‘R’ and ‘E’ married in 2011 and had a daughter in 2015; the marriage broke down in 2018 and the litigation that followed ran through the Family Court, the Karnataka High Court and this Court, all of which gave the father custody. Physical custody changed hands in June 2023. Weeks later the mother lodged an FIR under the POCSO Act against the father and his family. The Supreme Court transferred the investigation to the CBI and constituted a NIMHANS committee of child psychiatrists and psychologists; after CCTV review, forensic interviews and clinical evaluation, the CBI found the allegations uncorroborated. In Rajeev Giri v. Ekta Singh, 2026 INSC 1049, the Court quashed the FIR as an abuse of process, restored legal custody to the father, and remitted the case to the Family Court for a supervised reintegration guided by the two CBI officers and two NIMHANS doctors who had done the work.

“The mere registration of a case under the POCSO Act should not by itself give rise to an inference that the allegation is true.”

Then it wrote the rules for the next case. Where the accused is a parent or a co-residing family member and a matrimonial dispute exists, the investigating officer must verify the dispute; there is to be no automatic arrest; a child-psychiatry or clinical-psychology expert must be consulted before any decision to arrest, dispensable only for reasons recorded in writing; the expert’s report informs but does not control the officer’s discretion and cannot by itself found either a chargesheet or a closure report. The same gate applies before a Special Court takes cognizance on a private complaint; remand and bail courts are to check compliance; District Child Protection Units are to update their expert registers under the POCSO Rules, 2020. The judgment goes to every High Court Registrar and every Chief Secretary. The accusation, the Bench observed, “can damage the very fabric of the parent-child relationship and the resultant wound is bound to leave an indelible scar.”

The day before, a different bench had gone the other way on different facts. In Debarati Bhunia Chakraborty v. Suman Sankar Bhunia, 2026 INSC 1043 (Justices Vikram Nath and Sandeep Mehta, September 23), a chargesheet already stood filed against the father on a POCSO complaint triggered by the son’s NIMHANS evaluation; the Court held that granting him custody while it was pending “would be totally unwarranted and unjustified,” rejected the lower courts’ description of the mother’s job changes as a “nomadic life,” and permitted her to relocate both children to the United Kingdom, where she lectures at the University of Hull.

Why it matters: Read together, the two judgments set the week’s framework for every matrimonial-adjacent POCSO case in the country: a filed chargesheet disqualifies a parent from custody, but a complaint that surfaces mid-custody-dispute now passes through a mandatory expert gate before anyone is arrested or cognizance is taken. Bail, quashing and custody petitions will cite Rajeev Giri from Monday — and police stations will need the DCPU’s expert register to exist.

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Trade Marks: Can a Civil Judge Notified as a Commercial Court Hear Infringement Suits? Larger Bench to Decide

Bench: Justices J.B. Pardiwala and K. Vinod Chandran — September 21, 2026

Section 134 of the Trade Marks Act, 1999 bars infringement suits in any court inferior to a District Court. Jharkhand, like several States, has notified Civil Judges (Senior Division) as Commercial Courts for disputes between ₹3 lakh and ₹1 crore — so a trade mark suit in Jamshedpur went to a Civil Judge, with appeal to the District Judge and nothing beyond but Article 227. The appellants said the notification had quietly dismantled the statutory floor. In I.S.D.S. Private Limited v. M/s Khemka Food Products Pvt. Ltd., 2026 INSC 1027, the Court found itself between two of its own decisions: Kandla Export Corporation (2018), which lets a special statute prevail over the Commercial Courts Act, and Jaycee Housing (2022), which reads the Commercial Courts Act as operating notwithstanding special statutes.

“The legislative imprimatur cannot be diluted by the notifications issued by the High Courts.”

The Bench referred the conflict to a larger bench “for resolving the conflict and also settling the law to be uniform throughout the States and the jurisdiction not to be left to the different notifications issued in the various States,” directed the papers to the Chief Justice, and stayed the proceedings before the Commercial Court.

Why it matters: Every trade mark — and, by the same logic, copyright and designs — infringement suit pending before a Civil Judge sitting as a Commercial Court in a notifying State is under a jurisdictional cloud until the larger bench rules. Expect stay and transfer applications, and pressure on High Courts to revisit notifications that routed IP suits below the District Court.

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Criminal Investigation: A Botched Probe Shocks the Court’s Conscience — De Novo Investigation Fourteen Years On

Bench: Justices Sanjay Kumar and Sanjeev Sachdeva — September 21, 2026

On 9 October 2012, a seventeen-year-old left for college in Dharmasthala and did not return; her body was found the next day, one hand tied to a tree with her uniform shawl, with injuries consistent with rape and strangulation. The Belthangady police, then the Karnataka CID, then the CBI each prosecuted a single drifter, Santhosh Rao, and each gave a clean chit to three locally influential men the family and villagers had consistently named. Rao was acquitted for want of credible evidence. The Karnataka High Court refused the mother’s plea for a fresh investigation. In Kusumavati Gowda v. The Government of Karnataka, 2026 INSC 1030, the Court reversed.

The manner of the investigation — no CCTV secured, medical evidence not preserved, the appearance of shielding — “shocks the very conscience of the court.” Karnataka is to constitute a Special Investigation Team headed by a senior officer, staffed by investigators conversant with modern investigative technology and excluding everyone associated with the three earlier probes, to complete a de novo investigation within three months and report to the Court. The acquitted accused is protected against double jeopardy.

“Society would be failing in its duty if it does not provide justice to the victim of such a heinous crime by bringing the real culprits to the book.”

Why it matters: An acquittal does not close the file where the investigation was itself the failure — the Court has ordered a court-monitored SIT fourteen years after the crime and after three agencies had each declared it solved. Victims’ counsel have fresh authority for de novo investigation pleas; the judgment also returns the Dharmasthala case, already politically live in Karnataka, to active investigation.

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UAPA: “Sufficient Material to File a Chargesheet” Is Not a Concession That Investigation Is Over

Bench: Justices Prashant Kumar Mishra and Shree Chandrashekhar — September 21, 2026

The Maharashtra ATS registered an FIR on 21 September 2022 against alleged Popular Front of India members under Sections 120B, 121A and 153A IPC and Section 13(1)(b) UAPA, on material including a document titled “India-2047 — Towards Rule of Islam in India.” After ninety days the prosecution obtained two extensions under Section 43D(2)(b) totalling forty-five days, citing forensic analysis of seized devices and pending sanction. The Bombay High Court struck down the second, reading the prosecution’s statement that “sufficient material exists to file a chargesheet” as an admission that the investigation was complete, and granted default bail. In The State of Maharashtra v. Momin Moiuddin Gulam Hasan @ Moin Mistri, 2026 INSC 1021, the Court reversed.

“The investigation of a crime is the exclusive domain of the police. It is not the jurisdiction of the Court to decide when the investigation in a particular case should stop.”

The extension application had to be read as a whole: retrieval and analysis of electronic data and bank transactions is investigation, and obtaining sanction is a distinct step from completing it. The Special Judge’s order, the Bench held, meant that the time needed to retrieve data was itself sufficient ground for the extension. The respondent is to surrender within thirty days, free to seek regular bail.

Why it matters: The default-bail window in UAPA cases narrows: a stray sentence in an extension application will not be treated as a concession that the investigation is done. Counsel resisting extensions must show that the request is not bona fide on the whole record, not extract a phrase — and the judgment reads the “exclusive domain” of the police widely enough to cover the months forensic labs take.

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Sales Tax: Seven Judges Reserve a 27-Year-Old Reference on States’ Power to Levy Surcharges

Bench: Chief Justice Surya Kant and Justices K.V. Viswanathan, S.V. Bhatti, Joymalya Bagchi, N.V. Anjaria, Arun Palli and V. Mohana — September 22, 2026

Section 5A of the Orissa Sales Tax Act, 1947 imposed an additional tax on dealers by turnover — 10 per cent for those between ₹10 lakh and ₹1 crore, 15 per cent above it — computed on the sales tax already levied. In 1999, the Court referred Arjun Flour Mills v. State of Orissa to seven judges because its own precedents pulled apart: S. Kodar (1974) and Hoechst Pharmaceuticals (1983) had upheld such levies as taxes on sales within Entry 54 of the State List; India Cements (1990) had treated an additional levy differently. The reference sat for twenty-seven years. This week the seven-judge bench heard it and reserved judgment.

The Solicitor General’s opening was that the question is largely academic after GST, and that India Cements has in any event been overruled by the nine judges in Mineral Area Development Authority (2024); the Chief Justice agreed from the bench that “India Cements is no longer good law” and that Kodar had been approved in MADA. Justice Bagchi put the doctrinal point in a sentence — legislative competence “comes from the nature of tax, not the tax itself.”

Why it matters: Pre-GST assessments, surcharges and cesses computed on sales tax are still being litigated across the country, and the answer here decides whether a levy measured by another tax remains a tax on the sale. The bench’s remarks suggest the States will keep the power; the judgment will say how far, and will close one of the oldest open references on the Court’s docket — the same week a division bench asked the Chief Justice for a permanent Constitution Bench to prevent exactly such delays.

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Arbitration: The Appointing High Court’s City Is Not the Seat, and Neither Is the Venue of Convenience

Bench: Justices Sanjay Kumar and Sanjeev Sachdeva — September 23, 2026

Mahanadi Coalfields’ 2012 tender for hiring heavy earth-moving machinery at its Kulda open-cast project in Sundargarh had no arbitration clause; its general conditions made the courts where the work was executed competent for disputes. On the contractor’s writ petitions, the Orissa High Court in March 2019 referred the parties to a sole arbitrator under Section 11(6) — an order that named neither seat nor venue — and the arbitrator sat at Cuttack for his own convenience. When Mahanadi challenged the 2021 award under Section 34 before the District Judge, Sundargarh, the High Court held that court had no territorial jurisdiction, Cuttack being the seat, and that the petition was time-barred. In Mahanadi Coalfields Ltd v. M/s GSCO (Gurmeet Singh and Company) Infrastructure Pvt. Ltd., 2026 INSC 1038, the Court set that aside.

“There is a distinction between ‘seat’ and ‘venue’ of arbitration. While ‘Seat’ determines the Courts exercising supervisory jurisdiction over the arbitration proceedings, ‘Venue’ merely denoted the physical location where the sitting are held.”

Neither the location of the High Court that appointed the arbitrator nor the place where hearings were held for convenience makes that place the juridical seat. The contract pointed to the place of performance; the Section 34 petitions were filed within three months of the award and go back to the District Judge, Sundargarh, for decision on merits.

Why it matters: The seat-versus-venue argument after BGS SGS Soma is routinely run from wherever the Section 11 court happens to sit, and this closes that route in terms. Any party fighting a maintainability objection to a Section 34 petition filed at the place of contract performance now has a clean two-judge authority — and any Section 11 order that names no seat should be read with the contract, not the courthouse.

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Arbitration: A Clause Naming “Delay in Payment” Bars Pre-Reference Interest Outright

Bench: Justices P.S. Narasimha and Alok Aradhe — September 22, 2026

NEEPCO’s 1996 contract for civil works at a gas-turbine project in Tripura — about ₹17.09 crore — went to arbitration; the tribunal found the delay attributable to NEEPCO and, in 2015, awarded the contractor its claims with 12 per cent pre-reference interest. Clause 54 of the General Conditions said no interest would be payable on money withheld due to disputes, nor on account of “delay on the part of the Engineer-in-Charge making periodical or final payments.” The Commercial Court struck the interest; the Meghalaya High Court restored it, reading the clause as reaching only money withheld in dispute. In North Eastern Electric Power Corporation Limited v. Astra Construction Private Limited, 2026 INSC 1036, the Court restored the bar.

Clause 54 has two independent limbs, and the second — delay in payment — is exactly what the clause in Harish Chandra lacked and what the clauses in Sayeed Ahmed and Jaiprakash Associates v. THDC contained.

“By naming delay in payment as a separate ground, Clause 54 does what the clause in Harish Chandra never did.”

In awarding pre-reference interest against that express bar, the tribunal “exceeded the bounds of its jurisdiction under Section 31(7)(a) of the 1996 Act.”

Why it matters: A drafting map for both sides of every PSU works contract. One added line barring interest on “delayed payments” converts a Harish Chandra-type clause into a complete bar on pre-reference interest, and contractors on standard General Conditions should assume that interest is off the table for the pre-reference period unless the clause is narrower than this one.

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Family Law: No Anti-Suit Injunction on Speculation That a Foreign Decree Won’t Be Enforceable

Bench: Justices S.V.N. Bhatti and N.V. Anjaria — September 22, 2026

Both parties are Indian; they married in Kolkata in 2018 but lived at Academy Gardens, London, where the husband had been resident since his teens and the wife held a spousal and then a student visa. They separated in November 2023. The husband filed for divorce under the Hindu Marriage Act at Alipore in September 2024; the wife filed in the UK Family Court a month later on irretrievable breakdown and obtained interim maintenance and costs. The Alipore court restrained her English proceedings; the Calcutta High Court vacated the injunction. In Mihir Prakash Bajoria v. Vidushi Jain Bajoria, 2026 INSC 1034, the Court dismissed the husband’s appeal.

An anti-suit injunction is an exceptional remedy, available where the foreign forum is oppressive or vexatious or is forum non conveniens. It cannot rest on speculation that a foreign decree may prove unenforceable under Section 13 CPC — least of all where the foreign court has yet to rule on jurisdiction or merits, and is the forum of the parties’ habitual residence. Enforceability is a question for the recognition stage, not a reason to halt the foreign suit at the threshold.

Why it matters: The “file first in India and injunct the foreign case” strategy in NRI matrimonial disputes is sharply curtailed. Counsel for the spouse abroad now have a Supreme Court ruling that the Indian court’s view of a possible future foreign decree is no ground to restrain proceedings in the forum where the marriage actually lived.

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Corruption: Recovery of Tainted Money Without Proof of Demand Cannot Convict

Bench: Justices Ujjal Bhuyan and Arun Palli — September 22, 2026

A Punjab Patwari was accused of demanding ₹10,000 — settled at ₹9,500 — to mutate land in favour of a deceased man’s heirs. A Vigilance Bureau trap on 19 April 2002 recovered phenolphthalein-treated notes, and the Special Judge and the Punjab & Haryana High Court convicted him under Sections 7 and 13(2) of the Prevention of Corruption Act. He died during the appeal; his legal representatives carried it on. In Jaswinder Singh (dead through Lrs.) v. State of Punjab, 2026 INSC 1031, the Court acquitted him.

No witness saw the demand, none saw the money handed over and accepted, and the accounts of the recovery contradicted one another. Applying the Constitution Bench in Neeraj Dutta, proof of demand is the sine qua non.

“Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand, ipso facto would thus not be sufficient to bring home the charge under these two sections of the Act.”

Why it matters: A post-Neeraj Dutta application that treats trap cases with no eyewitness to the demand as fatal for the prosecution. Vigilance agencies must secure independent proof of the demand — a shadow witness who heard it, a recording — because recovery and a positive hand-wash are no longer enough, and a generation of pending trap-case appeals will be argued on this paragraph.

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BNSS: A Victim’s Appeal Against a Magistrate’s Acquittal Lies to the Sessions Court, Not the High Court

Bench: Justices J.B. Pardiwala and K. Vinod Chandran — September 22, 2026

A father whose son, admitted for depressive illness, died by suicide in hospital prosecuted a doctor and a nurse under Section 304A IPC. The Alipore Magistrate acquitted them. He appealed to the Calcutta High Court, where one Single Judge admitted the appeal and another, at final hearing, held it not maintainable. Appearing in person, assisted by an amicus, he came to the Supreme Court. In Subhas Chandra Sarkar v. The State of West Bengal, 2026 INSC 1052, the Court agreed with the High Court.

Under the proviso to Section 413 BNSS read with Sections 415(3) and 419, a victim’s appeal against acquittal lies to the court to which an appeal against a conviction by that court would ordinarily lie.

“The order of acquittal passed by a learned Magistrate, hence, has to be appealed before the Court in which a conviction ordered by a Magistrate can be appealed, which is the Sessions Court.”

The petition was dismissed with liberty to approach the Sessions Court; an appeal filed within a month is to be admitted and heard on merits without regard to the delay.

Why it matters: The first clear word from the Court on the forum for victims’ appeals under the new Code, carrying forward the position under the Section 372 CrPC proviso. Victims’ counsel who file in the High Court against a Magistrate’s acquittal risk dismissal and a limitation problem — and the judgment’s one-month window shows what the Court will do for the litigant who got it wrong in good faith.

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Admiralty: A Valid Termination Notice Ends the Demise Charter — Repossession Only Completes It

Bench: Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana — September 25, 2026

The owners of M.V. Nereus Progress bareboat-chartered her to Nereides Marine Services on the BIMCO BARECON 2017 form in October 2024. Nereides defaulted on hire; after demand notices and an anti-technicality notice allowing three banking days’ grace, the owners terminated under Clause 31(a)(i) on 13 November 2025 and issued a repossession notice on the 19th. Nereides delayed disclosing the vessel’s whereabouts, citing engine trouble, and reported her arrival at Tuticorin only on 2 December. Two days later Om Freight Forwarders — a creditor of Nereides under a different charter — obtained her ex parte arrest under Sections 5(1)(b) and 5(2) of the Admiralty Act, 2017, on the footing that Nereides was still the demise charterer. The Madras High Court sustained the arrest. In Owners and Parties Interested in M.V. Nereus Progress v. Om Freight Forwarders Ltd., 2026 INSC 1055, a three-judge bench vacated it.

“If a charterer’s demise status were held to continue for as long as the charterer chooses or is able to withhold physical possession, despite a validly issued termination notice, the owner’s contractual right of termination would be held hostage to the very default that occasioned its exercise.”

A validly issued notice under Clause 31(a) “was sufficient to bring the demise charter to an end”; physical repossession thereafter “operated only to complete the practical transfer of control.” Clause 32 makes the former charterer a gratuitous bailee in the interval — a status incompatible with a demise charterer’s, and so with an arrest founded on it.

Why it matters: The first Supreme Court ruling on when demise-charterer liability under the 2017 Act ends, and it protects owners from sister-claim arrests by a defaulting charterer’s creditors in the window between termination and redelivery. Coming from a three-judge bench led by the Chief Justice, it will be hard to distinguish in the admiralty courts at Bombay, Madras, Calcutta and Gujarat.

Other Notable SC Orders This Week

• Revenue cannot cure ineligibility in a tender (September 21) — In Micky Traders v. L.R.Y. Labour Contractor, 2026 INSC 1025, Justices Viswanathan and Aradhe upheld the quashing of a ₹16.51 crore mandi user-charge contract awarded to a bidder without the experience the tender demanded: “Bids can be compared only among bidders who are eligible to be compared in the first place.” Two days later, in O.P. Mehta v. Mohinder Kalta, 2026 INSC 1037, Justices Datta and Nagu held a PIL by the alter ego of an unsuccessful bidder, seeking an inter-se comparison of bids, improper — and let the contractor finish a ₹23 crore PMGSY road in three months at 2024 rates.
• A fire that “doesn’t seem accidental” (September 21) — In New India Assurance v. Hemkund Duplex and Board, 2026 INSC 1023, Justices Sanjay Kumar and Sachdeva set aside the NCDRC’s ₹2.4 crore award on a paper-mill fire claim that had shrunk from ₹15 crore to ₹7.31 crore, holding that a consumer forum cannot brush aside surveyors’ reports without identifying a specific deficiency in them.
• A preliminary issue cannot be carved out mid-trial (September 21) — In John Mathew v. Santha Paul, 2026 INSC 1020, Justices Viswanathan and Palli held that Order XIV Rule 2(2) CPC “is a prospective power to ‘try that issue first’ and does not authorize a retrospective reordering of trial already underway” — limitation and jurisdiction must be pressed before evidence on all issues begins.
• Successive appellate orders do not restart §28A (September 21) — In NOIDA v. Rajveer Singh, 2026 INSC 1026, Justices Pardiwala and Vinod Chandran held that limitation for a redetermination application under the 1894 Act ran from the first enhancement of 8 July 2019, not from a 2022 order that merely followed it.
• A widow’s limited interest ripens without partition (September 22) — In Ganapati v. Prabhakar, 2026 INSC 1033, Justices Bhatti and Anjaria held that a pre-1956 widow’s statutory interest becomes absolute ownership under Section 14(1) of the Hindu Succession Act, partition being “not a sine qua non.”
• No original, no discharge (September 22) — In Antonetto J D’Souza v. Aldila Braganza, 2026 INSC 1032, Justices Bhuyan and Chandurkar restored a forgery prosecution over an interpolated building plan: “Absence of the original document alleged to be forged does not necessarily sound the death knell of the prosecution case.”
• A completed cheque trial is not reopened for a lapse without prejudice (September 22) — In Sanu Varghese v. Shoukkathali, 2026 INSC 1053, Justices Pardiwala and Vinod Chandran set aside the Kerala High Court’s remand of a Section 138 case for retrial: “The plea of prejudice looms large and is stark in the above case by its absence.”
• Only the High Court and this Court can bar remission (September 24) — In Naval Kishore v. State of Punjab, 2026 INSC 1048, Justices Aravind Kumar and Pancholi affirmed convictions for a 2009 triple murder but set aside the Sessions Court’s “till rest of their life” sentence, substituting twenty-five years without remission.
• Death commuted, reform not disproved (September 24) — In Waris v. State of Madhya Pradesh, 2026 INSC 1050, Justices Nath, Mehta and Bishnoi affirmed convictions for the rape and murder of a six-year-old stepdaughter on the mother’s sole testimony — “ordinarily the last person who would shield the murderer of her own child” — and commuted the death sentence to life without remission, the State having led no evidence of incapacity for reform.
• A prosecutrix’s account cannot be half-believed (September 25) — In Paramjit Singh Bedi v. State of Punjab, 2026 INSC 1054, Justices Bhuyan and Chandurkar acquitted a man whose kidnapping conviction the courts below had rejected while accepting the same witness on rape: “immorality of an act sans credible evidence cannot justify a conviction.”
• Vande Mataram: no penal consequence for a conscientious objector (September 22) — Hearing T.M. Krishna’s challenge to the 2026 amendment extending the Prevention of Insults to National Honour Act to the National Song and the Home Ministry’s six-stanza mandate, the Chief Justice’s bench said Bijoe Emmanuel governs — nobody declining to sing on grounds of religion or conscience is to face criminal consequences — and sought the Union’s response in two weeks. The Solicitor General’s remark that “law making cannot be as per Naxalites’ idea” drew an objection from Dr S. Muralidhar; he declined to withdraw it.
• “A red flag”: three months on the Trinamool defection petitions (September 23) — The Chief Justice’s bench stopped short of directing the Lok Sabha Speaker but said Tenth Schedule petitions against the twenty rebel MPs are expected to be decided expeditiously, Justice Bagchi asking why a matter “of moments” with consequences for the democratic process had not been finished; the Speaker has since given the MPs until 8 October to reply.
• Trinamool symbol: fix a timeline (September 24) — On Mamata Banerjee’s petition against the Election Commission’s 17 September interim freeze of the party name and the “Flowers & Grass” symbol, the same bench asked how long the Commission needs — “We know what delay did in Shiv Sena” — and listed the matter next week. It also dismissed former Telangana MLA Danam Nagender’s challenge to his Tenth Schedule disqualification, effective from the day he filed as a Congress Lok Sabha candidate while holding his BRS seat.
• SIR: “almost mechanically” issued notices (September 22) — The Chief Justice’s bench asked the Election Commission to explain the criteria behind “logical discrepancy” notices to some 33 lakh Delhi electors and to consider additional filters; in the West Bengal matter, the Commission’s affidavit put 38.31 lakh appeals before the appellate tribunals — 22.21 lakh by excluded voters — with 1.26 lakh disposed of.
• Patna High Court’s “attempt to rape” verdict taken up suo motu (September 23) — The Chief Justice’s bench registered a suo motu case over a judgment holding that trying to remove a woman’s salwar and pressing her chest was at best Section 354 IPC, called some of its observations “offending,” and directed the Bihar Advocate General to ensure the accused is served before the order is examined.
• Cancer drugs at ten times the retailer’s price (September 22) — Told that a medicine supplied to retailers at ₹2,700 carried an MRP of ₹27,000, Justices Vikram Nath and Sandeep Mehta called the gap “broad daylight dacoity,” flagged hospitals compelling purchases from in-house pharmacies and taxpayers reimbursing inflated prices under government schemes, and listed the matter for 29 September.
• Premium FAR cannot regularise unauthorised construction in Karnataka (September 22) — Issuing notice on a challenge to the scheme under Section 18-B of the Karnataka Town and Country Planning Act, the Chief Justice’s bench directed that Premium FAR not be used to regularise unauthorised construction and made every clearance subject to the petition’s outcome.
• A Noida DM’s strictures stayed, the NSA quashing not (September 23 and 24) — Justices Satish Chandra Sharma and N.K. Singh stayed paragraphs 27 to 33 of the Allahabad High Court’s judgment — the ₹5 lakh recovery from District Magistrate Medha Roopam’s salary and the strictures against her — and clarified the next day that the quashing of student Akriti Chaudhary’s National Security Act detention stands; next hearing 7 October.
• Lakhimpur Kheri: the trial judge under the High Court’s lens (September 22) — On allegations for the victims that the trial judge had taken up matters assigned to other courts and granted relief in them, the Chief Justice’s bench asked the Chief Justice of the Allahabad High Court to examine them and report in a sealed cover, and gave Uttar Pradesh two weeks to appoint a senior public prosecutor.
• Ram temple donations: 105 instances, chargesheet by September 25 (September 21) — The Court-appointed SIT reported 105 instances of unauthorised removal of currency from CCTV footage, eyewitness statements and donation records; the Chief Justice’s bench directed the chargesheet be filed within the ninety-day period under Section 187 BNSS, which ran out on 25 September.
• ICU guidelines enforced by mandamus (September 21) — Justices Ahsanuddin Amanullah and R. Mahadevan directed the Centre, States and Union Territories — and private hospitals — to implement the 2026 Guidelines for Organisation and Delivery of Intensive Care Services, compressing twelve-month compliance windows to nine, ordering recruitment of specialists, doctors, nurses and allied staff within six, and requiring compliance reports by 5 November.
• NCLT infrastructure: status report in two weeks (September 21) — In the suo motu on tribunal vacancies, the Chief Justice’s bench recorded that 50 of 63 sanctioned NCLT members are in place and 18 retire by December 2027, called the NCLT and NCLAT the Government’s “lifeline,” and directed the Union to report on basic amenities at every bench after consulting the NCLT President.
• Reserved this week — the Union’s application for prospective effect of the 11 March OBC creamy-layer ruling (Justices Narasimha and Mahadevan, September 24), and the Sambhal Jami Masjid committee’s challenge to the Chandausi court’s survey order (Justices Narasimha and Aradhe, September 25).

Insolvency & Corporate

Personal Guarantors: The Subhash Chandra Plan Stays Frozen — Notice to the CBI, and a Fight Over the Five-Member Bench

NCLT, Principal Bench (five-member) and NCLAT, New Delhi — September 23, 2026

The repayment plan that offered ₹6.5 crore against admitted claims reported at ₹22,006 crore — approved on 25 August by 80.81 per cent of creditors by value, with five entities holding 61.78 per cent of that vote — came back before the five-member bench constituted by the NCLT President on 23 September. The bench issued notice to the CBI, returnable in four weeks, kept in force its 1 September stay on the approval order and the restraint on Subhash Chandra alienating property, and deferred the hearing. Chandra opposed the CBI being made a party and maintained the guaranteed borrowings were not his personal debts.

The same day, his appeal against the constitution of the five-member bench reached the NCLAT, which directed him to implead and serve the creditors — LIC Housing Finance, IDBI Trusteeship, HDFC Bank, Axis Bank, Canara Bank, Union Bank of India (UK) and RBL Bank among the dissenters — and listed it for 29 September. The appeal argues that the President’s order “travels beyond the limited statutory jurisdiction contemplated” under the Companies Act.

Why it matters: This is now the test case for whether a personal-guarantor plan carried by related-party votes can bind dissenting institutional lenders — exactly the outcome IBBI’s 12 September discussion paper proposes to foreclose by stripping related parties of their vote. The NCLAT round asks a prior question with consequences well beyond this case: whether the NCLT President can constitute a larger bench at all.

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IBBI’s Week: The Interim Moratorium Is Gone for Pending Guarantor Cases, and Liquidation Late Fees Begin

Insolvency and Bankruptcy Board of India — September 21, 22 and 24, 2026

Four instruments in four days. Circular IBBI/II/106/2026 of 21 September records what the Bombay and Delhi High Courts had held in July and August: with Sections 96(4) and 124(4) inserted by the IBC (Amendment) Act, 2026 from 26 May, the interim moratorium on personal-guarantor applications “ceased to operate from May 26, 2026” — including for Section 95 petitions that were pending on that date. The NCLT Delhi applied the position the same week in the Equentia Financial Services matters.

On 22 September, the Liquidation Process (Fifth Amendment) Regulations, 2026 replaced Regulations 31(3) and 31(4) with a single provision: a liquidator may modify an entry in the list of stakeholders when additional information warrants, and must intimate the Adjudicating Authority within thirty days — the prior leave of the tribunal is no longer required. And on 24 September, two circulars: IBBI/LIQ/107/2026 commences the ₹500-plus-GST-per-month late fee under Regulation 47B for every liquidation form due on or before 30 September and filed late, ending the transition that began in January; IBBI/II/108/2026 extends the filing deadline for the PGIRP-1 to PGIRP-6 forms from 30 September to 31 December 2026, with late fees only after that.

Why it matters: The “file a Section 95 petition and freeze recovery” tactic is over in terms — lenders can resume SARFAESI, DRT and arbitration action against guarantors with pending petitions, and now have a regulator’s statement to cite alongside the High Court rulings. For insolvency professionals, liquidation reporting carries live monetary penalties from 1 October, while personal-guarantor reporting gets one more quarter.

Other Notable Insolvency Orders

• Byju’s: the CoC must be heard on GLAS Trust’s removal (Supreme Court, September 21) — Justices Pardiwala and Vinod Chandran set aside the NCLAT’s order of 24 February and the NCLT Bengaluru’s of 26 August 2025 and directed, on consent, that Riju Ravindran’s application to remove GLAS Trust — holder of 99.41 per cent of the vote — be listed within two weeks with the Committee of Creditors impleaded and heard.
• Only the SFIO Director or an authorised officer may complain of Companies Act fraud (Supreme Court, September 21) — Dismissing the Centre’s review of its 9 January judgment, the Chief Justice’s bench (with Justices Vinod Chandran and Bagchi) confirmed that private complaints are barred, and clarified that the Central Government may authorise any officer other than the SFIO Director “by a general or special order in writing” under the second proviso to Section 212(6).
• Moser Baer Solar: the ₹54 crore goes back now (NCLAT, September 22) — Justice Yogesh Khanna and Barun Mitra rejected the liquidator’s plea to hold JFC Finance’s deposit until the ₹168 crore highest bidder pays in full; the earlier judgment “having already acquired finality as it has been affirmed up to the level of the Hon’ble Supreme Court, no further clarification is felt necessary.”
• Vidarbha Industries Power merges into Adani Power (NCLT Mumbai, September 24) — Vinay Goel and Charanjeet Singh Gulati sanctioned the amalgamation of the 600 MW Nagpur generator, completing the group’s ten-subsidiary consolidation with an appointed date of 1 April 2025.
• Delhi’s resolution plans move to Court No. 1 (NCLT, September 22) — An administrative order transferred all resolution-plan matters from the New Delhi Bench’s Courts 2, 3, 5 and 6 to the Principal Bench’s Court No. 1, the day after the Supreme Court sought a status report on tribunal infrastructure.

From the High Courts

GST: A Court-Directed Appearance Becomes an Overnight Arrest — Officers Named Personally

Punjab & Haryana High Court (Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor) — September 25, 2026

The Court had directed the petitioner in Kuldeep Goyal v. Union of India to appear before the CGST Commissionerate at Ludhiana at 11 in the morning on 23 September “to test his bonafides.” He was held overnight and arrested at 4:45 the next morning. The authorisation of arrest is dated 23 September; the arrest memo does not mention the Court’s order. The Chief Justice’s bench held that the arrest prima facie violated Article 21 and was an attempt to pre-empt proceedings pending before the Court, and directed the Chief Judicial Magistrate to release him forthwith on surrender of his passport.

“The respondents authorities considered the order of the Court as a charter to proceed in the manner, they deemed appropriate.”

It called the sequence “a brazen act of highhandedness where the constitutional safeguards available to a citizen have not been adhered to,” impleaded the Principal Commissioner and the Senior Intelligence Officer in their personal capacity, issued notice to both, and recorded an intention to recommend disciplinary proceedings. The release is interim, with no view on the merits; the matter returns on 29 September.

Why it matters: A Chief Justice-led bench naming revenue officers personally for an arrest made under cover of a court-ordered appearance is rare, and it lands the same week the Supreme Court told the police that re-arrest after an Article 22 breach needs a Magistrate’s leave. Tax practitioners advising clients summoned under Section 70 now have a High Court order to point at — and the 29 September hearing on the officers’ conduct is the one to watch.

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PMLA: Having Chosen the §50 Route, the ED Cannot Arrest on the Same Material Twelve Days Later

Bombay High Court (Justice Milind N. Jadhav) — September 21, 2026

On 29 January 2026 the Enforcement Directorate applied to the Special Court under Section 50 of the PMLA for permission to interrogate Rajendra Lodha, then in judicial custody, and obtained it the next day. Without conducting that interrogation, it arrested him under Section 19 on 12 February on the very same material — in an arrest application that “conspicuously avoids reference to the previous application dated 29.01.2026 and order dated 30.01.2026 altogether.” In Rajendra Narpatmal Lodha v. Directorate of Enforcement, the Court quashed the remand order of 13 February and released him on a ₹5 lakh bond.

“Once such an opinion was formed in writing and an order thereon was passed by the Special Court, Respondent No.1 cannot forego the same and abandon the same within a period of 12 days without complying with the order.”

Having formed and recorded an opinion to proceed under Section 50 and obtained an order on it, the agency cannot abandon that course and arrest on identical material absent fresh incriminating material or a supervening circumstance; “the power to arrest is a very drastic power which infringes upon the personal liberty of the arrestee.”

Why it matters: A sequencing constraint on Section 19 arrests grounded in the agency’s own recorded opinion rather than in Article 21 balancing alone — and one that every PMLA accused whose arrest followed a Section 50 application will now plead. Delhi’s High Court added a second data point the same week, granting bail in a terror-funding PMLA case after nearly four years’ custody on the footing that Section 45’s twin conditions yield once more than half the maximum sentence has run.

Other Notable High Court Orders

• Personal law is no shield from POCSO (Delhi HC, reported September 26) — Justice Sanjeev Narula declined to quash an FIR under Section 64(1) BNS and Section 6 POCSO against a man who married a sixteen-year-old under Muslim personal law: marriage “does not advance a child’s age,” and “constitutional liberty protects choice; it does not create an exception to POCSO or the BNS” (2026:DHC:8343).
• A PMLA bail order is “a relevant circumstance” for the predicate case (Delhi HC, September 23) — Justice Madhu Jain dismissed the CBI’s challenges to the 2022 bail granted to Chitra Ramakrishna and Sanjay Pandey in the NSE phone-tapping case: the bail order in the connected money-laundering case on identical facts is neither binding nor conclusive, but a court considering bail in the predicate case must weigh it (2026:DHC:8163).
• A defector may be disqualified from the House, not from the ballot (Allahabad HC, September 22) — Dismissing the election petition against the Bhadohi MP, Justice Raj Beer Singh held that paragraph 2(1)(a) of the Tenth Schedule operates on membership of the House the legislator then belongs to; Article 102(2) disqualifies from “being a member,” not from “being chosen as” one — though the conduct is not “a healthy practice for Democracy” (2026 LiveLaw (AB) 736).
• No judge-made penalty for MLAs who resign early (Madras HC, September 24) — The First Bench (Chief Justice S.A. Dharmadhikari and Justice G. Arul Murugan) dismissed a PIL seeking an “election expenditure security” from legislators who quit without compelling reasons: “We are being asked to design a punitive and financial regime that would operate as a fresh disqualification… a matter of legislative policy, not of judicial direction” (2026 LiveLaw (Mad) 458).
• Section 45 yields after half the maximum sentence (Delhi HC, reported September 24) — Justice Sanjeev Narula granted bail in the NSCN(IM) terror-funding PMLA case after nearly four years’ custody with five of twenty-seven witnesses examined: “Article 21 is not eclipsed by the nature of the accusation” (2026:DHC:8301).
• NPPA’s 2009 blanket ceiling notification quashed (Bombay HC, September 22) — Justices Manish Pitale and Shreeram Shirsat held the notification subjecting every formulation containing a scheduled drug to the corresponding ceiling “clearly over broad, expansive” and beyond the NPPA’s power under the DPCO 1995; a ₹13.41 crore recovery against Pharmed fell with it.
• AIBE compliance becomes a standing audit (Kerala HC, September 23) — Chief Justice Soumen Sen and Justice Syam Kumar V.M. directed the Bar Council of Kerala to update its list of advocates practising without AIBE clearance or a Certificate of Practice from 2021 onwards within eight weeks and keep it under continuous review, with the Registry and district courts to refuse filings where a non-compliant advocate holds the vakalath (2026 LiveLaw (Ker) 525).
• Habeas corpus by WhatsApp, at 10:42 pm (P&H HC, September 23–24) — On Punjab’s petition alleging the ED had confined two IAS officers and GMADA officials during a search, Justice Sanjay Vashisth heard the matter by video from a court official’s phone and appointed a Warrant Officer to visit; the officers said they were not detained, and the State withdrew the next day.
• “Really fed up with the authority” (Calcutta HC, September 24) — Justice Krishna Rao asked the Election Commission why, with 183 free symbols available, it allotted the Indian Secular Front’s “envelope” to the breakaway Democratic Trinamool Congress for the Nandigram bypoll, and adjourned for the Commission’s instructions.
• Judicial notice of a loudspeaker (MP HC, September 24) — Justices Subodh Abhyankar and Jai Kumar Pillai kept a 2023 noise-pollution PIL alive after recording that they had themselves seen processions breaching limits on the drive home and read of a seven-year-old’s death in school from a procession’s volume; fresh compliance report in a week, next 5 October.

At the Bar

The Court Turns to the Bar Council: Co-Option Upheld, Women in the BCI, and “What Do They Know About Legal Education?”

Supreme Court (Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana) — September 23 and 25, 2026

The Bar Council reconstitution the Court has supervised since December produced a week of orders. On 23 September it rejected an advocate’s objection to the co-option of retired Justice Jaishree Thakur to the Bar Council of Punjab & Haryana — the objection being that she had served as Returning Officer for the Council’s election, with petitions pending before the Justice Hima Kohli tribunal. “One of the finest and strongest judges has been nominated for Punjab,” the Chief Justice said. The same day the Court issued notice on an application for 30 per cent women’s representation in the Bar Council of India itself and a woman Chairperson on reconstitution: “It can’t happen that in State Assembly, there is a woman Member, but in Parliament there is none.” On 25 September it extended to every State Bar Council its 2 September request that the Attorney General consider raising Council strength — to 32 where needed — so that the women’s co-option does not displace elected members.

In a separate matter on 23 September, hearing Prashant Bhushan on the conflict of a regulator that also runs law colleges through the BCI-PEARL FIRST Trust, the bench questioned the Council’s statutory competence over legal education: the BCI can lay down the curriculum and the length of the course and promote legal education, the Chief Justice observed, but cannot control law colleges — “What do they know about legal education? There are experts.” And on 25 September it asked the Council to state whether it would withdraw the upper age limit of twenty for the five-year integrated course, Justice Bagchi doubting that the residential character of some programmes could justify an age cap on all.

Why it matters: Nine months into the Court’s oversight of the Bar’s institutions, the questions have moved from timetables to structure: the composition of the apex Council, the reach of its regulatory power, and whether it can set the age of entry to the profession. The Kerala High Court has meanwhile issued notice on allegations that the new Bar Council of Kerala filled its statutory committees from “a pre-prepared list” at its first meeting on 24 September — the reconstitution’s first governance dispute.

Other Notable at the Bar

• Twelve additional judges made permanent (Collegium, September 23) — The Chief Justice with Justices Vikram Nath and B.V. Nagarathna approved five additional judges of the Andhra Pradesh High Court, five of Kerala, one of Uttarakhand and one of Gauhati as permanent judges.
• Tejpal’s appeal: notice both ways (Supreme Court, September 24) — Having surrendered at Mapusa, Tarun Tejpal’s appeal against the Bombay High Court’s conviction and ten-year sentence came before Justices M.M. Sundresh and P.B. Varale, who issued notice to Goa — and notice to Tejpal on the State’s appeal for enhancement to life; a date for the suspension-of-sentence plea is to be considered.
• Advocates-on-Record examination (Supreme Court, September 25) — The December 2026 examination was announced, with applications open until 15 October.
• A permanent Constitution Bench, proposed from the bench (September 23) — Justices Datta and Sharma’s joint request to the Chief Justice, made in the Election Commissioners judgment above, cited Anoop Baranwal (eight years from filing to judgment) and Jai Bir Singh (fifteen years to reach nine judges) as the case for a standing five-judge bench.

Legislative & Regulatory Watch

Securities: SEBI Rewrites Settlement — a Window Before the Show-Cause Notice

SEBI Board, 215th meeting — September 24, 2026

The Board approved new Settlement of Administrative and Civil Proceedings Regulations, 2026 to replace the 2018 code. The structural change is timing: a settlement notice may now issue before the show-cause notice, with sixty days to apply; the post-notice window widens from sixty to ninety days; a fast-track route covers disclosure violations up to ₹10 lakh; a one-time ninety-day window opens on commencement; a 20 per cent add-on applies after rejection or appeal; and interest on disgorgement runs at 9 per cent, rising to 12 after a final order. Settlement becomes available for financial-statement misrepresentation and fund-diversion cases.

The same meeting approved new Portfolio Managers Regulations, 2026 — investment in IPOs and primary debt, up to 10 per cent of client assets in investment-grade unlisted debt, exchange-traded derivatives up to 1.25 times client assets, foreign securities, and a mutual-fund-style route with a ₹25 lakh minimum and a 1 per cent fee cap, the rulebook cut from seventy pages to thirty-three — along with a common advertisement code across intermediaries, FPI access to non-agricultural commodity derivatives, REIT and InvIT unitholder approvals by 75 per cent of votes cast, and a manager-led accredited-investor framework.

Why it matters: The pre-show-cause settlement window changes how defence counsel sequence a response to a SEBI investigation: the decision whether to settle now precedes, rather than follows, the regulator’s formal case. Two days earlier the regulator showed the settlement route’s reach, closing the Hindenburg-linked disclosure proceedings against five Adani group companies for ₹1.51 crore in total, without admission or denial.

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Banking: RBI Sets Market-Risk Capital for April 2027, Values Unquoted REIT Units at ₹1, and Cuts the Export Realisation Window

Reserve Bank of India — September 21 and 22, 2026

The Commercial Banks (Minimum Capital Requirements for Market Risk) Directions, 2026, issued on 21 September and effective 1 April 2027, align market-risk capital with revised Basel III through the Simplified Standardised Approach — risk-weighted assets at 12.5 times the capital charge — with the trading book tied to the “Held for Trading” category of the Investment Directions, revised specific-risk tables, a recalibrated look-through for debt funds and ETFs, and total return swaps brought under the credit-derivative treatment. Small finance banks, payments banks and local area banks are outside it.

The next day brought three more instruments. Amendments to the Investment Portfolio Directions require quoted REIT and InvIT units to be valued at market and unquoted units at the NAV disclosed under SEBI regulations — and where no NAV is computed or the units are “infrequently traded,” at ₹1. Final directions on the novation of OTC derivative contracts, drafted in July 2025, were inserted into the four Master Directions for novations from 22 September. And the Foreign Exchange Management (Export and Import of Goods and Services) (Amendment) Regulations, 2026 cut the export realisation period from fifteen months to nine — the extended limit from eighteen to twelve — from 1 October, preserving caution-list status for exporters listed as of 30 September.

Why it matters: Bank treasuries have eighteen months to rebuild market-risk models, and the ₹1 rule turns unquoted or thinly traded REIT and InvIT holdings into a near-total capital write-down overnight. Exporters’ counsel should note the nine-month clock: realisation timelines written into existing contracts on the fifteen-month assumption are now out of step with the regulation.

Other Notable Regulatory Moves

• Insurance distribution recalibrated (IRDAI, September 23) — A consultation paper proposes company-level caps on expenses of management for life insurers — 15 per cent of premium within two years, 12.5 within five — a shift of general insurers’ cap to a premium-income basis, product- and channel-level commission ceilings, claw-back for mis-selling, a ban on volume-linked incentives to bank and NBFC staff, and public disclosure of mis-selling data; comments by 25 October.
• Three penalties (RBI, September 24) — Hero FinCorp ₹10 lakh for excess interest under the Fair Practices Code; Ola Financial Services ₹3.10 lakh for failing to risk-categorise customers under the KYC Directions; KLM Axiva Finvest ₹2.70 lakh for not paying borrowers the surplus from gold auctions.
• L’Oréal India–Onesto Labs cleared (CCI, September 22) — Approval for the acquisition of the Innovist parent, with no appreciable adverse effect on competition found.
• Nidhi companies: a public warning (MCA, September 24) — Only 395 companies have been declared Nidhis; many operators have not filed NDH-4; deposits are not insured by the DICGC.

What We’re Watching Next Week

• UPI merchant charges (September 28) — the Chief Justice’s bench hears a PIL against the 14–15 September notifications under Section 10A of the Payment and Settlement Systems Act imposing MDR of 0.4 per cent on person-to-merchant UPI payments above ₹2,000 from 15 October, on Article 14 and excessive-delegation grounds.
• Cancer drug pricing (September 29) — Justices Nath and Mehta return to the ten-fold gap between retailer price and MRP, with the hospital in-house pharmacy question on the table.
• Subhash Chandra at the NCLAT (September 29) — the appeal against the five-member bench’s constitution, with the creditors now impleaded; the CBI’s response to the NCLT is due in four weeks.
• The Ludhiana CGST officers (September 29) — the Punjab & Haryana High Court hears the Principal Commissioner and the Senior Intelligence Officer in their personal capacity.
• Trinamool, twice — the Election Commission’s timeline for the symbol dispute is due before the Chief Justice’s bench next week; the twenty rebel MPs’ replies to the Speaker are due 8 October.
• Also on the calendar — the NCLT infrastructure status report lands in about two weeks; the Noida DM matter returns 7 October; the online child-abuse-material matter 15 October; the GST Council meets 7 October, postponed from 12 September. Still reserved: the seven-judge sales-tax surcharge reference, the OBC creamy-layer prospective-effect application, the Sambhal survey challenge, the two-child norm, the Sabarimala nine-judge reference and the Jindal Poly Films recall order. The Constitution Bench on the Election Commissioners Act awaits the Chief Justice’s order.

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