Chief justice suggests out-of-court settlement of cases

Expressing concern over the increasing backlog of cases in courts and the slow rate of disposal, Chief Justice of India K.G. Balakrishnan Monday said lawyers could try to settle most of the cases outside courts "as the present establishment cannot cope up".

Inaugurating the Hindi website and annual report 2006 of the district courts of Delhi, the Chief Justice of India said: "The reason for the increasing number of cases is attributed to the fact that the legal fraternity brings all cases to the court. An effort should be made by the lawyers to settle most of the cases outside the courts as the present establishment cannot cope up with the pendency."

According to the annual report 2006, more than 770,310 cases are pending in the district courts of Delhi.

Balakrishnan stressed the need for specialised courts, especially courts pertaining to family matters, but admitted that the disposable rate of cases in 2006 has declined as compared to 2005.

"In India, the judiciary is not well remunerated and there is an urgent need to have better infrastructure to cope up with the increasing work pressure," he said.

Chief Justice of Delhi High Court M.K. Sarma, Justice Madan B. Lokur and Justice Anil Kumar along with other judges were present at the function.

"With the first phase of computerization over in the district courts, we are now aiming to bring changes like introduction of digital signatures, SMS services for lawyers and litigants and installation of CCTVs in the courts," said the chief justice of the Delhi High Court.

The number of cases filed in the courts in 2006 was 76,000 more than in 2005.

Only 279 cases were disposed in 2006.

Companies raise capital in the stock market on the basis of valid incorporation

Companies raise capital in the stock market on the basis of valid incorporation under the Companies Act, 1956, compliance with the Rules/Regulations under the Companies Act, 1956 and the SEBI Act, 1992, listing agreements with the Stock Exchange concerned and subject to the Guidelines and Regulation of SEBI as the Capital market regulator. As such, no instances of fake companies have come to notice in the stock market in the last two years.

The details of the efforts made by the Government for the protection of small investors in the stock market are as under:

The enactment of the SEBI Act, 1992 for setting up of SEBI to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and related matters;

Setting up of an Investor Education and Protection Fund (IEPF) by an amendment enacted in 1999, in the Companies Act, 1956, by addition of Section 205(C) in the Act, for promotion of investors’ awareness and protection of their interests;

Setting up of the Serious Fraud Investigation Office (SFIO) under the Ministry of Company Affairs to investigate cases of corporate fraud and to prosecute such Directors and Officers of the company who may have conducted the affairs of the company in a fraudulent manner detrimental to, inter alia, the interest of investors.

Implementation of MCA 21, the e-governance programme of the Ministry of Company Affairs, under which disclosures made through documents filed by the companies as required by statute are available for viewing in electronic form, on-line, on round the clock basis to stakeholders on payment of prescribed fees. This initiative is aimed at ensuring enhanced transparency as to the management, governance and financial affairs of companies, thereby enabling protection of the interest of investors/stakeholders.

This information was given by Shri Prem Chand Gupta, Minister of Company Affairs in reply to the questions raised by Smt. Sushma Swaraj in Rajya Sabha today.

INCORPORATION OF A PRIVATE COMPANY

The incorporation of a Company is governed by the Companies Act 1956. The Companies Act is an Act to consolidate and amend the law relating to companies and certain other associations. It extends to the whole of India. Chapters I and II deal with the incorporation of a company and matters matters incidental thereto.

PRIVATE COMPANY / PUBLIC COMPANY

Private company means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles,

(a) restricts the rights to transfer its shares, if any;

(b) limits the number of its members to fifty not including-

(i) persons who are in the employment of the company, and

(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and

(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company ;

(d) prohibits any invitation or acceptance of deposits from persons other than its member, directors or their relatives;

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definitions, be treated as a single member;

Public company means a company which -

(a) is not a private company;

(b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;

(c) is a private company which is a subsidiary of a company which is not a private company.

• Every private company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than one lakh rupees, shall, within a period of two years from such commencement, enhance its paid-capital to one lakh rupees.

• Every private company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than five lakh rupees, shall, within a period of two years from such commencement, enhance its paid-capital to five lakh rupees.

• Where a private company or a public company fails to enhance its paid-up capital in the manner specified in sub-section (3) or sub-section (4), such company shall be deemed to be a defunct company within the meaning of section 560 and its name shall be struck off from the register by the Registrar.

• A company registered under section 25 before or after the commencement of Companies (Amendment) Act, 2000 shall not be required to have minimum paid-up capital specified in this section.

What amounts to sexual harassment?

What amounts to sexual harassment?

Sexual harassment includes such unwelcome sexually determined behaviour (whether directly or by implication) as:

(a) physical contact and advances
(b) a demand or request for sexual favours
(c) sexually coloured remarks
(d) showing pornography
(e) any other unwelcome physical, verbal or non-verbal conduct of sexual nature.

Where any of these acts is committed in circumstances where under the victim of such conduct has a reasonable apprehension that in relation to the victim's employment or work whether she is drawing salary, or honorarium or voluntary, whether in government, public or private enterprise such conduct can be humiliating and may constitute a health and safety problem it amounts to sexual harassment.

It is discriminatory for instance when the woman has reasonable grounds to believe that her objection would disadvantage her in connection with her employment or work including recruiting or promotion or when it creates a hostile work environment. Adverse consequences might be visited if the victim does not consent to the conduct in question or raises any objection thereto.

Anticipatory Bail

Anticipatory bail is a direction to release a person on bail, issued even before the person is arrested.

WHEN CAN A PERSON APPLY

When any person apprehends that there is a move to get him arrested on false or trump up charges, or due to enmity with someone, or he fears that a false case is likely to be built up against him,

He has the right to move the court of Session or the High Court under section 438 of the code of Criminal Procedure for grant of bail in the event of his arrest, and the court may, if it thinks fit, direct that in the event of such arrest, he shall be released on bail.

CONDITIONS THAT MAY BE IMPOSED BY THE COURT

The High Court or the Court of Session may include such conditions in the light of the facts of the particular case, as it may think fit, including:

(a) a condition that the person shall make himself available for interrogation by the police officer as and when required;

(b) a condition that the person shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or to any police officer;

(c) a condition that the person shall not leave India without the previous permission of the court.

ARREST

If such person is thereafter arrested, and is prepared either at the time of arrest or at any time while in the custody of such officer to give bail, he shall be released on bail and the magistrate taking cognizance of such offence decides that warrant should be issued against that person, he shall issue a bailable warrant in conformity with the direction of the court granting anticipatory bail.

ANTCIPATORY BAIL NOT A BLANKET ORDER

The applicant must show by disclosing special facts and events that he has reason to believe, that he may be arrested for a non-bailable offence so that the court may take care to specify the offence or offences in respect of which alone the order will be effective and it is not a blanket order covering all other offences.

CANCELLATION

An accused is free on bail as long as the same is not cancelled. The High Court or Court of Session may direct that any person who has been released on bail be arrested and commit him to custody on an application moved by the complainant or the prosecution.

ANTICIPATORY BAIL NOT AVAILABLE IN UTTAR PRADESH

The Monopolistic and Restrictive Trade Practices Act, 1969

The Monopolistic and Restrictive Trade Practices Act, 1969, was enacted

• To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few,

• To provide for the control of monopolies, and

• To prohibit monopolistic and restrictive trade practices.

The MRTP Act extends to the whole of India except Jammu and Kashmir.

Unless the Central Government otherwise directs, this act shall not apply to:

1. Any undertaking owned or controlled by the Government Company,

2. Any undertaking owned or controlled by the Government,

3. Any undertaking owned or controlled by a corporation (not being a company established by or under any Central, Provincial or State Act,

4. Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees,

5. Any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons under powers by the Central Government,

6. Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or state Act,

7. Any financial institution.

RESTRICTIVE TRADE PRACTICE

A restrictive trade practice is a trade practice, which

• Prevents, distorts or restricts competition in any manner; or

• Obstructs the flow of capital or resources into the stream of production; or

• Which tends to bring about manipulation of prices or conditions of delivery or effected the flow of supplies in the market of any goods or services, imposing on the consumers unjustified cost or restrictions.

INQUIRY INTO RESTRICTIVE PRACTICES

The Commission may inquire into any restrictive trade practice

• Upon receiving a complaint from any trade association, consumer or a registered consumer association, or

• Upon a reference made to it by the Central or State Government or

• Upon its own knowledge or information

RELIEF AVAILABLE

The commission shall if after making an inquiry it is of the opinion that the practice is prejudicial to the pubic interest, or to the interest of any consumer it may direct that –

• The practice shall be discontinued or shall not be repeated;

• The agreement relating thereto shall be void in respect of such restrictive trade practice or shall stand modified.

• The Commission may permit the party to any restrictive trade practice to take steps so that it is no longer prejudicial to the public interest

However no order shall be made in respect of

1. any agreement between buyers relating to goods which are bought by the buyers for consumption and not for ultimate resale;

2. a trade practice which is expressly authorised by any law in force.

Consumer Case

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI


ORIGINAL PETITION NO. 95 OF 2005



RAMA MILK PRIVATE LTD.

R-346, ADINATH SOCIETY,

PUNE – 411009


...... Complainant

Vs.






1. MAHARASHTRA STATE

FINANCIAL CORPORATION

NEW EXCELSOR BUILDING

(5TH, 7TH, 8TH, 9TH FLOORS)

A.K. NAYAK MARG,

FORT,

BOMBAY-400001



2. THE REGIONAL MANAGER,

MAHARASHTRA STATE

FINANCIAL CORPORATION

OPP. FIRE STATION,

STATION ROAD

AURANGABAD

(MAHARASHTRA)



...........Opp. Parties



BEFORE:




HON’BLE MR. JUSTICE R.C. JAIN,

PRESIDING MEMBER

HON’BLE DR. P.D. SHENOY, MEMBER



For the Complainant : Mr. S. P. Dange, Advocate



For the Opp. Parties : Mr. Santosh Paul & Mr. Arvind Gupta,

Advocates

Dated the 9th September, 2008

ORDER


DR. P.D. SHENOY, MEMBER


In this case the Complainant, M/s. Rama Milk Private Ltd. (for short “Rama Milk”) wanted to set up a milk processing plant with the financial help from Maharashtra State Finance Corporation (for short “Corporation”). As the Complainant became defaulter the Corporation initiated recovery proceedings against it u/s 29 of the State Financial Corporation Act, 1951 (for short the “Act”).

Aggrieved by the action of the Corporation, Rama Milk knocked the doors of the Hon’ble High Court of Bombay as well as the Hon’ble Supreme Court but without success. The Corporation had also given an offer for one time settlement to M/s. Rama Milk. After issuing a notice to the Corporation on 27.05.04 for payment of huge compensation the complainant filed complaint before us in October, 2005.

The main issue to be decided by us is as to whether there was any deficiency in service on the part of the Corporation and if so what relief the complainant is entitled to?
FACTS OF THE CASE

The Complainant is a proprietary concern and Shri Manik Chand is its sole proprietor who is an educated unemployed and wanted to set up a milk plant. On 20.04.81, Complainant submitted a loan application to the Corporation alongwith project report for the milk plant with a request of loan amount of Rs.20 lakhs. He was granted a loan of Rs.9,10,000/- on 10.5.84 on the security of land, factory building, plant and machinery. This amount was disbursed in installments from 25.09.85 to 28.08.88. His request for additional loan was not granted by the Corporation. It is the say of the Complainant that all of a sudden the Corporation issued notice on 14.12.92 under Section 29 of the Act for recovery of the loan amount with instructions to give possession of the unit. He approached the District Collector against the decision of the Corporation. The Corporation filed an FIR with the Police Station, Kalamb on 6.3.93 alleging that the Complainant had taken back the possession of the project site forcibly from them and henceforth Complainant would be responsible for the plant and machinery and all other articles lying at the site of the unit. Complainant also alleged that about 10 officials of the Corporation alongwith Police Force came to the project site on 22.8.93 and took forcibly the possession of the unit again without taking any inventory and without following the procedure. It is the say of the Complainant that the Opposite Parties had handed over back the possession of the unit to the Complainant and the Bhumi Pujan was organized on 1.10.96 which was attended by the officials of the Opposite Parties also. Complainant was shocked to receive letter from the Corporation on 14.11.03 stating that the Complainant had defaulted in making payment of the dues to the Corporation to the extent of Rs.14,27,765/-. In the letter dated 10.10.03 received on 14.11.03 the Corporation proposed to make one time settlement for an amount of Rs.7,75,463.45/-. According to the Complainant despite the fact that the unit never came into proper operation, an amount of Rs.18.50 lakhs was paid to the Corporation in the following manner:-

i) Rs.3.5 lacs

ii) Rs.5 lacs before the Hon’ble Supreme Court

iii) Rs. 5 lacs by way of Bank Draft

iv) Rs. 5 lacs as full and final settlement in the year 1996 after the function of “Bhumi Pujan” was done on 1.11.96.

According to the Complainant, the Corporation has committed deficiency in service such as sanctioning of inadequate finance, inordinate delay in disbursement of the loan installments, pressure to repay the loan amount despite unit having its gestination period and moratorium period by invoking provisions of Section 29 of the Act, filing four false criminal cases against them, callous and non-co-operative attitude of the Opposite Parties resulting to unit becoming sick and non-issuance of the NOC by the Corporation etc.

On account of the above said alleged deficiencies the Complainant had claimed the followings relief:-

i) direct the opposite parties to issue a “No Dues Certificate” to the complainant.

ii) award an amount of Rs.6,57,00,000 (Rupees six crore Fifty six lacs only) to the complainant against the opposite Parties as detailed in para no. 36 of the complaint with interest @ 12% from the date of loss suffered by the Complainant.

iii) award future interest @ 12% p.a. to the complainant on the claim amount of Rs.6,57,00,000/- till the date of payment of the said claim amount.

iv) award litigation expenses of Rs.50,000/- as cost to the complainants.

v) pass any other or further orders as this Commission may deem fit, just and proper in the facts and circumstances of the present case.

APPLICATION FOR CONDONATION OF DELAY

Complainant has filed an application under Section 24A of the Consumer Protection Act, 1986 for condonation of delay stating that the complaint is within limitation as cause of action arose in favour of the Complainant and against the Opposite Parties on 10.10.03 when the Corporation issued a letter alleging that Complainant had defaulted in making payment of dues to them to the extent of Rs.14,27,765/- and subsequently on 27.05.04 and 17.06.04 when the Complainant had given legal notices to the Opposite Parties. He has submitted that though the Complaint is within time but by way of abundant precaution to meet the situation if this Commission comes to the conclusion that there is a delay in filing complaint, the application has been filed and the delay, if any, is neither intentional nor deliberate for the following reasons :-

a) On 20.4.1981 the complainant made an application to the opposite parties for sanctioning of loan of Rs.20 lakhs, and thereafter kept on pursuing the matter with the opposite parties.

b) The Opposite Parties sanctioned the loan on 10.5.1984 and thereafter took four long years to disburse the loan, the last installment of Rs.59,000/- was disbursed on 23.08.1988.

c) Before the complete disbursement of the loan the opposite parties gave notices dated 25.09.1987, 28.09.1987 and 02.09,1988 to the complainant for recovery of its dues though the unit had not even gone into production.

That from the details given herein above it is evident that the opposite parties have always kept the complainant on his toes every time giving false hopes to the complainant for restarting his unit and at the same time never co-operated with him. The complainant on his part has been diligently making efforts to make his unit functional as his entire savings of life and the sale proceeds of his agricultural land had been pumped into the unit and his livelihood was solely dependent on the said unit. Further, four false criminal cases filed by the opposite parties against the complainant kept the complainant occupied. Besides this the complainant was not having any finances to initiate any litigation against the opposite parties.

REPLY OF THE OPPOSITE PARTIES TO THE COMPLAINT

.......................................................................

15. The view in Mahesh Chandra case appears to have been too widely expressed without taking note of the ground realities and the intended object of the statute. If the guidelines as indicated are to be strictly followed, it would be giving premium to a dishonest borrower. It would not further the interest of any Corporation and consequently of the industrial undertakings intending to avail financial assistance. It would only provide an unwarranted opportunity to the defaulter (in most cases chronic and deliberate) to stall recovery proceedings.



In Karnataka State Industrial Investment & Development Corporation Ltd. Vs. Cavelet India Ltd. and Ors. – (2005) 4 SCC 456, the Apex court has held as under :-

21. The examination of the facts, in the light of the aforenoted legal principles reveals that KSIIDC acted in a bona fide manner. The procedure followed by KSIIDC to dispose of the assets of the borrower to realise the dues cannot be held to be unreasonable or unfair. The sale was conducted by issuing advertisements in the newspapers. Steps were taken to secure the best price. The question before the High Court was only about the validity of sale to Vinpack and the plea of the borrower was that the unit was sold at a ridiculously low price. The learned Single Judge gave reasonable opportunity to the borrower to pay the same amount as payable by Vinpack failing which the unit was directed to be sold to Vinpack after a specified date. The borrower failed to comply with the order of the learned Single Judge or seek extension of time and also did not challenge it in writ appeal within the time specified in the order of learned Single Judge. Under these circumstances, the unit was sold to Vinpack and the possession handed over to it. The Division Bench, after holding that the procedure adopted was not in conformity with the guidelines enumerated in Mahesh Chandra case did not examine the effect of offer given to the borrower and not availed by him resulting in the sale in favour of Vinpack. In this view, the approach of the Division Bench cannot be sustained. Further, the subsequent line of cases distinguishing Mahesh Chandra and the decision in the case of Jagdamba Oil Mills which overruled Mahesh Chandra have already been noticed hereinbefore.



The recent judgments of the Apex Court amply support the case of the Corporation.

The main issue is whether there is any deficiency in service by the Corporation. Despite of the short-comings and negative action by the complainant, the Corporation in all fairness has given an One Time Settlement offer to the Complainant on 10.10.03 asking the complainant to pay Rs.7,75,468/- making the offer valid upto 31.10.03. Instead of accepting this offer the Complainant had issued a legal notice alleging unfair trade practice on the part of the Corporation on 27.10.04. We do not find an iota of deficiency on the part of the Corporation in view of the above detailed analysis of the facts and also the recent judgements of the Supreme Court which have distinguished the judgement delivered in Mahash Chanda’s case (supra) quoted by the Ld. Counsel for the Complainant. Accordingly, this complaint deserves to be dismissed. Hence, dismissed as such. There shall be no orders as to cost.



.............……......................J.
(R.C.JAIN)
PRESIDING MEMBER



.............……......................
(P.D. SHENOY)

MEMBER

YD

For Complete Case Please see http://ncdrc.nic.in/judgements.html

Formation or incorporation of A Company

Formation or incorporation of A Company – For the formation of a company, a company passes through the following thee stages :-

1. Promotion Stage.
2. Incorporation Stage.
3. Commencement of business stage.

1. Promotion Stage: The stage of conceiving an idea and its working is termed as promotion of a company. The person involved in this task is termed as “Promoter”. There are certain important decisions which are taken before the formation of the company. There first important matter to decide could be either :-

(1) To start a new business altogether, or
(2) To acquire an already running business, if it is available at considerable attractive terms and conditions. Some time it does happen that some people may start a business without having sufficient knowledge or sufficient experience or sufficient funds and later on they decide to dispose of that business to avoid huge losses. In such a case it may be better to acquire a running business with favorable terms and conditions and it may prove to be a good decision.

The other important matters be decided before the formation of the company could be the decision regarding the product to be produced, the size of the company, the capital involved in the project, the sources of the capital and whether it shall be a Private Company or a Public Company.

Any of the above decisions i.e., to start a new business altogether or to acquire an already running business, along with the other matters shall have to be taken by some person or persons who are at the helm of the affairs. They are called PROMOTERS.

Where it has been decided to form a Private Company 2 persons and where it has been decided to form a Public Company at least 7 persons shall subscribe their names to a Memorandum of Association and they shall also comply with the other formalities in respect of the registration of the company under the Indian Companies Act, 1956.

Document to be filed with the Registrar: It is desirable to ascertain from the Registrar (Registrar of the State in which the Registered office of the company shall be situated) of the companies that whether the proposed name of the company shall be approved if registration is sought for a new company with such name.

Where already a company with such name is existing, it shall not be allowed by the Registrar, because tow companies with the similar name cannot be registered.

But if he says yes, because no other company is registered with that name, an application for the registration of the company should be presented to the Registrar of the State in which the Registered office of the company shall be situated. The application along with necessary fee shall be presented along with the following documents :

(1) The Memorandum of Association.
(2) The Articles of Association, if any which should be signed by the subscribers to the Memorandum of Association.
(3) Any agreement with the individual persons who are proposed to e appointed as Managers, Directors or Managing Director of the company.
(4) A statement of the nominal capital of the Company.
(5) A notice of address of the registered office of the company.
(6) A list of the Directors who have agreed to become the first Directors of the company along with their consent to act as Directors and to take up the qualification shares of the company in the case of a public company.
(7) A declaration that all the requirements of the Companies Act have been complied with, shall also be submitted, which shall be signed by one nay of the following persons :

(i) An advocate of the Supreme Court or High Court, or
(ii) An attorney or a pleader entitled to appear before a High Court, or
(iii) A Secretary or a Chartered Accountant in whole time practice in India, who is engaged in the formation of the company, or
(iv) A person named in the Articles as a Directors, Manager or Secretary of the company.

Where the Registrar of Companies is satisfied that all the requirement have been complied with, he will register the company and enter the name of the company in the Register of Companies.

2. Incorporation Stage : Where the Registrar of Companies is satisfied that all the requirements have been complied with, he will register the company, and enter the name of the company in the Register of Companies.

When a company is registered and its name in entered in the register of companies, the Registrar will issue a Certificate of Incorporation in which he certifies that the company is incorporated under his hand and in the case of a limited company that the company is a Limited Company.

* When a company is registered and a Certificate of Incorporation is issued by the Registrar, it shall have the following effects :

• The company shall become s Separate Legal Entity from the date mentioned on the Certificate of Incorporation, which is considered as date of birth of the company.
  
• The Company acquires Perpetual Succession. The members may come, members may go, but it goes for ever.
  
• The company becomes the owner of its property and the Promoters of Shareholders have the right to share in the profits of the company.
  
• The company can sue and can be sued in its own name.

Citi India may slash over 1,000 jobs: Report

BS Reporter / Mumbai November 22, 2008, 1:02 IST

Days after Citi’s global CEO Vikram Pandit said the group planned to reduce head-count by 52,000, there are reports that the financial major will lay off over 1,000 employees in India. The financial services company has around 10,000 employees in India.

It said that Citigroup will also cut dozens of additional positions from its investment and corporate banking team though the layoff plans are still being finalised.

When contacted, a Citi India spokesperson said, “We have said before that we are expecting only minimal impact for India. We continue to hire for the business, especially on campuses where we remain very active.”

There could be some cuts in Citi’s domestic workforce due to underperformance, a senior bank executive said.

CITI has maintained that a large part of the domestic staff strength has already come down following the sale of its business process outsourcing arm, Citigroup Global Services to TCS about a month ago. The BPO outfit had around 12,000 employees.

Earlier this week at the Business Standard Banking Round Table Citi South Asia CEO Sanjay Nayar had said the group’s businesses in emerging markets, including India, are doing very well

Acts, Bills & Rules

Acts

Societies Registration Act 1860

Partnership Act 1932

Companies ( Donation to National ) Fund Act 1951

Companies Act, 1956 Part 1

Companies Act 1956 Part 2

The Companies Amendment Act, 2006

The Monopolies and Restrictive Trade Practices Act, 1969

The Competition Act, 2002

The Competition Amendment Act, 2007

The Chartered Accountants Act, 1949 [As amended by the Chartered Accountants (Amendment) Act, 2006]

Cost and Works Accountants Act, 1959 [As Amended By The Cost And Works Accountants (Amendment) Act, 2006]

The Company Secretaries Act, 1980 [As amended by The Company Secretaries (Amendment) Act, 2006]

Bills

The Companies Bill, 2008

Corrigenda to The Companies Bill, 2008

The Limited Liability Partnership Bill, 2008

Rules

ICAI

Procedure of Investigation ( English & Hindi version)

Procedure of Meetings ( English & Hindi version)

The Appellate Authority ( English & Hindi version)

Corrigendum G.S.R.225(E) ( English & Hindi version)

Chartered Accountants(Election to the council) Rules 2006 ( English & Hindi version)

Chartered Accountants(Election Tribunal) Rules,2006 ( English & Hindi version)

ICWAI

Procedure of Investigation ( English & Hindi version)

Procedure of Meetings ( English & Hindi version)

The Appellate Authority ( English & Hindi version)

Compliance rules

Companies (Accounting Standards) Rules, 2006

Companies (Issue of Share Certificate) Rules, 1960

Trustees (Declaration of Holdings of Shares and Debentures) Rules, 1964

The Companies (Public Trustee) Rules, 1973

Companies (Particulars of Employees) Rules, 1975

Companies (Transfer of Profits to Reserves) Rules, 1975

The Companies (Declaration of Beneficial Interest in Shares) Rules, 1975

Public Companies (Terms of Issue of Debentures and Raising of Loans with Option to Convert such Debentures or Loans into Shares) Rules, 1977

Companies Unpaid Dividend (Transfer to General Revenue Account of the Central Government) Rules, 1978

Companies (Appointment and Qualifications of Secretary) Rules, 1988

Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

Private Limited Company and Unlisted Public Limited Copmpany (Buy Back of Securities) Rules 1999

The Companies ((Issue of Share Capital with Differential Voting Rights) Rules, 2001

The Companies (Appointment of the Small Shareholders Director) Rules, 2001

The Companies (Passing of the Resolution by Postal Ballot) Rules, 2001

Unlisted Public Companies (Preferential Allotment) Rules, 2003

Audit rules

Companies (Branch Audit Exemption) Rules, 1961

Manufacturing and Other Companies (Auditor's Report) Order, 1988

Cost Audit (Report) Rules, 1996

Cost Accounting Record Rules of 44 products

Cost Audit Report Rules 2001

Companies Auditors Report order 2003 (CARO)

Company Law Board

The Offices Of The Company Law Board Benches (Destruction Of Records) Rules, 1980

Company Law Board (Fees on Applications and Petitions) Rules, 1991

Company Law Board Regulations, 1991

Company Law Board (Qualifications, Experience and Other Conditions Of Service of Members) Rules, 1993

Company Law Board (Qualifications, Experience and Other Conditions of Service of Members) ( Amendment) Rules, 1996

Company Law Board (Qualifications, Experience and Other Conditions of Service of Members) (Amendment) Rules, 1997

Competition Commission of India

Companies (Preservation and Disposal of Records) Rules, 1966

Competition Commission of India (Oath of Office and of Secrecy for Chairperson and other Members) Rules, 2003

Competition Commission of India (Salary, Allowances and other Terms and Conditions of Service of Chairperson and other Members) Rules, 2003

Court liquidator rules

Companies (Court) Rules, 1959

Companies (Official Liquidator's Accounts) Rules, 1965

Companies Liquidation Accounts Rules, 1965

Deposit rules

Companies (Acceptance of Deposits) Rules, 1975

Companies (Acceptance of Deposits Amendment) Rules, 1997

Destruction of records rules

Companies (Preservation and Disposal of Records) Rules, 1966

The Offices Of The Regional Directors (Destruction Of Records) Rules, 1976

The Office Of The Public Trustee (Destruction of Records) Rules, 1984

Disposal of Records (in the Offices of the Registrar of Companies) Rules, 2003

General rules and regulations

Companies Regulations, 1956

Companies (Central Government's) General Rules and Forms, 1956

Application of section 159 to Foreign Companies Rules 1975

Companies (Appointment of Sole Agents) Rules, 1975

Companies (Declaration of Dividend out of Reserves) Rules, 1975

Companies (Application for Extension of time or Exemption under sub-section (8) of section 58A) Rules, 1979

Companies (Fees on Applications) Rules, 1999

The Companies (Compliance Certificate) Rules, 2001

Investor rules

The Investors Education and Protection Fund (Awareness an Protection of Investors) Rules 2001

• Director of the company alone cannot commit anything on behalf of the company without the sanction of the Board of director. Shabh Shanti Services Ltd. v. Manula’s Agarwalla & Ors. 2005 SCC (Cri) 993.
  
  
• The Companies Act 1956 - Conviction u/s 454(5) of the Act will be challenged in appeal before the Division Bench of the H.C. P. George Philip v. Official Liquidator, 2004(4) RCR (Crl.) 98 Kerala FB.
  
  
• Flat allotted to the employee who died. The legal heirs can be prosecuted on non vacating the flat after due notice. Lalita Jalan v. Bombay Gas Co. Ltd., 2003(3) RCR(CRi. )76(SC) 2003 SCC(Cri) 1281 : AIR 2003 SC 3157 :2003 SC 3157 : 2003 Cri.L.I. 2514.
  
  
• Companies Act – Defamation against the co. Every director of the co. can file the complaint. Johan Thomas v. Dr. K. Jagadeesam. JT 2001(5 (SC) 398 : 2001(3) RCR(Cri.) 381 : AIR 2001 SC 2657 : 2001 Cri.L.J. 3322.
  
  
• Companies Act – Offence committed by an Indian in foreign country. The Indian Court will try the offence. A.V. Mohan Rao v. M. Kishan Rao, 2002 SSC(Cri.) 1281 : AIR 2002 SC 2653.
  
  
• Companies Act – S. 434 – Notice beyond the period of 15 days in case of dishonor of Cheque Is not valid. M/s. Uniplas India Ltd v. State, JT 2001 (5). (SC) 465 : 2001(3) RCR (Cri) 511 : AIR 2001 SC 2625 : 2001 Cri.l.j. 3326.
  
  
• Section 630 All members of an employee or an ex – employee of a company cannot be prosecuted for the offence. M/s. J.K. Ltd v. Mrs. Mata Mishar, JT 2001(2) (SC) 36 : 2001(1) RCR(Cri.) 561: AIR 2001 SC 649.
  
  
• Registrar of the company can file the complaint when the offence is under section 113. Registrar of Companies v. Rajshree Sugar and Chemicals Ltd., 2002(2) Crimes 322 SC3( 2000) CCR 21 (SC) : 2000(2) RCR (Cri.) 874 : AIR 2000 SC 1643.
  
  
• Companies Act - Refusal to transfer shares has to be intimated to the applicant with in 2 monhts from the date of delivery. Unit Trust of India v. Jagdish Rai, 2(2000) CPj. 106 Chd. SCDRC..
  
  
• Companies Act – winding up order was passed by the High Court. Court’s Leave has to be obtained for further proceedings against the company. Asia Pacific Investment Trust Ltd. v. Amod Juneja, 1(2000) CPJ. 239 Delhi, S.C.D.R.C. New Delhi
  
  
• Section 113 – Prosecution – Limitation under the Act is 6 months. The limitation shall be counted from the date of knowledge of the offence to the complainant. Registrar of Companies v. Rajshree Sugar and Chemicals Ltd., 2000(2) Crimes 322 (SC) : AIR 2000 SC 1643.
  
  
• Company Court is not competent to take the cognizance of the offence U/S. 629 of the Act committed by the Managing Director of the Company. V. Sugandha Lal v. Boby Varghese, 2000 Cri.L.K. 4121 Kerala.
  
  
• Section . 628 – Filing of flase statement in form 32 in an offence. K. Radha Krishana v. C.V. Mnaikandan, 1(1999) CCR 11 HC : 1998 Cri.LJ. 3583.
  
  
• Default in Filing annual return and balance sheet of the company. The continuing offences U/Ss. 159, 162, 220 attracted. Anita Chadha v. Registrar of companies, 1999 Cri.L.J. 2433 Delhi.
  
  
• S. 391, 393 – For the compromise & arrangement the sanction of the Court is to be obtained and the Court cannot work as an appellate Court for examination of the scheme. Miheer H, Mafatlal v. Mafatlal Industries Ltd., AIR 1997 SC 506.
  
  
• The managing director is responsible for criminal liability for any offence committed by the employers/Company. 4(1996)CCR 163(SC).
  
  
• S. 159/220 – the offences are continuing offences. Rani Joseph v. Registrar of Companies, Kerala, 1995 Cri.L.J. 3832 (Kerala).

THE COMPANIES (AMENDMENT) ACT, 2006

Act Name : THE COMPANIES (AMENDMENT) ACT, 2006
Act title : No. 23 of 2006
Enactment date : 29th May, 2006.

1. SECTION(1.) Short title and commencement.

2. SECTION(2.) Amendment of section 253.

3. SECTION(3.) Insertion of new sections 266A, 266B, 266C, 266D, 266E, 266F and 266G.

4. SECTION(4.) Insertion of new sections 610B, 610C, 610D and 610E.

Section 1. Short title and commence-ment.- (1) This Act may be called the Companies (Amendment) Act, 2006.(2) It shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different provisions of this Act.

Section 2. Amendment of section 253. - In section 253 of the Companies Act, 1956 (hereinafter referred to as the principal Act), the following proviso shall be inserted, namely:—“Provided that no company shall appoint or re-appoint any individual as director of the company unless he has been allotted a Director Identification Number under section 266B.”.

Section 3. Insertion of new sections 266A, 266B, 266C, 266D, 266E, 266F and 266G.- After section 266 of the principal Act, the following sections shall be inserted, namely:—“Director Identification Number

266A. Application for allotment of Director Identification Number.-

Every—(a) individual, intending to be appointed as director of a company; or (b) director of a company appointed before the commencement of the Companies (Amendment) Act, 2006, shall make an application for allotment of Director Identification Number to the Central Government in such form, and manner (including electronic form) alongwith such fee, as may be prescribed: Provided that every director, appointed before the commencement of the Companies (Amendment) Act, 2006, shall make, within sixty days of the commencement of the said Act, such application to the Central Government: Provided further that every applicant, who has made an application under this section for allotment of a Director Identification Number, may be appointed as a director in a company, or, hold office as director in a company till such time such applicant has been allotted the Director Identification Number.

266B. Allotment of Director Identification Number.-

The Central Government shall, within one month from the receipt of the application under section 266A, allot a Director Identification Number to an applicant, in such manner as may be prescribed.

266C.Prohibition to obtain more than one Director Identification Number.-

No individual, who had already been allotted a Director Identification Number under section 266B, shall apply, obtain or possess another Director Identification Number.

266D.Obligation of director to intimate Director Identification Number to concerned company or companies.-

Every existing director shall, within one month of the receipt of Director Identification Number from the Central Government, intimate his Director Identification Number to the company or all companies wherein he is a director.

266E.Obligation of company to inform Director Identification Number to Registrar.- or section 266C or section 266D or section

266E.-

(1) Every company shall, within one week of the receipt of intimation under section 266D, furnish the Director Identification Number of all its directors to the Registrar or any other officer or authority as may be specified by the Central Government. (2) Every intimation under sub-section (1) shall be furnished in such form and manner as may be prescribed.

266F.Obligation to indicate Director Identification Number. -

Every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall quote the Director Identification Number in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of the director.

266G.Penalty for contravention of provisions of section 266A or section 266C or section 266D or section 266E.-

If any individual or director, referred to in section 266A or section 266C or section 266D or a company referred to in section 266E, contravenes any of the provisions of those sections, every such individual or director or the company, as the case may be, who or which, is in default, shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which the contravention continues.

Explanation.—

For the purposes of sections 266A, 266B, 266C, 266D, 266E and 266F, the Director Identification Number means an identification number which the Central Government may allot to any individual, intending to be appointed as director or to any existing directors of a company, for the purpose of his identification as such.”.

Section 4. Insertion of new sections 610B, 610C, 610D and 610E.-

After section 610A of the principal Act, the following sections shall be inserted, namely:—

“610 B.Provisions relating to filing of applications, documents, inspection, etc., through electronic form.-

(1) Notwithstanding anything contained in this Act, and without prejudice to the provisions contained in section 6 of the Information Technology Act, 2000, the Central Government may, by notification in the Official Gazette, make rules so as to require from such date as may be specified in the rules, that—

(a) such applications, balance-sheet, prospectus, return, declaration, memorandum of association, articles of association, particulars of charges, or any other particulars or document as may be required to be filed or delivered under this Act or rules made thereunder, shall be filed through the electronic form and authenticated in such manner as may be specified in the rules;

(b) such document, notice, any communication or intimation, required to be served or delivered under this Act, shall be served or delivered under this Act through the electronic form and authenticated in such manner as may be specified in the rules;

(c) such applications, balance-sheet, prospectus, return, register, memorandum of association, articles of association, particulars of charges, or any other document and return filed under this Act or rules made thereunder shall be maintained by the Registrar in the electronic form and registered or authenticated, as the case may be, in such manner as may be specified in the rules;

(d) such inspections of the memorandum of association, articles of association, register, index, balance-sheet, return or any other document maintained in the electronic form, which is otherwise available for such inspection under this Act or rules made thereunder, may be made by any person through the electronic form as may be specified in the rules;

(e) such fees, charges or other sums payable under this Act or rules made thereunder shall be paid through the electronic form and in such manner as may be specified in the rules;

(f) the Registrar shall, register change of registered office, alteration of memorandum of association or articles of association, prospectus, issue certificate of incorporation or certificate of commencement of business, register such document, issue such certificate, record notice, receive such communication as may be required to be registered or issued or recorded or received, as the case may be, under this Act or rules made thereunder or perform duties or discharge functions or exercise powers under this Act or rules made thereunder or do any act which is by this Act directed to be performed or discharged or exercised or done by the Registrar, by the electronic form, in such manner as may be specified in the rules.

(2) The Central Government may, by notification in the Official Gazette, frame a scheme to carry out the provisions specified under sub-section (1) through the electronic form: Provided that the Central Government may appoint different dates in respect of different Registrar of Companies or Regional Directors from which such scheme shall come into force.

610C.Power to modify Act in relation to electronic records (including the manner and form in which electronic records shall be filed).-

(1) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act, so far as it is required for the purpose of electronic record specified under section 610B in the electronic form,—

(a) shall not apply, in relation to the matters specified under clauses (a) to (f) of sub-section (1) of section 610B, as may be specified in the notification;
or(b) shall apply, in relation to the matters specified under clauses (a) to (f) of sub-section (1) of section 610B only with such consequential exceptions, modifications or adoptions as may be specified in the notification:Provided that no such notification which relates to imposition of fines or other pecuniary penalties or demand or payment of fees or contravention of any of the provisions of this Act or offence shall be issued under this sub-section.

(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses.

610D. Providing of value added services through electronic form.- The Central Government may provide such value added services through the electronic form and levy such fees as may be prescribed.

610E.Application of provision of Act 21 of 2000.- All the provisions of the Information Technology Act, 2000 relating to the electronic records (including the manner and format in which the electronic records shall be filed), in so far as they are not inconsistent with this Act, shall apply, or in relation, to the records in electronic form under section 610B.”.

K. N. CHATURVEDI,Secy. to the Govt. of India.————