Contributors: Mr Bhushan Shah, Partner, Ms Shreya Dalal, Associate Partner Mr Abhishek Nair, Associate On 22 August 2025, the Central Government enacted the Promotion and Regulation of Online Gaming Act, 2025 (“Gaming Act”). The Bill was passed by Parliament with remarkable speed, within seven minutes in the Lok Sabha and twenty-six minutes in the Rajya Sabha, before receiving Presidential assent the following day. The Gaming Act provides for the promotion of e-sports and online social games, while prohibiting online money games involving stakes or wagers for monetary gain. It also establishes a regulatory authority to oversee the sector and sets out stringent penalties for violations. Recognition and Promotion of E-Sports and Social Games The Gaming Act empowers the Central Government to formally recognise e-sports as a legitimate competitive sport. It may issue guidelines, establish training academies, provide incentives, and coordinate with States to promote such activities. Online social games designed for entertainment or educational purposes and not involving monetary stakes are also to be facilitated through registration mechanisms, awareness initiatives, and institutional support programmes. Definitions under the Act The Act introduces the following key definitions: Online game: any game offered on a digital platform. E-sport: skill-based competitive events without wagering. Online social game: non-wagering, entertainment, or skill-development based online games. Online money game: any game involving fees, deposits, or stakes in expectation of monetary or equivalent returns, excluding e-sports. Recognition and Promotion of E-Sports and Social Games The Gaming Act empowers the Central Government to recognise e-sports as a legitimate competitive sport through guidelines, training academies, incentives, and coordination with States. Both e-sports and online social games are subject to registration with the designated Authority, which may impose technical and playerprotection standards. Online social games for entertainment or educational purposes without monetary stakes will be promoted through registration mechanisms, awareness initiatives, and institutional support. Prohibition of Online Money Games The Gaming Act imposes a complete prohibition on offering, operating, advertising, or participating in online money games, including those offered from foreign jurisdictions. Banks and financial institutions are also prohibited from facilitating related transactions. Penalties for violations: Up to three years’ imprisonment and fines up to ₹1 crore for offering online money games or facilitating funds for online money games. Up to two years’ imprisonment and fines up to ₹50 lakh for advertising online money games. Enhanced punishments for repeat offences. Non-compliance with directions may lead to penalties up to ₹10 lakh, suspension, or cancellation of registration. Offences under the prohibition of online money games are cognizable and non-bailable, and company officers may also be held liable. The Act further empowers investigation, search, and seizure (including of digital resources), and blocking of non-compliant services. Authority and Regulatory Oversight The Central Government may establish or designate an Authority to classify games, register permissible ones, address complaints, and issue directions. MHCO Comment The Gaming Act provides a comprehensive framework for the regulation of online gaming in India. It balances the encouragement of e-sports and social games with stringent restrictions on money-based gaming. However, the Gaming Act has already had a disruptive impact on the industry as leading platforms such as WinZO, Dream11, MPL, and PokerBaazi have already suspended their real-money offerings immediately following the enactment of the said Act, in a sector employing over 20 million people. By effectively shutting down the largest revenue-generating segment of the online gaming industry, the Gaming Act is eroding the growth in the sector. We believe that the Central Government ought to have issued market policy consultation papers and taken public comments before drastically resorting to passing the Gaming Act in such a hasty manner.  

Authors: BHUSHAN SHAH, Partner and AAKASH MEHTA, Senior Associate On 3 July 2025, the High Court of Bombay passed an Order setting aside directions passed by Arbitral Tribunal imposing personal liability on sole shareholder of One Person Company (OPC). FACTS Innovative Film Academy Private Limited (“Innovative”), is a One Person Company (“OPC”) incorporated under the provisions of Companies Act, 2013 formed by Mr. Saravana Prasad as its sole shareholder. Innovative entered into a Production Agreement dated 10 March 2021 (“Agreement”) with Endemol India Private Limited (“Endemol”) to produce episodes of the television show “Masterchef” in Tamil, Telugu, Kannada, and Malayalam. Endemol delivered the Tamil and Telugu episodes and raised invoices totaling approximately ₹15.93 crores, of which ₹4.45 crores was paid and ₹1.08 crores was adjusted against other dues, leaving an outstanding balance of approximately ₹10.40 crores. Disputes over these dues which lead to arbitral proceedings in turn resulting in the impugned interim order. The Arbitral Tribunal directed both Innovative and Prasad to: deposit ₹10.40 crores in a fixed deposit in a nationalized bank; disclose all assets (movable and immovable) and all encumbrances, charges and attachment on such assets since March 2019; disclose details of all companies and firms in which they are shareholders, directors or partners and the extent of their interest in such enterprises; disclose all income-tax returns since March 2019 along with the profit and loss account and all ledger statements along with narrations; and disclose details of all bank accounts held by them since March 2019. Innovative and Prasad challenged these directions, arguing that imposing personal obligations on Prasad violated the limited liability framework of OPC under the Companies Act, 2013. ISSUE Does the limited liability of an OPC mean that the sole shareholder is not personally liable? JUDGMENT The High Court held that the order passed by Arbitral Tribunal erred in treating Innovative and Prasad as one entity, disregarding the legal distinction between an OPC and its sole shareholder. The Court pointed out that under Section 2(62) of the Companies Act, 2013, an OPC is a distinct juridical entity with limited liability, shielding the sole shareholder (Prasad) from personal liability for the company’s obligations. The Court further emphasized that the concept of OPC is inspired by global practices (e.g., in the EU, USA, UK, China, and Singapore), and was designed to ring- fence personal assets from business liabilities. The Arbitral Tribunal’s directions against Prasad, including the deposit and disclosures, conflicted with this fundamental policy of Indian law. The Court further opined that that Prasad’s actions as the signatory to contracts or correspondence would not make him personally liable and such a view would undermine the statutory OPC framework. The Court further held the Arbitral Tribunal’s direction for Innovative to deposit monies in a fixed deposit is a balanced approach which protects Endemol’s interests without depriving Innovative of control over the funds. The Bombay High Court partially allowed the appeals with ruling that the directions imposing obligations on Saravana Prasad for the deposit and disclosures were set aside as they violated the limited liability protections of OPC under the Companies Act, 2013. The Bombay High Court further held that the directions against Innovative, including the fixed deposit and disclosures of its assets, liabilities, and interests, were upheld as just and equitable interim measures. The Court also clarified that its observations were not intended to influence the final arbitration outcome. MHCO COMMENT In our opinion, this judgment strengthens the legal framework laid out in the Companies Act, 2013 for One Person Companies in India, affirming that sole shareholders cannot be held personally liable for company obligations unless there are specific contractual or factual grounds that justify the same. The order provides clarity for entrepreneurs using the OPC structure, ensuring their personal assets remain protected. The decision also underscores the judiciary’s restraint in interfering with arbitral orders unless they are violative of fundamental legal principles.

Litigation Update: Individuals Liability — One Person Company LITIGATION UPDATE: INDIVIDUALS LIABILITY IN CASE OF ONE PERSON COMPANY Authors: BHUSHAN SHAH, Partner and AAKASH MEHTA, Associate On 3 July 2025, the High Court of Bombay passed an Order setting aside directions passed by Arbitral Tribunal imposing personal liability on sole shareholder of One Person Company (OPC). FACTS Innovative Film Academy Private Limited (“Innovative”), is a one person company (“OPC”) incorporated under the provisions of Companies Act, 2013 formed by Mr. Saravana Prasad as its sole shareholder. Innovative entered into a Production Agreement dated 10 March 2021 (“Agreement”) with Endemol India Private Limited (“Endemol”) to produce episodes of the television show “Masterchef” in Tamil, Telugu, Kannada, and Malayalam. Endemol delivered the Tamil and Telugu episodes and raised invoices totaling approximately ₹15.93 crores, of which ₹4.45 crores was paid and ₹1.08 crores was adjusted against other dues, leaving an outstanding balance of approximately ₹10.40 crores. Disputes over these dues which lead to arbitral proceedings in turn resulting in the impugned interim order. The Arbitral Tribunal directed both Innovative and Prasad to: deposit ₹10.40 crores in a fixed deposit in a nationalized bank; disclose all assets (movable and immovable) and all encumbrances, charges and attachment on such assets since March 2019; disclose details of all companies and firms in which they are shareholders, directors or partners and the extent of their interest in such enterprises; disclose all income-tax returns since March 2019 along with the profit and loss account and all ledger statements along with narrations; and disclose details of all bank accounts held by them since March 2019. Innovative and Prasad challenged these directions, arguing that imposing personal obligations on Prasad violated the limited liability framework of OPC under the Companies Act, 2013. ISSUE Does the limited liability of an OPC mean that the sole shareholder is not personally liable? JUDGMENT The High Court held that the order passed by Arbitral Tribunal erred in treating Innovative and Prasad as one entity, disregarding the legal distinction between an OPC and its sole shareholder. The Court pointed out that under Section 2(62) of the Companies Act, 2013, an OPC is a distinct juridical entity with limited liability, shielding the sole shareholder (Prasad) from personal liability for the company’s obligations. The Court further emphasized that the concept of OPC is inspired by global practices (e.g., in the EU, USA, UK, China, and Singapore), and was designed to ring-fence personal assets from business liabilities. The Arbitral Tribunal’s directions against Prasad, including the deposit and disclosures, conflicted with this fundamental policy of Indian law. The Court further opined that that Prasad’s actions as the signatory to contracts or correspondence would not make him personally liable and such a view would undermine the statutory OPC framework. The Court further held the Arbitral Tribunal’s direction for Innovative to deposit monies in a fixed deposit is a balanced approach which protects Endemol’s interests without depriving Innovative of control over the funds. The Bombay High Court partially allowed the appeals with ruling that the directions imposing obligations on Saravana Prasad for the deposit and disclosures were set aside as they violated the limited liability protections of OPC under the Companies Act, 2013. The Bombay High Court further held that the directions against Innovative, including the fixed deposit and disclosures of its assets, liabilities, and interests, were upheld as just and equitable interim measures. The Court also clarified that its observations were not intended to influence the final arbitration outcome. MHCO COMMENT In our opinion, this judgment strengthens the legal framework laid out in the Companies Act, 2013 for One Person Companies in India, affirming that sole shareholder cannot be held personally liable for company obligations unless there are specific contractual or factual grounds that justify the same. The order provides clarity for entrepreneurs using the OPC structure, ensuring their personal assets remain protected. The decision also underscores the judiciary’s restraint in interfering with arbitral orders unless they are violative of fundamental legal principles.

Authors: Purvi Asher, Partner and Karishma Maheshwari, Associate This case concerns a recent decision dated 4 August 2025 by the Bombay High Court in the case of Sachin Malpani and Ors. vs. Nilam Patil and Ors. The writ petition questioned the method of levying maintenance charges in a registered condominium under the Maharashtra Apartment Ownership Act, 1970 (“the Act”), and challenged the jurisdiction of the Deputy Registrar of Co-operative Societies in directing such charges to be apportioned based on undivided share. Brief Facts The petition stemmed from a dispute in the ‘Treasure Park’ condominium comprising 356 apartments. The petitioners, owning larger apartments (3BHK, 4BHK), objected to an order by the Deputy Registrar of Co-operative Societies, Pune, dated 8 July 2021, which directed that maintenance charges be levied proportionate to the undivided share of each owner, instead of the previously prevailing equal charge. The challenge was rejected by the Co-operative Court on 13 May 2022, prompting the present writ petition. Issues for Adjudication The core issues for adjudication were:   Whether the Deputy Registrar of Co-operative Societies had jurisdiction under the Act to pass such orders. What is the correct method of levying maintenance charges- equal across apartments or proportionate to undivided share in common areas, as prescribed by law and the condominium’s Deed of Declaration. Held The Bombay High Court held that: Notifications issued by the State Government validly conferred powers of the Registrar under the Maharashtra Co-operative Societies Act, 1960 onto the District Deputy Registrar, thus justifying the order's jurisdiction. The Deed of Declaration provisions and Sections 6 and 10 of the Act require that both common profits and common expenses be distributed among apartment owners in proportion to their undivided interest. The impugned resolutions and past practice of equal maintenance do not override statutory requirements; apartment owners with a higher undivided share must contribute proportionally to common expenses. Relief The Court dismissed the writ petition, upholding both the Deputy Registrar’s order dated 8 July 2021, and the Co-operative Court’s order dated 13 May 2022. The petitioners’ challenge was rejected, confirming the requirement of proportionate maintenance charges. MHCO Comment This judgment clarifies the application of the Act in the context of maintenance contribution in registered condominiums, emphasizing statutory compliance over majority resolutions. It confirms that statutory covenants in the Deed of Declaration and the Act must govern apportionment of expenses, ensuring fairness in financial obligations shared among owners according to their interest, preventing disproportionate burdens on smaller flat owners and aligning practice with the law.