Volume : 8, Issue : 7, JUL 2022

BENEFICIAL OWNERSHIP, PLEDGE ENFORCEMENT AND REGULATORY CONFLICTS: A RE-EXAMINATION OF THE SUPREME COURT’S RULING IN PTC INDIA FINANCIAL SERVICES LTD. V. VENKATESWARLU KARI (CA NO. 5443 OF 2019)

DR. NANDITA S JHA

Abstract

Having recently settled a difficult and long-standing question on the treatment of pledged dematerialised securities is the Supreme Court of India’s decision in PTC India Financial Services Ltd. v. Venkateswarlu Kari. The Court ruled that on invocation under the Depositories Act, 1996, the recording of a pledgee as “beneficial owner" is a procedural duty which allows for sale, not transfer of title. Such a clarification has major implications for the Takeover Regulations, Insider Trading Regulations and the contractual pledge doctrine which is governed by the Indian Contract Act, 1872. The intention of this paper is to show that there is little room for confusion in the interpretation of the law, even if regulation would be guided by contract law in theory which requires a significant harmonisation between the law and the actual contracts.

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IESRJ

International Educational Scientific Research Journal

E-ISSN: 2455-295X

International Indexed Journal | Multi-Disciplinary Refereed Research Journal

ISSN: 2455-295X

Peer-Reviewed Journal - Equivalent to UGC Approved Journal

Peer-Reviewed Journal

Article No : 13

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References

  1. PTC India Financial Services Ltd. v. Venkateswarlu Kari, (2023) SCC OnLine SC 1469.
  2. Liquid Holdings Pvt. Ltd. v. SEBI, (2011) SAT (Mumbai).
  3. Indian Contract Act, 1872, §§ 172–179.
  4. Depositories Act, 1996.
  5. SEBI (Depositories and Participants) Regulations, 2018, Regulation 79.
  6. PTC India Financial Services Ltd. v. Venkateswarlu Kari, (2023) SCC OnLine SC 1469.
  7. Indian Contract Act, 1872, § 177.
  8. SEBI, Guidance Note on SEBI (Prohibition of Insider Trading) Regulations, 2015 (Public document).