companies (amendment) act, 2000
An Act further to amend
the Companies Act, 1956.
Be
it enacted by Parliament in the Fifty-first Year of the
1. (1) This Act may be called the Companies (Amendment) Act, 2000.
(2) The provisions of this Act, other than sections 7 and 80, shall come into force at once and sections 7 and 80 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. In section 2 of the Companies Act, 1956 (1 of 1956) (hereinafter referred to as the principal Act),—
(a) clause (1) shall be re-numbered as clause (1A) thereof and before the clause as so re-numbered, the
following clause shall be inserted, namely :—
‘(1) “abridged prospectus” means a memorandum
containing such salient features of a prospectus as may be prescribed;’;
(b) clauses (3)
and (4) shall be omitted;
(c) after clause (12),
the following clauses shall be inserted, namely :—
‘(12A) “depository”
has the same meaning as in the Depositories Act, 1996 (22 of 1996);
(12B) “derivative” has the same meaning as in
clause (aa)
of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);’;
(d) after clause (14),
the following clause shall be inserted, namely:—
‘(14A) “dividend” includes any interim
dividend;’;
(e) after clause (15),
the following clause shall be inserted, namely :—
‘(15A) “employees stock option” means the option
given to the whole-time directors, officers or employees of a company, which
gives such directors, officers or employees the benefit or right to purchase or
subscribe at a future date, the securities offered by the company at a
pre-determined price;’;
(f) after clause (19),
the following clauses shall be inserted, namely :—
‘(19A) “hybrid” means any security which has the
character of more than one type of security, including their derivatives;
(19B) “information memorandum” means a process
undertaken prior to the filing of a prospectus by which a demand for the
securities proposed to be issued by a company is elicited, and the price and
the terms of issue for such securities is assessed, by means of a notice,
circular, advertisement or document;’;
(g) after clause (23),
the following clause shall be inserted, namely :—
‘(23A) “listed public companies” means a public
company which has any of its securities listed in any recognized stock
exchange;’;
(h) clause (25)
shall be omitted;
(i) for clause (30), the following clause shall be
substituted, namely:—
‘(30) “officer” includes any director, manager
or secretary or any person in accordance with whose directions or instructions
the Board of directors or any one or more of the directors is or are accustomed
to act;’;
(j) after clause (31),
the following clause shall be inserted, namely :—
‘(31A) “option in securities” has the same
meaning as in clause (d) of
section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);’;
(k) clause (44)
shall be omitted;
(l) after clause (45A),
the following clause shall be inserted, namely :—
‘(45AA)“securities”
means securities as defined in clause (h)
of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956),
and includes hybrids;’;
(m) after clause (46),
the following clause shall be inserted, namely :—
‘(46A) “share with differential rights” means a
share that is issued with differential rights in accordance with the provisions
of section 86;’.
3. In section 3 of the principal Act,—
(a) in sub-section (1),—
(i) in clause (iii),—
(A) in the opening portion, for the words
“means a company which, by its articles,—”, the words “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,—” shall
be substituted;
(B) after
sub-clause (c), before the
proviso, the following clause shall be inserted, namely:—
“(d) prohibits any invitation or
acceptance of deposits from persons
other than its members, directors or their relatives:”;
(ii) for clause (iv),
the following clause shall be substituted, namely:—
‘(iv) “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;’;
(b) after sub-section
(2), the following sub-sections shall be inserted, namely:—
“(3) 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-up capital to one lakh rupees.
(4) Every
public 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-up capital to five lakh rupees.
(5) 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.
(6) 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.”.
4. In section 4 of the principal Act, in sub-section (2), in clause (b), the words “, managing agent, secretaries and treasurers” shall be omitted.
5. In section 11 of the principal Act, in sub-section (5), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
6. In section 16 of the principal Act, in sub-section (3), the words “, managing agent, secretaries and treasurers” shall be omitted.
7. After section 17 of the principal Act, the following section shall be inserted, namely:—
“17A. Change of
registered office within a State.—(1) No company shall change the place
of its registered office from one place to another within a State unless such
change is confirmed by the Regional Director.
(2) The
company shall make an application in the prescribed form to the Regional
Director for confirmation under sub-section (1).
(3) The
confirmation referred to in sub-section (1), shall be communicated to the
company within four weeks from the date of receipt of application for such
change.
Explanation.—For the purposes of
this section, it is hereby declared that the provisions of this section shall
apply only to the companies which change the registered office from the
jurisdiction of one Registrar of Companies to the jurisdiction of another
Registrar of Companies within the same State.
(4) The
company shall file, with the Registrar a certified copy of the confirmation by
the Regional Director for change of its registered office under this section,
within two months from the date of confirmation, together with a printed copy
of the memorandum as altered and the Registrar shall register the same and
certify the registration under his hand within one month from the date of
filing of such document.
(5) The
certificate shall be conclusive evidence that all the requirements of this Act with respect
to the alteration and confirmation have been complied with and henceforth the memorandum as altered
shall be the memorandum of the company.”.
8. In section 22 of the principal Act, in sub-section (2), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
9. In section 25 of the principal Act, in sub-section (10), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
10. In section 39 of the principal Act,—
(a) in sub-section (1), clause (c) shall be omitted;
(b) in sub-section (2), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted.
11. In section 40 of the principal Act,—
(a) in sub-section
(1), the words, brackets, letter and figures “in the agreement referred to in
clause (c) of sub-section (1)
of section 39 or in any other agreement” shall be omitted;
(b) in sub-section (2), for the words “ten rupees”, the words
“one hundred rupees” shall be substituted.
12. In section 43A of the principal Act,—
(a) after sub-section (2), the following sub-section shall be
inserted, namely :—
“(2A) Where a public company referred to in sub-section (2)
becomes a private company on or after the commencement of the Companies
(Amendment) Act, 2000, such company shall inform the Registrar that it has
become a private company and thereupon the Registrar shall substitute the word
‘private company’ for the word ‘public company’ in the name of the company upon
the register and shall also make the necessary alterations in the certificate
of incorporation issued to the company and in its memorandum of association
within four weeks from the date of application made by the company.”.
(b) after sub-section (10), the following sub-section shall be
inserted, namely :—
“(11) Nothing contained in this section, except sub-section
(2A), shall apply on and after the commencement of the Companies (Amendment)
Act, 2000.”.
13. In section 44 of the principal Act,—
(a) in sub-section
(3), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(b) in sub-section
(4), for the words “five thousand rupees”, the words “fifty thousand rupees”
shall be substituted.
14. In section 49 of the principal Act, in sub-section (9), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
15. In section 54 of the principal Act, the words “the managing agent, the secretaries and treasurers,” shall be omitted.
16. After section 55 of the principal Act, the following section shall be inserted, namely :—
“55A. Powers of
Securities and Exchange Board of India.—The provisions contained in
sections 55 to 58, 59 to 84, 108, 109, 110, 112, 113, 116, 117, 118, 119, 120,
121, 122, 206, 206A and 207, so far as they relate to issue and transfer of
securities and non-payment of dividend shall,—
(a) in case of listed public companies;
(b) in case of
those public companies which intend to get their securities listed on any
recognized stock exchange in
be administered by the Securities and Exchange Board of
India; and
(c) in any other case, be administered by the Central
Government.
Explanation.—For removal of doubts,
it is hereby declared that all powers relating to all other matters including
the matters relating to prospectus, statement in lieu of prospectus, return of
allotment, issue of shares and redemption of irredeemable preference shares
shall be exercised by the Central Government, Company Law Board or the
Registrar of Companies, as the case may be.”.
17. In section 56 of the principal Act, in sub-section (3), after the second proviso, for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
18. In section 58A of the principal Act,—
(a) in sub-section (6), in clause (a), in sub-clause (ii),—
(i) for the words
“one lakh rupees”, the words “ten lakh
rupees” shall be substituted;
(ii) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted;
(b) in sub-section
(10), for the words “not less than rupees fifty”, the words “not less than
rupees five hundred” shall be substituted.
Insertion of new sections 58AA and 58AAA.
19. After section 58A of the principal Act, the following sections shall be inserted, namely:—
‘58AA. Small
depositors.—(1) Every company, which accepts deposits from small
depositors, shall intimate to the Company Law Board any default made by it in
repayment of any such deposits or part thereof or any interest thereupon.
(2) The intimation
under sub-section (1) shall,—
(a) be given within sixty days from the date of default;
(b) include particulars in respect of the names and addresses of
each small depositor, the principal sum of deposits due to them and interest
accrued thereupon.
Explanation.—For removal of doubts, it
is hereby declared that the intimation under this section shall be given on
monthly basis.
(3) Where
a company has made a default in repayment of any deposit or part thereof or any
interest thereupon to a small depositor, the Company Law Board, on receipt of
intimation under sub-section (1) shall,—
(a) exercise, on its own motion, powers conferred upon it by sub-section (9) of section 58A;
(b) pass an appropriate order within a period of thirty days from the date of receipt of intimation under sub-section (1):
Provided that the Board may pass
order after expiry of the period of thirty days, after giving the small
depositors an opportunity of being heard:
Provided further that it
shall not be necessary for a small depositor to be present at the hearing of
the proceeding under this sub-section.
(4) No
company shall, at any time, accept further deposits from small depositors,
unless each small depositor, whose deposit has matured, had been paid the
amount of the deposit and the interest accrued thereupon :
Provided that nothing contained in this sub-section shall apply to—
(a) any deposit which has been renewed by the small depositor
voluntarily; or
(b) any deposit,
whose repayment has become impracticable due to the death of the small
depositor or whose repayment has been stayed by a competent court or authority.
(5) Every
company, which has on any occasion made a default in the repayment of a deposit
or part thereof or any interest thereupon to a small depositor, shall state, in
every future advertisement and application form inviting deposits from the public,
the total number of small depositors and amount due to them in respect of which
such default has been made.
(6) Where
any interest accrued on deposits of the small depositors has been waived, the
fact of such waiver shall be mentioned by the company in every advertisement
and application form inviting deposits issued after such waiver.
(7) Where
a company had accepted deposits from small depositors and subsequent to such
acceptance of deposits, obtains funds by taking a loan for the purposes of its
working capital from any bank, it shall first utilize the funds so obtained for
the repayment of any deposit or any part thereof or any interest thereupon to
the small depositor before applying such funds for any other purpose.
(8) Every
application form, issued by a company to a small depositor for accepting
deposits from him, shall contain a statement to the effect that the applicant
had been apprised of—
(a) every past
default by the company in the repayment of deposit or interest thereon, if any,
such default has occurred; and
(b) the waiver of interest under sub-section (6), if any, and
reasons therefore.
(9) Whoever
knowingly fails to comply with the provisions of this section or comply with
any order of the Company Law Board shall be punishable with imprisonment which
may extend to three years and shall also be liable to fine for not less than
five hundred rupees for every day during which such non-compliance continues.
(10) If
a company or any other person contravenes any provision of this section, every
person, who at the time the contravention was committed, was a director of the
company, as well as the company, shall be deemed to be guilty of the offence
and shall be liable to be proceeded against and punished accordingly.
(11) The
provisions of section 58A shall, as far as may be, apply to the deposits made
by a small depositor under this section.
Explanation.—For the purposes of this
section, “a small depositor” means a depositor who has deposited in a financial
year a sum not exceeding twenty thousand rupees in a company and includes his
successors, nominees and legal representatives.
58AAA. Default in acceptance or refund of deposits
to be cognizable.—(1) Notwithstanding anything contained in sections 621
and 624, every offence connected with or arising out of acceptance of deposits
under section 58A or section 58AA shall be cognizable offence under the Code of
Criminal Procedure, 1973.
(2) No
court shall take cognizance of any offence under sub-section (1) except on a
complaint made by the Central Government or any officer authorized by it in
this behalf.’.
20. In section 59 of the principal Act, in sub-section (1), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
21. In section 60 of the principal Act, in sub-section (5), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
Insertion of new sections 60A and 60B.
22. After section 60 of the principal Act, the following sections shall be inserted, namely :—
‘60A. Shelf
prospectus.—(1) Any public financial
institution, public sector bank or scheduled bank whose main object is
financing shall file a shelf prospectus.
(2) A
company filing a shelf prospectus with the Registrar shall not be required to
file prospectus afresh at every stage of offer of securities by it within a
period of validity of such shelf prospectus.
(3) A
company filing a shelf prospectus shall be required to file an information
memorandum on all material facts relating to new charges created, changes in
the financial position as have occurred between the first offer of securities,
previous offer of securities and the succeeding offer of securities within such
time as may be prescribed by the Central Government, prior to making of a
second or subsequent offer of securities under the shelf prospectus.
(4) An
information memorandum shall be issued to the public along with shelf
prospectus filed at the stage of the first offer of securities and such
prospectus shall be valid for a period of one year from the date of opening of
the first issue of securities under that prospectus :
Provided that where an update of information memorandum is filed
every time an offer of securities is made, such memorandum together with the
shelf prospectus shall constitute the prospectus.
Explanation.—For the purpose of this
section,—
(a) “financing” means making loans to or
subscribing in the capital of, a private industrial enterprise engaged in
infrastructural financing or, such other company as the Central Government may
notify in this behalf;
(b) “shelf prospectus”
means a prospectus issued by any financial institution or bank for one or more
issues of the securities or class of securities specified in that prospectus.
60B. Information memorandum.—(1) A public
company making an issue of securities may circulate information memorandum to
the public prior to filing of a prospectus.
(2) A
company inviting subscription by an information memorandum shall be bound to
file a prospectus prior to the opening of the subscription lists and the offer
as a red-herring prospectus, at least three days before the opening of the
offer.
(3) The
information memorandum and red-herring prospectus shall carry same obligations
as are applicable in the case of a prospectus.
(4) Any
variation between the information memorandum and the red-herring prospectus
shall be highlighted as variations by the issuing company.
Explanation.—For the purposes of
sub-sections (2), (3) and (4), “red-herring prospectus” means a prospectus
which does not have complete particulars on the price of the securities offered
and the quantum of securities offered.
(5) Every
variation as made and highlighted in accordance with sub-section (4) above
shall be individually intimated to the persons invited to subscribe to the
issue of securities.
(6) In
the event of the issuing company or the underwriters to the issue have invited
or received advance subscription by way of cash or post-dated cheques or stock-invest, the company or such underwriters
or bankers to the issue shall not encash such
subscription moneys or post-dated cheques or
stock-invest before the date of opening of the issue, without having
individually intimated the prospective subscribers of the variation and without
having offered an opportunity to such prospective subscribers to withdraw their
application and cancel their post-dated cheques or
stock-invest or return of subscription paid.
(7) The
applicant or proposed subscriber shall exercise his right to withdraw from the
application on any intimation of variation within seven days from the date of
such intimation and shall indicate such withdrawal in writing to the company
and the underwriters.
(8) Any
application for subscription which is acted upon by the company or underwriters
or bankers to the issue without having given enough information of any
variations, or the particulars of withdrawing the offer or opportunity for
canceling the post-dated cheques or stock invest or
stop payments for such payments shall be void and the applicants shall be
entitled to receive a refund or return of its post-dated cheques
or stock-invest or subscription moneys or cancellation of its application, as
if the said application had never been made and the applicants are entitled to
receive back their original application and interest at the rate of fifteen per
cent from the date of encashment till payment of realization.
(9) Upon
the closing of the offer of securities, a final prospectus stating therein the
total capital raised, whether by way of debt or share capital and the closing
price of the securities and any other details as were not complete in the red-herring
prospectus shall be filed in a case of a listed public company with the
Securities and Exchange Board and Registrar, and in any other case with the
Registrar only.’.
23. In section 63 of the principal Act, in sub-section (1), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
24. In section 67 of the principal Act,—
(a) in sub-section (3), the following proviso shall be inserted,
namely:—
“Provided that nothing contained in this
sub-section shall apply in a case where the offer or invitation to subscribe
for shares or debentures is made to fifty persons or more :
Provided further that nothing contained
in the first proviso shall apply to the non-banking financial companies or
public financial institutions specified in section 4A of the Companies Act,
1956 (1 of 1956).”;
(b) after sub-section (3), the following sub-section shall be
inserted, namely:—
“(3A) Notwithstanding anything contained in
sub-section (3), the Securities and Exchange Board of India shall, in
consultation with the Reserve Bank of India, by notification in the Official
Gazette, specify the guidelines in respect of offer or invitation made to the
public by a public financial institution specified under section 4A or
non-banking financial company’s referred to in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of
1934).”.
25. In section 68 of the principal Act, for the words “ten thousand rupees”, the words “one lakh rupees” shall be substituted.
26. After section 68A of the principal Act, the following section shall be inserted, namely :—
“68B. Initial offer
of securities to be in dematerialized form in certain cases.—Notwithstanding
anything contained in any other provisions of this Act, every listed public
company, making initial public offer of any security for a sum of rupees ten crores or more, shall issue the same only in dematerialized
form by complying with the requisite provisions of the Depositories Act, 1996
(22 of 1996) and the regulations made thereunder.”.
27. In section 69 of the principal Act, in sub-section (4), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
28. In section 70 of the principal Act,—
(a) in sub-section
(4), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted;
(b) in sub-section
(5), for the words “five thousand rupees”, the words “fifty thousand rupees”
shall be substituted.
29. In section 72 of the principal Act, in sub-section (3), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
30. In section 73 of the principal Act, in sub-sections (2B) and (3), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
31. In section 75 of the principal Act, in sub-section (4),—
(a) for the words “five hundred rupees”, the words “five
thousand rupees” shall be substituted;
(b) in the proviso,
for the words “five thousand rupees”, the words “fifty thousand rupees” shall
be substituted.
32. In section 76 of the principal Act, in sub-section (5), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
33. In section 77 of the principal Act,—
(a) in sub-section
(2), in the proviso, in clause (c),
the words “, managing agents, secretaries and treasurers” shall be omitted;
(b) in sub-section
(4), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted.
34. In section 79 of the principal Act, in sub-section (4), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
35. In section 80 of the principal Act, in sub-section (6), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
36. In section 80A of the principal Act, in sub-section (3), in clause (a), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
37. In section 84 of the principal Act, in sub-section (3), for the words “ten thousand rupees”, the words “one lakh rupees” shall be substituted.
Substitution of new section for section 86.
38. For section 86 of the principal Act, the following section shall be substituted, namely :—
“86. New issues of
share capital to be only of two kinds.—The share capital of a company
limited by shares shall be of two kinds only, namely :—
(a) equity share capital—
(i) with voting
rights; or
(ii) with differential rights as to dividend,
voting or otherwise in accordance with such rules and subject to such
conditions as may be prescribed;
(b) preference share capital.”.
39. Section 88 of the
principal Act shall be omitted.
40. In section 89 of the principal Act,—
(a) in sub-section (2),—
(i) for clause (a), the following clause shall be
substituted, namely:—
“(a) any resolution relating to the appointment or reappointment of
a director or to any variation in the terms of an agreement between the company
and a managing or whole-time director thereof;”;
(ii) clause (c)
shall be omitted;
(b) in sub-section
(3), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted.
41. In section 95 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
42. In section 97 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
43. In section 107 of the principal Act, in sub-section (5), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
44. In section 108-I of the principal Act, for the words “five thousand rupees”, wherever they occur, the words “fifty thousand rupees” shall be substituted.
45. In section 111 of the principal Act,—
(a) in sub-section (9),—
(i) for the words
“one thousand rupees”, the words “ten thousand rupees” shall be substituted;
(ii) for the words “one hundred rupees”, the words “one thousand
rupees” shall be substituted;
(b) in sub-section (12), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted.
46. In section 113 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
47. In section 115 of the principal Act, in sub-section (6), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
Insertion of new sections
117A, 117B and 117C.
48. After section 117 of the principal Act, the following sections shall be inserted, namely :—
“117A. Debenture
trust deed.—(1) A trust deed for securing any issue of debentures shall
be in such form and shall be executed within such period as may be prescribed.
(2) A
copy of the trust deed shall be open to inspection to any member or debenture
holder of the company and he shall also be entitled to obtain copies of such
trust deed on payment of such sum as may be prescribed.
(3) If
a copy of the trust deed is not made available for inspection or is not given
to any member or debenture holder, the company and every officer of the company
who is in a default, shall be punishable, for each
offence, with fine which may extend to five hundred rupees for every day during
which the offence continues.
117B. Appointment of debenture trustees and duties
of debenture trustees.—(1) No company shall issue a prospectus or a
letter of offer to the public for subscription of its debentures, unless the
company has, before such issue, appointed one or more debenture trustees for
such debentures and the company has, on the face of the prospectus or the
letter of offer, stated that the debenture trustee or trustees have given their
consent to the company to be so appointed :
Provided that no person shall be
appointed as a debenture trustee, if he—
(a) beneficially holds shares in the company;
(b) is beneficially entitled to moneys which are to be paid by
the company to the debenture trustee;
(c) has entered
into any guarantee in respect of principal debts secured by the debentures or
interest thereon.
(2) Subject
to the provisions of this Act, the functions of the debenture trustees shall
generally be to protect the interest of holders of debentures (including the
creation of securities within the stipulated time) and to redress the
grievances of holders of debentures effectively.
(3) In
particular, and without prejudice to the generality of the foregoing functions,
a debenture trustee may take such other steps as he may deem fit—
(a) to ensure that the
assets of the company issuing debentures and each of the guarantors are
sufficient to discharge the principal amount at all times;
(b) to satisfy himself
that the prospectus or the letter of offer does not contain any matter which is
inconsistent with the terms of the debentures or with the trust deed;
(c) to ensure that the
company does not commit any breach of covenants and provisions of the trust deed;
(d) to take such
reasonable steps to remedy any breach of the covenants of the trust deed or the
terms of issue of debentures;
(e) to take steps to
call a meeting of holders of debentures as and when such meeting is required to
be held.
(4) Where
at any time the debenture trustee comes to a conclusion that the assets of the
company are insufficient or are likely to become insufficient to discharge the
principal amount as and when it becomes due, the debenture trustee may file a
petition before the Company Law Board and the Company Law Board may, after
hearing the company and any other person interested in the matter, by an order,
impose such restrictions on the incurring of any further liabilities as the
Company Law Board thinks necessary in the interests of holders of the
debentures.
117C. Liability of company to create security and
debenture redemption reserve.—(1)
Where a company issues debentures after the commencement of this Act, it shall
create a debenture redemption reserve for the redemption of such debentures, to
which adequate amounts shall be credited, from out of its profits every year
until such debentures are redeemed.
(2) The
amounts credited to the debenture redemption reserve shall not be utilized by
the company except for the purpose aforesaid.
(3) The
company referred to in sub-section (1) shall pay interest and redeem the
debentures in accordance with the terms and conditions of their issue.
(4) Where
a company fails to redeem the debentures on the date of maturity, the Company
Law Board may, on the application of any or all the holders of debentures
shall, after hearing the parties concerned, direct, by order, the company to
redeem the debentures forthwith by the payment of principal and interest due
thereon.
(5) If
default is made in complying with the order of the Company Law Board under
sub-section (4), every officer of the company who is in default, shall be
punishable with imprisonment which may extend to three years and shall also be
liable to a fine of not less than five hundred rupees for every day during
which such default continues.”.
49. In section 118 of the principal Act, in sub-section (2),—
(a) for the words “fifty rupees”, the words “five hundred
rupees” shall be substituted;
(b) for the words “twenty rupees”, the words “two hundred
rupees” shall be substituted.
50. In section 127 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
51. In section 133 of the principal Act, in sub-section (2), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
52. In section 137 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
53. In section 142 of the principal Act,—
(a) in sub-section
(1), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(b) in sub-section
(2), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted.
54. In section 143 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
55. In section 144 of the principal Act, in sub-section (3),—
(a) for the words “fifty rupees”, the words “five hundred
rupees” shall be substituted;
(b) for the words “twenty rupees”, the words “two hundred
rupees” shall be substituted.
56. In section 146 of the principal Act, in sub-section (4), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
57. In section 147 of the principal Act,—
(a) in sub-section (2), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted;
(b) in sub-section
(3), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(c) in sub-section (4) for the words “five hundred rupees”, the
words “five thousand rupees” shall be substituted.
58. In section 148 of
the principal Act, in sub-section (2), for the words “one thousand rupees”, the
words “ten thousand rupees” shall be substituted.
59. In section 149 of the principal Act,—
(a) in sub-section
(2A), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted.
(b) in sub-section (6) for the words “five hundred rupees”, the
words “five thousand rupees” shall be substituted.
60. In section 150 of the principal Act, in sub-section (2), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
61. In section 151 of the principal Act, in sub-section (4), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
62. In section 152 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
63. Section 153A of the principal Act, shall be renumbered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely:—
“(2) The
provisions of this section shall not apply on and after the commencement of the
Companies (Amendment) Act, 2000.”.
64. In section 153B of the principal Act, after Explanation to sub-section (4), the following sub-section shall be inserted, namely:—
“(5) The
provisions of this section shall not apply on and after the commencement of the
Companies (Amendment) Act, 2000.”.
65. In section 154 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
66. In section 157 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
67. In section 158 of the principal Act, in sub-section (9), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
68. In section 159 of the principal Act, in sub-section (1), in clause (g), the words “managing agents, secretaries and treasurers” shall be omitted.
69. In section 160 of the principal Act, in sub-section (1), in clause (b), the words “, its managing agent, its secretaries and treasurers” shall be omitted.
70. In section 162 of the principal Act, in sub-section (1), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
71. In section 163 of the principal Act, in sub-section (5), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
72. In section 165 of the principal Act,—
(a) in sub-section (3),—
(i) in clause (d), the words “managing agent,
secretaries and treasurers,” shall be omitted;
(ii) for clause (g),
the following clause shall be substituted, namely:—
“(g) the arrears, if any, due on calls from every director and
from the manager; and”
(iii) for clause (h),
the following clause shall be substituted, namely:—
“(h) the particulars
of any commission or brokerage paid or to be paid in connection with the issue
or sale of shares or debentures to any director or to the manager,”;
(b) in sub-section
(9), for the words “five hundred rupees”, the words “five thousand rupees” shall
be substituted.
73. In section 168 of the principal Act,—
(a) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted;
(b) for the words
“two hundred and fifty rupees”, the words “two thousand five hundred rupees”
shall be substituted.
74. In section 173 of the principal Act, in sub-section (2), the words “the managing agent, if any, the secretaries and treasurers, if any,” at both the places where they occur shall be omitted.
75. In section 176 of the principal Act,—
(a) in sub-section
(2), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(b) in sub-section
(4), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted.
76. In section 187B of the principal Act, after sub-section (6), the following sub-section shall be inserted, namely:—
“(7) The provisions of this section shall not apply on and
after the commencement of the Companies (Amendment) Act, 2000.”.
77. In section 187C of the principal Act, after sub-section (7), the following sub-section shall be inserted, namely:—
“(8) The provisions of this section shall not apply to the
trustee referred to in section 187B on and after the commencement of the
Companies (Amendment) Act, 2000.”.
78. In section 188 of the principal Act, in sub-section (8), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
79. In section 192 of the principal Act,—
(a) in sub-section (4), clause (d) shall be omitted;
(b) in sub-section
(5), for the words “twenty rupees”, the words “two hundred rupees” shall be
substituted;
(c) in sub-section (6), for the words “ten rupees”, the words
“one hundred rupees” shall be substituted.
Insertion
of new section 192A.
80. After section 192 of the principal Act, the following section shall be inserted, namely :—
‘192A. Passing of
resolutions by postal ballot.—(1) Notwithstanding anything contained in
the foregoing provisions of this Act, a listed public company may, and in the case
of resolutions relating to such business as the Central Government may, by
notification, declare to be conducted only by postal ballot, shall, get any
resolution passed by means of a postal ballot, instead of transacting the
business in general meeting of the company.
(2) Where
a company decides to pass any resolution by resorting to postal ballot, it
shall send a notice to all the shareholders, along with a draft resolution
explaining the reasons therefore, and requesting them to send their assent or
dissent in writing on a postal ballot within a period of thirty days from the
date of posting of the letter.
(3) The
notice shall be sent by registered post acknowledgement due, or by any other
method as may be prescribed by the Central Government in this behalf, and shall
include with the notice, a postage pre-paid envelope for facilitating the
communication of the assent or dissent of the shareholder to the resolution
within the said period.
(4) If
a resolution is assented to by a requisite majority of the shareholders by
means of postal ballot, it shall be deemed to have been duly passed at a
general meeting convened in that behalf.
(5) If
a shareholder sends under sub-section (2) his assent or dissent in writing on a
postal ballot and thereafter any person fraudulently defaces or destroys the
ballot paper or declaration of identify of the shareholder, such person shall
be punishable with imprisonment for a term which may extend to six months or
with fine or with both.
(6) If
a default is made in complying with sub-sections (1) to (4), the company and
every officer of the company, who is in default shall
be punishable with fine which may extend to fifty thousand rupees in respect of
each such default.
Explanation.—For the purposes of this
section, “postal ballot” includes voting by electronic mode.’
81. In section 193 of the principal Act, in sub-section (6), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
82. In section 196 of the principal Act, in sub-section (3), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
83. In section 197 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
84. In section 197A of the principal Act, clauses (b) and (c) shall be omitted.
85. In section 198 of the principal Act,—
(a) in sub-section (1),—
(i) the words
“managing agent, secretaries and treasurers or” shall be omitted;
(ii) for the figures
and word “, 350 and 351”, the word and figures “and 350” shall be substituted;
(iii) proviso shall be omitted;
(b) in sub-section (4), in the Explanation, the figures “348, 352,” shall be omitted.
86. In section 199 of the principal Act, in sub-section (1),—
(a) the words “, the managing agent, secretaries and treasurers”
shall be omitted;
(b) for the figures and word “, 350 and 351”, the word and
figures “and 350” shall be substituted.
87. In section 201 of the principal Act, sub-section (2) shall be omitted.
88. In section 202 of the principal Act, in sub-section (1),—
(a) the words “managing agent, secretaries and treasurers, or”
shall be omitted;
(b) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted.
89. In section 203 of the principal Act, in sub-section (7), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
90. In section 204 of the principal Act,—
(a) in sub-section (1), the words “managing agent, secretaries
and treasurers or” shall be omitted;
(b) sub-section (2) shall be omitted.
91. Section 204A of the principal Act, shall be omitted.
92. In section 205 of the principal Act, after sub-section (1), the following sub-sections shall be inserted, namely :—
“(1A) The Board of directors may declare interim dividend
and the amount of dividend including interim dividend shall be deposited in a
separate bank account within five days from the date of declaration of such
dividend.
(1B) The amount of dividend
including interim dividend so deposited under sub-section (1A) shall be used
for payment of interim dividend.
(1C) The provisions contained in sections 205, 205A, 205C,
206, 206A and 207 shall, as far as may be, also apply to any interim dividend.”.
93. In section 205A of the principal Act,—
(a) in sub-section
(1), for the words “forty-two days”, wherever they occur, the words “thirty
days” shall be substituted;
(b) in sub-section
(8), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted.
Substitution
of new section for section 207.
94. For section 207 of the principal Act, the following section shall be substituted, namely:—
“207. Penalty for
failure to distribute dividends within thirty days.—Where a dividend has
been declared by a company but has not been paid, or the warrant in respect
thereof has not been posted, within thirty days from the date of declaration,
to any shareholder entitled to the payment of the dividend, every director of
the company shall, if he is knowingly a party to the default, be punishable
with simple imprisonment for a term which may extend to three years and shall
also be liable to a fine of one thousand rupees for every day during which such
default continues and the company shall be liable to pay simple interest at the
rate of eighteen per cent per annum during the period for which such default
continues:
Provided that no offence shall be deemed to have been committed
within the meaning of the foreign provisions in the following cases, namely:—
(a) where the dividend could not be paid by reason of the
operation of any law;
(b) where a
shareholder has given directions to the company regarding the payment of the
dividend and those directions cannot be complied with;
(c) where there is a dispute regarding the right to receive the
dividend;
(d) where the
dividend has been lawfully adjusted by the company against any sum due to it
from the shareholder; or
(e) where, for any
other reason, the failure to pay the dividend or to post the warrant within the
period aforesaid was not due to any default on the part of the company.”.
95. In section 209 of the principal Act,—
(a) in sub-section
(5), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted;
(b) in sub-section (6),—
(i) for clause (a), the following clause shall be
substituted, namely:—
“(a) where
the company has a managing director or manager, such managing director or
manager and all officers and other employees of the company; and”;
(ii) clauses (b)
and (c) shall be omitted;
(iii) for clause (d),
the following clause shall be substituted, namely:—
“(d) where the company has neither a managing director nor
manager, every director of the company.”;
(iv) clause (e)
shall be omitted;
(c) in sub-section (7),—
(i) the words
“managing agent, secretaries and treasurers,” shall be omitted;
(ii) for the words “one thousand rupees”, the words “ten thousand
rupees” shall be substituted.
96. In section 209A of the principal Act,—
(a) in sub-section (1), for clause (ii) and the proviso, the following shall be substituted,
namely:—
“(ii) by such officer
of the Government as may be authorized by the Central Government in this
behalf;
(iii) by such officers of the Securities and Exchange Board of
India as may be authorized by it:
Provided that such inspection
may be made without giving any previous notice to the company or any officer
thereof:
Provided further that the
inspection by the Securities and Exchange Board of India shall be made in
respect of matters covered under sections referred to in section 55A;”;
(b) in sub-section
(6), after the words “Central Government”, the words “or the Securities and
Exchange Board of India in respect of inspection made by its officers” shall be
inserted;
(c) in sub-section
(8), for the words “five thousand rupees”, the words “fifty thousand rupees”
shall be substituted.
97. In section 210 of the principal Act, in sub-sections (5) and (6), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
98. In section 211 of the principal Act,—
(a) in sub-section
(7), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted;
(b) in sub-section (8),—
(i) the words
“managing agent, secretaries and treasurers,” shall be omitted;
(ii) for the words “one thousand rupees”, the words “ten thousand
rupees” shall be substituted.
99. In section 212 of the principal Act,—
(a) in sub-section
(9), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted;
(b) in sub-section (10),—
(i) the words
“managing agent, secretaries and treasurers” shall be omitted;
(ii) for the words “one thousand rupees”, the words “ten thousand
rupees” shall be substituted.
100. In section 215 of the principal Act, in sub-section (1), in clause (ii), the words “managing agent, secretaries and treasurers,” shall be omitted.
101. In section 217 of the principal Act,—
(a) after Explanation
to sub-section (2A), the following sub-section shall be inserted, namely:—
“(2AA) The Board’s report shall also include a
Directors’ Responsibility Statement, indicating therein,—
(i) that in the preparation of the
annual accounts, the applicable accounting standards had been followed along
with proper explanation relating to
material departures;
(ii) that the directors had selected such
accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the company at the end of the financial year and of the
profit or loss of the company for that period;
(iii) that the directors had taken proper and
sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the
company and for preventing and detecting fraud and other irregularities;
(iv) that the directors had prepared the annual accounts on a
going concern basis.”;
(b) in sub-sections
(5) and (6), for the words “two thousand rupees”, the words “twenty thousand
rupees” shall be substituted.
102. In section 218 of the principal Act, for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
103. In section 219 of the principal Act, in sub-sections (3) and (4), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
104. In section 220 of the principal Act, in sub-section (1), in clause (a), the words “managing agent, secretaries and treasurers,” shall be omitted.
105. In section 221 of the principal Act,—
(a) sub-section (2) shall be omitted;
(b) in sub-section (3), the words “managing agent, secretaries
and treasurers,” shall be omitted;
(c) in sub-section
(4), for the words “five thousand rupees”, the words “fifty thousand rupees”
shall be substituted.
106. In section 223 of the principal Act, in sub-section (4), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
107. In section 224 of the principal Act,—
(a) in sub-section (1B), after the third proviso, the following
proviso shall be inserted, namely:—
“Provided also that the provisions
of this sub-section shall not apply, on and after the commencement of the
Companies (Amendment) Act, 2000, to a private company.”;
(b) in sub-section
(4), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(c) in sub-section (8), after clause (a), the following clause shall be inserted, namely:—
“(aa) in the case of an auditor appointed under
section 619 by the Comptroller and Auditor-General of
108. In section 226 of the principal Act, in sub-section (3), for clauses (e) and (f), the following clause shall be substituted, namely:—
“(e)
a person holding any security of that company after a
period of one year from the date of commencement of the Companies (Amendment)
Act, 2000.
Explanation.—For the purposes of
this section, “security” means and instrument which carries voting rights.”.
109. In section 227 of the principal Act, in sub-section (3), after clause (d), the following clauses shall be inserted, namely:—
“(e)
in thick type or in italics the observations or
comments of the auditors which have any adverse effect on the functioning of
the company;
(f)
whether any director is disqualified from being appointed as director under
clause (g) of sub-section (1)
of section 274.”.
110. In section 232 of the principal Act, for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
111. In section 233 of the principal Act, for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
112. In section 233A of the principal Act, in sub-section (5), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
113. In section 233B of the principal Act, in sub-section (11), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
114. In section 234 of the principal Act, in sub-section (4), in clause (a),—
(a) for the words “five hundred rupees”, the words “five
thousand rupees” shall be substituted;
(b) for the words “fifty rupees”, the words “five hundred
rupees” shall be substituted.
115. In section 234A of the principal Act,—
(a) in sub-section (1),—
(i) the words “any
managing agent or secretaries and treasurers or” shall be omitted;
(ii) the words “or
any associate of such managing agent or secretaries and treasurers,” shall be
omitted;
(b) in sub-section
(3), the words “the managing agent or the secretaries and treasurers or the
associate of such managing agent or secretaries and treasurers or” shall be
omitted.
116. In section 239 of the principal Act, in sub-section (1),—
(a) for clause (b),
the following clause shall be substituted, namely:—
“(b) any
other body corporate which is, or has at any relevant time been managed by any
person as managing director or as manager, who is, or was, at the relevant
time, the managing director or the manager of the company, or”;
(b) for clause (d),
the following clause shall be substituted, namely:—
“(d) any person who is
or has at any relevant time been the company’s managing director or manager,”;
(c) for the portion beginning with the words
“the inspector shall, subject to the provisions of sub-section (2)” and ending
with the words “affairs of the first-mentioned company”, the following shall be
substituted, namely:—
“the inspector shall,
subject to the provisions of sub-section (2), have power so to do and shall report
on the affairs of the other body corporate or of the managing director or
manager, so far as he thinks that the results of his investigation thereof are
relevant to the investigation of the affairs of the first-mentioned company.”.
117. In section 240 of the principal Act,—
(a) for sub-section (1), the following sub-section shall be
substituted, namely:—
“(1) It shall be the duty of all officers and
other employees and agents of the company, and where the affairs of any other
body corporate are investigated by virtue of section 239, of all officers and
other employees and agents of such body corporate—
(a) to preserve and to produce to an
inspector or any person authorised by him in this
behalf with the previous approval of the Central Government, all books and
papers of, or relating to, the company or, as the case may be, or of relating
to the other body corporate, which are in their custody or power; and
(b) otherwise to
give to the inspector all assistance in connection with the investigation which
they are reasonably able to give.”;
(b) in sub-section
(2), for the words “other body corporate, managing agent, secretaries and
treasurers or associate,”, the words “or other body corporate” shall be
substituted;
(c) in sub-section (3),—
(i) for the words “two thousand
rupees”, the words “twenty thousand rupees” shall be substituted;
(ii) for the words “two hundred rupees”, the words “two thousand
rupees” shall be substituted.
118. In section 240A of the principal Act,—
(a) in sub-section (1),—
(i) the words “any
managing agent or secretaries and treasurers or” shall be omitted;
(ii) the words “or
any associate of such managing agent or secretaries and treasurers” shall be
omitted;
(b) in sub-section
(3), the words “the managing agent, or the secretaries and treasurers or the
associate of such managing agent or secretaries and treasurers or” shall be
omitted.
119. In section 241 of the principal Act, in sub-section (2),—
(a) in clause (a),
the words “,managing agent, secretaries and treasurers or associate” shall be
omitted;
(b) in clause (b),—
(i) for sub-clause
(i),
the following sub-clause shall be substituted, namely:—
“(i) who is a member of the company or other body corporate
dealt with in the report by virtue of section 239; or”;
(ii) sub-clause (ii)
shall be omitted;
(iii) in sub-clause (iii), the words “, managing agent,
secretaries and treasurers or associate” shall be omitted.
120. In section 242 of the principal Act, in sub-section (1),—
(a) the words
“managing agent, secretaries and treasurers, or associate of a managing agent
or secretaries and treasurers,” shall be omitted;
(b) for the words
“agents of the company, body corporate, managing agent, secretaries and
treasurers, or associate”, the words “agents of the company or body corporate,”
shall be substituted.
121. In section 243 of the principal Act,—
(a) the words “or
any such managing agent, secretaries and treasurers or associate being a body
corporate,” shall be omitted;
(b) for the words
“the company, body corporate, managing agent, secretaries and treasurers or
associate,” at both the places where they occur, the words “the company or body
corporate,” shall be substituted.
122. In section 245 of the principal Act, the words “managing agent, secretaries and treasurers, associate,” wherever they occur, shall be omitted.
123. In section 247 of the principal Act,—
(a) sub-section (4) shall be omitted;
(b) in sub-section (5),—
(i) the words “or of any managing
agent, secretaries and treasurers, or associate” shall be omitted;
(ii) the words
“managing agent, secretaries and treasurers, or associate” at both the places
where they occur, shall be omitted;
(iii) the words “or of the managing agent, secretaries, treasurers
or associate” shall be omitted.
Omission
of sections 248 and 249.
124. Sections 248 and 249 of the principal Act shall be omitted.
125. In section 250 of the principal Act,—
(a) in sub-section (1), the figures and word “248 or 249” shall
be omitted;
(b) in sub-sections
(9) and (10), for the words “five thousand rupees”, the words “fifty thousand
rupees” shall be substituted.
126. In section 250A of the principal Act, for the figures and word “247, 248 or 249,” the word and figures “or 247” shall be substituted.
127. In section 251 of the principal Act,—
(a) in the opening
portion, for the figures and word “234 to 250” the figures and words “234 to
247 and 250” shall be substituted;
(b) in clause (b), the words “managing agent,
secretaries and treasurers” at both the places where they occur, shall be
omitted.
128. In section 252 of the principal Act, in sub-section (1), the following shall be inserted, namely:—
‘Provided that a public company having,—
(a) a paid-up capital of five crore
rupees or more;
(b) one
thousand or more small shareholders,
may have a director elected
by such small shareholders in the manner as may be prescribed.
Explanation.—For the purposes of
this sub-section “small shareholders” means a shareholder holding shares of
nominal value of twenty thousand rupees or less in a public company to which
this section applies.’.
129. Section 261 of the principal Act shall be omitted.
130. In section 269 of the principal Act,—
(a) in sub-section
(6), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(b) in sub-section (10),—
(i) in clause (a), for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted;
(ii) in clauses (b) and (c), for the words “ten thousand rupees”, the words “one lakh rupees” shall be substituted;
(c) in sub-section (11), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted.
131. In section 272 of the principal Act, for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
132. In section 274 of the principal Act, in sub-section (1), after clause (f), the following clause shall be inserted, namely:—
“(g)
such person is already a director of a public company
which,—
(A) has not filed
the annual accounts and annual returns for any continuous three financial years
commencing on and after the first day of April, 1999; or
(B) has failed to
repay its deposit or interest thereon on due date or redeem its debentures on
due date or pay dividend and such failure continues for one year or more :
Provided that such person shall not be eligible to be appointed as a
director of any other public company for a period of five years from the date
on which such public company, in which he is a director, failed to file annual
accounts and annual returns under sub-clause (a) or has failed to repay its deposit or interest or redeem its
debentures on due date or pay dividend referred to in clause (b).”.
133. In section 275 of the principal Act, for the words “twenty companies”, the words “fifteen companies” shall be substituted.
134. In section 276 of the principal Act,—
(a) for the word “twenty” wherever it occurs, the word “fifteen”
shall be substituted;
(b) for the words
“this Act” at both the places where they occur, the words, brackets and figures
“the Companies (Amendment) Act, 2000” shall be substituted.
135. In section 277 of the principal Act,—
(a) in sub-section (1),—
(i) for the words
“twenty companies”, the words “fifteen companies” shall be substituted;
(ii) for the words
“this Act”, the words, brackets and figures “the Companies (Amendment) Act,
2000” shall be substituted;
(b) in sub-section (2),—
(i) for the words
“nineteen companies”, the words “fourteen companies” shall be substituted;
(ii) for the words
“this Act”, the words, brackets and figures “the Companies (Amendment) Act,
2000” shall be substituted;
(iii) for the word
“twenty” at both the places where it occurs, the word “fifteen” shall be
substituted.
136. In section 279 of the principal Act,—
(a) for the words “twenty companies”, the words “fifteen
companies” shall be substituted;
(b) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted.
137. In section 283 of the principal Act,—
(a) in sub-section (1), in clause (l),—
(i) the words “or
as a nominee of the managing agent of the company”, shall be omitted;
(ii) the words “or, as the case may be, the managing agency comes
to an end” shall be omitted;
(b) in sub-section
(2A), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted.
138. In section 286 of the principal Act, in sub-section (2), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
139. In section 292 of the principal Act, in sub-section (1), the first proviso, the words “the managing agent, secretaries and treasurers”, shall be omitted.
Insertion
of new section 292A.
140. After section 292 of the principal Act, the following section shall be inserted, namely :—
‘292A. Audit
Committee.—(1) Every public company having paid-up capital of not less
than five crores of rupees shall constitute a
committee of the Board knows as “Audit Committee” which shall consist of not
less than three directors and such number of other directors as the Board may
determine of which two-thirds of the total number of members shall be
directors, other than managing or whole-time directors.
(2) Every
Audit Committee constituted under sub-section (1) shall act in accordance with
terms of reference to be specified in writing by the Board.
(3) The
members of the Audit Committee shall elect a chairman from amongst themselves.
(4) The
annual report of the company shall disclose the composition of the Audit
Committee.
(5) The
auditors, the internal auditor, if any, and the director-in-charge of finance
shall attend and participate at meetings of the Audit Committee but shall not
have the right to vote.
(6) The
Audit Committee should have discussions with the auditors periodi-cally
about internal control systems, the scope of audit including the observations
of the auditors and review the half-yearly and annual financial statements
before submission to the Board and also ensure compliance of internal control
systems.
(7) The
Audit Committee shall have authority to investigate into any matter in relation
to the items specified in this section or referred to it by the Board and for
this purpose, shall have full access to information contained in the records of
the company and external professional advice, if necessary.
(8) The
recommendations of the Audit Committee on any matter relating to financial
management, including the audit report, shall be binding on the Board.
(9) If
the Board does not accept the recommendations of the Audit Committee, it shall
record the reasons therefor and communicate such
reasons to the shareholders.
(10) The
chairman of the Audit Committee shall attend the annual general meetings of the
company to provide any clarification on matters relating to audit.
(11) If
a default is made in complying with the provisions of this section, the
company, and every officer who is in default, shall be punishable with
imprisonment for a term which may extend to one year, or with fine which may
extend to fifty thousand rupees, or with both.’.
141. In section 294 of the principal Act,—
(a) sub-section (4) shall be omitted;
(b) in sub-section (8),—
(a) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted;
(b) for the words “fifty rupees”, the words “five hundred
rupees” shall be substituted.
142. In section 295 of the principal Act,—
(a) in sub-section
(1), in clause (e), the words
“managing agent, secretaries and treasurers,” shall be omitted;
(b) in sub-section (2),—
(i) for clause (b), the following clause shall be
substituted, namely:—
“(b) any loan made by a holding company to its subsidiary
company;”;
(ii) for clause (c),
the following clause shall be substituted, namely:—
“(c) any guarantee given or security provided by a holding
company in respect of any loan made to its subsidiary company.”;
(c) in sub-section
(4), for the words “five thousand rupees”, the words “fifty thousand rupees”
shall be substituted.
143. Section 298 of the principal Act shall be omitted.
144. In section 299 of the principal Act, in sub-section (4), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
145. In section 300 of the principal Act, in sub-section (4), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
146. In section 301 of the principal Act, in sub-section (4), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
147. In section 302 of the principal Act,—
(a) sub-section (3) shall be omitted;
(b) in sub-section
(5), for the words “one thousand rupees”, the words “ten thousand rupees” shall
be substituted;
(c) in sub-section (6), the words “managing agent or secretaries
and treasurers,” shall be omitted.
148. In section 303 of the principal Act,—
(a) the words “managing agent, secretaries and treasurers,”
wherever they occur, shall be omitted;
(b) in sub-section (1), in clause (a), the words “managing agent” shall be omitted;
(c) in sub-section (3), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted.
149. In section 304 of the principal Act, in sub-section (2), in clause (a), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
150. In section 305 of the principal Act, in sub-section (1),—
(a) the words
“managing agent, secretaries and treasurers,” at both the places where they
occur shall be omitted;
(b) for the words “five hundred rupees”, the words, “five
thousand rupees” shall be substituted.
151. In section 307 of the principal Act,—
(a) in sub-section
(7), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted;
(b) in sub-section (8),—
(i) for the words
“five thousand rupees”, the words “fifty thousand rupees” shall be substituted;
(ii) for the words “twenty rupees”, the words “two hundred
rupees” shall be substituted;
(c) sub-section (11) shall be omitted.
152. In section 308 of the principal Act, in sub-section (3), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
153. In section 309 of the principal Act, in sub-section (4), in the first proviso, in clause (i), the words “a managing agent or secretaries and treasurers,” shall be omitted.
154. In section 314 of the principal Act, in sub-section (2), in clause (a), the words “, managing agent, secretaries and treasurers” shall be omitted.
155. In section 318 of the principal Act, in sub-section (3), in clause (a), the words “managing agent;” shall be omitted.
156. In section 320 of the principal Act, in sub-section (3), for the words “two hundred and fifty rupees”, the words “two thousand five hundred rupees” shall be substituted.
157. In section 322 of the principal Act,—
(a) in sub-section (1), the words “or of the managing agent,
secretaries and treasurers” shall be omitted;
(b) in sub-section (2),—
(i) the words “, managing agent,
secretaries and treasurers” at both the places where they occur, shall be
omitted;
(ii) the words “, the managing agent, secretaries and treasurers”
shall be omitted;
(iii) the words “, its managing agent, secretaries and treasurers,”
shall be omitted;
(c) in sub-section (3),—
(i) the words “managing agent,
secretaries and treasurers” at both the places where they occur, shall be
omitted;
(ii) for the words “one thousand rupees” , the words “ten
thousand rupees” shall be substituted.
158. In section 323 of the principal Act, in sub-section (1), the words “or of its managing agent, secretaries and treasurers” shall be omitted.
Omission
of sections 324, 324A, 325, 325A, 326 to 348.
159. Sections 324, 324A, 325, 325A, 326 to 348 of the principal Act shall be omitted.
160. In section 349 of the principal Act,—
(a) in sub-section (1), the words and figures “for the purpose
of section 348,” shall be omitted;
(b) in sub-section (5), clause (a) shall be omitted.
161. In section 350 of the principal Act, for the words “the amount calculated with reference to the written down value of the assets”, the words “the amount of depreciation on assets” shall be substituted.
Omission
of sections 351 to 354.
162. Sections 351 to 354 of the principal Act shall be omitted.
163. In section 355 of the principal Act, for the figures and word “348 to 354” the figures and word “349 and 350” shall be substituted.
Omission
of sections 356 to 369.
164. Sections 356 to 369 of the principal Act shall be omitted.
165. In section 370A of the principal Act,—
(a) the words and figures “section 369 or” shall be omitted;
(b) in the proviso, clause (a) shall be omitted.
166. In section 371 of the principal Act, in sub-section (1),—
(a) the words and figures “section 369 or” shall be omitted;
(b) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted.
167. In section 374 of the principal Act, for the words “five thousand rupees” , the words “fifty thousand rupees” shall be substituted.
168. Section 375 of the principal Act shall be omitted.
Substitution
of new section for section 376.
169. For section 376 of the principal Act, the following section shall be substituted, namely :—
“376. Conditions
prohibiting reconstruction or amalgamation of company.—Where any
provision in the memorandum or articles of a company, or in any resolution
passed in general meeting by, or by the Board of Directors of the company, or
in an agreement between the company and any other person, whether made before
or after the commencement of this Act, prohibits the reconstruction of the
company or its amalgamation with any body corporate or bodies corporate, either
absolutely or except on the condition that the managing director or manager of
the company is appointed or reappointed as managing director or manager of the
reconstructed company or of the body resulting from amalgamation, as the case
may be, shall become void with effect from the commencement of this Act, or be
void, as the case may be.”.
Omission
of sections 377 to 383.
170. Sections 377 to 383 of the principal Act shall be omitted.
171. In section 383A of the principal Act,—
(a) in sub-section (1), the following proviso shall be inserted,
namely:—
“Provided that every company not required
to employ a whole-time secretary under sub-section (1) and having a paid-up
share capital of ten lakh rupees or more shall file
with the Registrar a certificate from a secretary in whole-time practice in
such form and within such time and subject to such conditions as may be
prescribed, as to whether the company has complied with all provisions of this
Act and a copy of such certificate shall be attached with Board’s report
referred to in section 217”.
(b) in sub-section
(1A), for the words “fifty rupees”, the words “five hundred rupees” shall be
substituted.
172. In section 387 of the principal Act, for the figures and word “350 and 351”, the word and figures “and 350” shall be substituted.
173. In section 388E of the principal Act,—
(a) in sub-section (1), the proviso shall be omitted;
(b) sub-section (2) shall be omitted.
174. In section 391 of the principal Act, in sub-section (5), for the words “ten rupees”, the words “one hundred rupees” shall be substituted.
175. In section 393 of the principal Act,—
(a) in sub-section
(1), in clause (a), the words
“managing agent, secretaries and treasurers” shall be omitted;
(b) in sub-section (4),—
(i) for the words
“five thousand rupees” , the words “fifty thousand rupees” shall be
substituted;
(ii) the words “managing agent, secretaries and treasurers,” shall
be omitted;
(c) in sub-section (5),—
(i) the words
“managing agent, secretaries and treasurers”, shall be omitted;
(ii) for the words “five hundred rupees”, the words “five
thousand rupees” shall be substituted.
176. In section 394 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
177. In section 395 of the principal Act, in sub-section (4A), in clause (b), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
178. In section 398 of the principal Act, in sub-section (1), in clause (b),—
(i) the words “or
of its managing agent or secretaries and treasurers” shall be omitted;
(ii) the words “or
in the constitution or control of the firm or body corporate acting as its
managing agent or secretaries and treasurers,” shall be omitted.
179. In section 402 of the principal Act, in clause (d), sub-clauses (iii) and (iv) shall be omitted.
180. In section 404 of the principal Act, in sub-section (4), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
181. In section 405 of the principal Act, the words “the managing agent, secretaries and treasurers” shall be omitted.
182. In section 407 of the principal Act,—
(a) in sub-section (1), in clause (b),—
(i) the words “managing agent,
secretaries and treasurers,” at both the places where they occur, shall be
omitted;
(ii) the words “managing agent or secretaries and treasurers”
shall be omitted;
(b) in sub-section (2),—
(A) in clause (a),
the words “managing agent, secretaries and treasurers” shall be omitted;
(B) clause (b)
shall be omitted;
(C) in clause (c), for the words “five thousand
rupees”, the words “fifty thousand rupees” shall be substituted.
183. In section 409 of the principal Act, in sub-section (1), the words “the managing agent, the secretaries and treasurers” shall be omitted.
184. In section 416 of the principal Act,—
(a) in sub-section (1), the words “managing agent, secretaries
and treasurers” shall be omitted;
(b) in sub-section
(3), in clause (b), for the
words “two hundred rupees”, the words “two thousand rupees” shall be
substituted.
185. In section 420 of the principal Act, for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
186. In section 423 of the principal Act, for the words “two hundred rupees” , the words “two thousand rupees” shall be substituted.
187. In section 427 of the principal Act, the words “managing agent, secretaries and treasurers” wherever they occur, shall be omitted.
188. In section 445 of the principal Act, in sub-section (1), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
189. In section 454 of the principal Act, in sub-section (5), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
190. In section 469 of the principal Act, in sub-section (2), in clause (b), the words “managing agent, secretaries and treasurers” shall be omitted.
191. In section 481 of the principal Act, in sub-section (3), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
192. In section 485 of the principal Act, in sub-section (2), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
193. In section 488 of the principal Act, in sub-section (3), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
194. In section 491 of the principal Act, the words “managing agent, secretaries and treasurers”, shall be omitted.
195. In section 493 of the principal Act, in sub-section (3), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
196. In section 495 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
197. In section 496 of the principal Act, in sub-section (2), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
198. In section 497 of the principal Act,—
(a) in sub-section (3), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted;
(b) in sub-section
(7), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted.
199. In section 500 of the principal Act, in sub-section (6), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
200. In section 501 of the principal Act, in sub-section (2), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
201. In section 508 of the principal Act, in sub-section (2), for the words “one hundred rupees”, the words “one thousand rupees” shall be substituted.
202. In section 509 of the principal Act,—
(a) in sub-section (3), for the words “fifty rupees”, the words
“five hundred rupees” shall be substituted;
(b) in sub-section
(7), for the words “five hundred rupees”, the words “five thousand rupees”
shall be substituted.
203. In section 513 of the principal Act, in sub-section (3),—
(a) the words “the managing agent or secretaries and
treasurers”, shall be omitted;
(b) for the words “one thousand rupees”, the words “ten thousand
rupees” shall be substituted.
204. In section 514 of the principal Act, for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
205. In section 516 of the principal Act, in sub-section (2), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
206. In section 542 of the principal Act, in sub-section (3), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
207. In section 543 of the principal Act, in sub-section (1), for the words “managing agent, secretaries and treasurers”, at both the places where they occur, shall be omitted.
208. In section 547 of the principal Act, in sub-section (2), for the words “five hundred rupees”, the words “five thousand rupees” shall be substituted.
209. In section 550 of the principal Act, in sub-section (4), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
210. In section 551 of the principal Act, in sub-section (5),—
(a) for the words
“five hundred rupees”, the words “five thousand rupees” shall be substituted;
(b) in the proviso,
for the words “one thousand rupees”, the words “ten thousand rupees” shall be
substituted.
211. In section 559 of the principal Act, in sub-section (2), for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
212. In section 560 of the principal Act, the words “managing agent, secretaries and treasurers”, wherever they occur, shall be omitted.
213. In section 568 of the principal Act, in clause (a), the words “the managing agent, if any, the secretaries and treasurers, if any”, shall be omitted.
214. In section 583 of the principal Act, in sub-section (5), in clauses (a) and (b) the words “managing agent, secretaries and treasurers”, shall be omitted.
215. In section 598 of the principal Act,—
(a) for the words “one thousand rupees”, the words “ten thousand
rupees” shall be substituted;
(b) for the words “one hundred rupees”, the words “one thousand
rupees” shall be substituted.
Insertion
of new section 605A.
216. After section 605 of the principal Act, the following section shall be inserted, namely :—
“605A. Offer of
Indian Depository Receipts.—Notwithstanding
anything contained in any other law for the time being in force, the Central
Government may make rules applicable for—
(a) the offer of Indian Depository Receipts;
(b) the requirement
of disclosures in prospectus or letter of offer issued in connection with
Indian Depository Receipts;
(c) the manner in
which the Indian Depository Receipts shall be dealt in a depository mode and by
custodian and underwriters;
(d) the manner of sale, transfer or transmission of Indian
Depository Receipts,
by a company incorporated, or to be
incorporated outside
217. In section 606 of the principal Act,—
(a) after the words
“application for shares or debentures”, the words “application for shares,
debentures or Indian Depository Receipts” shall be substituted;
(b) for word and figures “and 605”, the word and figures “605
and 605A” shall be substituted;
(c) for the words “five thousand rupees”, the words “fifty
thousand rupees” shall be substituted.
218. In section 615 of the principal Act, in sub-section (6), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
219. Section 618 of the principal Act shall be omitted.
220. In section 619 of the principal Act, in sub-section (2), the words “the Central Government on the advice of” shall be omitted.
221. In section 621 of the principal Act, in sub-section (1), after the proviso the following shall be inserted, namely :—
“Provided further that the court
may take cognizance of offence relating to issue and transfer of securities and
non-payment of dividend on a complaint in writing by a person authorised by the Securities Exchange Board of India.”.
222. In section 621A of the principal Act, in sub-sections (1) and (6), for the words “five thousand rupees”, the words “fifty thousand rupees” shall be substituted.
223. In section 627 of the principal Act, in sub-section (1), in clause (ii), the words “managing agent, secretaries and treasurers or” shall be omitted.
224. In section 629A of the principal Act,—
(a) for the words
“five hundred rupees”, the words “five thousand rupees” shall be substituted;
(b) for the words “fifty rupees”, the words “five hundred
rupees” shall be substituted.
225. In section 630 of the principal Act, in sub-section (1), for the words “one thousand rupees”, the words “ten thousand rupees” shall be substituted.
226. In section 631 of the principal Act, for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.
227. In section 635AA of the principal Act, in clause (a), for the figures and word “247, 248 or 249” the word and figures “or 247” shall be substituted.
228. In section 635B of the principal Act, in sub-section (1), in clause (a), the words and figures “section 248 or section 249” shall be omitted.
229. In section 637 of the principal Act, in sub-section (2), the figures and brackets “248, 249, 324, 326, 328, 329, 332, 343, 345, 346, 347(2), 352, 369” shall be omitted.
230. In section 640B of the principal Act,—
(a) in sub-section
(1), for the figures and word “311, 326, 328, 329, 332, 343, 345, 346 or 352”,
the word and figures “or 311” shall be substituted;
(b) in sub-section (2), clause (d) shall be omitted.
231. In section 642 of the principal Act, in sub-section (2),—
(a) for the words “five hundred rupees”, the words “five
thousand rupees” shall be substituted;
(b) for the words “fifty rupees”, the words “five hundred rupees” shall be substituted.