The Co m p a n i e s Act, 19 5 6 Con t e n t s

PART I: PRELIMI N A RY ................................................................................................................................17

1.Short title, commencement and extent............................................................................................................17 2.Definitions.......................................................................................................................................................17 2A. Interpretation of certain words and expressions........................................................................................20 3.Definitions of "company", "existin company", "pri!ate company" and "p"#lic company".........................21 $.%eanin of "holdin company" and "s"#sidiary"..........................................................................................22 $A. &"#lic financial instit"tions........................................................................................................................23 '.%eanin of "officer who is in defa"lt"............................................................................................................23 (.%eanin of "relati!e"......................................................................................................................................2$ 7.Interpretation of "person in accordance with whose directions or Instr"ctions directors are acc"stomed to act" 2$ ).&ower of *entral +o!ernment to declare an esta#lishment not to #e a #ranch office...................................2$ ,.Act to o!erride memorand"m, articles, etc.....................................................................................................2$ 10.-"risdiction of *o"rts....................................................................................................................................2' 10A. *onstit"tion of .ri#"nal/ ........................................................................................................................2' 100. &roced"re of .ri#"nal...............................................................................................................................2' 10*. &owers of .ri#"nal....................................................................................................................................2' 10D. Appeals a ainst decisions, etc., of the .ri#"nal......................................................................................2'

PART IA:

!AR " !# C!MPA NY LA$ A"MI NI%T R A TI ! N ........................................................&5

101. *onstit"tion of 0oard of *ompany 2aw Administration ........................................................................2' 103. Appeals a ainst the orders of the *ompany 2aw 0oard .........................................................................2( 103A. Dissol"tion of *ompany 2aw 0oard......................................................................................................2(

PART I : NATI! N A L C!MPA NY LA$ TRI ' N A L .........................................................................&7

1030. *onstit"tion of 4ational *ompany 2aw .ri#"nal.................................................................................27 103*. *omposition of .ri#"nal........................................................................................................................27 103D. 5"alifications for appointment of &resident and %em#ers...................................................................27 1031. .erm of office of &resident and %em#ers..............................................................................................2) 1033. 3inancial and administrati!e powers of %em#er Administration.........................................................2) 103+. Salary, allowances and other terms and conditions of ser!ice of &resident and other %em#ers........2, 1036. 7acancy in .ri#"nal...............................................................................................................................2, 103I. 8esi nation of &resident and %em#er....................................................................................................2, 103-. 8emo!al and s"spension of &resident or %em#er..................................................................................2, 1039. :fficers and employees of .ri#"nal.......................................................................................................30 1032. 0enches of .ri#"nal................................................................................................................................30 103%. :rder of .ri#"nal...................................................................................................................................31 1034. &ower to re!iew......................................................................................................................................31 103:. Dele ation of powers..............................................................................................................................31 103&. &ower to see; assistance of *hief %etropolitan %a istrate and District %a istrate............................31

PART IC: APPELLATE TRI ' N A L ..........................................................................................................(1

1035. Appeal from order of .ri#"nal...............................................................................................................31 1038. *onstit"tion of Appellate .ri#"nal........................................................................................................32 103S. 7acancy in Appellate .ri#"nal, etc........................................................................................................32 103.. .erm of office of *hairperson and %em#ers.........................................................................................32 8esi nation of *hairperson and %em#ers.............................................................................................33 AAct 4o.1103<. of 1,'( dated 1)th -an"ary, 1,'(B 1037. 8emo!al and s"spension of *hairperson and %em#ers of Appellate .ri#"nal....................................33 103=. allowances and other terms and conditions of ser!ice of *hairperson and %em#ers............33 (Amended uptoSalary, Companies Amendment Act, 2002) 103>. Selection *ommittee..............................................................................................................................33 103?. *hairperson, etc., to #e p"#lic ser!ants.................................................................................................3$ 103@. &rotection of action ta;en in ood faith.................................................................................................3$ 103@A. &roced"re and powers of .ri#"nal and Appellate .ri#"nal.................................................................3$

e# q

#o) *se +, -i) m pe) s o n n e . on. ,

10+. &ower to p"nish for contempt..................................................................................................................3' 10+A. Staff of Appellate .ri#"nal....................................................................................................................3' 10+0. *i!il co"rt not to ha!e C"risdiction........................................................................................................3' 10+*. 7acancy in .ri#"nal or Appellate .ri#"nal not to in!alidate acts or proceedin s..............................3' 10+D. 8i ht to le al representation.................................................................................................................3( 10+1. 2imitation...............................................................................................................................................3( 10+3. Appeal to S"preme *o"rt.......................................................................................................................3(

PART II: INC!RP!R A T I ! N !# C!MPA NY AN" MATTER% INCI"E N T A L T/ERET! ....(6

11.&rohi#ition of associations and partnerships exceedin certain n"m#er.....................................................3( 12.%ode of formin incorporated company.......................................................................................................37 13.8eD"irements with respect to memorand"ms ..............................................................................................37 1$.3orm of memorand"m...................................................................................................................................3) 1'.&rintin and si nat"re of memorand"m.......................................................................................................3) 1'A. Special pro!ision as to alteration of memorand"m conseD"ent on alteration of name of State of %adras................................................................................................................................................................3) 1'0. Special pro!ision as to alteration of memorand"m conseD"ent on alteration of name of State of %ysore................................................................................................................................................................3) 1(.Alteration of memorand"m...........................................................................................................................3) 17.Special resol"tion and confirmation #y *entral +o!ernment reD"ired for alteration of memorand"m......3, 17A. *han e of re istered office within a State...............................................................................................3, 1).Alteration to #e re istered within three months...........................................................................................$0 1,.1ffect of fail"re to re ister.............................................................................................................................$0 20.*ompanies not to #e re istered with "ndesira#le names..............................................................................$0 21.*han e of name #y company........................................................................................................................$1 22.8ectification of name of company.................................................................................................................$1 23.8e istration of chan e of name and effect thereof.......................................................................................$1 2$.*han e of name of existin pri!ate limited companies/..............................................................................$2 2'.&ower to dispense with "2imited" in name of charita#le or other company................................................$2 2(.Articles prescri#in re "lations....................................................................................................................$3 27.8e "lations reD"ired in case of "nlimited company, company limited #y "arantee or pri!ate company limited #y shares.................................................................................................................................................$3 2).Adoption and application of .a#le A in the case of companies limited #y shares......................................$3 2,.3orm of articles in the case of other companies............................................................................................$$ 30.3orm and si nat"re of articles.......................................................................................................................$$ 31.Alteration of articles #y special resol"tion....................................................................................................$$ 32.8e istration of "nlimited company as limited, etc.......................................................................................$$ 33.8e istration of memorand"m and articles....................................................................................................$' 3$.1ffect of re istration......................................................................................................................................$' 3'.*oncl"si!eness of certificate of incorporation..............................................................................................$' 3(.1ffect of memorand"m and articles..............................................................................................................$( 37.&ro!ision as to companies limited #y "arantee...........................................................................................$( 3).1ffect of alteration in memorand"m or articles............................................................................................$( 3,.*opies of memorand"m and articles, etc., to #e i!en to mem#ers.............................................................$( $0.Alteration of memorand"m or articles, etc., to #e noted in e!ery copy........................................................$7 $1.Definition of "mem#er".................................................................................................................................$7 $2.%em#ership of holdin company..................................................................................................................$7 $3.*onseD"ences of defa"lt in complyin with conditions constit"tin a company a pri!ate company..........$) $3A. &ri!ate company to #ecome p"#lic company in certain cases.................................................................$) $$.&rospect"s or statement in lie" of prospect"s to #e filed #y pri!ate company on ceasin to #e pri!ate company..............................................................................................................................................................'0 $'.%em#ers se!erally lia#le for de#ts where #"siness carried on with fewer than se!en, or in the case of a pri!ate company, two mem#ers..........................................................................................................................'1 $(.3orm of contracts...........................................................................................................................................'1 $7.0ills of exchan e and promissory notes........................................................................................................'1 $).1xec"tion of deeds.........................................................................................................................................'1 $,.In!estments of company to #e held in its own name....................................................................................'2 '0.&ower for company to ha!e official seal for "se o"tside India.....................................................................'3 '1.Ser!ice of doc"ments on company ...............................................................................................................'3 '2.Ser!ice of doc"ments on 8e istrar................................................................................................................'3 '3.Ser!ice of doc"ments on mem#ers #y company............................................................................................'3 '$.A"thentication of doc"ments and proceedin s.............................................................................................'$

PART III: PR!%PECT '% AN" ALL!T M E N T , AN" !T/ER MATTER% RELATIN 0 T! I%%'E !# %/ARE% !R "E EN T ' R E% .................................................................................................51
''.Datin of prospect"s......................................................................................................................................'$ ''A. &owers of Sec"rities and 1xchan e 0oard of India.................................................................................'$ '(.%atters to #e stated and reports to #e set o"t in prospect"s.........................................................................'' '7.1xpert to #e "nconnected with formation, or mana ement of company......................................................'( ').1xpertEs consent to iss"e of prospect"s containin statement #y him..........................................................'( ')A. Deposits not to #e in!ited witho"t iss"in an ad!ertisement..................................................................'( ')AA. Small depositors....................................................................................................................................') ')AAA. Defa"lt in acceptance or ref"nd of deposits to #e co niFa#le.............................................................', ')0. &ro!isions relatin to prospect"s to apply to ad!ertisement....................................................................', ',.&enalty and interpretation ............................................................................................................................', (0.8e istration of prospect"s.............................................................................................................................', (0A. Shelf prospect"s........................................................................................................................................(0 (00. Information memorand"m........................................................................................................................(0 (1..erms of contract mentioned in prospect"s or statement in lie" of prospect"s, not to #e !aried................(1 (2.*i!il lia#ility for misstatements in prospect"s..............................................................................................(1 (3.*riminal lia#ility for misstatements in prospect"s ......................................................................................(3 ($.Doc"ment containin offer of shares or de#ent"res for sale to #e deemed prospect"s................................(3 ('.Interpretation of pro!isions relatin to prospect"ses....................................................................................(3 ((.4ewspaper ad!ertisements of prospect"s......................................................................................................($ (7.*onstr"ction of references to offerin shares or de#ent"res to the p"#lic, etc.............................................($ ().&enalty for fra"d"lently ind"cin persons to in!est money..........................................................................($ ()A. &ersonation for acD"isition, etc., of shares..............................................................................................(' ()0. Initial offer of sec"rities to #e in dematerialised form in certain cases...................................................(' (,.&rohi#ition of allotment "nless minim"m s"#scription recei!ed.................................................................(' 70.&rohi#ition of allotment in certain cases "nless statement in lie" of prospect"s deli!ered to 8e istrar.....(( 71.1ffect of irre "lar allotment..........................................................................................................................(7 72.Applications for, and allotment of, shares and de#ent"res...........................................................................(7 73.Allotment of shares and de#ent"res to #e dealt in on stoc; exchan e.........................................................(7 7$.%anner of rec;onin fifth, ei hth and tenth days in sections 72 and 73.....................................................(, 7'.8et"rn as to allotments..................................................................................................................................(, 7(.&ower to pay certain commissions and prohi#ition of payment of all other commissions, disco"nts, etc.. 70 77.8estrictions on p"rchase #y company, or loans #y company for p"rchase, of its own or its holdin companyEs shares ...............................................................................................................................................71 77A. &ower of company to p"rchase its own sec"rities....................................................................................71 77AA. .ransfer of certain s"ms to capital redemption reser!e acco"nt..........................................................73 770. &rohi#ition for #"y/#ac; in certain circ"mstances...................................................................................73 7).Application of premi"ms recei!ed on iss"e of 13'Asec"ritiesB.....................................................................7$ 7,.&ower to iss"e shares at a disco"nt ..............................................................................................................7$ 7,A. Iss"e of sweat eD"ity shares......................................................................................................................7' )0.&ower to iss"e redeema#le preference shares...............................................................................................7' )0A. 8edemption of irredeema#le preference shares, etc.................................................................................7( )1.3"rther iss"e of capital..................................................................................................................................77

PART I2: %/ARE CAPITAL AN" "E ENT ' RE % .............................................................................73

)2.4at"re of shares Aor de#ent"resB...................................................................................................................7) )3.4"m#erin of shares.....................................................................................................................................7) )$.*ertificate of shares.......................................................................................................................................7) )'.)'. .wo ;inds of share capital......................................................................................................................7, )(.4ew iss"es of share capital to #e only of two ;inds......................................................................................7, )7.7otin ri hts..................................................................................................................................................7, )).&rohi#ition of iss"e of shares with disproportionate ri hts..........................................................................)0 ),..ermination of disproportionately excessi!e !otin ri hts in existin companies......................................)0 ,0.Sa!in s...........................................................................................................................................................)1 ,1.*alls on shares of some class to #e made on "niform #asis.........................................................................)1 ,2.&ower of company to accept "npaid share capital, altho" h not called/"p..................................................)1 ,3.&ayment of di!idend in proportion to amo"nt paid/"p.................................................................................)1 ,$.&ower of limited company to alter its share capital......................................................................................)1 ,$A. Share capital to stand increased where an order is made "nder section )1G$H.......................................)2 ,'.4otice to 8e istrar of consolidation of share capital, con!ersion of shares into stoc;, etc.........................)2 ,(.1ffect of con!ersion of shares into stoc;.......................................................................................................)3

,7.4otice of increase of share capital or of mem#ers........................................................................................)3 ,).&ower of "nlimited company to pro!ide for reser!e share capital on re/re istration..................................)3 ,,.8eser!e lia#ility of limited company.............................................................................................................)3 100.Special resol"tion for red"ction of share capital.........................................................................................)3 101.Application to (aA.ri#"nalB for confirmin order, o#Cections #y creditors, and settlement of list of o#Cectin creditors..............................................................................................................................................)$ 102.:rder confirmin red"ction and powers of A.ri#"nalB on ma;in s"ch order..........................................)$ 103.8e istration of order and min"te of red"ction............................................................................................)' 10$.2ia#ility of mem#ers in respect of red"ced shares......................................................................................)' 10'.&enalty for concealin name of creditor, etc...............................................................................................)( 10(.Alteration of ri hts of holders of special classes of shares.........................................................................)( 107.8i hts of dissentient shareholders...............................................................................................................)( 10)..ransfer not to #e re istered except on prod"ction of instr"ment of transfer............................................)( 10)A. 8estriction on acD"isition of certain shares...........................................................................................)) 10)0. 8estriction on transfer of shares.............................................................................................................), 10)*. 8estriction on the transfer of shares of forei n companies....................................................................), 10)D. &ower of *entral +o!ernment to direct companies not to i!e effect to the transfer...........................,0 10)1. .ime within which ref"sal to he comm"nicated....................................................................................,0 10)3. 4othin in sections 10)A to 10)D to apply to +o!ernment companies, etc.........................................,0 10)+. Applica#ility of the pro!isions of sections 10)A to 10)3......................................................................,0 10)6. *onstr"ction of certain expressions "sed in sections 10)A to 10)+.....................................................,1 10)/I. &enalty for acD"isition or transfer of share in contra!ention of sections 10)A to 10)D......................,1 10,..ransfer #y le al representati!e..................................................................................................................,1 10,A. 4omination of shares.............................................................................................................................,2 10,0. .ransmission of shares...........................................................................................................................,2 110.Application for transfer...............................................................................................................................,2 111.&ower to ref"se re istration and appeal a ainst ref"sal.............................................................................,3 111A. 8ectification of re ister on transfer........................................................................................................,$ 112.*ertification of transfers..............................................................................................................................,$ 113.2imitation of time for iss"e of certificate....................................................................................................,' 11$.Iss"e and effect of share warrants to #earer................................................................................................,( 11'.Share warrants and entries in re ister of mem#ers....................................................................................,( 11(.&enalty for personation of shareholder ......................................................................................................,( 117.De#ent"res with !otin ri hts not to #e iss"ed hereafter...........................................................................,( 117A. De#ent"re tr"st deed...............................................................................................................................,7 1170. Appointment of de#ent"re tr"stees and d"ties of de#ent"re tr"stees.....................................................,7 117*. 2ia#ility of company to create sec"rity and de#ent"re redemption reser!e...........................................,7 11).8i ht to o#tain copies of and inspect tr"st deed.........................................................................................,) 11,.2ia#ility of tr"stees for de#ent"re holders...................................................................................................,) 120.&erpet"al de#ent"res....................................................................................................................................,, 121.&ower to re/iss"e redeemed de#ent"res in certain cases.............................................................................,, 122.Specific performance of contract to s"#scri#e for de#ent"res..................................................................100 123.&ayments of certain de#ts o"t of assets s"#Cect to floatin char e in priority to claims "nder the char e 100

PART 2:

RE0I%TRATI ! N !# C/AR 0E% ........................................................................................14 4

12$."*har e" to incl"de mort a e in this &art................................................................................................100 12'.*ertain char es to #e !oid a ainst liD"idator or creditors "nless re istered............................................100 12(.Date of notice of char e.............................................................................................................................101 127.8e istration of char es on properties acD"ired s"#Cect to char e............................................................101 12).&artic"lars in case of series of de#ent"res entitlin holders pari pass" ..................................................102 12,.&artic"lars in case of commission, etc., on de#ent"res.............................................................................102 130.8e ister of char es to #e ;ept #y 8e istrar...............................................................................................102 131.Index to re ister of char es.......................................................................................................................103 132.*ertificate of re istration..........................................................................................................................103 133.1ndorsement of certificate of re istration on de#ent"re or certificate of de#ent"re stoc;.......................103 13$.D"ty of company as re ards re istration and ri ht of interested party....................................................103 13'.&ro!isions of &art to apply to modification of char es.............................................................................103 13(.*opy of instr"ment creatin char e to #e ;ept #y company at re istered office......................................10$ 137.1ntry in re ister of char es of appointment of recei!er or mana er........................................................10$ 13).*ompany to report satisfaction and proced"re thereafter.........................................................................10$ 13,.&ower of 8e istrar to ma;e entries of satisfaction and release in a#sence of intimation from company 10$

1$0.*opy of memorand"m of satisfaction to #e f"rnished to company..........................................................10' 1$1.8ectification #y *entral +o!ernment of re ister of char es....................................................................10' 1$2.&enalties.....................................................................................................................................................10' 1$3.*ompanyIs re ister of char es..................................................................................................................10' 1$$.8i ht to inspect copies of instr"ments creatin char es and companyIs re ister of char es..................10( 1$'.Application of &art to char es reD"irin re istration "nder it #"t not "nder pre!io"s law.....................10(

PART 2I: MAN A 0 E M E N T AN" A" MI N I%TR A T I ! N .....................................................................14 6 Cha p t e ) I: 0en e ) a . P)o5i si o n s ...........................................................................................................14 6
1$(.8e istered office of company....................................................................................................................10( 1$7.&"#lication of name #y company..............................................................................................................107 1$).&"#lication of a"thorised as well as s"#scri#ed and paid/"p capital........................................................107 1$,.8estrictions on commencement of #"siness..............................................................................................10) 1'0.8e ister of mem#ers..................................................................................................................................10, 1'1.Index of mem#ers......................................................................................................................................110 1'2.8e ister and index of de#ent"re holders...................................................................................................110 1'2A. 8e ister and index of #eneficial owners to #e of de#ent"re holder.....................................................110 1'3..r"sts not to he entered on re ister...........................................................................................................110 1'3A. Appointment of p"#lic tr"stee..............................................................................................................110 1'30. Declaration as to shares and de#ent"res held in tr"st..........................................................................111 1'$.&ower to close re ister of mem#ers or de#ent"re holders.........................................................................111 1''.&ower of *o"rt to rectify re ister of mem#ers..........................................................................................111 1'(.4otice to 8e istrar of rectification of re ister..........................................................................................111 1'7.&ower for company to ;eep forei n re ister of mem#ers or de#ent"re holders.......................................112 1').&ro!isions as to forei n re isters..............................................................................................................112 1',.Ann"al ret"rn to #e made #y company ha!in a share capital.................................................................113 1(0.Ann"al ret"rn to #e made #y company not ha!in a share capital..........................................................113 1(1.3"rther pro!isions re ardin ann"al ret"rn and certificate to #e annexed thereto..................................113 1(2.&enalty and interpretation.........................................................................................................................11$ 1(3.&lace of ;eepin , and inspection of, re isters and ret"rns.......................................................................11$ 1($.8e isters, etc. to #e e!idence.....................................................................................................................11' 1('.Stat"tory meetin and stat"tory report of company..................................................................................11' 1((.Ann"al eneral meetin ............................................................................................................................11( 1(7.&ower of *entral +o!ernment to call ann"al eneral meetin ................................................................117 1().&enalty for defa"lt in complyin with section 1(( or 1(7........................................................................117 1(,.*allin of extraordinary eneral meetin on reD"isition ........................................................................117 170.Sections 171 to 1)( to apply to meetin s..................................................................................................11) 171.2en th of notice for callin meetin .........................................................................................................11) 172.*ontents and manner of ser!ice of notice and persons on whom it is to #e ser!ed ................................11, 173.1xplanatory statement to #e annexed to notice.........................................................................................11, 17$.5"or"m for meetin ..................................................................................................................................120 17'.*hairman of meetin .................................................................................................................................120 17(.&roxies.......................................................................................................................................................120 177.7otin to #e #y show of hands in first instance........................................................................................121 17).*hairmanEs declaration of res"lt of !otin #y show of hands to #e concl"si!e........................................121 17,.Demand for poll.........................................................................................................................................121 1)0..ime of ta;in poll....................................................................................................................................122 1)1.8estriction on exercise of !otin ri ht of mem#ers who ha!e not paid calls, etc....................................122 1)2.8estrictions on exercise of !otin ri ht in other cases to #e !oid............................................................122 1)3.8i ht of mem#er to "se his !otes differently............................................................................................122 1)$.Scr"tineers at poll......................................................................................................................................122 1)'.%anner of ta;in poll and res"lt thereof..................................................................................................122 1)(.&ower of .ri#"nal to order meetin to #e called.......................................................................................122 1)7.8epresentation of corporations at meetin s of companies and of creditors.............................................123 1)7A. 8epresentation of the &resident and +o!ernors in meetin s of companies of which they are mem#ers 123 1)70. 1xercise of !otin ri hts in respect of shares held in tr"st .................................................................123 1)7*. Declaration #y persons not holdin #eneficial interest in any share...................................................12$ 1)7D. In!esti ation of #eneficial ownership of shares in certain cases.........................................................12' 1)).*irc"lation of mem#ersI resol"tions ........................................................................................................12' 1),.:rdinary and special resol"tions ..............................................................................................................12( 1,0.8esol"tions reD"irin special notice ........................................................................................................12(

1,1.8esol"tions passed at adCo"rned meetin s ...............................................................................................12( 1,2.8e istration of certain resol"tions and a reements .................................................................................12( 1,2A. &assin of resol"tions #y postal #allot.................................................................................................127 1,3.%in"tes of proceedin s of eneral meetin s and of 0oard and other meetin s .....................................12) 1,$.%in"tes to #e e!idence .............................................................................................................................12) 1,'.&res"mptions to #e drawn where min"tes d"ly drawn and si ned...........................................................12, 1,(.Inspection of min"te #oo;s of eneral meetin s.......................................................................................12, 1,7.&"#lication of reports of proceedin s of eneral meetin s.......................................................................12, 1,7A. *ompany not to appoint or employ certain different cate ories of mana erial personnel at the same time 12, 1,).:!erall maxim"m mana erial rem"neration and mana erial rem"neration in case of a#sence or inadeD"acy of profits .......................................................................................................................................130 1,,.*alc"lation of commission, etc., in certain cases ....................................................................................130 200.&rohi#ition of tax/free payments ..............................................................................................................130 201.A!oidance of pro!isions relie!in lia#ility of officers and a"ditors of company.....................................131 202.<ndischar ed insol!ent not to mana e companies ..................................................................................131 203.&ower to restrain fra"d"lent persons from mana in companies ...........................................................131 20$.8estriction on appointment of firm or #ody corporate to office or place of profit "nder a company .....132 20$A. AJ J JB...................................................................................................................................................133 20'.Di!idend to #e paid only o"t of profits ....................................................................................................133 20'A. <npaid di!idend to #e transferred to special di!idend acco"nt ..........................................................13$ A20'0. &ayment of "npaid or "nclaimed di!idend ........................................................................................13' A20'*. 1sta#lishment of In!estor 1d"cation and &rotection 3"nd................................................................13' 20(.Di!idend not to he paid except to re istered shareholders or to their order or to their #an;ers ............13( 20(A. 8i ht to di!idend, ri hts shares, and #on"s shares to #e held in a#eyance pendin re istration of transfer of shares .............................................................................................................................................13( 207.&enalty for fail"re to distri#"te di!idends within thirty days...................................................................13( 20).&ower of company to pay Interest o"t of capital in certain cases.............................................................137 20,.0oo;s of acco"nt to #e ;ept #y company .................................................................................................137 20,A. Inspection of #oo;s of acco"nt, etc., of companies .............................................................................13) 210.Ann"al acco"nts and #alance sheet .........................................................................................................13, 210A. *onstit"tion of 4ational Ad!isory *ommittee on Acco"ntin Standards .........................................1$0 211.3orm and contents of #alance sheet and profit and loss acco"nt ............................................................1$1 212.0alance sheet of holdin company to incl"de certain partic"lars as to its s"#sidiaries .........................1$2 213.3inancial year of holdin company and s"#sidiary .................................................................................1$$ 21$.8i hts of holdin companyIs representati!e and mem#ers......................................................................1$$ 21'.A"thentication of #alance sheet and profit and loss acco"nt ..................................................................1$$ 21(.&rofit and loss acco"nt to #e annexed and a"ditorsE report to #e attached to #alance sheet ...................1$' 217.0oardIs report............................................................................................................................................1$' 21).&enalty for improper iss"e, circ"lation or p"#lication of #alance sheet or profit and loss acco"nt ........1$( 21,.8i ht of mem#ers to copies of #alance sheet and a"ditorsI report. .........................................................1$7 220..hree copies of #alance sheet, etc., to #e filed with 8e istrar .................................................................1$7 221.D"ty of officer to ma;e disclos"re of payments, etc ................................................................................1$) 222.*onstr"ction of references to doc"ments annexed to acco"nts ...............................................................1$) 223.*ertain companies to p"#lish statement in the 3orm in .a#le 3 in Sched"le I ......................................1$, 22$.Appointment and rem"neration of a"ditors .............................................................................................1$, 22$A. A"ditor not to #e appointed except with the appro!al of the company #y special resol"tion in certain cases 1'1 22'.&ro!isions as to resol"tions for appointin or remo!in a"ditors ...........................................................1'1 22(.5"alifications and disD"alifications of a"ditors ......................................................................................1'2 227.&owers and d"ties of a"ditors ...................................................................................................................1'2 22).A"dit of acco"nts of #ranch office of company........................................................................................1'$ 22,.Si nat"re of a"dit report, etc.....................................................................................................................1'' 230.8eadin and inspection of a"ditorEs report...............................................................................................1'' 231.8i ht of a"ditor to attend eneral meetin ...............................................................................................1'' 232.&enalty for non/compliance with sections 22' to 231..............................................................................1'' 233.&enalty for non/compliance #y a"ditor with sections 227 and 22,..........................................................1'' 233A. &ower of *entral +o!ernment to direct special a"dit in certain cases................................................1'' 2330. A"dit of cost acco"nts in certain cases.................................................................................................1'( 23$.&ower of 8e istrar to call for information or explanation........................................................................1'7 23$A. SeiF"re of doc"ments #y 8e istrar.......................................................................................................1') 23'.In!esti ation of the affairs of a company .................................................................................................1',

23(.Application #y mem#ers to #e s"pported #y e!idence and power to call for sec"rity..............................1', 237.In!esti ation of companyEs affairs in other cases......................................................................................1', 23).3irm, #ody corporate or association not to #e appointed as inspector......................................................1', 23,.&ower of inspectors to carry in!esti ation into affairs of related companies 21AJJJB, etc......................1(0 2$0.&rod"ction of doc"ments and e!idence ...................................................................................................1(0 2$0A. SeiF"re of doc"ments #y inspector.......................................................................................................1(1 2$1.Inspectors" report......................................................................................................................................1(2 2$2.&rosec"tion................................................................................................................................................1(2 2$3.Application for windin "p of company or an order "nder section 3,7 or 3,).......................................1(2 2$$.&roceedin s for reco!ery of dama es or property.....................................................................................1(3 2$'.1xpenses of in!esti ation..........................................................................................................................1(3 2$(.InspectorsE report to he e!idence...............................................................................................................1($ 2$7.In!esti ation of ownership of company....................................................................................................1($ 2'0.Imposition of restrictions "pon shares and de#ent"res and prohi#ition of transfer of shares or de#ent"res in certain cases..................................................................................................................................................1(' 2'0A. 7ol"ntary windin /"p of company, etc., not to stop in!esti ation proceedin s..................................1(( 2'1.Sa!in for le al ad!isers and #an;ers.......................................................................................................1((

Cha p t e ) II : "i) e c t o ) s ...............................................................................................................................16 6

2'2.%inim"m n"m#er of directors..................................................................................................................1(( 2'3.:nly indi!id"als to #e directors................................................................................................................1(7 2'$.S"#scri#ers of memorand"m deemed to #e directors...............................................................................1(7 2''.Appointment of directors and proportion of those who are to retire #y rotation.....................................1(7 2'(.Ascertainment of directors retirin #y rotation and fillin of !acancies..................................................1(7 2'7.8i ht of persons other than retirin directors to stand for directorship...................................................1() 2').8i ht of company to increase or red"ce the n"m#er of directors.............................................................1() 2',.Increase in n"m#er of directors to reD"ire +o!ernment sanction............................................................1() 2(0.Additional directors...................................................................................................................................1() 2(2.3illin of cas"al !acancies amon directors.............................................................................................1(, 2(3.Appointment of directors to #e !oted on indi!id"ally..............................................................................1(, 2(3A. Sections 177, 2'', 2'( and 2(3 not to apply in relation to companies not carryin #"siness for profit, etc. 1(, 2($.*onsent of candidate for directorship to #e filed with the company and consent to act as director to #e filed with the 8e istrar.....................................................................................................................................1(, 2('.:ption to company to adopt proportional representation for the appointment of directors....................170 2((.8estrictions on appointment or ad!ertisement of director........................................................................170 2(7.*ertain persons not to #e appointed mana in directors. .......................................................................171 2().Amendment of pro!ision relatin to mana in , whole/time or non/rotational directors to reD"ire +o!ernment appro!al.......................................................................................................................................171 2(,.Appointment of mana in or whole/time director or mana er to reD"ire +o!ernment appro!al only in certain cases......................................................................................................................................................171 270..ime within which share D"alification is to #e o#tained and maxim"m amo"nt thereto........................172 271.3ilin of declaration of share D"alification #y director............................................................................172 272.&enalty.......................................................................................................................................................172 273.Sa!in ........................................................................................................................................................173 27$.DisD"alifications of directors....................................................................................................................173 27'.4o person to #e a director of more than Afifteen companiesB...................................................................173 27(.*hoice to #e made #y director of more than AfifteenB companies at commencement of Act...................17$ 277.*hoice #y person #ecomin director of more than Afifteen companiesB after commencement of Act.....17$ 27).1xcl"sion of certain directorships for the p"rposes of sections 27', 27( and 277..................................17$ 27,.&enalty.......................................................................................................................................................17' 2)3. 7acation of office #y directors................................................................................................................17' 2)$. 8emo!al of directors................................................................................................................................17( 2)'. 0oard to meet at least once in e!ery three calendar months..................................................................177 2)(. 4otice of meetin s...................................................................................................................................177 2)7. 5"or"m for meetin s..............................................................................................................................177 2)). &roced"re where meetin adCo"rned for want of D"or"m......................................................................177 2),. &assin of resol"tions #y circ"lation.......................................................................................................177 2,0. 7alidity of acts of directors.....................................................................................................................17) 2,1. +eneral powers of 0oard.........................................................................................................................17) 2,2. *ertain powers to he exercised #y 0oard only at meetin ......................................................................17) 2,2A. A"dit *ommittee .................................................................................................................................17,

2,3. 8estrictions on powers of 0oard.............................................................................................................17, 2,3A. &rohi#itions and restrictions re ardin political contri#"tions...........................................................1)1 2,30. &ower of 0oard and other persons to ma;e contri#"tions to the 4ational Defence 3"nd, etc...........1)1 2,$. Appointment of sole sellin a ents to reD"ire appro!al of company in eneral meetin ......................1)2 2,$A. &rohi#ition of payment of compensation to sole sellin a ents for loss of office in certain cases....1)3 2,$AA. &ower of *entral +o!ernment to prohi#it the appointment of sole sellin a ents in certain cases 1)$ 2,'. 2oans to directors, etc.............................................................................................................................1)$ 2,(. Application of section 2,' to #oo; de#ts in certain cases......................................................................1)' 2,7. 0oardEs sanction to #e reD"ired for certain contracts in which partic"lar directors are interested......1)' 2,). 1)( 2,,. Disclos"re of interest #y director............................................................................................................1)( 300. Interested director not to participate or !ote in 0oardEs proceedin s.....................................................1)7 301. 8e ister of contracts, companies and firms in which directors are interested.......................................1)) 302. Disclos"re to mem#ers of directors interest in contract appointin mana er, mana in director AJJJB 1)) 303. 8e ister of directors, AJJJB etc................................................................................................................1), 30$. Inspection of the re ister.........................................................................................................................1,0 30'. D"ty of directors etc. to ma;e disclos"re................................................................................................1,0 30(. 8e ister to e ;ept #y 8e istrar and Inspection thereof...........................................................................1,1 307. 8e ister of directorsE shareholdin s, etc.................................................................................................1,1 30). D"ty of directors and persons deemed to #e directors to ma;e disclos"re of shareholdin s................1,2 30,. 8em"neration of directors.......................................................................................................................1,2 310. &ro!isions for increase in rem"neration to reD"ire +o!ernment sanction.............................................1,3 311. Increase in rem"neration of mana in director on reappointment or appointment after Act to reD"ire +o!ernment sanction........................................................................................................................................1,$ 312. &rohi#ition of assi nment of office #y director.......................................................................................1,$ 313. Appointment and term of office of alternate directors...........................................................................1,$ 31$. Director, etc., not to hold office or place of profit .................................................................................1,$ A31'. Application of sections 31( and 317/ 8epealed #y the *ompanies GAmendmentH Act, 1,(0B...........1,( 31(. 4"m#er of companies of which one person may #e appointed mana in director...............................1,( 317. %ana in director not to #e appointed for more than fi!e years at a time............................................1,( 31). *ompensation for loss of office not permissi#le except to mana in or whole/time directors or to directors who are mana ers..............................................................................................................................1,7 31,. &ayment to director, etc., for loss of office, etc., in connection with transfer of "nderta;in or property 1,) 320. &ayment to director for loss of office, etc., in connection with transfer of shares.................................1,) 321. &ro!isions s"pplementary to sections 31), 31, and 320........................................................................1,, 322. Directors, etc., with "nlimited lia#ility in limited company..................................................................1,, 323. Special resol"tion of limited company ma;in lia#ility of directors, etc., "nlimited............................1,,

Cha p t e ) III: Ma n a 6 i n 6 A6e n t s ...........................................................................................................&4 4

3$,. Determination of net profits....................................................................................................................200 A3'03'0. Ascertainment of depreciation........................................................................................................201 3''. Sa!in ......................................................................................................................................................201 370. 2oans, etc., to companies "nder the same mana ement.........................................................................202 A370A. &ro!isions as to certain loans which co"ld not ha!e #een made if sections 3(, and 370 were in force 20$ 371. &enalty for contra!ention of section 3(,, 370 or 370A..........................................................................20$ A372. &"rchase #y company of shares, etc., of other companies....................................................................20$ 372A. Inter/corporate loans and in!estments.................................................................................................20( 373. In!estments made #efore commencement of Act...................................................................................20) 37$. &enalty for contra!ention of section 372 or 373.....................................................................................20, A37(. *onditions prohi#itin reconstr"ction or amal amation of company..................................................20,

.............................................................................................................................................................................&4 9 #oot Not e : ......................................................................................................................................................&4 9 6a. The Co m p a n i e s 7%ec o n 8 Am e n 8 m e n t 9 Act, &4 4 & 8at e 8 the 11 t h :an*a ) , , &4 4 ( .............................................................................................................................................................................&4 9 Cha p t e ) I2: A. %ec) e t a ) i e s ; 7< = = = > T ) e a s * ) e ) s ........................................................................&4 9
A3)3A. *ertain companies to ha!e secretaries...............................................................................................20,

. Ma n a 6 e ) s .................................................................................................................................................&1 4
3)$. 3irm or #ody corporate not to #e appointed mana er.............................................................................210 3)'. *ertain persons not to #e appointed mana ers.......................................................................................210 3)(. 4"m#er of companies of which a person may #e appointed mana er...................................................210 3)7. 8em"neration of mana er.......................................................................................................................210 3)). Application of sections 2(,, 310, 311, 312 and 317 to mana ers12'...................................................211 3))A. Sections 3)( to 3)) not to apply to certain pri!ate companies./.........................................................211

<Ch a p t e ) I2A: ...........................................................................................................................................&1 1 Po? e ) s o- cCe n t ) a . 60o 5 e ) n m e n t to )e m o 5 e m a n a 6 e ) i a . pe) s o n n e . -)o m o--ic e on the )ec o m m e n 8 a t i o n o- the 6a< T ) i + * n a . > > .................................................................................&1 1
3))0. 8eference to (aA.ri#"nalB of cases a ainst mana erial personnel./....................................................211 3))*. Interim order #y (aA.ri#"nalB..............................................................................................................212 3))D. Decision of the (aA.ri#"nalB................................................................................................................212 3))1. &ower of *entral +o!ernment to remo!e mana erial personnel on the #asis of (aA.ri#"nalB decision 212

Cha p t e ) 2: A)+i t ) a t i o n , Co m p ) o m i s e s , A)) a n 6 e m e n t s an 8 Reco n s t ) * c t i o n s .........&1 &

3),. &ower for companies to refer matters to ar#itration/ .............................................................................212 3,0. Interpretation of sections 3,1 and 3,3....................................................................................................212 3,1. &ower to compromise or ma;e arran ements with creditors and mem#ers...........................................213 (aA3,2. &ower of .ri#"nal to enforce compromise and arran ement............................................................213 3,3. Information as to compromises or arran ements with creditors and mem#ers.....................................21$ 3,$. &ro!isions for facilitatin reconstr"ction and amal amation of companies..........................................21$ 3,$A. 4otice to #e i!en to *entral +o!ernment for applications "nder sections 3,1 and 3,$...................21' 3,'. &ower and d"ty to acD"ire shares of shareholders dissentin from scheme or contract appro!ed #y maCority.............................................................................................................................................................21' 3,(. &ower of *entral +o!ernment to pro!ide for amal amation of companies in national interest..........217 3,(A. &reser!ation of #oo;s and papers of amal amated company..............................................................21)

Cha p t e ) 2I: P)e5 e n t i o n o- op p ) e s s i o n an8 mis m a n a 6 e m e n t ..........................................&1 3

3,7. 3,). 3,,. $00. $01. $02. $03. $0$. $0'. $0(. $07. $0). $0,. Application to (aA.ri#"nalB for relief in cases of oppression.................................................................21) Application to (aA.ri#"nalB for relief in cases of mismana ement.......................................................21) 8i ht to apply "nder sections 3,7 and 3,).............................................................................................21, 4otice to #e i!en to *entral +o!ernment of applications "nder sections 3,7 and 3,).......................21, 8i ht of *entral +o!ernment to apply "nder sections 3,7 and 3,)......................................................21, &owers of (aA.ri#"nalB on application "nder section 3,7 or 3,).........................................................21, Interim order #y (aA.ri#"nalB................................................................................................................220 1ffect of alteration of memorand"m or articles of company #y order "nder section 3,7 or 3,).........220 Addition of respondents to application "nder section 3,7 or 3,)..........................................................221 Application of sections '3, to '$$ to proceedin s "nder sections 3,7 and 3,)....................................221 *onseD"ences of termination or modification of certain a reements....................................................221 &owers of +o!ernment to pre!ent oppression or mismana ement........................................................221 &ower of (aA.ri#"nalB to pre!ent chan e in 0oard of directors li;ely to affect company preC"dicially 222

Cha p t e ) 2II: Cons t i t * t i o n an 8 po ? e ) s o- <A8 5 i s o ) , Co m m i t t e e > ..................................&& &

$10. Appointment of Ad!isory *ommittee.....................................................................................................222

Cha p t e ) 2III: Misc e .. a n e o * s P)o5i si o n s ........................................................................................&& (

$1(. *ontracts #y a ents of company in which company is "ndisclosed principal.......................................223 $17. 1mployeesE sec"rities to #e deposited in post office sa!in s #an; or Sched"led 0an; ..........................223 $1). &ro!isions applica#le to pro!ident f"nds of employees..........................................................................223 $1,. 8i ht of employee to see #an;Es receipt for moneys or sec"rities referred to in section $17 or $1)....22$ $20. &enalty for contra!ention of sections $17, $1) and $1,.........................................................................22$ $21. 3ilin of acco"nts of recei!ers..................................................................................................................22$ $22. In!oices, etc., to refer to recei!er where there is one..............................................................................22$ $23. &enalty for non/compliance with sections $21 and $22.........................................................................22' (a$2$. Application of sections $21 to $23 to, recei!ers and mana ers appointed #y .ri#"nal, and, mana ers appointed in p"rs"ance of an instr"ment.........................................................................................................22'

6aPART 2IA: RE2I2AL AN" RE/A ILIT A TI ! N !# %IC@ IN"'%TRIA L C!MPA N IE% && 5
$2$A. 8eference to .ri#"nal...........................................................................................................................22'

$2$0. InD"iry into wor;in of sic; ind"strial companies..............................................................................22( $2$*. &owers of .ri#"nal to ma;e s"ita#le order on completion of inD"iry.................................................227 $2$D. &reparation and sanction of schemes...................................................................................................227 $2$1. 8eha#ilitation #y i!in financial assistance.......................................................................................230 $2$3. Arran ement for contin"in operations, etc., d"rin inD"iry..............................................................230 $2$+. =indin "p of sic; ind"strial company...............................................................................................230 $2$6. :peratin a ency to prepare complete in!entory, etc..........................................................................231 $2$I. Direction not to dispose of assets...........................................................................................................231 $2$-. &ower of .ri#"nal to call for periodic information...............................................................................231 $2$9. %isfeasance proceedin s......................................................................................................................231 $2$2. &enalty for certain offences....................................................................................................................232

PART 2II: $IN "I N 0 'P ..........................................................................................................................&( & Cha p t e ) I: P)e.i m i n a ) , ...........................................................................................................................&( &
$2'. $2(. $27. $2). $2,. $30. $31. $32. %odes of windin "p...............................................................................................................................232 2ia#ility as contri#"tories of present and past mem#ers........................................................................233 :#li ations of directors AJJJB and mana ers whose lia#ility is "nlimited............................................233 Definition of "contri#"tory"....................................................................................................................23$ 4at"re of lia#ility of contri#"tory...........................................................................................................23$ *ontri#"tories in case of death of mem#er.............................................................................................23$ *ontri#"tories in case of insol!ency of mem#er.....................................................................................23$ *ontri#"tories in case of windin "p of a #ody corporate which is a mem#er......................................23$

Cha p t e ) II: $in 8 i n 6 *p +, the 6a <T ) i + * n a . > ..............................................................................&( 1

(a$33. *irc"mstances in which company may #e wo"nd "p #y .ri#"nal.....................................................23' $3$. *ompany when deemed "na#le to pay its de#ts.....................................................................................23' $3,. &ro!isions as to applications for windin "p..........................................................................................23' (a$3,A. Statement of affairs to #e filed on windin "p of a company..........................................................23( $$0. (a8i ht to present windin "p petition where company is #ein wo"nd "p !ol"ntarily.......................237 $$1. *ommencement of windin "p #y .ri#"nal...........................................................................................237 $$1A. (a2e!y and collection of cess on t"rno!er or ross receipts of companies.........................................237 $$10. (a*reditin proceeds of cess to *onsolidated 3"nd of India...............................................................237 $$1*. (a8eha#ilitation and re!i!al 3"nd.......................................................................................................237 $$1D. Application of 3"nd..............................................................................................................................23) $$11. (a&ower to call for information............................................................................................................23) $$13. (a&enalty for non/payment of cess.......................................................................................................23) (a$$1+. 8ef"nd of f"nd in certain cases........................................................................................................23) $$2. &owers of (aA.ri#"nalB............................................................................................................................23) (a$$3. &ower of .ri#"nal on hearin petition................................................................................................23, $$$. (a:rder for windin "p to #e comm"nicated to :fficial 2iD"idator and 8e istrar..............................23, $$'. *opy of windin "p order to #e filed with 8e istrar..............................................................................23, $$(. S"its stayed on windin "p order............................................................................................................23, (a$$(A. 8esponsi#ility of directors and officers to s"#mit to .ri#"nal a"dited #oo;s of acco"nt................2$0 $$7. 1ffect of windin "p order......................................................................................................................2$0 $$). (aAppointment of :fficial 2iD"idator....................................................................................................2$0 $$,. :fficial 2iD"idator to #e liD"idator.........................................................................................................2$1 $'0. Appointment and powers of pro!isional liD"idator................................................................................2$1 $'1. +eneral pro!isions as to liD"idators........................................................................................................2$1 $'2. Style, etc., of liD"idator...........................................................................................................................2$1 $'3. 8ecei!er not to #e appointed of assets with liD"idator...........................................................................2$2 $'$. Statement of affairs to #e made to :fficial 2iD"idator...........................................................................2$2 $''. 8eport #y :fficial 2iD"idator..................................................................................................................2$3 $'(. *"stody of companyEs property................................................................................................................2$3 $'7. &owers of liD"idator................................................................................................................................2$$ $'). Discretion of liD"idator...........................................................................................................................2$' $')A. 1xcl"sion of certain time in comp"tin periods of limitation.............................................................2$' (a$',. &ro!ision for le al assistance to liD"idator.........................................................................................2$' $(0. 1xercise and control of liD"idatorIs powers...........................................................................................2$( $(1. 0oo;s to #e ;ept #y liD"idator.................................................................................................................2$( $(2. A"dit of liD"idatorEs acco"nts..................................................................................................................2$( $(3. *ontrol of *entral +o!ernment o!er liD"idators ...................................................................................2$7 $($. Appointment and composition of committee of inspection....................................................................2$7

$('. *onstit"tion and proceedin s of committee of inspection......................................................................2$7 $((. &ower of .ri#"nal to stay windin "p......................................................................................................2$) $(7. Settlement of list of contri#"tories and application of assets.................................................................2$) $(). Deli!ery of property to liD"idator............................................................................................................2$) $(,. &ayment of de#ts d"e #y contri#"tory and extent of set/off....................................................................2$, $70. &ower of .ri#"nal to ma;e calls..............................................................................................................2$, $71. &ayment into #an; of moneys d"e to company.......................................................................................2$, (a$72. %oneys and sec"rities paid into #an; to #e s"#Cect to order of .ri#"nal...........................................2$, $73. :rder on contri#"tory to #e concl"si!e e!idenced..................................................................................2$, $7$. &ower to excl"de creditors not pro!in in time......................................................................................2'0 $7'. AdC"stment of ri hts of contri#"tories....................................................................................................2'0 $7(. &ower to order costs................................................................................................................................2'0 $77. &ower to s"mmon persons s"spected of ha!in property of company, etc.............................................2'0 $7). &ower to order p"#lic examination of promoters, directors, etc.............................................................2'1 $7,. &ower to arrest a#scondin contri#"tory.................................................................................................2'1 (a$)0. Sa!in of existin powers of .ri#"nal................................................................................................2'1 $)1. Dissol"tion of company...........................................................................................................................2'2 $)2. :rder made in any *o"rt to #e enforced #y other *o"rts.......................................................................2'2 $)3. Appeals from orders................................................................................................................................2'2

Cha p t e ) III: 2o.* n t a ) , ?i n 8 i n 6 *p ..................................................................................................&5 &

$)$. *irc"mstances in which company may #e wo"nd/"p !ol"ntarily..........................................................2'2 $)'. &"#lication of resol"tion to wind/"p !ol"ntarily....................................................................................2'2 $)(. *ommencement of !ol"ntary windin "p...............................................................................................2'3 $)7. 1ffect of !ol"ntary windin "p on stat"s of company............................................................................2'3 $)). Declaration of sol!ency in case of proposal to wind/"p !ol"ntarily......................................................2'3 $),. &ro!isions applica#le to a mem#ersE !ol"ntary windin "p...................................................................2'$ $,0. &ower of company to appoint and fix rem"neration of liD"idators........................................................2'$ $,1. 0oardEs powers to cease on appointment of a liD"idator........................................................................2'$ $,2. &ower to fill !acancy in office of liD"idator............................................................................................2'$ $,3. 4otice of appointment of liD"idator to #e i!en to 8e istrar.................................................................2'$ $,$. &ower of liD"idator to accept shares, etc., as consideration for sale of property of company...............2'' $,'. D"ty of liD"idator to call creditorsE meetin in case of insol!ency........................................................2'' $,(. D"ty of liD"idator to call eneral meetin at the end of each year........................................................2'' $,7. 3inal meetin and dissol"tion.................................................................................................................2'( $,). Alternati!e pro!isions as to ann"al and final meetin s in case of insol!ency.......................................2'7 $,,. &ro!isions applica#le to a creditorEs !ol"ntary windin "p....................................................................2'7 '00. %eetin of creditors................................................................................................................................2'7 '01. 4otice of resol"tions passed #y creditorsE meetin to #e i!en to 8e istrar..........................................2'7 '02. Appointment of liD"idator.......................................................................................................................2') '03. Appointment of committee of inspection................................................................................................2') '0$. 3ixin of liD"idatorsE rem"neration........................................................................................................2') '0'. 0oardEs powers to cease on appointment of liD"idator...........................................................................2') '0(. &ower to fill !acancy in office of liD"idator............................................................................................2', '07. Application of section $,$ to a creditors !ol"ntary windin "p............................................................2', '0). D"ty of liD"idator to call meetin s of company and of creditors at end of each year............................2', '0,. 3inal meetin and dissol"tion.................................................................................................................2', '10. &ro!isions applica#le to e!ery !ol"ntary windin "p.............................................................................2(0 '11. Distri#"tion of property of company.......................................................................................................2(0 '11A. Application of section $'$ to !ol"ntary windin "p...........................................................................2(0 '12. &owers and d"ties of liD"idator in !ol"ntary windin "p.......................................................................2(0 '13. 0ody corporate not to #e appointed as liD"idator...................................................................................2(1 '1$. *orr"pt ind"cement affectin appointment as liD"idator.......................................................................2(1 '1'. (a&ower of .ri#"nal to appoint and remo!e liD"idator in !ol"ntary windin "p..................................2(1 '1(. 4otice #y liD"idator of his appointment.................................................................................................2(2 '17. Arran ement when #indin on company and creditors.........................................................................2(2 '1). (a&ower to apply to .ri#"nal to ha!e D"estions determined or powers exercised.................................2(2 '1,. (aApplication of liD"idator to .ri#"nal for p"#lic examination of promoters, directors, etc..............2(2 '20. *osts of !ol"ntary windin "p................................................................................................................2(2 '21. Sa!in of ri ht of creditors and contri#"tories to apply for windin "p................................................2(3

Cha p t e ) I2: $in 8 i n 6 *p s*+A e c t to s*p e ) 5 i s i o n o- Co*) t ...................................................&6 (

Cha p t e ) 2: P)o 5is i o n s ap p. i c a + . e to e5e ) , m o 8 e o- ?i n 8 i n 6 *p ...................................&6 (

'2). De#ts of all descriptions to #e admitted to proof....................................................................................2(3 '2,. Application of insol!ency r"les in windin "p of insol!ent companies.................................................2(3 '2,A. :!erridin preferential payments........................................................................................................2($ '30. &referential payments..............................................................................................................................2(' '31. 3ra"d"lent preference..............................................................................................................................2(( '31A. A!oidance of !ol"ntary transfer...........................................................................................................2(7 '32. .ransfers for #enefit of all creditors to #e !oid.......................................................................................2(7 '33. 2ia#ilities and ri hts of certain fra"d"lently preferred persons.............................................................2(7 '3$. 1ffect of floatin char e..........................................................................................................................2(7 '3'. Disclaimer of onero"s property in case of a company which is #ein wo"nd/"p..................................2(7 '3(. A!oidance of transfers, etc., after commencement of windin "p.........................................................2(, (a'37. A!oidance of certain attachments, exec"tions, etc., in windin "p #y .ri#"nal................................2(, '3). :ffences #y officers of companies in liD"idation....................................................................................2(, '3,. &enalty for falsification of #oo;s.............................................................................................................270 '$0. &enalty for fra"ds #y officers...................................................................................................................271 '$1. 2ia#ility where proper acco"nts not ;ept................................................................................................271 '$2. 2ia#ility for fra"d"lent cond"ct of #"siness............................................................................................271 (a'$3. &ower of .ri#"nal to assess dama es a ainst delinD"ent directors, etc..............................................272 '$$. 2ia#ility "nder sections '$2 and '$3 to extend to partners or directors in firm or company................272 '$'. &rosec"tion of delinD"ent officers and mem#ers of the company..........................................................272 '$(. 2iD"idator to exercise certain powers s"#Cect to sanction......................................................................273 '$7. 4otification that a company is in liD"idation.........................................................................................27$ '$). 0oo;s and papers of company to #e e!idence.........................................................................................27$ '$,. Inspection of #oo;s and papers #y creditors and contri#"tories.............................................................27$ ''0. Disposal of #oo;s and papers of company..............................................................................................27$ ''1. Information as to pendin liD"idations...................................................................................................27' ''2. 0fficial 2iD"idator to ma;e payments into the p"#lic acco"nt of India.................................................27( ''3. 7ol"ntary liD"idator to ma;e payments into Sched"led 0an;...............................................................27( ''$. 2iD"idator not to pay moneys into pri!ate #an;in acco"nt..................................................................27( '''. <npaid di!idends and "ndistri#"ted assets to #e paid into the *ompanies 2iD"idation Acco"nt.........27( ''(. 1nforcement of d"ty of liD"idator to ma;e ret"rns, etc..........................................................................277 ''7. %eetin s to ascertain wishes of creditors or contri#"tories...................................................................27) ''). *o"rt or person #efore whom affida!it may #e sworn............................................................................27) '',. &ower of (aA.ri#"nalB to declare dissol"tion of company !oid..............................................................27) '(0. &ower of 8e istrar to stri;e def"nct company off re ister.....................................................................27)

PART 2III: APPLICATI ! N !# ACT T! C!MPA NIE% #!RME " !R RE0I%TERE " 'N"ER PRE2I! '% C!MPA N IE% LA$% .............................................................................................................&7 9
'(1. '(2. '(3. '($. Application of Act to companies formed and re istered "nder pre!io"s companies laws....................27, Application of Act to companies re istered #"t not formed "nder pre!io"s companies laws./.............2)0 Application of Act to "nlimited companies re istered "nder pre!io"s companies laws.......................2)0 %ode of transferrin shares in the case of companies re istered "nder Acts 1, of 1)'7 and 7 of 1)(0 2)0 *ompanies capa#le of #ein re istered1.................................................................................................2)0 Definition of "Coint/stoc; company"1'...................................................................................................2)1 8eD"irements for re istration of Coint/stoc; companies1(.....................................................................2)1 8eD"irements for re istration of companies not #ein Coint stoc; companies17...................................2)2 A"thentication of statements of existin companies..............................................................................2)2 &ower of 8e istrar to reD"ire e!idence as to nat"re of company...........................................................2)2 4otice to c"stomers on re istration of #an;in company with limited lia#ility....................................2)2 *han e of name for p"rposes of re istration..........................................................................................2)2 Addition of "2imited" or "&ri!ate 2imited" to name..............................................................................2)3 *ertificate of re istration of existin companies....................................................................................2)3 7estin of property on re istration.........................................................................................................2)3 Sayin for existin lia#ilities..................................................................................................................2)3 *ontin"ation of pendin le al proceedin s............................................................................................2)3 1ffect of re istration "nder &art..............................................................................................................2)3 &ower to s"#stit"te memorand"m and articles for deed of settlement...................................................2)$ &ower of *o"rt to stay or restrain proceedin s.......................................................................................2)'

PART IB: C!MPA N IE% A'T/ ! R I%E " T! RE0I%TER 'N"ER T/I% ACT .........................&3 4
'('. '((. '(7. '(). '(,. '70. '71. '72. '73. '7$. '7'. '7(. '77. '7). '7,. ')0.

')1. S"its stayed on windin "p order............................................................................................................2)'

PART IBA: C/APTER I C PR!" ' CER C!MPA N IE% .....................................................................&3 5

')1A. Definitions............................................................................................................................................2)'

PART IBA: C/APTER II C INC!RP!R A T I ! N !# PR!" ' CE R C!MPA N IE% AN" !T/ER MATTER% ........................................................................................................................................................&3 6
')10. :#Cects of &rod"cer *ompany..............................................................................................................2)( ')1*. 3ormation of &rod"cer *ompany and its re istration..........................................................................2)( ')1D. %em#ership and !otin ri hts of %em#ers of &rod"cer *ompany....................................................2)7 ')11. 0enefits to %em#ers.............................................................................................................................2)7 ')13. %emorand"m of &rod"cer *ompany....................................................................................................2)) ')1+. Articles of association..........................................................................................................................2)) ')16. Amendment of memorand"m...............................................................................................................2), ')1/I. Amendment of articles.........................................................................................................................2,0 ')1-. :ption to inter/State co/operati!e societies to #ecome &rod"cer *ompanies.......................................2,0 ')19. 1ffect of incorporation of &rod"cer *ompany.....................................................................................2,1 ')12. 7estin of "nderta;in in &rod"cer *ompany.....................................................................................2,1 ')1%. *oncession, etc., to #e deemed to ha!e #een ranted to &rod"cer *ompany.....................................2,1 ')14. &ro!isions in respect of officers and other employees of inter/State co/operati!e society..................2,1

PART IBA: C/APTER III C MAN A 0 E M E N T !# PR!" ' C ER C!MPA NY .............................&9 &
')1/:. 4"m#er of directors..............................................................................................................................2,2 ')1&. Appointment of directors......................................................................................................................2,2 ')15. 7acation of office #y directors.............................................................................................................2,3 ')18. &owers and f"nctions of 0oard.............................................................................................................2,3 ')1S. %atters to #e transacted at eneral meetin .........................................................................................2,$ ')1.. 2ia#ility of directors..............................................................................................................................2,$ ')1<. *ommittee of directors.........................................................................................................................2,$ ')17. %eetin s of 0oard and D"or"m............................................................................................................2,' ')1=. *hief 1xec"ti!e and his f"nctions.......................................................................................................2,' ')1>. Secretary of &rod"cer *ompany...........................................................................................................2,(

PART IBA: C/APTER I2 C 0ENERA L MEETIN 0% ........................................................................&9 6

')1@A. Ann"al eneral meetin s....................................................................................................................2,(

PART IBA: C/APTER 2 C %/ARE CAPITAL AN" MEM ER% RI0/T% .................................&9 7
')1@0. Share capital........................................................................................................................................2,) ')1@*. Special "ser ri hts..............................................................................................................................2,) ')1@D. .ransfera#ility of shares and attendant ri hts...................................................................................2,)

Cha p t e ) 2: P)o 5is i o n s ap p. i c a + . e to e5e ) , m o 8 e o- ?i n 8 i n 6 *p ...................................&9 3

')1@1. 0oo;s of acco"nt..................................................................................................................................2,) ')1@3. Internal a"dit........................................................................................................................................2,, ')1@+. D"ties of a"ditor "nder this &art.........................................................................................................2,, ')1@6. Donations or s"#scription #y &rod"cer *ompany..............................................................................2,, ')1@I. +eneral and other reser!es...................................................................................................................2,, ')1@-. Iss"e of #on"s shares............................................................................................................................2,, ')1@9. 2oan, etc., to %em#ers........................................................................................................................300 ')1@2. In!estment in other companies, formation of s"#sidiaries, etc..........................................................300 ')1@%. &enalty for contra!ention...................................................................................................................300 ')1@4. Amal amation, mer er or di!ision, etc., to form new &rod"cer *ompanies.....................................301 ')1@:. Disp"tes...............................................................................................................................................303 ')1@&. Stri;e off name of &rod"cer *ompany................................................................................................303 ')1@5. &ro!isions of this &art to o!erride other laws.....................................................................................30$ ')1@8. Application of pro!isions relatin to pri!ate companies....................................................................30$ ')1@S. 8econ!ersion of &rod"cer *ompany to inter/State co/operati!e society............................................30$ ')1@.. &ower to modify Act in its application to &rod"cer *ompanies.........................................................30' ')2. %eanin of ""nre istered company"......................................................................................................30' ')3. =indin "p of "nre istered companies..................................................................................................30' ')$. &ower to wind/"p forei n companies, altho" h dissol!ed.....................................................................30( ')'. *ontri#"tories in windin "p of "nre istered company..........................................................................30( ')(. &ower to stay or restrain proceedin s.....................................................................................................30( ')7. S"its, etc., stayed on windin "p order....................................................................................................307

')). Directions as to property in certain cases...............................................................................................307 '),. &ro!isions of &art c"m"lati!e..................................................................................................................307 ',0. Sa!in and constr"ction of enactments conferrin power to wind/"p partnership, association or company in certain cases..................................................................................................................................307 ',1. Application of sections ',2 to (02 to forei n companies.......................................................................307 ',2. Doc"ments, etc., to #e deli!ered to 8e istrar #y forei n companies carryin on #"siness in India......30) ',3. 8et"rn to he deli!ered to 8e istrar #y forei n company where doc"ments, etc., altered......................30, ',$. Acco"nts of forei n company..................................................................................................................30, ','. :#li ation to state name of forei n company, whether limited, and co"ntry where incorporated........30, ',(. Ser!ice on forei n company....................................................................................................................310 ',7. :ffice where doc"ments to #e deli!ered.................................................................................................310 ',). &enalties...................................................................................................................................................310 ',,. *ompanyEs fail"re to comply with &art not to affect Its lia#ility "nder contracts, etc...........................310 (00. 8e istration of char es, appointment of recei!er and #oo;s of acco"nt................................................310 (01. 3ees for re istration of doc"ments "nder &art........................................................................................311 (02. Interpretation of fore oin sections of &art............................................................................................311 (03. Datin of prospect"s and partic"lars to #e contained therein................................................................311 (0$. &ro!isions as to expertIs consent and allotment.....................................................................................312 (0'. 8e istration of prospect"s.......................................................................................................................313 (0'A. :ffer of Indian Depository 8eceipts.....................................................................................................313 (0(. &enalty for contra!ention of sections (03, (0$, 32*A(0' and (0'AB....................................................313 (07. *i!il lia#ility for misstatements in prospect"s.......................................................................................31$ (0). Interpretation of pro!isions as to prospect"ses.......................................................................................31$ (0,. 8e istration offices..................................................................................................................................31$ (10. Inspection, prod"ction and e!idence of doc"ments ;ept #y 8e istrar...................................................31$ (10A. Admissi#ility of micro films, facsimile copies of doc"ments, comp"ter printo"ts and doc"ments on comp"ter media as doc"ments and as e!idence...............................................................................................31' (11. 3ees in Sched"le > to #e paid.................................................................................................................31' (12. 3ees, etc., paid to 8e istrar and other officers to he acco"nted for to *entral +o!ernment.................31( (13. &ower of *entral +o!ernment to red"ce fees, char es, etc....................................................................31( (1$. 1nforcement of d"ty of company to ma;e ret"rns, etc., to 8e istrar.....................................................31( (1$A. &ower of *o"rt tryin offences "nder the Act to direct the filin of doc"ments with 8e istrar........31( (1'. &ower of *entral +o!ernment to direct companies to f"rnish information or statistics.......................317 (1(. Application of Act to Ins"rance, #an;in , electricity s"pply and other companies o!erned #y special Acts 31) (17. Definition of "+o!ernment *ompany"...................................................................................................31) (1,. Application of sections 22$ to 233 to +o!ernment companies..............................................................31) (1,A. Ann"al reports on +o!ernment companies.........................................................................................31, (1,0. &ro!isions of section (1, to apply to certain companies.....................................................................31, (20. &ower to modify Act in relation to +o!ernment companies..................................................................31, (20A. &ower to modify Act in its application to 4idhis, etc..........................................................................320 (200. Special /pro!isions as to companies in +oa, Daman and Di".............................................................320 (20*. Special pro!isions as to companies in -amm" and 9ashmir...............................................................320 (21. :ffences a ainst Act to #e co niFa#le only on complaint #y 8e istrar, shareholder or +o!ernment. .320 (a(21A. *omposition of certain offences.......................................................................................................321 (22. -"risdiction to try offences......................................................................................................................322 (23. *ertain offences tria#le s"mmarily in &residency towns........................................................................322 (2$. :ffences to #e non/co niFa#le................................................................................................................322 (2$A. &ower, of *entral +o!ernment to appoint company prosec"tors........................................................322 (2$0. Appeal a ainst acD"ittal.......................................................................................................................322 (2'. &ayment of compensation in cases of fri!olo"s or !exatio"s prosec"tion..............................................322 (2(. Application of fines.................................................................................................................................323 (27. &rod"ction and inspection of #oo;s where offence s"spected................................................................323 (2). &enalty for false statements.....................................................................................................................323 (2,. &enalty for false e!idence........................................................................................................................32$ (2,A. &enalty where no specific penalty is pro!ided elsewhere in the Act..................................................32$ (30. &enalty for wron f"l withholdin of/property........................................................................................32$ (31. &enalty for improper "se of words "2imited" and "&ri!ate 2imited".....................................................32$ (32. &ower to reD"ire limited company to i!e sec"rity for costs..................................................................32$ (33. &ower of *o"rt to rant relief in certain cases.........................................................................................32' (3$. 1nforcement of orders of *o"rts.............................................................................................................32' (3$A. 1nforcement of orders of *ompany 2aw 0oard..................................................................................32'

(3'. 1nforcement of orders of one *o"rt #y other *o"rts..............................................................................32' (3'A. &rotection of acts done in ood faith....................................................................................................32( (3'AA. 4on/disclos"re of information in certain cases..................................................................................32( (3'0. &rotection of employees d"rin in!esti ation #y inspector or pendency or proceedin #efore (aAAppellate .ri#"nalB in certain cases...........................................................................................................32( (3(. 8ed"ction of fees, char es, etc., paya#le to company.............................................................................327 (37. Dele ation #y *entral +o!ernment of its powers and f"nctions "nder Act...........................................327 (a(37A. &ower of *entral +o!ernment or .ri#"nal to accord appro!al, etc., s"#Cect to conditions and to prescri#e fees on applications...........................................................................................................................327 (37AA. &ower of *entral +o!ernment to fix a 2imit with re ard to rem"neration.....................................32) (370. *ondonation of delays in certain cases................................................................................................32) (3). Ann"al report #y *entral +o!ernment...................................................................................................32) (3,. Ann"al reports on +o!ernment companies to #e placed #efore &arliament, etc....................................32) ($0. 7alidation of re istration of firms as mem#ers of charita#le and other companies..............................32) (a($0A. 1xcl"sion of time reD"ired in o#tainin copies of order of *o"rt or .ri#"nal.................................32, ($00. 3orms of, and proced"re in relation to, certain applications...............................................................32, ($1. &ower to alter Sched"les.........................................................................................................................32, ($2. &ower of *entral +o!ernment to ma;e r"les..........................................................................................32, (a($3. &ower of *entral +o!ernment to ma;e r"les relatin to windin "p..................................................330 ($$. 8epeal of Acts specified in Sched"le >II................................................................................................330 ($'. Sa!in of orders, r"les, etc., in force at commencement of Act.............................................................331 ($(. Sa!in of operation of section 13) of Act 7 of 1,13..............................................................................331 ($7. Sa!in of pendin proceedin s for windin "p......................................................................................331 (a($7A. .ransfer of windin "p proceedin s to .ri#"nal..............................................................................331 ($). Sa!in of prosec"tions instit"ted #y liD"idator or *o"rt "nder section 237 of Act, 1,13......................331 ($,. *onstr"ction of references to former enactments in doc"ments............................................................332 ('0. *onstr"ction of "re istrar of Coint stoc; companies" in Act 21 of 1)(0................................................332 ('1. *onstr"ction of references to extraordinary resol"tion in articles etc....................................................332 (a('1A. 8eference of windin "p of companies in any law...........................................................................332 ('2. Appointment "nder pre!io"s companies laws to ha!e effect as if made "nder Act...............................332 ('3. 3ormer re istration offices contin"ed.....................................................................................................332 ('$. 8e isters "nder pre!io"s companies laws to #e deemed to #e part of re isters "nder Act....................332 (''. 3"nds and acco"nts "nder Act to #e in contin"ation of f"nds and acco"nts "nder pre!io"s companies laws 332 ('(. Sa!in of incorporation "nder repealed Acts.........................................................................................333 ('7. Sa!in of certain .a#les "nder pre!io"s companies laws .....................................................................333 ('). Section ( of the +eneral *la"ses Act, 1),7 to apply in addition to sections ($' to ('7 of Act...........333

%C/E" ' L E I..................................................................................................................................................(( 1 Ta+. e A: Re6 * . a t i o n s -o) m a n a 6 e m e n t o- a co m p a n , .i m i t e 8 +, sha ) e s .................(( 1 Ta+. e : Me m o ) a n 8 * m o- Asso ci a t i o n o- a Co m p a n , .i m i t e 8 +, sha) e s .................(1 3 Ta+. e C: Me m o ) a n 8 * m an8 A)ti c. e s o- Asso ci a t i o n o- a Co m p a n , .i m i t e 8 +, 6*a ) a n t e e an8 no t ha 5i n 6 a sha ) e capi t a . ..................................................................................(1 3 Ta+. e ": Me m o ) a n 8 * m an 8 a) ti c. e s o- asso ci a t i o n o- a co m p a n , .i m i t e 8 +, 6*a ) a n t e e an8 ha 5i n 6 a sha ) e capi t a . ..........................................................................................(5 & Ta+. e E: Me m o ) a n 8 * m an8 A)tic . e s o- Asso ci a t i o n o- an *n.i m i t e 8 co m p a n , .....(5 ( Ta+. e #: #o) m o- sta t e m e n t to +e p* + . i s h e 8 +, .i m i t e 8 +a n D i n 6 co m p a n i e s , ins* ) a n c e co m p a n i e s an 8 8ep o s i t , p) o 5 i 8 e n t o) +e n e - i t socie t i e s ...............................(5 5 %C/E" ' L E IA ...............................................................................................................................................(5 5 %C/E" ' L E II .................................................................................................................................................(5 6 %C/E" ' L E III ................................................................................................................................................(6 & %C/E" ' L E I2 ...............................................................................................................................................(6 6 %C/E" ' L E 2 .................................................................................................................................................(7 4 %C/E" ' L E 2I ...............................................................................................................................................(3 4 %C/E" ' L E 2II ; 2III ...............................................................................................................................(9 5

%C/E" ' L E IB ............................................................................................................................................(9 5 %C/E" ' L E BI ..............................................................................................................................................(9 7 %C/E" ' L E BII ............................................................................................................................................(9 9 %C/E" ' L E BIII .............................................................................................................................................(9 9 %C/E" ' L E BI2 ............................................................................................................................................14 1 %C/E" ' L E B2 ..............................................................................................................................................11 4

An Act to consolidate and amend the law relating to companies and certain other associations
01 it enacted #y &arliament in the Sixth ?ear of the 8ep"#lic of India as followsK /

PART I:
1.
G1H G2H G3H AJJJB

PRELIMINARY

Short title, commencement and extent

.his Act may #e called the *ompanies Act, 1,'(. It shall come into force on s"ch date as the *entral +o!ernment may, #y notification in the :fficial +aFette, appoint. It extends to the whole of IndiaKB

AProvided AJJJB that it shall apply to the State of 4a aland s"#Cect to s"ch modifications, if any, as the *entral +o!ernment may, #y notification in the :fficial +aFette, specify.B

2.

e!initions

In this Act, "nless the context otherwise reD"ires,/ AG1H AG1AHB G1BH G2H "a#rid ed prospect"s" means a memorand"m containin s"ch salient feat"res of a prospect"s as may #e prescri#edLB "alter" and "alteration" shall incl"de the ma;in of additions and omissionsL "Appellate .ri#"nal" means the 4ational *ompany 2aw Appellate .ri#"nal constit"ted "nder s"#/ section G1H of section 1038LB "articles" means the articles of association of a company as ori inally framed or as altered from time to time in p"rs"ance of any pre!io"s companies law or of this Act, incl"din , so far as they apply to the company, the re "lations contained, as the case may #e, in .a#le 0 in the Sched"le annexed to Act 4o. 1, of 1)'7 or in .a#le A in the 3irst Sched"le annexed to the Indian *ompanies Act, 1))2, or in .a#le A in the 3irst Sched"le annexed to the Indian *ompanies Act, 1,13, or in .a#le A in Sched"le I annexed to this ActL "#an;in company" has the same meanin as in the 0an;in *ompanies Act, 1,$,L "0oard of directors" or "0oard", in relation to a company, means the 0oard of directors of the companyL "#ody corporate" or "corporation" incl"des a company incorporated o"tside India #"t Adoes not incl"de/ GaH G#H GcH G)H AG,H a corporation soleL a co/operati!e society re istered "nder any law relatin to co/operati!e societiesL and any other #ody corporate Gnot #ein a company as defined in this ActH, which the *entral +o!ernment may, #y notification in the :fficial +aFette, specify in this #ehalfLB

AJJJB G'H G(H G7H

"#oo; and paper" and "#oo; or paper" incl"de acco"nts, deeds, A!o"chers,B writin s, and doc"mentsL "#ranch office" in relation to a company means/ GaH G#H GcH any esta#lishment descri#ed as a #ranch #y the companyL or any esta#lishment carryin on either the same or s"#stantially the same acti!ity as that carried on #y the head office of the companyL or any esta#lishment en a ed in any prod"ction, processin or man"fact"re,

#"t does not incl"de any esta#lishment specified in any order made #y the *entral +o!ernment "nder section )LB G10H "company" means a company as defined in section 3L

A10A AG11H

"*ompany 2aw 0oard" means the 0oard of *ompany 2aw Administration constit"ted "nder section 101LB "the *o"rt" means,/ GaH

with respect to any matter relatin to a company Gother than any offence a ainst this ActH, the *o"rt ha!in C"risdiction "nder this Act with respect to that matter relatin to that company, as pro!ided in section 10L G#H with respect to any offence a ainst this Act, the *o"rt of a %a istrate of the 3irst *lass or, as the case may #e, a &residency %a istrate, ha!in C"risdiction to try s"ch offenceLB G12H "de#ent"re" incl"des de#ent"re stoc;, #onds and any other sec"rities of a company, whether constit"tin a char e on the assets of the company or notL AG12AH "depository" has the same meanin as in the Depositories Act, 1,,(L G120H G13H G1$H "deri!ati!e" has the same meanin as in cla"se GaaH of section 2 of the Sec"rities *ontracts G8e "lationH Act, 1,'(LB

"director" incl"des any person occ"pyin the position of director, #y whate!er name calledL "District *o"rt" means the principal *i!il *o"rt of ori inal C"risdiction in a district, #"t does not incl"de a 6i h *o"rt in the exercise of its ordinary ori inal ci!il C"risdictionL AG1$AH "di!idend" incl"des any interim di!idendLB G1'H "doc"ment" incl"des s"mmons, notice, reD"isition, order, other le al process, and re isters, whether iss"ed, sent or ;ept in p"rs"ance of this or any other Act or otherwiseL

AG1'AH "employees stoc; option" means the option i!en to the whole/time directors, officers or employees of a company, which i!es s"ch directors, officers or employees the #enefit or ri ht to p"rchase or s"#scri#e at a f"t"re date, the sec"rities offered #y the company at a pre/determined priceLB G1(H "existin company" means an existin company as defined in section 3L G17H "financial year" means, in relation to any #ody corporate, the period in respect of which any profit and loss acco"nt of the #ody corporate laid #efore it in ann"al eneral meetin is made "p, whether that period is a year or notK Provided that, in relation to an ins"rance company, "financial year" shall mean the calendar year referred to in s"#/section G1H of section 11 of the Ins"rance Act, 1,3)L "+o!ernment company" means a +o!ernment company within the meanin of section (17L "holdin company" means a holdin company within the meanin of section $L

G1)H AJJJB G1,H

AG1,AH "hy#rid" means any sec"rity which has the character of more than one type of sec"rity, incl"din their deri!ati!esL AG19AA H "ind"strial company" means a company which owns one or more ind"strial "nderta;in sL G19ABH "ind"strial "nderta;in " means any "nderta;in , pertainin to any ind"stry carried on in one or more factories or "nits #y any company, as defined in cla"se GaaH of section 3 of the Ind"stries GDe!elopment and 8e "lationH Act, 1,'1G(' of 1,'1H #"t does not incl"de a small/scale ind"strial "nderta;in as defined in cla"se GjH of that sectionLB G1,0H "information memorand"m" means a process "nderta;en prior to the filin of a prospect"s #y which a demand for the sec"rities proposed to #e iss"ed #y a company is elicited, and the price and the terms of iss"e for s"ch sec"rities is assessed, #y means of a notice, circ"lar, ad!ertisement or doc"mentLB AG20H G21H G22H G23H JJJB "ins"rance company" means a company which carries on the #"siness of ins"rance either solely or in conC"nction with any other #"siness or #"sinessesL "iss"ed enerally" means, in relation to a prospect"s, iss"ed to persons irrespecti!e of their #ein existin mem#ers or de#ent"re holders of the #ody corporate to which the prospect"s relatesL "limited company" means a company limited #y shares or #y "aranteeL

AG23AH "listed p"#lic companies" means a p"#lic company which has any of its sec"rities listed in any reco nised stoc; exchan eLB G2$H "mana er" means an indi!id"al Gnot #ein the mana in a entH who, s"#Cect to the s"perintendence, control and direction of the 0oard of Directors, has the mana ement of the whole, or s"#stantially the

whole, of the affairs of a company, and incl"des a director or any other person occ"pyin the position of a mana er, #y whate!er name called, and whether "nder a contract of ser!ice or notL AJJJB G2(H "mana in director" means a director who, #y !irt"e of an a reement with the company or of a resol"tion passed #y the company in eneral meetin or #y its 0oard of directors or, #y !irt"e of its memorand"m or articles of association, is entr"sted within 1)As"#stantial powers of mana ementB which wo"ld not otherwise #e exercisa#le #y him, and incl"des a director occ"pyin the position of a mana in director, #y whate!er name calledK Provided that the power to do administrati!e acts of a ro"tine nat"re when so a"thorised #y the 0oard s"ch as the power to affix the common seal of the company to any doc"ment or to draw and endorse any cheD"e on the acco"nt of the company in any #an; or to draw and endorse any ne otia#le instr"ment or to si n any certificate of share or to direct re istration of transfer of any share, shall not #e deemed to #e incl"ded within s"#stantial powers of mana ementK Provided f"rther that a mana in director of a company shall exercise his powers s"#Cect to the s"perintendence, control and direction of its 0oard of directorsLB G27H G2)H "mem#er", in relation to a company, does not incl"de a #earer of a share/warrant of the company iss"ed in p"rs"ance of section 11$L "memorand"m" means the memorand"m of association of a company as ori inally framed or as altered from time to time in p"rs"ance of any pre!io"s companies law or of this ActL

G2,H "modify" and "modification" shall incl"de the ma;in of additions and omissionsL AG29AH "net worth" means the s"m total of the paid/"p capital and free reser!es after ded"ctin the pro!isions or expenses as may #e prescri#ed. Explanation .M3or the p"rposes of this cla"se, "free reser!es" means all reser!es created o"t of the profits and share premi"m acco"nt #"t does not incl"de reser!es created o"t of re!al"ation of assets, write #ac; of depreciation pro!isions and amal amationLB AG30H "officer" incl"des any director, mana er or secretary or any person in accordance with whose directions or instr"ctions the 0oard of directors or any one or more of the directors is or are acc"stomed to actLB G31H "officer who is in defa"lt", in relation to any pro!ision referred to in section ', has the meanin specified in that sectionL AG31AH "option in sec"rities" has the same meanin as in cla"se GdH of section 2 of the Sec"rities *ontracts G8e "lationH Act, 1,'(LB [(31AA H "operatin a ency" means any ro"p of experts consistin of persons ha!in special ;nowled e of #"siness or ind"stry in which the sic; ind"strial company is en a ed and incl"des p"#lic financial instit"tion, State le!el instit"tion, sched"led #an; or any other person as may #e specified as the operatin a ency #y the .ri#"nalLB G32H "paid/"p capital" or "capital paid/"p" incl"des capital credited as paid/"pL G33H "prescri#ed" means, as respects the pro!isions of this Act relatin to the windin "p of companies except s"#/section G'H of section '03, 2$As"#/section G3H of section ''0, section ''2 and s"#/section G3H of section '''B, prescri#ed #y r"les made #y the S"preme *o"rt in cons"ltation with (aAthe .ri#"nalB, and as respects the other pro!isions of this Act incl"din s"#/section G'H of section '03, 2'As"#/section G3H of section ''0, section ''2 and s"#/section G3H of section '''B, prescri#ed #y r"les made #y the *entral +o!ernmentL "pre!io"s companies law" means any of the laws specified in cla"se GiiH of s"#/section G1H of section 3L "pri!ate company" means a pri!ate company as defined in section 3L "prospect"s" means 2(Aany doc"ment descri#ed or iss"ed as a prospect"s and incl"des anyB notice, circ"lar, ad!ertisement or other doc"ment 17Ain!itin deposits from the p"#lic orB in!itin offers from the p"#lic for the s"#scription or p"rchase of any shares in, or de#ent"res of, a #ody corporateL "p"#lic company" means a p"#lic company as defined in section 3L "p"#lic holiday" means a p"#lic holiday within the meanin of the 4e otia#le Instr"ments Act, 1))1K Provided that no day declared #y the *entral +o!ernment to #e a p"#lic holiday shall #e deemed to #e s"ch a holiday, in relation to any meetin , "nless the declaration was notified #efore the iss"e of the notice con!enin s"ch meetin L

G3$H G3'H G3(H

G37H G3)H

G3,H

"reco nised stoc; exchan e" means, in relation to any pro!ision of this Act in which it occ"rs, a stoc; exchan e, whether in or o"tside India, which is notified #y the *entral +o!ernment in the :fficial +aFette as a reco nised stoc; exchan e for the p"rposes of that pro!isionL "8e istrar" means a 8e istrar, or an Additional, a -oint, a Dep"ty or an Assistant 8e istrar, ha!in the d"ty of re isterin companies "nder this ActL "relati!e" means, with reference to any person, any one who is related to s"ch person in any of the ways specified in section (, and no othersL "Sched"le" means a Sched"le annexed to this ActL "Sched"led 0an;" has the same meanin as in the 8eser!e 0an; of India Act, 1,3$L

G$0H G$1H G$2H G$3H AJJJB AG$'H

"secretary" means a *ompany Secretary within the meanin of cla"se GcH of s"#/section G1H of section 2 of the *ompany Secretaries Act, 1,)0, and incl"des any other indi!id"al possessin the 2)Aprescri#ed D"alificationsB and appointed to perform the d"ties which may #e performed #y a secretary "nder this Act and any other ministerial or administrati!e d"tiesLB AG$'AH "secretary in whole/time practice" means a secretary who shall #e deemed to #e in practice within the meanin of s"#/section G2H of section 2 of the *ompany Secretaries Act, 1,)0, and who is not in f"ll/ time employmentLB AG$'AAH "sec"rities" means sec"rities as defined in cla"se GhH of section 2 of the Sec"rities *ontracts G8e "lationH Act, 1,'(, and incl"des hy#ridsLB AG$'0H "Sec"rities and 1xchan e 0oard of India" means the Sec"rities and 1xchan e 0oard of India esta#lished "nder section 3 of the Sec"rities and 1xchan e 0oard of India Act, 1,,2LB G$(H "share" means share in the share capital of a company, and incl"des stoc; except where a distinction #etween stoc; and shares is expressed or impliedL

AG$(AH "share with differential ri hts" means a share that is iss"ed with differential ri hts in accordance with the pro!isions of section )(LB G46AAH "sic; ind"strial company" means an ind"strial company which hasM Gi H the acc"m"lated losses in any financial year eD"al to fifty per cent. or more of its a!era e net worth d"rin fo"r years immediately precedin s"ch financial yearL or GiiH failed to repay its de#ts within any three consec"ti!e D"arters on demand made in writin for its repayment #y a creditor or creditors of s"ch companyL G46ABH "State le!el instit"tion" means any of the followin instit"tions, namelyKM GaH the State 3inancial *orporations esta#lished "nder section 3 or section 3A and instit"tions notified "nder section $( of the State 3inancial *orporations Act, 1,'1 G(3 of 1,'1HL

G$7H G$)H

GbH the State Ind"strial De!elopment *orporations re istered "nder this ActLB "s"#sidiary company" or "s"#sidiary" means a s"#sidiary company within the meanin of section $K "total !otin power", in re ard to any matter relatin to a #ody corporate, means the total n"m#er of !otes which may #e cast in re ard to that matter on a poll at a meetin of s"ch #ody, if all the mem#ers thereof and all other persons, if any, ha!in a ri ht to !ote on that matter are present at the meetin , and cast their !otesL "tradin corporation" means a tradin corporation within the meanin of entries $3 and $$ in 2ist I in the Se!enth Sched"le to the *onstit"tionL

G$,H

AJJJB AG49AH ".ri#"nal" means the 4ational *ompany 2aw .ri#"nal constit"ted "nder s"#section G 1H of section 1030LB G'0H "!ariation" shall incl"de a#ro ationL and "!ary" shall incl"de a#ro ate.

2A.

"nterpretation o! certain words and expressions

=ords and expressions "sed and not defined in this Act #"t defined in the Depositories Act, 1,,( shall ha!e the same meanin s respecti!ely assi ned to them in that Act.B

#.

e!initions o! $compan%$, $existing compan%$, $private compan%$ and $pu&lic compan%$

In this Act, "nless the context otherwise reD"ires, the expressions "company", "existin company", "pri!ate company" and "p"#lic company", shall, s"#Cect to the pro!isions of s"#/section G2H, ha!e the meanin s specified #elow,/ GiH "company" means a company formed and re istered "nder this Act or an existin company as defined in cla"se GiiHL GiiH "existin company" means a company formed and re istered "nder any of the pre!io"s companies laws specified #elowK/ GaH any Act or Acts relatin to companies in force #efore the Indian *ompanies Act, 1)((, and repealed #y that ActL G#H the Indian *ompanies Act, 1)((L GcH GdH GeH AGfH the Indian *ompanies Act, 1))2L the Indian *ompanies Act, 1,13L the 8e istration of .ransferred *ompanies :rdinance, 1,$2L and any law correspondin to any of the Acts or the :rdinance aforesaid and in force/ G1H in the mer ed territories or in a &art 0 States Gother than the State of -amm" and 9ashmirH, or any part thereof, #efore the extension thereto of the Indian *ompanies Act, 1,13L or in the State of -amm" and 9ashmir, or any part thereof, #efore the commencement of the -amm" and 9ashmir G1xtension of 2awsH Act, 1,'( 33Ain so far as #an;in , ins"rance and financial corporations are concerned, and #efore the commencement of the *entral 2aws G1xtension to -amm" and 9ashmirH Act, 1,() in so far as other corporations are concernedBLB and

G1H

G2H

GiiiH

AG H the &ort" "ese *ommercial *ode AJJJB in so far as it relates to "sociedades anonimas"LB "pri!ate company" 3'AAmeans a company which has a minim"m paid/"p capital of one la;h r"pees or s"ch hi her paid/"p capital as may #e prescri#ed, and #y its articles,MB GaH restricts the ri ht to transfer its shares, if anyL G#H limits the n"m#er of its mem#ers to fifty not incl"din / GiH persons who are in the employment of the companyL and GiiH

persons who, ha!in #een formerly in the employment of the company, were mem#ers of the company while in that employment and ha!e contin"ed to #e mem#ers after the employment ceasedL and GcH prohi#its any in!itation to the p"#lic to s"#scri#e for any shares in, or de#ent"res of, the companyK" AGdH prohi#its any in!itation or acceptance of deposits from persons other than its mem#ers, directors or their relati!esKB Provided that where two or more persons hold one or more shares in a company Cointly, they shall, for the p"rposes of this definition, #e treated as a sin le mem#erL AGi!H "p"#lic company" means a company whichM GaH G#H GcH G2H is not a pri!ate companyL has a minim"m paid/"p capital of fi!e la;h r"pees or s"ch hi her paid/"p capital, as may #e prescri#edL is a pri!ate company which is a s"#sidiary of a company which is not a pri!ate companyLB

<nless the context otherwise reD"ires, the followin companies shall not #e incl"ded within the scope of any of the expressions defined in cla"ses GiH to Gi!H of s"#/section G1H, and s"ch companies shall #e deemed, for the p"rposes of this Act, to ha!e #een formed and re istered o"tside IndiaK/ GaH a company the re istered office whereof is in 0"rma, Aden or &a;istan and which immediately #efore the separation of that co"ntry from India was a company as defined in cla"se GiH of s"#/ section G1HL

AG#H AG3H

JJJB

G$H

1!ery pri!ate company, existin on the commencement of the *ompanies GAmendmentH Act, 2000, with a paid/"p capital of less than one la;h r"pees, shall, within a period of two years from s"ch commencement, enhance its paid/"p capital to one la;h r"pees. 1!ery p"#lic company, existin on the commencement of the *ompanies GAmendmentH Act, 2000, with a paid/"p capital of less than fi!e la;h r"pees, shall within a period of two years from s"ch commencement, enhance its paid/"p capital to fi!e la;h r"pees. =here a pri!ate company or a p"#lic company fails to enhance its paid/"p capital in the manner specified in s"#/section G3H or s"#/section G$H, s"ch company shall #e deemed to #e a def"nct company within the meanin of section '(0 and its name shall #e str"c; off from the re ister #y the 8e istrar. A company re istered "nder section 2' #efore or after the commencement of *ompanies GAmendmentH Act, 2000 shall not #e reD"ired to ha!e minim"m paid/"p capital specified in this section.B

G'H

G(H

'.
G1H

(eaning o! $holding compan%$ and $su&sidiar%$

3or the p"rposes of this Act, a company shall, s"#Cect to the pro!isions of s"#/section G3H, #e deemed to #e a s"#sidiary of another if, #"t only if, / GaH AG#H that other controls the composition of its 0oard of directorsL or that other/ GiH where the first/mentioned company is an existin company in respect of which the holders of preference shares iss"ed #efore the commencement of this Act ha!e the same !otin ri hts in all respects as the holders of eD"ity shares, exercises or controls more than half of the total !otin power of s"ch companyL where the first/mentioned company is any other company, holds more than half in nominal !al"e of its eD"ity share capitalL orB

GiiH GcH

the first/mentioned company is a s"#sidiary of any company which is that otherEs s"#sidiary.

Illustration
*ompany 0 is a s"#sidiary of company A, and company * is a s"#sidiary of company 0. *ompany * is a s"#sidiary of company A, #y !irt"e of cla"se GcH a#o!e. If company D is a s"#sidiary of company *, company D will #e a s"#sidiary of company 0 and conseD"ently also of company A, #y !irt"e of cla"se GcH a#o!e, and so on. G2H 3or the p"rposes of s"#/section G1H, the composition of a companyEs 0oard of directors shall #e deemed to #e controlled #y another company if, #"t only if, that other company #y the exercise of some power exercisa#le #y it at its discretion witho"t the consent or conc"rrence of any other person, can appoint or remo!e the holders of all or a maCority of the directorshipsL #"t for the p"rposes of this pro!ision that other company shall #e deemed to ha!e power to appoint to a directorship with respect to which any of the followin conditions is satisfied, that is to say/ GaH that a person cannot #e appointed thereto witho"t the exercise in his fa!o"r #y that other company of s"ch a power as aforesaidL G#H that a personEs appointment thereto follows necessarily from his appointment as director, 21AJJJB or mana er of, or to any other office or employment in, that other companyL or AGcH that the directorship is held #y an indi!id"al nominated #y that other company or a s"#sidiary thereof.B In determinin whether one company is a s"#sidiary of another/ GaH G#H any shares held or power exercisa#le #y that other company in a fid"ciary capacity shall #e treated as not held or exercisa#le #y itL s"#Cect to the pro!isions of cla"ses GcH and GdH, any shares held or power exercisa#le / GiH #y any person as a nominee for that other company Gexcept where that other is concerned only in a fid"ciary capacityHL or

G3H

GiiH

#y, or #y a nominee for, a s"#sidiary of that other company, not #ein a s"#sidiary which is concerned only in a fid"ciary capacityL shall #e treated as held or exercisa#le #y that other companyL GcH any shares held or power exercisa#le #y any person #y !irt"e of the pro!isions of any de#ent"res of the first/mentioned company or of a tr"st deed for sec"rin any iss"e of s"ch de#ent"res shall #e disre ardedL GdH any shares held or power exercisa#le #y, or #y a nominee for, that other or its s"#sidiary Anot #ein held or exercisa#le as mentioned in cla"se GcHB shall #e treated as not held or exercisa#le #y that other, if the ordinary #"siness of that other or its s"#sidiary, as the case may #e, incl"des the lendin of money and the shares are held or the power is exercisa#le as aforesaid #y way of sec"rity only for the p"rposes of a transaction entered into in the ordinary co"rse of that #"siness. 3or the p"rposes of this Act, a company shall #e deemed to #e the holdin company of another if, #"t only if, that other is its s"#sidiary. In this section, the expression "company" incl"des any #ody corporate, and the expression "eD"ity share capital" has the same meanin as in s"#/section G2H of section )'. In the case of a #ody corporate which is incorporated in a co"ntry o"tside India, a s"#sidiary or holdin company of the #ody corporate "nder the law of s"ch co"ntry shall #e deemed to #e a s"#sidiary or holdin company of the #ody corporate within the meanin and for the p"rposes of this Act also, whether the reD"irements of this section are f"lfilled or not. A pri!ate company, #ein a s"#sidiary of a #ody corporate incorporated o"tside India, which, if incorporated in India, wo"ld #e a p"#lic company within the meanin of this Act, shall #e deemed for the p"rposes of this Act to #e a s"#sidiary of a p"#lic company if the entire share capital in that pri!ate company is not held #y that #ody corporate whether alone or to ether with one or more other #odies corporate incorporated o"tside India.B

G$H G'H G(H

AG7H

'A.
G1H

Pu&lic !inancial institutions

1ach of the financial instit"tions specified in this s"#/section shall #e re arded, for the p"rposes of this Act, as a p"#lic financial instit"tion, namelyK/ GiH the Ind"strial *redit and In!estment *orporation of India 2imited, a company formed and re istered "nder the Indian *ompanies Act, 1,13L GiiH the Ind"strial 3inance *orporation of India, esta#lished "nder section 3 of the Ind"strial 3inance *orporation Act, 1,$)L GiiiH the Ind"strial De!elopment 0an; of India, esta#lished "nder section 3 of the Ind"strial De!elopment 0an; of India Act, 1,($L Gi!H the 2ife Ins"rance *orporation of India, esta#lished "nder section 3 of the 2ife Ins"rance *orporation Act, 1,'(L G!H the <nit .r"st of India, esta#lished "nder section 3 of the <nit .r"st of India Act, 1,(3L AG!iH the Infrastr"ct"re De!elopment 3inance *ompany 2imited, a company formed and re istered "nder this Act.B

G2H

S"#Cect to the pro!isions of s"#/section G1H, the *entral +o!ernment may, #y notification in the :fficial +aFette, specify s"ch other instit"tion as it may thin; fit to #e a p"#lic financial instit"tionK Provided that no instit"tion shall #e so specified "nless/ GiH it has #een esta#lished or constit"ted #y or "nder any *entral ActL or GiiH not less than fifty/one per cent of the paid/"p share capital of s"ch instit"tion is held or controlled #y the *entral +o!ernment.B

).

(eaning o! $o!!icer who is in de!ault$

3or the p"rpose of any pro!ision in this Act which enacts that an officer of the company who is in defa"lt shall #e lia#le to any p"nishment or penalty, whether #y way of imprisonment, fine or otherwise, the expression "officer who is in defa"lt" means all the followin officers of the company, namelyK/ GaH G#H GcH GdH GeH GfH G H the mana in director or mana in directorsL the whole/time director or whole/time directorsL the mana erL the secretaryL any person in accordance with whose directions or instr"ctions the 0oard of directors of the company is acc"stomed to actL any person char ed #y the 0oard with the responsi#ility of complyin with that pro!isionK Provided that the person so char ed has i!en his consent in this #ehalf to the 0oardL where any company does not ha!e any of the officers specified in cla"ses GaH to GcH, any director or directors who may #e specified #y the 0oard in this #ehalf or where no director is so specified, all the directorsK Provided that where the 0oard exercises any power "nder cla"se GfH or cla"se G H, it shall, within thirty days of the exercise of s"ch powers, file with the 8e istrar a ret"rn in the prescri#ed form.B

*.

(eaning o! $relative$

A person shall #e deemed to #e a relati!e of another, if, and only if, / GaH they are mem#ers of a 6ind" "ndi!ided familyL or G#H GcH they are h"s#and and wifeL or the one is related to the other in the manner indicated in Sched"le IA.B

+.

"nterpretation o! $person in accordance with whose directions or "nstructions directors are accustomed to act$

1xcept where this Act expressly pro!ides otherwise, a person shall not #e deemed to #e, within the meanin of any pro!ision in this Act, a person in accordance with whose directions or instr"ctions the 0oard of directors of a company is acc"stomed to act, #y reason only that the 0oard acts on ad!ice i!en #y him in a professional capacity.

,.

Power o! Central -overnment to declare an esta&lishment not to &e a &ranch o!!ice

.he *entral +o!ernment may, #y order, declare that in the case of any company, $$AJJJB, any esta#lishment carryin on either the same or s"#stantially the same acti!ity as that carried on #y the head office of the company, or Aany esta#lishment en a ed in any prod"ction, processin or man"fact"reB, shall not #e treated as a #ranch office of the company for all or any of the p"rposes of this Act.

..

Act to override memorandum, articles, etc

Sa!e as otherwise expressly pro!ided in the Act/ GaH the pro!isions of this Act shall ha!e effect notwithstandin anythin to the contrary contained in the memorand"m or articles of a company, or in any a reement exec"ted #y it, or in any resol"tion passed #y the company in eneral meetin or #y its 0oard of directors, whether the same #e re istered, exec"ted or passed, as the case may #e, #efore or after the commencement of this ActL and G#H any pro!ision contained in the memorand"m, articles, a reement or resol"tion aforesaid shall, to the extent to which it is rep" nant to the pro!isions of this Act, #ecome or #e !oid, as the case may #e.

10.
G1H

/urisdiction o! Courts
.he *o"rt ha!in C"risdiction "nder this Act shall #e/ GaH the 6i h *o"rt ha!in C"risdiction in relation to the place at which the re istered office of the company concerned is sit"ate, except to the extent to which C"risdiction has #een conferred on any District *o"rt or District *o"rts s"#ordinate to that 6i h *o"rt in p"rs"ance of s"#/section G2HL and

G#H

G2H

where C"risdiction has #een so conferred, the District *o"rt in re ard to matters fallin within the scope of the C"risdiction conferred, in respect of companies ha!in their re istered offices in the district. .he *entral +o!ernment may, #y notification in the :fficial +aFette and s"#Cect to s"ch restrictions, limitations and conditions as it thin;s fit, empower any District *o"rt to exercise all or any of the C"risdiction conferred #y this Act "pon the *o"rt, not #ein the C"risdiction conferred/ GaH G#H in respect of companies enerally, #y sections 237, 3,1, 3,$, 3,', and 3,7 to $07, #oth incl"si!eL

G3H

in respect of companies with a paid/"p share capital of not less than one la;h of r"pees, #y &art 7II Gsections $2' to '(0H and the other pro!isions of this Act relatin to the windin "p of companies. 3or the p"rposes of C"risdiction to wind "p companies, the expression "re istered office" means the place which has lon est #een the re istered office of the company d"rin the six months immediately precedin the presentation of the petition for windin "p.

10A. Constitution o! 0ri&unal1

Omitted by t e !ompanies "ribunal (Abolition# A$t% 196&% '(e()( 1st( *uly% 196&+

102. Procedure o! 0ri&unal

Omitted by se$tion 1 and ,$ edule% ibid 'it e))e$t )rom 1st( *uly% 196&( B

10C. Powers o! 0ri&unal

Omitted by se$tion 4 and ,$ edule% ibid 'it e))e$t )rom 1st( *uly% 196& .B

10 . Appeals against decisions, etc., o! the 0ri&unal

Omitted by se$tion 4 and ,$ edule% ibid% 'it e))e$t )rom 1st( *uly% 196&( B

PART IA:

BOARD OF COMPANY LAW ADMINISTRATION

103. Constitution o! 2oard o! Compan% 4aw Administration

AG1H As soon as may #e after the commencement of the *ompanies GAmendmentH Act, 1,)), the *entral +o!ernment shall, #y notification in the :fficial +aFette, constit"te a 0oard to #e called the 0oard of *ompany 2aw Administration. .he *ompany 2aw 0oard shall exercise and dischar e s"ch powers and f"nctions as may #e (a Aconferred on it #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002B, #y or "nder this Act or any other law, and shall also exercise and dischar e s"ch other powers and f"nctions of the *entral +o!ernment "nder this Act or any other law as may #e (aAconferred on it #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002B #y the *entral +o!ernment, #y notification in the :fficial +aFette "nder the pro!isions of this Act or that other law.B .he *ompany 2aw 0oard shall consist of s"ch n"m#er of mem#ers, not exceedin $)AnineB, as the *entral +o!ernment deems fit, to #e appointed #y that +o!ernment #y notification in the :fficial +aFetteK

G1AH

G2H

AProvided that the *entral +o!ernment may, #y notification in the :fficial +aFette, contin"e the appointment of the chairman or any other mem#er of the *ompany 2aw 0oard f"nctionin as s"ch immediately #efore the commencement of the *ompanies GAmendmentH Act, 1,)), as the chairman or any other mem#er of the *ompany 2aw 0oard, after s"ch commencement for s"ch period not exceedin three years as may #e specified in the notification.B AG2AH G3H G$H AG$AH G$0H .he mem#ers of the *ompany 2aw 0oard shall possess s"ch D"alifications and experience as may #e prescri#ed.B :ne of the mem#ers shall #e appointed #y the *entral +o!ernment to #e the chairman of the *ompany 2aw 0oard. 4o act done #y the *ompany 2aw 0oard shall #e called in D"estion on the ro"nd only of any defect in the constit"tion of, or the existence of any !acancy in, the *ompany 2aw 0oard. JJJB A.he 0oardB may, #y order in writin , form one or more 0enches from amon its mem#ers and a"thorise each s"ch 0ench to exercise and dischar e s"ch of the 0oardEs powers and f"nctions as may #e specified in the orderL and e!ery order made or act done #y a 0ench in exercise of s"ch powers or dischar e of s"ch f"nctions shall #e deemed to #e the order or act, as the case may #e, of the 0oard. 1!ery 0ench referred to in s"#/section G$0H shall ha!e powers which are !ested in a *o"rt "nder the *ode of *i!il &roced"re, 1,0), while tryin a s"it, in respect of the followin matters, namelyK/ GaH disco!ery and inspection of doc"ments or other material o#Cects prod"ci#le as e!idenceL G#H GcH GdH GeH GfH G$DH enforcin the attendance of witnesses and reD"irin the deposit of their expensesL compellin the prod"ction of doc"ments or other material o#Cects prod"ci#le as e!idence and impo"ndin the sameL examinin witnesses on oathL rantin adCo"rnmentsL reception of e!idence on affida!its.

G$*H

1!ery 0ench shall #e deemed to #e a ci!il co"rt for the p"rposes of section 1,' and '$A*hapter >>7I of the *ode of *riminal &roced"re, 1,73B, and e!ery proceedin #efore the 0ench shall #e deemed to #e a C"dicial proceedin within the meanin of sections 1,3 and 22) of the Indian &enal *ode, 1)(0, and for the p"rpose of section 1,( of that *ode.B =itho"t preC"dice to the pro!isions of s"#/sections G$*H and G$DH, the *ompany 2aw 0oard shall in the exercise of its powers and the dischar e of its f"nctions "nder this Act, or any other law #e "ided #y the principles of nat"ral C"stice and shall act in its discretion. S"#Cect to the fore oin pro!isions of this section, the *ompany 2aw 0oard shall ha!e power to re "late its own proced"re.B

AG'H

G(H

105. Appeals against the orders o! the Compan% 4aw 2oard

Any person a rie!ed #y any decision or order of the *ompany 2aw 0oard (aAmade #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002B may file an appeal to the 6i h *o"rt within sixty days from the date of comm"nication of the decision or order of the *ompany 2aw 0oard to him on any D"estion of law arisin o"t of s"ch orderK Provided that the 6i h *o"rt may, if it is satisfied that the appellant was pre!ented #y s"fficient ca"se from filin the appeal within the said period, allow it to #e filed within a f"rther period not exceedin sixty daysB.

105A.
(1# (2#

issolution o! Compan% 4aw 2oard

On and )rom t e $ommen$ement o) t e !ompanies (,e$ond Amendment# A$t% 2--2% t e Board o) !ompany .a' Administration $onstituted under sub/se$tion (1# o) se$tion 1-E s all stand dissol0ed( On t e dissolution o) t e !ompany .a' Board% t e persons appointed as ! airman% 1i$e/! airman and members and o))i$ers and ot er employees o) t at Board and oldin2 o))i$e as su$ immediately be)ore su$ $ommen$ement s all 0a$ate t eir respe$ti0e o))i$es and no su$ ! airman% 1i$e/

! airman and member and o))i$er and ot er employee s all be entitled to $laim any $ompensation )or t e premature termination o) t e term o) is o))i$e or o) any $ontra$t o) ser0i$e3 Provided t at e0ery o))i$er or ot er employee% ' o as been% immediately be)ore t e dissolution o) t e !ompany .a' Board% appointed on deputation basis to t at Board% s all% on su$ dissolution% stand re0erted to is parent $adre% 4inistry or 5epartment% as t e $ase may be3 Provided !urther t at e0ery o))i$er and ot er employee o) t e !ompany .a' Board employed on re2ular basis by t at Board% s all be$ome% on and )rom t e dissolution o) t e Board% t e o))i$er and employee% respe$ti0ely% o) t e !entral 6o0ernment 'it t e same ri2 ts and pri0ile2es as to pension% 2ratuity and ot er li7e bene)its as 'ould a0e been admissible to im i) t e ri2 ts in relation to t at Board ad not been trans)erred to% and 0ested in% t e !entral 6o0ernment and s all $ontinue to do so unless and until is employment in t e !entral 6o0ernment is duly terminated or until is remuneration% terms and $onditions o) employment are duly altered by t at 6o0ernment3 Provided also t at not'it standin2 anyt in2 $ontained in t e Industrial 5isputes A$t% 194& (14 o) 194&#% or in any ot er la' )or t e time bein2 in )or$e% t e trans)er o) t e ser0i$es o) any o))i$er or ot er employee employed in t e !ompany .a' Board% to t e !entral 6o0ernment s all not entitle su$ o))i$er or ot er employee to any $ompensation under t is A$t or under any ot er la' )or t e time bein2 in )or$e and no su$ $laim s all be entertained by any $ourt% tribunal (in$ludin2 t e "ribunal under t is A$t# or ot er aut ority3 Provided also t at ' ere t e !ompany .a' Board as establis ed a pro0ident )und% superannuation )und% 'el)are )und or ot er )und )or t e bene)it o) t e o))i$ers and ot er employees employed in t at Board% t e monies relatable to t e o))i$ers and ot er employees ' ose ser0i$es a0e been trans)erred by or under t is A$t to t e !entral 6o0ernment s all% out o) t e monies standin2% on t e dissolution o) t e !ompany .a' Board to t e $redit o) su$ pro0ident )und% superannuation )und% 'el)are )und or ot er )und% stand trans)erred to% and 0est in% t e !entral 6o0ernment and su$ monies ' i$ stand so trans)erred s all be dealt 'it by t at 6o0ernment in su$ manner as may be pres$ribed( (3# All matters or pro$eedin2s or $ases pendin2 be)ore t e !ompany .a' Board on or be)ore t e $onstitution o) t e "ribunal under se$tion 1-8B% s all% on su$ $onstitution% stand trans)erred to t e 9ational !ompany .a' "ribunal and t e said "ribunal s all dispose o) su$ $ases in a$$ordan$e 'it t e pro0isions o) t is A$t(+

PART IB:

NATIONAL COMPANY LAW TRIBUNAL

1052. Constitution o! 6ational Compan% 4aw 0ri&unal

.he *entral +o!ernment shall, #y notification in the :fficial +aFette, constit"te a .ri#"nal to #e ;nown as the 4ational *ompany 2aw .ri#"nal to exercise and dischar e s"ch powers and f"nctions as are, or may #e, conferred on it #y or "nder this Act or any other law for the time #ein in force.

105C. Composition o! 0ri&unal

.he .ri#"nal shall consist of a &resident and s"ch n"m#er of -"dicial and .echnical %em#ers not exceedin sixty/two, as the *entral +o!ernment deems fit, to #e appointed #y that +o!ernment, #y notification in the :fficial +aFette.

105 . 7uali!ications !or appointment o! President and (em&ers

(1# (2# " e !entral 6o0ernment s all appoint a person ' o as been% or is :uali)ied to be% a *ud2e o) a ;i2 !ourt as t e <resident o) t e "ribunal( A person s all not be :uali)ied )or appointment as *udi$ial 4ember unless e= (a# (b# as% )or at least )i)teen years% eld a judi$ial o))i$e in t e territory o) India> or as% )or at least ten years been an ad0o$ate o) a ;i2 !ourt% or as partly eld judi$ial o))i$e and as been partly in pra$ti$e as an ad0o$ate )or a total period o) )i)teen years> or

($#

(d#

as eld )or at least )i)teen years a 6roup ?A@ post or an e:ui0alent post under t e !entral 6o0ernment or a ,tate 6o0ernment [in$ludin2 at least t ree years o) ser0i$e as a 4ember o) t e Indian !ompany .a' ,er0i$e (.e2al Bran$ # in ,enior Administrati0e 6rade in t at ser0i$e+> or as eld )or at least )i)teen years a 6roup ?A@ post or an e:ui0alent post under t e !entral 6o0ernment (in$ludin2 at least t ree years o) ser0i$e as a 4ember o) t e Indian .e2al ,er0i$e in 6rade I o) t at ser0i$e#(

(3#

A person s all not be :uali)ied )or appointment as "e$ ni$al 4ember unless e= (a# as eld )or at least )i)teen years a 6roup ?A@ post or an e:ui0alent post under t e !entral 6o0ernment or a ,tate 6o0ernment [in$ludin2 at least t ree years o) ser0i$e as a 4ember o) t e Indian !ompany .a' ,er0i$e (A$$ounts Bran$ # in ,enior Administrati0e 6rade in t at ser0i$e+> or (b# is% or as been% a *oint ,e$retary to t e 6o0ernment o) India under t e !entral ,ta))in2 ,$ eme% or eld any ot er post under t e !entral 6o0ernment or a ,tate 6o0ernment $arryin2 a s$ale o) pay ' i$ is not less t an t at o) a *oint ,e$retary to t e 6o0ernment o) India% )or at least )i0e years and as ade:uate 7no'led2e o)% and experien$e in% dealin2 'it problems relatin2 to $ompany la'> or ($# (d# (e# is% or as been% )or at least )i)teen years in pra$ti$e as a $ artered a$$ountant under t e ! artered A$$ountants A$t% 1949 (3A o) 1949#> or is% or as been% )or at least )i)teen years in pra$ti$e as a $ost a$$ountant under t e !osts and Bor7s A$$ountants A$t% 19C9 (23 o) 19C9#> or is% or as been% )or at least )i)teen years 'or7in2 experien$e as a ,e$retary in ' ole/time pra$ti$e as de)ined in $lause (4CA# o) se$tion 2 o) t is A$t and is a member o) t e Institute o) t e !ompanies ,e$retaries o) India $onstituted under t e !ompany ,e$retaries A$t% 19A- (C6 o) 19A-#> or is a person o) ability% inte2rity and standin2 a0in2 spe$ial 7no'led2e o)% and pro)essional experien$e o) not less t an t'enty years in% s$ien$e% te$ nolo2y% e$onomi$s% ban7in2% industry% la'% matters relatin2 to industrial )inan$e% industrial mana2ement% industrial re$onstru$tion% administration% in0estment% a$$ountan$y% mar7etin2 or any ot er matter% t e spe$ial 7no'led2e o)% or pro)essional experien$e in% ' i$ 'ould be in t e opinion o) t e !entral 6o0ernment use)ul to t e "ribunal> or is% or as been% a <residin2 O))i$er o) a .abour !ourt% "ribunal or 9ational "ribunal $onstituted under t e Industrial 5isputes A$t% 194& (14 o) 194&#> or is a person a0in2 spe$ial 7no'led2e o)% and experien$e o) not less t an )i)teen years in% t e matters relatin2 to labour(

()#

(2# ( #

1xplanation. =8or t e purposes o) t is <art%= (i# D*udi$ial 4emberD means a 4ember o) t e "ribunal appointed as su$ under sub/se$tion (2# o) se$tion 1-85 and in$ludes t e <resident o) t e "ribunal> (ii# D"e$ ni$al 4emberD means a 4ember o) t e "ribunal appointed as su$ under sub/se$tion (3# o) se$tion 103D.

1053. 0erm o! o!!ice o! President and (em&ers

" e <resident and e0ery ot er 4ember o) t e "ribunal s all old o))i$e as su$ )or a term o) t ree years )rom t e date on ' i$ e enters upon is o))i$e% but s all be eli2ible )or reappointment3 Provided t at no <resident or ot er 4ember s all old o))i$e as su$ a)ter e as attained%= (a# in t e $ase o) t e <resident% t e a2e o) sixty/se0en years> (b# in t e $ase o) any ot er 4ember% t e a2e o) sixty/)i0e years3 Provided !urther t at t e <resident or ot er 4ember may retain is lien 'it 5epartment% as t e $ase may be% ' ile oldin2 o))i$e as su$ ( is parent $adre or 4inistry or

1055. 5inancial and administrative powers o! (em&er Administration

" e !entral 6o0ernment s all desi2nate any *udi$ial 4ember or "e$ ni$al 4ember as 4ember Administration ' o s all exer$ise su$ )inan$ial and administrati0e po'ers as may be 0ested in im under t e rules ' i$ may be made by t e !entral 6o0ernment3 Provided t at t e 4ember Administration s all a0e aut ority to dele2ate su$ o) is )inan$ial and administrati0e po'ers as e may t in7 )it to any ot er o))i$er o) t e "ribunal subje$t to t e $ondition t at su$ o))i$er s all% ' ile exer$isin2 su$ dele2ated po'ers $ontinue to a$t under t e dire$tion% superintenden$e and $ontrol o) t e 4ember Administration(

105-. Salar%, allowances and other terms and conditions o! service o! President and other (em&ers
" e salary and allo'an$es and ot er terms and $onditions o) ser0i$e o) t e <resident and ot er 4embers o) t e "ribunal s all be su$ as may be pres$ribed3 Provided t at neit er t e salary and allo'an$es nor t e ot er terms and $onditions o) ser0i$e o) t e <resident and ot er 4embers s all be 0aried to t eir disad0anta2e a)ter t eir appointment(

1058. 9acanc% in 0ri&unal

(1# In t e e0ent o) t e o$$urren$e o) any 0a$an$y in t e o))i$e o) t e <resident o) t e "ribunal by reason o) is deat % resi2nation or ot er'ise% t e senior/ most 4ember s all a$t as t e <resident o) t e "ribunal until t e date on ' i$ a ne' <resident% appointed in a$$ordan$e 'it t e pro0isions o) t is A$t to )ill su$ 0a$an$y% enters upon is o))i$e( B en t e <resident is unable to dis$ ar2e is )un$tions o'in2 to absen$e% illness or any ot er $ause% t e senior/most 4ember or% as t e $ase may be% su$ one o) t e 4embers o) t e "ribunal% as t e !entral 6o0ernment% may% by noti)i$ation% aut orise in t is be al)% s all dis$ ar2e t e )un$tions o) t e <resident until t e date on ' i$ t e <resident resumes is duties( I)% )or reason ot er t an temporary absen$e% any 0a$an$y o$$urs in t e o))i$e o) t e <resident or a 4ember% t e !entral 6o0ernment s all appoint anot er person in a$$ordan$e 'it t e pro0isions o) t is A$t to )ill t e 0a$an$y and t e pro$eedin2s may be $ontinued be)ore t e "ribunal )rom t e sta2e at ' i$ t e 0a$an$y is )illed(

(2#

(3#

105". :esignation o! President and (em&er

" e <resident or a 4ember o) t e "ribunal may% by noti$e in 'ritin2 under is and addressed to t e !entral 6o0ernment% resi2n is o))i$e3 Provided t at t e <resident or a 4ember s all% unless e is permitted by t e !entral 6o0ernment to relin:uis is o))i$e sooner% $ontinue to old o))i$e until t e expiry o) t ree mont s )rom t e date o) re$eipt o) su$ noti$e or until a person duly appointed as is su$$essor enters upon is o))i$e or until t e expiry o) t e term o) o))i$e% ' i$ e0er is t e earliest(

105/. :emoval and suspension o! President or (em&er

(1# " e !entral 6o0ernment may% in $onsultation 'it t e ! ie) *usti$e o) India% remo0e )rom o))i$e t e <resident or any 4ember o) t e "ribunal% ' o= (a# as been adjud2ed an insol0ent> or (b# ($# (d# as been $on0i$ted o) an o))en$e ' i$ % in t e opinion o) t e !entral 6o0ernment% in0ol0es moral turpitude> or as be$ome p ysi$ally or mentally in$apable o) a$tin2 as su$ <resident or 4ember o) t e "ribunal> or as a$:uired su$ )inan$ial or ot er interest as is li7ely to a))e$t prejudi$ially is )un$tions as su$ <resident or 4ember o) t e "ribunal> or

(e# as so abused is position as to render is $ontinuan$e in o))i$e prejudi$ial to t e publi$ interest3

Provided t at no su$ <resident or a 4ember s all be remo0ed on any o) t e 2rounds spe$i)ied in $lauses (b# to (e# 'it out 2i0in2 im reasonable opportunity o) bein2 eard in respe$t o) t ose $ ar2es( (2# " e <resident or a 4ember o) t e "ribunal s all not be remo0ed )rom is o))i$e ex$ept by an order made by t e !entral 6o0ernment on t e 2round o) pro0ed misbe a0iour or in$apa$ity a)ter an in:uiry made by a *ud2e o) t e ,upreme !ourt in ' i$ su$ <resident or a 4ember ad been in)ormed o) t e $ ar2es a2ainst im and 2i0en a reasonable opportunity o) bein2 eard in respe$t o) t ose $ ar2es( " e !entral 6o0ernment may suspend )rom o))i$e t e <resident or 4ember o) t e "ribunal in respe$t o) ' om a re)eren$e as been made to t e *ud2e o) t e ,upreme !ourt under sub/se$tion (2# until t e !entral 6o0ernment as passed orders on re$eipt o) t e report o) t e *ud2e o) t e ,upreme !ourt on su$ re)eren$e( " e !entral 6o0ernment may% by rules% re2ulate t e pro$edure )or t e in0esti2ation o) misbe a0iour or in$apa$ity o) t e <resident or a 4ember re)erred to in sub/se$tion (2#(

(3#

(4#

105;. <!!icers and emplo%ees o! 0ri&unal

(1# (2# (3# " e !entral 6o0ernment s all pro0ide t e "ribunal 'it su$ o))i$ers and ot er employees as it may deem )it( " e o))i$ers and ot er employees o) t e "ribunal s all dis$ ar2e t eir )un$tions under t e 2eneral superintenden$e o) t e 4ember Administration( " e salaries and allo'an$es and ot er terms and $onditions o) ser0i$e o) t e o))i$ers and ot er employees o) t e "ribunal s all be su$ as may be pres$ribed(

1054. 2enches o! 0ri&unal

(1# ,ubje$t to t e pro0isions o) t is se$tion% t e po'ers o) t e "ribunal may be exer$ised by Ben$ es% $onstituted by t e <resident o) t e "ribunal% out o) ' i$ one s all be a *udi$ial 4ember and anot er s all be a "e$ ni$al 4ember re)erred to in $lauses (a# to ()# o) sub/se$tion (3# o) se$tion 1-853 Provided t at it s all be $ompetent )or t e 4embers aut orised in t is be al) to )un$tion as a Ben$ $onsistin2 o) a sin2le 4ember and exer$ise t e jurisdi$tion% po'ers and aut ority o) t e "ribunal in respe$t o) su$ $lass o) $ases or su$ matters pertainin2 to su$ $lass o) $ases% as t e <resident o) t e "ribunal may% by 2eneral or spe$ial order% spe$i)y3 Provided )urt er t at i) at any sta2e o) t e earin2 o) any su$ $ase or matter% it appears to t e 4ember o) t e "ribunal t at t e $ase or matter is o) su$ a nature t at it ou2 t to be eard by a Ben$ $onsistin2 o) t'o 4embers% t e $ase or matter may be trans)erred by t e <resident o) t e "ribunal or% as t e $ase may be% re)erred to im )or trans)er to su$ Ben$ as t e <resident may deem )it( " e <resident o) t e "ribunal s all% )or t e disposal o) any $ase relatin2 to re abilitation% restru$turin2 or 'indin2 up o) t e $ompanies% $onstitute one or more ,pe$ial Ben$ es $onsistin2 o) t ree or more 4embers% ea$ o) ' om s all ne$essarily be a *udi$ial 4ember% a "e$ ni$al 4ember appointed under any o) t e $lauses (a# to ()# o) sub/se$tion (3# o) se$tion 1-85% and a 4ember appointed under $lause (2# or $lause ( # o) sub/se$tion (3# o) se$tion 1-853 Provided t at in $ase a ,pe$ial Ben$ passes an order in respe$t o) a $ompany to be 'ound up% t e 'indin2 up pro$eedin2s o) su$ $ompany may be $ondu$ted by a Ben$ $onsistin2 o) a sin2le 4ember( I) t e 4embers o) a Ben$ di))er in opinion on any point or points% it s all be de$ided a$$ordin2 to t e majority% i) t ere is a majority% but i) t e 4embers are e:ually di0ided% t ey s all state t e point or points on ' i$ t ey di))er% and t e $ase s all be re)erred by t e <resident o) t e "ribunal )or earin2 on su$ point or points by one or more o) t e ot er 4embers o) t e "ribunal and su$ point or points s all be de$ided a$$ordin2 to t e opinion o) t e majority o) 4embers o) t e "ribunal ' o a0e eard t e $ase% in$ludin2 t ose ' o )irst eard it( " ere s all be $onstituted su$ number o) Ben$ es as may be noti)ied by t e !entral 6o0ernment( In addition to t e ot er Ben$ es% t ere s all be a <rin$ipal Ben$ at 9e' 5el i presided o0er by t e <resident o) t e "ribunal(

(2#

(3#

(4# (C#

(6#

" e <rin$ipal Ben$ o) t e "ribunal s all a0e po'ers o) trans)er o) pro$eedin2s )rom any Ben$ to anot er Ben$ o) t e "ribunal in t e e0ent o) inability o) any Ben$ )rom earin2 any su$ pro$eedin2s )or any reason3 Provided t at no trans)er o) any pro$eedin2s s all be made under t is sub/se$tion ex$ept a)ter re$ordin2 t e reasons )or so doin2 in 'ritin2(

105(. <rder o! 0ri&unal

(1# (2# " e "ribunal may% a)ter 2i0in2 t e parties to any pro$eedin2 be)ore it% an opportunity o) bein2 eard% pass su$ orders t ereon as it t in7s )it( " e "ribunal may% at any time 'it in t'o years )rom t e date o) t e order% 'it a 0ie' to re$ti)yin2 any mista7e apparent )rom t e re$ord% amend any order passed by it under sub/se$tion (1#% and s all ma7e su$ amendment i) t e mista7e is brou2 t to its noti$e by t e parties( " e "ribunal s all send a $opy o) e0ery order passed under t is se$tion to all t e parties $on$erned(

(3#

1056. Power to review

" e "ribunal s all a0e po'er to re0ie' its o'n orders(

105<.

elegation o! powers

" e "ribunal may% by 2eneral or spe$ial order% dele2ate% subje$t to su$ $onditions and limitations% i) any% as may be spe$i)ied in t e order% to any 4ember or o))i$er or ot er employee o) t e "ribunal or ot er person aut orised by t e "ribunal to mana2e any industrial $ompany or industrial underta7in2 or any operatin2 a2en$y% su$ po'ers and duties under t is A$t as it may deem ne$essary(

105P. Power to see= assistance o! Chie! (etropolitan (agistrate and istrict (agistrate
(1# " e "ribunal or any operatin2 a2en$y% on bein2 dire$ted by t e "ribunal may% in order to ta7e into $ustody or under its $ontrol all property% e))e$ts and a$tionable $laims to ' i$ a si$7 industrial $ompany is or appears to be entitled% re:uest% in 'ritin2% t e ! ie) 4etropolitan 4a2istrate or t e 5istri$t 4a2istrate 'it in ' ose jurisdi$tion any property% boo7s o) a$$ount or any ot er do$ument o) su$ si$7 industrial $ompany% be situate or be )ound% to ta7e possession t ereo)% and t e ! ie) 4etropolitan 4a2istrate or t e 5istri$t 4a2istrate% as t e $ase may be% s all% on su$ re:uest bein2 made to im%= (a# ta7e possession o) su$ property% boo7s o) a$$ount or ot er do$uments> and (b# $ause t e same to be entrusted to t e "ribunal or t e operatin2 a2en$y( 8or t e purpose o) se$urin2 $omplian$e 'it t e pro0isions o) sub/se$tion (1#% t e ! ie) 4etropolitan 4a2istrate or t e 5istri$t 4a2istrate may ta7e or $ause to be ta7en su$ steps and use or $ause to be used su$ )or$e as may% in is opinion% be ne$essary( 9o a$t o) t e ! ie) 4etropolitan 4a2istrate or t e 5istri$t 4a2istrate done in pursuan$e o) t is se$tion s all be $alled in :uestion in any $ourt or be)ore any aut ority on any 2round ' atsoe0er(+

(2#

(3#

PART IC:

APPELLATE TRIBUNAL

1057. Appeal !rom order o! 0ri&unal

(1# (2# Any person a22rie0ed by an order or de$ision o) t e "ribunal may pre)er an appeal to t e Appellate "ribunal( 9o appeal s all lie to t e Appellate "ribunal )rom an order or de$ision made by t e "ribunal 'it t e $onsent o) parties(

(3#

E0ery appeal under sub/se$tion (1# s all be )iled 'it in a period o) )orty/)i0e days )rom t e date on ' i$ a $opy o) t e order or de$ision made by t e "ribunal is re$ei0ed by t e appellant and it s all be in su$ )orm and a$$ompanied by su$ )ee as may be pres$ribed3 Provided t at t e Appellate "ribunal may entertain an appeal a)ter t e expiry o) t e said period o) )orty/)i0e days )rom t e date a)oresaid i) it is satis)ied t at t e appellant 'as pre0ented by su))i$ient $ause )rom not )ilin2 t e appeal in time( On re$eipt o) an appeal pre)erred under sub/se$tion (1#% t e Appellate "ribunal s all% a)ter 2i0in2 parties to t e appeal% an opportunity o) bein2 eard% pass su$ orders t ereon as it t in7s )it% $on)irmin2% modi)yin2 or settin2 aside t e order appealed a2ainst( " e Appellate "ribunal s all send a $opy o) e0ery order made by it to t e "ribunal and parties to t e appeal( " e appeal )iled be)ore t e Appellate "ribunal under sub/se$tion (1# s all be dealt 'it by it as expeditiously as possible and endea0our s all be made by it to dispose o) t e appeal )inally 'it in six mont s )rom t e date o) t e re$eipt o) t e appeal(

(4#

(C# (6#

105:. Constitution o! Appellate 0ri&unal

(1# " e !entral 6o0ernment s all% by noti)i$ation in t e O))i$ial 6aEette% $onstitute 'it e))e$t )rom su$ date as may be spe$i)ied t erein% an Appellate "ribunal to be $alled t e "National Company Law Appellate Tribunal" $onsistin2 o) a ! airperson and not more t an t'o 4embers% to be appointed by t at 6o0ernment% )or earin2 appeals a2ainst t e orders o) t e "ribunal under t is A$t( " e ! airperson o) t e Appellate "ribunal s all be a person ' o as been a *ud2e o) t e ,upreme !ourt or t e ! ie) *usti$e o) a ;i2 !ourt( A 4ember o) t e Appellate "ribunal s all be a person o) ability% inte2rity and standin2 a0in2 spe$ial 7no'led2e o)% and pro)essional experien$e o) not less t an t'enty/)i0e years in% s$ien$e% te$ nolo2y% e$onomi$s% ban7in2% industry% la'% matters relatin2 to labour% industrial )inan$e% industrial mana2ement% industrial re$onstru$tion% administration% in0estment% a$$ountan$y% mar7etin2 or any ot er matter% t e spe$ial 7no'led2e o)% or pro)essional experien$e in ' i$ % 'ould be in t e opinion o) t e !entral 6o0ernment use)ul to t e Appellate "ribunal(

(2# (3#

105S. 9acanc% in Appellate 0ri&unal, etc.

(1# In t e e0ent o) t e o$$urren$e o) any 0a$an$y in t e o))i$e o) t e ! airperson o) t e Appellate "ribunal by reason o) is deat % resi2nation or ot er'ise% t e senior/most 4ember o) t e Appellate "ribunal s all a$t as t e ! airperson o) t e Appellate "ribunal until t e date on ' i$ a ne' ! airperson appointed in a$$ordan$e 'it t e pro0isions o) t is A$t to )ill su$ 0a$an$y enters upon is o))i$e( B en t e ! airperson o) t e Appellate "ribunal is unable to dis$ ar2e is )un$tions o'in2 to absen$e% illness or any ot er $ause% t e senior/most 4ember or% as t e $ase may be% su$ one o) t e 4ember o) t e Appellate "ribunal% as t e !entral 6o0ernment may% by noti)i$ation% aut orise in t is be al)% s all dis$ ar2e t e )un$tions o) t e ! airperson until t e date on ' i$ t e ! airperson resumes is duties( I)% )or reason ot er t an temporary absen$e% any 0a$an$y o$$urs in t e o))i$e o) t e ! airperson or a 4ember% t e !entral 6o0ernment s all appoint anot er person in a$$ordan$e 'it t e pro0isions o) t is A$t to )ill t e 0a$an$y and t e pro$eedin2s may be $ontinued be)ore t e Appellate "ribunal )rom t e sta2e at ' i$ t e 0a$an$y is )illed(

(2#

(3#

1050. 0erm o! o!!ice o! Chairperson and (em&ers

" e ! airperson or a 4ember o) t e Appellate "ribunal s all old o))i$e as su$ )or a term o) t ree years )rom t e date on ' i$ e enters upon is o))i$e% but s all be eli2ible )or reappointment )or anot er term o) t ree years3 Provided t at no ! airperson or ot er 4ember s all old o))i$e as su$ a)ter e as attained%=

(a# (b#

in t e $ase o) t e ! airperson% t e a2e o) se0enty years> in t e $ase o) any ot er 4ember% t e a2e o) sixty/se0en years(

105>. :esignation o! Chairperson and (em&ers

" e ! airperson or a 4ember o) t e Appellate "ribunal may% by noti$e in 'ritin2 under is and addressed to t e !entral 6o0ernment% resi2n is o))i$e3 Provided t at t e ! airperson or a 4ember o) t e Appellate "ribunal s all% unless e is permitted by t e !entral 6o0ernment to relin:uis is o))i$e sooner% $ontinue to old o))i$e until t e expiry o) t ree mont s )rom t e date o) re$eipt o) su$ noti$e or until a person duly appointed as is su$$essor enters upon is o))i$e or until t e expiry o) is term o) o))i$e% ' i$ e0er is t e earliest(

1059. :emoval and suspension o! Chairperson and (em&ers o! Appellate 0ri&unal

(1# " e !entral 6o0ernment may% in $onsultation 'it t e ! ie) *usti$e o) India% remo0e )rom o))i$e t e ! airperson or any 4ember o) t e Appellate "ribunal% ' o= (a# as been adjud2ed an insol0ent> or (b# ($# (d# (e# (2# as been $on0i$ted o) an o))en$e ' i$ % in t e opinion o) t e !entral 6o0ernment% in0ol0es moral turpitude> or as be$ome p ysi$ally or mentally in$apable o) a$tin2 as su$ ! airperson or 4ember o) t e Appellate "ribunal> or as a$:uired su$ )inan$ial or ot er interest as is li7ely to a))e$t prejudi$ially is )un$tions as su$ ! airperson or 4ember o) t e Appellate "ribunal> or as so abused is position as to render is $ontinuan$e in o))i$e prejudi$ial to t e publi$ interest(

(3#

(4#

" e ! airperson or a 4ember o) t e Appellate "ribunal s all not be remo0ed )rom is o))i$e ex$ept by an order made by t e !entral 6o0ernment on t e 2round o) pro0ed misbe a0iour or in$apa$ity a)ter an in:uiry made by a *ud2e o) t e ,upreme !ourt in ' i$ su$ ! airperson or 4ember ad been in)ormed o) t e $ ar2es a2ainst im and 2i0en a reasonable opportunity o) bein2 eard in respe$t o) t ose $ ar2es( " e !entral 6o0ernment may suspend )rom o))i$e t e ! airperson or a 4ember o) t e Appellate "ribunal in respe$t o) ' om a re)eren$e as been made to t e *ud2e o) t e ,upreme !ourt under sub/ se$tion (2# until t e !entral 6o0ernment as passed orders on re$eipt o) t e report o) t e *ud2e o) t e ,upreme !ourt on su$ re)eren$e( " e !entral 6o0ernment may% by rules% re2ulate t e pro$edure )or t e in0esti2ation o) misbe a0iour or in$apa$ity o) t e ! airperson or a 4ember re)erred to in sub/se$tion (2#(

105?. Salar%, allowances and other terms and conditions o! service o! Chairperson and (em&ers
(1# (2# " e salary and allo'an$es and ot er terms and $onditions o) ser0i$e o) t e ! airperson and ot er 4embers o) t e Appellate "ribunal s all be su$ as may be pres$ribed( " e salary% allo'an$es and ot er terms and $onditions o) ser0i$e o) t e ! airperson and ot er 4embers o) t e Appellate "ribunal s all not be 0aried to t eir disad0anta2e a)ter appointment(

105@. Selection Committee

(1# " e ! airperson and 4embers o) t e Appellate "ribunal and <resident and 4embers o) t e "ribunal s all be appointed by t e !entral 6o0ernment on t e re$ommendations o) a ,ele$tion !ommittee $onsistin2 o)= (a# ! ie) *usti$e o) India or is nominee ! airperson>

(b# ($# (d#

,e$retary in t e 4inistry o) 8inan$e and !ompany A))airs 4ember>

(2# (3#

,e$retary in t e 4inistry o) .abour 4ember> ,e$retary in t e 4inistry o) .a' and *usti$e (5epartment o) .e2al A))airs or .e2islati0e 5epartment# 4ember> (e# ,e$retary in t e 4inistry o) 8inan$e and !ompany A))airs (5epartment o) !ompany A))airs# 4ember( " e *oint ,e$retary in t e 4inistry or 5epartment o) t e !entral 6o0ernment dealin2 'it t is A$t s all be t e !on0enor o) t e ,ele$tion !ommittee( " e !entral 6o0ernment s all% 'it in one mont )rom t e date o) o$$urren$e o) any 0a$an$y by reason o) deat % resi2nation or remo0al o) t e ! airperson and 4embers o) t e Appellate "ribunal and <resident and 4embers o) t e "ribunal and six mont s be)ore t e superannuation or end o) tenure o) t e ! airperson and 4embers o) t e Appellate "ribunal and <resident and 4embers o) t e "ribunal% ma7e a re)eren$e to t e ,ele$tion !ommittee )or )illin2 up o) t e 0a$an$y( " e ,ele$tion !ommittee s all re$ommend 'it in one mont a panel o) t ree names )or e0ery 0a$an$y re)erred to it( Be)ore re$ommendin2 any person )or appointment as t e ! airperson and 4embers o) t e Appellate "ribunal and <resident and 4embers o) t e "ribunal% t e ,ele$tion !ommittee s all satis)y itsel) t at su$ person does not a0e )inan$ial or ot er interest ' i$ is li7ely to a))e$t prejudi$ially is )un$tions as su$ ! airperson or 4ember o) t e Appellate "ribunal or <resident or 4ember o) t e "ribunal% as t e $ase may be( 9o appointment o) t e ! airperson and 4embers o) t e Appellate "ribunal and <resident and 4embers o) t e "ribunal s all be in0alidated merely by reason o) any 0a$an$y or any de)e$t in t e $onstitution o) t e ,ele$tion !ommittee(

(4# (C#

(6#

105A. Chairperson, etc., to &e pu&lic servants

" e ! airperson% 4embers% o))i$ers and ot er employees o) t e Appellate "ribunal and t e <resident% 4embers% o))i$ers and ot er employees o) t e "ribunal s all be deemed to be publi$ ser0ants 'it in t e meanin2 o) se$tion 21 o) t e Indian <enal !ode (4C o) 1A6-#(

105B. Protection o! action ta=en in good !aith

9o suit% prose$ution or ot er le2al pro$eedin2s s all lie a2ainst t e Appellate "ribunal or its ! airperson% 4ember% o))i$er or ot er employee or a2ainst t e "ribunal% its <resident% 4ember% o))i$er or ot er employee or operatin2 a2en$y or li:uidator or any ot er person aut orised by t e Appellate "ribunal or t e "ribunal in t e dis$ ar2e o) any )un$tion under t is A$t )or any loss or dama2e $aused or li7ely to be $aused by any a$t ' i$ is in 2ood )ait done or intended to be done in pursuan$e o) t is A$t(

105BA. Procedure and powers o! 0ri&unal and Appellate 0ri&unal

(1# " e "ribunal and t e Appellate "ribunal s all not be bound by t e pro$edure laid do'n in t e !ode o) !i0il <ro$edure% 19-A (C o) 19-A#% but s all be 2uided by t e prin$iples o) natural justi$e and% subje$t to t e ot er pro0isions o) t is A$t and o) any rules made by t e !entral 6o0ernment% t e "ribunal and t e Appellate "ribunal s all a0e po'er to re2ulate t eir o'n pro$edure( " e "ribunal and t e Appellate "ribunal s all a0e% )or t e purposes o) dis$ ar2in2 its )un$tions under t is A$t% t e same po'ers as are 0ested in a $i0il $ourt under t e !ode o) !i0il <ro$edure% 19-A (C o) 19A-# ' ile tryin2 a suit in respe$t o) t e )ollo'in2 matters% namely3= (a# (b# ($# summonin2 and en)or$in2 t e attendan$e o) any person and examinin2 im on oat > re:uirin2 t e dis$o0ery and produ$tion o) do$uments> re$ei0in2 e0iden$e on a))ida0its>

(2#

(d#

subje$t to t e pro0isions o) se$tions 123 and 124 o) t e Indian E0iden$e A$t% 1A&2 (1 o) 1A&2#% re:uisitionin2 any publi$ re$ord or do$ument or $opy o) su$ re$ord or do$ument )rom any o))i$e> issuin2 $ommissions )or t e examination o) 'itnesses or do$uments> re0ie'in2 its de$isions> dismissin2 a representation )or de)ault or de$idin2 it ex parte> settin2 aside any order o) dismissal o) any representation )or de)ault or any order passed by it ex parte> and any ot er matter ' i$ may be pres$ribed by t e !entral 6o0ernment(

(e# ()# (2# ( # (i# (3#

Any order made by t e "ribunal or t e Appellate "ribunal may be en)or$ed by t at "ribunal in t e same manner as i) it 'ere a de$ree made by a $ourt in a suit pendin2 t erein% and it s all be la')ul )or t e "ribunal or t e Appellate "ribunal to send in $ase o) its inability to exe$ute su$ order% to t e $ourt 'it in t e lo$al limits o) ' ose jurisdi$tion%= (a# (b# in t e $ase o) an order a2ainst a $ompany% t e re2istered o))i$e o) t e $ompany is situate> or in t e $ase o) an order a2ainst any ot er person% t e person $on$erned 0oluntarily resides or $arries on business or personally 'or7s )or 2ain( All pro$eedin2s be)ore t e "ribunal or t e Appellate "ribunal s all be deemed to be judi$ial pro$eedin2s 'it in t e meanin2 o) se$tions 193 and 22A% and )or t e purposes o) se$tion 196 (4C o) 1A6-#% o) t e Indian <enal !ode and t e "ribunal and t e Appellate "ribunal s all be deemed to be a $i0il $ourt )or t e purposes o) se$tion 19C and ! apter FF1I o) t e !ode o) !riminal <ro$edure% 19&3 (2 o) 19&4#(

(4#

10-. Power to punish !or contempt

" e Appellate "ribunal s all a0e t e same jurisdi$tion% po'ers and aut ority in respe$t o) $ontempt o) itsel) as t e ;i2 !ourt as and may exer$ise% )or t is purpose under t e pro0isions o) t e !ontempt o) !ourts A$t% 19&1(&- o) 19&1#% ' i$ s all a0e t e e))e$t subje$t to modi)i$ations t at= (a# (b# t e re)eren$e t erein to a ;i2 !ourt s all be $onstrued as in$ludin2 a re)eren$e to t e Appellate "ribunal> t e re)eren$e to t e Ad0o$ate/6eneral in se$tion 1C o) t e said A$t s all be $onstrued as a re)eren$e to su$ la' o))i$ers as t e !entral 6o0ernment may spe$i)y in t is be al)(

10-A. Sta!! o! Appellate 0ri&unal

(1# (2# (3# " e !entral 6o0ernment s all pro0ide t e Appellate "ribunal 'it su$ o))i$ers and ot er employees as it may t in7 )it( " e o))i$ers and ot er employees o) t e Appellate "ribunal s all dis$ ar2e t eir )un$tions under t e 2eneral superintenden$e o) t e ! airperson o) t e Appellate "ribunal( " e salaries and allo'an$es and ot er $onditions o) ser0i$e o) t e o))i$ers and ot er employees o) t e Appellate "ribunal s all be su$ as may be pres$ribed(

10-2. Civil court not to have Curisdiction

(1# 9o $i0il $ourt s all a0e jurisdi$tion to entertain any suit or pro$eedin2 in respe$t o) any matter ' i$ t e "ribunal or t e Appellate "ribunal is empo'ered to determine by or under t is A$t or any ot er la' )or t e time bein2 in )or$e and no injun$tion s all be 2ranted by any $ourt or ot er aut ority in respe$t o) any a$tion ta7en or to be ta7en in pursuan$e o) any po'er $on)erred by or under t is A$t or any ot er la' )or t e time bein2 in )or$e(

10-C. 9acanc% in 0ri&unal or Appellate 0ri&unal not to invalidate acts or proceedings

9o a$t or pro$eedin2 o) t e "ribunal or t e Appellate "ribunal s all be :uestioned or s all be in0alid merely on t e 2round o) existen$e o) any 0a$an$y or de)e$t in t e establis ment o) t e "ribunal or t e Appellate "ribunal% as t e $ase may be(

10- . :ight to legal representation

" e appli$ant or t e appellant may eit er appear in person or aut orise one or more $ artered a$$ountants or $ompany se$retaries or $ost a$$ountants or le2al pra$titioners or any o))i$er to present is or its $ase be)ore t e "ribunal or t e Appellate "ribunal% as t e $ase may be( 1xplanation .= 8or t e purposes o) t is se$tion%= (a# D$ artered a$$ountantD means a $ artered a$$ountant as de)ined in $lause (b# o) sub/se$tion (1# o) se$tion 2 o) t e ! artered A$$ountants A$t% 1949 (3A o) 1949# and ' o as obtained a $erti)i$ate o) pra$ti$e under sub/se$tion (1# o) se$tion 6 o) t at A$t> (b# D$ompany se$retaryD means a $ompany se$retary as de)ined in $lause ($# o) subse$tion (1# o) se$tion 2 o) t e !ompanies ,e$retaries A$t% 19A- (C6 o) 19A-# and ' o as obtained a $erti)i$ate o) pra$ti$e under sub/se$tion (1# o) se$tion 6 o) t at A$t> D$ost a$$ountantD means a $ost a$$ountant as de)ined in $lause (b# o) sub/se$tion (1# o) se$tion 2 o) t e !ost and Bor7s A$$ountants A$t% 19C9 (23 o) 19C9# and ' o as obtained a $erti)i$ate o) pra$ti$e under sub/se$tion (1# o) se$tion 6 o) t at A$t> Dle2al pra$titionerD means an ad0o$ate% a 0a7il or any attorney o) any ;i2 !ourt% and in$ludes a pleader in pra$ti$e(

($#

(d#

10-3. 4imitation
" e pro0isions o) t e .imitation A$t% 1963 (36 o) 1963# s all% as )ar as may be% apply to an appeal made to t e Appellate "ribunal(

10-5. Appeal to Supreme Court

Any person a22rie0ed by any de$ision or order o) t e Appellate "ribunal may )ile an appeal to t e ,upreme !ourt 'it in sixty days )rom t e date o) $ommuni$ation o) t e de$ision or order o) t e Appellate "ribunal to im on any :uestion o) la' arisin2 out o) su$ de$ision or order3 Provided t at t e ,upreme !ourt may% i) it is satis)ied t at t e appellant 'as pre0ented by su))i$ient $ause )rom )ilin2 t e appeal 'it in t e said period% allo' it to be )iled 'it in a )urt er period not ex$eedin2 sixty days(@

PART II:

INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO

Certain companies, associations and partnerships to &e registered as companies under Act 11.
G1H

Prohi&ition o! associations and partnerships exceeding certain num&er

4o company, association or partnership consistin of more than ten persons shall #e formed for the p"rpose of carryin on the #"siness of #an;in , "nless it is re istered as a company "nder this Act, or is formed in p"rs"ance of some other Indian 2aw. 4o company, association or partnership consistin of more than twenty persons shall #e formed for the p"rpose of carryin on any other #"siness that has for its o#Cect the acD"isition of ain #y the company, association or partnership, or #y the indi!id"al mem#ers thereof, "nless it is re istered as a company "nder this Act, or is formed in p"rs"ance of some other Indian law.

G2H

G3H

.his section shall not apply to a Coint family as s"ch carryin on a #"sinessL and where a #"siness is carried on #y two or more " Coint families, in comp"tin the n"m#er of persons for the p"rposes of s"#/ sections G1H and G2H, minor mem#ers of s"ch families shall #e excl"ded. 1!ery mem#er of a company, association or partnership carryin on #"siness in contra!ention of this section shall #e personally lia#le for all lia#ilities inc"rred in s"ch #"siness. 1!ery person who is a mem#er of a company, association or partnership formed in contra!ention of this section shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB.

G$H G'H

Memorandum of association 12.

G1H

(ode o! !orming incorporated compan%

Any se!en or more persons, or where the company to #e formed will #e a pri!ate company, any two or more persons, associated for any lawf"l p"rpose may, #y s"#scri#in their names to a memorand"m of association and otherwise complyin with the reD"irements of this Act in respect of re istration, form an incorporated company, with or witho"t limited lia#ility. S"ch a company may #e either/ GaH a company ha!in the lia#ility of its mem#ers limited #y the memorand"m to the amo"nt, if any, "npaid on the shares respecti!ely held #y them Gin this Act termed "a company limited #y shares"HL a company ha!in the lia#ility of its mem#ers limited #y the memorand"m to s"ch amo"nt as the mem#ers may respecti!ely "nderta;e #y the memorand"m to contri#"te to the assets of the company in the e!ent of its #ein wo"nd "p Gin this Act termed "a company limited #y "arantee"HL or a company not ha!in any limit on the lia#ility of its mem#ers Gin this Act termed "an "nlimited company"H.

G2H

G#H

GcH

1#.
G1H

:eDuirements with respect to memorandums

.he memorand"m of e!ery company shall state / GaH the name of the company with "2imited" as the last word of the name in the case of a p"#lic limited company, and with "&ri!ate 2imited" as the last words of the name in the case of a pri!ate limited companyL G#H AGcH GdH the State in which the re istered office of the company is to #e sit"ateL AJJJB in the case of a company in existence immediately #efore the commencement of the *ompanies GAmendmentH Act, 1,(', the o#Cects of the companyL in the case of a company formed after s"ch commencement,/ GiH the main o#Cects of the company to #e p"rs"ed #y the company on its incorporation and o#Cects incidental or ancillary to the attainment of the main o#CectsL

G2H G3H

GiiH other o#Cects of the company not incl"ded in s"#/cla"se GiHL and GeH in the case of companies Gother than tradin corporationsH, with o#Cects not confined to one State, the States to whose territories the o#Cects extend.B .he memorand"m of a company limited #y shares or #y "arantee shall also state that the lia#ility of its mem#ers is limited. .he memorand"m of a company limited #y "arantee shall also state that each mem#er "nderta;es to contri#"te to the assets of the company in the e!ent of its #ein wo"nd "p while he is a mem#er or within one year after he ceases to #e a mem#er, for payment of the de#ts and lia#ilities of the company, or of s"ch de#ts and lia#ilities of the company as may ha!e #een contracted #efore he ceases to #e a mem#er, as the case may #e, and of the costs, char es and expenses of windin "p, and for adC"stment of the ri hts of the contri#"tories amon themsel!es, s"ch amo"nt as may #e reD"ired, not exceedin a specified amo"nt. In the case of a company ha!in a share capital/

G$H

GaH

"nless the company is an "nlimited company, the memorand"m shall also state the amo"nt of share capital with which the company is to #e re istered and the di!ision thereof into shares of a fixed amo"ntL no s"#scri#er of the memorand"m shall ta;e less than one shareL and each s"#scri#er of the memorand"m shall write opposite to his name the n"m#er of shares he ta;es.

G#H GcH

1'.

5orm o! memorandum

.he memorand"m of association of a company shall #e in s"ch one of the 3orms in .a#les 0, *, D and 1 in Sched"le I as may #e applica#le to the case of the company, or in a 3orm as near thereto as circ"mstances admit.

1).

Printing and signature o! memorandum

.he memorand"m shall/ GaH #e printed, G#H GcH #e di!ided into para raphs n"m#ered consec"ti!ely, and #e si ned #y each s"#scri#er Gwho shall add his address, description and occ"pation, if anyH, in the presence of at least one witness who shall attest the si nat"re and shall li;ewise add his address, description and occ"pation, if any.

1)A. Special provision as to alteration o! memorandum conseDuent on alteration o! name o! State o! (adras
=here, in the memorand"m of association of a company in existence immediately #efore the commencement of the %adras State GAlteration of 4ameH Act, 1,(), it is stated that %adras is the State in which the re istered office of that company is sit"ate, then, notwithstandin anythin contained in this Act, the said memorand"m shall, as from s"ch commencement, #e deemed to ha!e #een altered #y s"#stit"tion of a reference to the State of .amil 4ad" for the reference to the State of %adras, and the 8e istrar of the State of .amil 4ad" shall ma;e necessary alterations in the memorand"m of association and the certificate of incorporation of the said company.B

1)2. Special provision as to alteration o! memorandum conseDuent on alteration o! name o! State o! (%sore
=here, in the memorand"m of association of a company in existence immediately #efore the commencement of the %ysore State GAlteration of 4ameH Act, 1,73, it is stated that %ysore is the State in which the re istered office of that company is sit"ate, then, notwithstandin anythin contained in this Act, the said memorand"m shall, as from s"ch commencement, #e deemed to ha!e #een altered #y s"#stit"tion of a reference to the State of 9arnata;a for the reference to the State of %ysore, and the 8e istrar of the State of 9arnata;a shall ma;e necessary alterations in the memorand"m of association and the certificate of incorporation of the said company.B

1*.
G1H G2H

Alteration o! memorandum
A company shall not alter the conditions contained in its memorand"m except in the cases, in the mode, and to the extent, for which express pro!ision is made in this Act. :nly those pro!isions which are reD"ired #y section 13 or #y any other specific pro!ision contained in this Act, to #e stated in the memorand"m of the company concerned shall #e deemed to #e conditions contained in its memorand"m.

G3H

G$H

:ther pro!isions contained in the memorand"m, incl"din those relatin to the appointment of a mana in director, AJJJB or mana er, may #e altered in the same manner as the articles of the company, #"t if there is any express pro!ision in this Act permittin of the alteration of s"ch pro!isions in any other manner, they may also #e altered in s"ch other manner. All references to the articles of a company in this Act shall #e constr"ed as incl"din references to the other pro!isions aforesaid contained in its memorand"m.

1+.

Special resolution and con!irmation &% Central -overnment reDuired !or alteration o! memorandum
A $ompany may% by spe$ial resolution% alter t e pro0isions o) its memorandum so as to $ an2e t e pla$e o) its re2istered o))i$e )rom one ,tate to anot er% or 'it respe$t to t e obje$ts o) t e $ompany so )ar as may be re:uired to enable it= (a# (b# ($# (d# (e# ()# to $arry on its business more e$onomi$ally or more e))i$iently> or to attain its main purpose by ne' or impro0ed means> or to enlar2e or $ an2e t e lo$al area o) its operations> or to $arry on some business ' i$ under t e existin2 $ir$umstan$es may $on0eniently or ad0anta2eously be $ombined 'it t e business o) t e $ompany> or to restri$t or abandon any o) t e obje$ts spe$i)ied in t e memorandum> or to sell or dispose o) t e ' ole or any part o) t e underta7in2% or o) any o) t e underta7in2s% o) t e $ompany> or

[(1#

(2#

(2# to amal2amate 'it any ot er $ompany or body o) persons( " e alteration o) t e pro0isions o) memorandum relatin2 to t e $ an2e o) t e pla$e o) its re2istered o))i$e )rom one ,tate to anot er s all not ta7e e))e$t unless it is $on)irmed by t e !entral 6o0ernment on petition( Be)ore $on)irmin2 t e alteration% t e !entral 6o0ernment must be satis)ied= (a# t at su))i$ient noti$e as been 2i0en to e0ery older o) t e debentures o) t e $ompany% and to e0ery ot er person or $lass o) persons ' ose interests 'ill% in t e opinion o) t e !entral 6o0ernment% be a))e$ted by t e alteration> and (b# t at% 'it respe$t to e0ery $reditor ' o% in t e opinion o) t e !entral 6o0ernment% is entitled to obje$t to t e alteration% and ' o si2ni)ies is obje$tion in t e manner dire$ted by t e !entral 6o0ernment% eit er is $onsent to t e alteration as been obtained or is debt or $laim as been dis$ ar2ed or as been determined% or as been se$ured3

(3#

Provided t at t e !entral 6o0ernment may% in t e $ase o) any person or $lass o) persons% )or spe$ial reasons% dispense 'it t e noti$e re:uired by $lause (a#( (4# " e !entral 6o0ernment s all $ause noti$e o) t e petition )or $on)irmation o) t e alteration to be ser0ed on t e Ge2istrar ' o s all also be 2i0en a reasonable opportunity o) appearin2 be)ore t e !entral 6o0ernment and state is obje$tions and su22estions% i) any% 'it respe$t to t e $on)irmation o) t e alteration( " e !entral 6o0ernment may ma7e an order $on)irmin2 t e alteration on su$ terms and $onditions% i) any% as it t in7s )it% and may ma7e su$ order as to $osts as it t in7s proper( " e !entral 6o0ernment s all% in exer$isin2 its po'ers under t is se$tion% a0e re2ard to t e ri2 ts and interests o) t e members o) t e $ompany and o) e0ery $lass o) t em% as 'ell as to t e ri2 ts and interests o) t e $reditors o) t e $ompany and o) e0ery $lass o) t em( " e !entral 6o0ernment may% i) it t in7s )it% adjourn t e pro$eedin2s in order t at an arran2ement may be made to t e satis)a$tion o) t e !entral 6o0ernment )or t e pur$ ase o) t e interests o) dissentient members> and may 2i0e su$ dire$tions and ma7e su$ orders as it t in7s )it )or )a$ilitatin2% or $arryin2 into e))e$t% any su$ arran2ement3 Provided t at no part o) t e $apital o) t e $ompany may be expended )or any su$ pur$ ase(+

(C# (6#

(&#

1+A. Change o! registered o!!ice within a State

AG1H G2H G3H

4o company shall chan e the place of its re istered office from one place to another within a State "nless s"ch chan e is confirmed #y the 8e ional Director. .he company shall ma;e an application in the prescri#ed form to the 8e ional Director for confirmation "nder s"#/section G1H. .he confirmation referred to in s"#/section G1H, shall #e comm"nicated to the company within fo"r wee;s from the date of receipt of application for s"ch chan e. Explanation( M3or the p"rposes of this section, it is here#y declared that the pro!isions of this section shall apply only to the companies which chan e the re istered office from the C"risdiction of one 8e istrar of *ompanies to the C"risdiction of another 8e istrar of *ompanies within the same State. .he company shall file, with the 8e istrar a certified copy of the confirmation #y the 8e ional Director for chan e of its re istered office "nder this section, within two months from the date of confirmation, to ether with a printed copy, of the memorand"m as altered and the 8e istrar shall re ister the same and certify the re istration "nder his hand within one month from the date of filin of s"ch doc"ment. .he certificate shall #e concl"si!e e!idence that all the reD"irements of this Act with respect to the alteration and confirmation ha!e #een complied with and henceforth the memorand"m as altered shall #e the memorand"m of the company.B

G$H

G'H

1,.
AG1H

Alteration to &e registered within three months

A company shall file with the 8e istrar/ GaH a special resol"tion passed #y a company in relation to cla"ses GaH to G H of s"#/section G1H of section 17, within one month from the date of s"ch resol"tionL or G#H a certified copy of the order of the (aA*entral +o!ernmentB made "nder s"#/section G'H of that section conformin the alteration, within three months from the date of order, as the case may #e, to ether with a printed copy of the memorand"m as altered and the 8e istrar shall re ister the same and certify the re istration "nder his hand within one month from the date of filin of s"ch doc"ments.B .he certificate shall #e concl"si!e e!idence that all the reD"irements of this Act with respect or the alteration and the confirmation thereof ha!e #een complied with, and thenceforth the memorand"m as so altered shall #e the memorand"m of the company. =here the alteration in!ol!es a transfer of the re istered office from one State to another, a certified copy of the order confirmin the alteration shall #e filed #y the company with the 8e istrar of each of the States, and the 8e istrar of each s"ch State shall re ister the same, and shall certify "nder his hand the re istration thereofL and the 8e istrar of the State all doc"ments relatin to the company re istered, recorded or field in this office. .he A*entral +o!ernmentB may, at any time, #y order, extend the time for the filin of doc"ments ((Aor for the re istration of the alterationB "nder this section #y s"ch period as it thin;s proper.

G2H

G3H

G$H

1..
G1H AG2H

3!!ect o! !ailure to register

4o s"ch alteration as is referred to in section 17 shall ha!e any effect "ntil it has #een d"ly re istered in accordance with the pro!isions of section 1). If the doc"ments reD"ired to #e filed with the 8e istrar "nder section 1) are not filed within the time allowed "nder that section, s"ch alteration and the order of the A*entral +o!ernmentB made "nder s"#/ section G'H of section 17 and all proceedin s connected therewith, shall, at the expiry of s"ch period, #ecome !oid and inoperati!eK Provided that the A*entral +o!ernmentB may, on s"fficient ca"se shown, re!i!e the order on application made within a f"rther period of one month.B

Provisions with respect to names of companies 20. Companies not to &e registered with undesira&le names

G1H AG2H

4o company shall #e re istered #y a name which, in the opinion of the *entral +o!ernment, is "ndesira#le. =itho"t preC"dice to the enerality of the fore oin power, a name which is identical with, or too nearly resem#les,/ GiH GiiH the name #y which a company in existence has #een pre!io"sly re istered, or a re istered trade mar;, or a trade mar; which is s"#Cect of an application for re istration, of any other person "nder the .rade %ar;s Act, 1,,,, may #e deemed to #e "ndesira#le #y the *entral +o!ernment within the meanin of s"#/section G1H.

G3H

.he *entral +o!ernment may, #efore deemin a name as "ndesira#le "nder cla"se GiiH of s"#/section G2H, cons"lt the 8e istrar of .rade %ar;s.B

21.

Change o! name &% compan%

A company may, #y special resol"tion and with the appro!al of the *entral +o!ernment si nified in writin , chan e its nameK AProvided that no s"ch appro!al shall #e reD"ired where the only chan e in the name of a company is the addition thereto or, as the case may #e, the deletion therefrom, of the word "&ri!ate", conseD"ent on the con!ersion in accordance with the pro!isions of this Act of a p"#lic company into a pri!ate company or of a pri!ate company into a p"#lic company.B

22.
G1H

:ecti!ication o! name o! compan%

AIf, thro" h inad!ertence or otherwise, a company on its first re istration or on its re istration #y a new name, is re istered #y a name which,/ GiH in the opinion of the *entral +o!ernment is identical with, or too nearly resem#les, the name #y which a company in existence has #een pre!io"sly re istered, whether "nder this Act or any pre!io"s companies law, the first/mentioned company, or on an application #y a re istered proprietor of a trade mar;, is in the opinion of the *entral +o!ernment identical with, or too nearly resem#les, a re istered trade mar; of s"ch proprietor "nder the .rade %ar;s Act, 1,,,, s"ch company,/B GaH G#H may, #y ordinary resol"tion and with the pre!io"s appro!al of the *entral +o!ernment si nified in writin , chan e its name or new nameL and shall, if the *entral +o!ernment so directs within twel!e months of its first re istration or re istration #y its new name, as the case may #e, or within twel!e months of the commencement of this Act, whiche!er is later, #y ordinary resol"tion and with the pre!io"s appro!al of the *entral +o!ernment si nified in writin , chan e its name or new name within a period of three months from the date of the direction or s"ch lon er period as the *entral +o!ernment may thin; fit to allow.

GiiH

G2H

AProvided that no application "nder cla"se GiiH made #y a re istered proprietor of a trade mar; after fi!e years of comin to notice of re istration of the company shall #e considered #y the *entral +o!ernment.B If a company ma;es defa"lt in complyin with any direction i!en "nder cla"se G#H of s"#/section G1H, the company, and e!ery officer who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aone tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es.

2#.
G1H

:egistration o! change o! name and e!!ect thereo!

=here a company chan es its name in p"rs"ance of section 21 or 22, the 8e istrar shall enter the new name on the re ister in the place of the former name, and shall iss"e a fresh certificate of incorporation with the necessary alterations em#odied thereinL and the chan e of name shall he complete and effecti!e only on the iss"e of s"ch a certificate.

G2H G3H

.he 8e istrar shall also ma;e the necessary alteration in the memorand"m of association of the company. .he chan e of name shall not effect any ri hts or o#li ations of the company, or render defecti!e any le al proceedin s #y or a ainst itL and any le al proceedin s which mi ht ha!e #een contin"ed or commenced #y or a ainst the company #y its former name may #e contin"ed #y or a ainst the company #y its new name.

2'.
G1H

Change o! name o! existing private limited companies1

In the case of a company which was a pri!ate limited company immediately #efore the commencement of this Act, the 8e istrar shall enter the word "&ri!ate" #efore the word "2imited" in the name of the company "pon the re ister and shall also ma;e the necessary alterations in the certificate of incorporation iss"ed to the company and in its memorand"m of association. S"#/section G3H of section 23 shall apply to a chan e of name "nder s"#/section G1H, as it applies to a chan e of name "nder section 21.

G2H

2).
G1H

Power to dispense with $4imited$ in name o! charita&le or other compan%

=here it is pro!ed to the satisfaction of the *entral +o!ernment that an associationK/

GaH is a#o"t to #e formed as a limited company for promotin commerce, art, science, reli ion, charity or any other "sef"l o#Cect, and G#H intends to apply its profits, if any, or other income in promotin its o#Cects, and to prohi#it the payment of any di!idend to its mem#ers, the *entral +o!ernment may, #y licence, direct that the association may #e re istered as a company with limited lia#ility, witho"t the addition to its name of the word "2imited" or the words "&ri!ate 2imited". G2H .he association may there"pon #e re istered accordin lyL and on re istration shall enCoy all the pri!ile es, and Gs"#Cect to the pro!isions of this sectionH #e s"#Cect to all the o#li ations, of limited companies. =here it is pro!ed to the satisfaction of the *entral +o!ernment/ GaH G#H that the o#Cects of a company re istered "nder this Act as a limited company are restricted to those specified in cla"se GaH of s"#/section G1H, and that #y its constit"tion the company is reD"ired to apply its profits, if any, or other income in promotin its o#Cects and is prohi#ited from payin any di!idend to its mem#ers,

G3H

the *entral +o!ernment may, #y licence, a"thorise the company #y a special resol"tion to chan e its name, incl"din or consistin of the omission of the word "2imited" or the words "&ri!ate 2imited"L and section 23 shall apply to a chan e of name "nder this s"#/section as it applies to a chan e of name "nder section 21. G$H G'H A firm may #e a mem#er of any association or company licensed "nder this section, #"t on the dissol"tion of the firm, its mem#ership of the association or company shall cease. A licence may #e ranted #y the *entral +o!ernment "nder this section on s"ch conditions and s"#Cect to s"ch re "lations as it thin;s fit, and those conditions and re "lations, shall #e #indin on the #ody to which the licence is ranted, and where the rant is "nder s"#/section G1H, shall, if the *entral +o!ernment so directs, #e inserted in the memorand"m, or in the articles, or partly in the one and partly in the other. It shall not #e necessary for a #ody to which a licence is so ranted to "se the word "2imited" or the words "&ri!ate 2imited" as any part of its name and, "nless its articles otherwise pro!ide, s"ch #ody shall, if the *entral +o!ernment #y eneral or special order so directs and to the extent specified in the directions, #e exempt from s"ch of the pro!isions of this Act as may #e specified therein.B .he licence may at any time #e re!o;ed #y the *entral +o!ernment, and "pon re!ocation, the 8e istrar shall enter the word "2imited" or the words "&ri!ate 2imited" at the end of the name "pon the re ister of the #ody to which it was rantedL and the #ody shall cease to enCoy the exemption ranted #y this sectionK

AG(H

G7H

Provided that, #efore a licence is so re!o;ed, the *entral +o!ernment shall i!e notice in writin of its intention to the #ody, and shall afford it an opport"nity of #ein heard in opposition to the re!ocation. AG)HGaH A #ody in respect of which a licence "nder this section is in force shall not alter the pro!isions of its memorand"m with respect to its o#Cects except with the pre!io"s appro!al of the *entral +o!ernment si nified in writin . G#H .he *entral +o!ernment may re!o;e the licence of s"ch a #ody if it contra!enes the pro!isions of cla"se GaH. GcH In accordin the appro!al referred to in cla"se GaH, the *entral +o!ernment may !ary the licence #y ma;in it s"#Cect to s"ch conditions and re "lations as that +o!ernment thin;s fit, in lie" of, or in addition to, the conditions and re "lations, if any, to which the licence was formerly s"#Cect. GdH =here the alteration proposed in the pro!isions of the memorand"m of a #ody "nder this s"#/section is with respect to the o#Cects of the #ody so far as may #e reD"ired to ena#le it to do any of the thin s specified in cla"ses GaH to G H of s"#/section G1H of section 17, the pro!isions of this s"#/section shall #e in addition to, and not in dero ation of, the pro!isions of that section.B G,H <pon the re!ocation of a licence ranted "nder this section to a #ody the name of which contains the words "*ham#er of *ommerce", that #ody shall, within a period of three months from the date of re!ocation or s"ch lon er period as the *entral +o!ernment may thin; fit to allow, chan e its name to a name which does not contain those wordsL and/ GaH the notice to #e i!en "nder the pro!iso to s"#/section G7H to that #ody shall incl"de a statement of the effect of the fore oin pro!isions of this s"#/sectionL and G#H section 23 shall apply to a chan e of name "nder this s"#/section as it applies to a chan e of name "nder section 21. G10H If the #ody ma;es defa"lt in complyin with the reD"irements of s"#/section G,H, it shall #e p"nisha#le with fine which may extend to 70AAfi!e tho"sands r"peesB for e!ery day d"rin which the defa"lt contin"es.

Articles of Association 2*. Articles prescri&ing regulations

.here may in the case of a p"#lic company, limited #y shares, and there shall in the case of an "nlimited company or a company limited #y "arantee or a pri!ate company limited #y shares, #e re istered with the memorand"m, articles of association si ned #y the s"#scri#ers of the memorand"m, prescri#in re "lations for the company.

2+.

:egulations reDuired in case o! unlimited compan%, compan% limited &% guarantee or private compan% limited &% shares
In the case of an "nlimited company, the articles shall state the n"m#er of mem#ers with which the company is to #e re istered and, if the company has a share capital, the amo"nt of share capital with which the company is to #e re istered. In the case of a company limited #y "arantee, the articles shall state the n"m#er of mem#ers with which the company is to #e re istered. In the case of a pri!ate company ha!in a share capital, the articles shall contain pro!isions relatin to the matters specified in s"#/cla"ses GaH, G#H and GcH of cla"se GiiiH of s"#/section G1H of section 3L and in the case of any other pri!ate company, the articles shall contain pro!isions relatin to the matters specified in the said s"#/cla"ses G#H and GcH.

G1H

G2H

G3H

2,.

Adoption and application o! 0a&le A in the case o! companies limited &% shares

G1H G2H

.he articles of association of a company limited #y shares may adopt all or any of the re "lations contained in .a#le A in Sched"le I. In the case of any s"ch company which is re istered after the commencement of this Act, if articles are not re istered, or if articles are re istered, in so far as the articles do not excl"de or modify the re "lations contained in .a#le A aforesaid, those re "lations shall, so far as applica#le, #e the re "lations of the company in the same manner and to the same extent as if they were contained in d"ly re istered articles.

2..

5orm o! articles in the case o! other companies

.he articles of association of any company, not #ein a company limited #y shares, shall #e in s"ch one of the 3orms in .a#les *, D and 1 in Sched"le I as may #e applica#le, or in a 3orm as near thereto as circ"mstances admitK AProvided that nothin in this section shall #e deemed to pre!ent a company from incl"din any additional matters in its articles in so far as they are not inconsistent with the pro!isions contained in the 3orm in any of the .a#les *, D and 1, adopted #y the company.B

#0.

5orm and signature o! articles

Articles shall/ GaH #e printedL G#H GcH #e di!ided into para raphs n"m#ered consec"ti!elyL and #e si ned #y each s"#scri#er of the memorand"m of association Gwho shall add his address, description and occ"pation, if anyH, in the presence of at least one witness who shall attest the si nat"re and shall li;ewise add his address, description and occ"pation, if any.

#1.
G1H

Alteration o! articles &% special resolution

S"#Cect to the pro!isions of this Act and to the conditions contained in its memorand"m, a company may, #y special resol"tion, alter its articlesK AProvided that no alteration made in the articles "nder this s"#/section which has the effect of con!ertin a p"#lic company into a pri!ate company, shall ha!e effect "nless s"ch alteration has #een appro!ed #y the *entral +o!ernment.B Any alteration so made shall, s"#Cect to the pro!isions of this Act, #e as !alid as if ori inally contained in the articles and #e s"#Cect in li;e manner to alteration #y special resol"tion. =here any alteration s"ch as is referred to in the pro!iso to s"#/section G1H has #een appro!ed #y the *entral +o!ernment, a printed copy of the articles as altered shall #e filed #y the company with the 8e istrar within one month of the date of receipt of the order of appro!al.B .he power of alterin articles "nder this section shall, in the case of any company formed and re istered "nder Act 4o. 1, of 1)'7 and Act 4o. 7 of 1)(0 or either of them, extend to alterin any pro!isions in .a#le 0 annexed to Act 1, of 1)'7, and shall also, in the case of an "nlimited company formed and re istered "nder the said Acts or either of them, extend to alterin any re "lations relatin to the amo"nt of capital or its distri#"tion into shares, notwithstandin that those re "lations are contained in the memorand"m.

G2H AG2AH

G3H

Change of Registration of Companies #2.

G1H

:egistration o! unlimited compan% as limited, etc

S"#Cect to the pro!isions of this section,/ GaH a company re istered as "nlimited may re ister "nder this Act as a limited companyL and

G#H G2H

a company already re istered as a limited company may re/re ister "nder this Act.

G3H

:n re istration in p"rs"ance of this section, the 8e istrar shall close the former re istration of the company, and may dispense with the deli!ery to him of copies of any doc"ments with copies of which he was f"rnished on the occasion of the ori inal re istration of the company L #"t, sa!e as aforesaid, the re istration shall ta;e place in the same manner and shall ha!e effect, as if it were the first re istration of the company "nder this Act. .he re istration of an "nlimited company as a limited company "nder this section shall not affect any de#ts, lia#ilities, o#li ations or contracts inc"rred or entered into, #y, to, with or on #ehalf of, the company #efore the re istration, and those de#ts, lia#ilities, o#li ations and contracts may #e enforced in the manner pro!ided for &art I> of this Act in the case of a company re istered in p"rs"ance of that part.

-eneral provisions with respect to memorandum and articles ##.

G1H

:egistration o! memorandum and articles

.here shall #e presented for re istration, to the 8e istrar of the State in which the re istered office of the company is stated #y the memorand"m to #e sit"ate/ GaH the memorand"m of the companyL G#H AGcH its articles, if anyL and the a reement, if any, which the company proposes/to enter into with any indi!id"al for appointment as its mana in or whole/time director or mana er.B A declaration #y an ad!ocate of the S"preme *o"rt or of a 6i h *o"rt, an attorney or a pleader entitled to appear #efore a 6i h *o"rt, or 7'Aa secretary, or a chartered acco"ntant, in whole/time practice in IndiaB, who is en a ed in the formation of a company, or #y a person named in the articles as a director, 7(AJJJB mana er or secretary of the company, that all the reD"irements of this Act and the r"les there"nder ha!e #een complied within respect of re istration and matters precedent and incidental thereto, shall #e filed with the 8e istrarL and the 8e istrar may accept s"ch a declaration as s"fficient e!idence of s"ch compliance. AExplanation/ 3or the p"rposes of this s"#/section, "chartered acco"ntant in whole/time practice in India" means a chartered acco"ntant within the meanin of cla"se G#H of s"#/section G1H of section 2 of the *hartered Acco"ntants Act, 1,$,, who is practisin in India and who is not in f"ll/time employment.B

G2H

G3H

If the 8e istrar is satisfied that all the reD"irements aforesaid ha!e #een complied with #y the company and that it is a"thorised to #e re istered "nder this Act, he shall retain and re ister the memorand"m, the articles, if any, and the a reement referred to in cla"se GcH of s"#/section G1H, if any.

#'.
G1H G2H

3!!ect o! registration
:n the re istration of the memorand"m of company, the 8e istrar shall certify "nder his hand that the company is incorporated and, in the case of a limited company, that the company is limited. 3rom the date of incorporation mentioned in the certificate of incorporation, s"ch of the s"#scri#ers of the memorand"m and other persons, as may from time to time #e mem#ers of the company, shall #e a #ody corporate #y the name contained in the memorand"m capa#le forthwith of exercisin all the f"nctions of an incorporated company, and ha!in perpet"al s"ccession and a common seal, #"t with s"ch lia#ility on the part of the mem#ers to contri#"te to the assets of the company in the e!ent of its #ein wo"nd "p as is mentioned in this Act.

#).

Conclusiveness o! certi!icate o! incorporation

A certificate of incorporation i!en #y the 8e istrar in respect of any association shall #e concl"si!e e!idence that all the reD"irements of this Act ha!e #een complied within respect of re istration and matters precedent

and incidental thereto, and that the association is a company a"thorised to #e re istered and d"ly re istered "nder this Act.

#*.
G1H

3!!ect o! memorandum and articles

S"#Cect to the pro!isions of this Act, the memorand"m and articles shall, when re istered, #ind the company and the mem#ers thereof to the same extent as if they respecti!ely had #een si ned #y the company and #y each mem#er, and contained co!enants on its and his part to o#ser!e all the pro!isions of the memorand"m and of the articles. All money paya#le #y any mem#er to the company "nder the memorand"m or articles shall #e a de#t d"e from him to the company.

G2H

#+.
G1H

Provision as to companies limited &% guarantee

In the case of a company limited #y "arantee and not ha!in a share capital, and re istered on or after the first day of April, 1,1$, e!ery pro!ision in the memorand"m or articles or in any resol"tion of the company p"rportin to i!e any person a ri ht to participate in the di!isi#le profits of the company otherwise than as a mem#er shall #e !oid. 3or the p"rpose of the pro!isions of this Act relatin to the memorand"m of a company limited #y "arantee and of this section, e!ery pro!ision in the memorand"m or articles, or in any resol"tion, of any company limited #y "arantee and re istered on or after the first day of April, 1,1$, p"rportin to di!ide the "nderta;in of the company into shares or interests, shall #e treated as a pro!ision for a share capital, notwithstandin that the nominal amo"nt or n"m#er of the shares or interests is not specified there#y.

G2H

#,.

3!!ect o! alteration in memorandum or articles

4otwithstandin anythin in the memorand"m or articles of a company, no mem#er of the company shall #e #o"nd #y an alteration made in the memorand"m or articles after the date on which he #ecame a mem#er, if and so far as the alteration reD"ires him to ta;e or s"#scri#e for more shares than the n"m#er held #y him at the date on which the alteration is made, or in any way increases his lia#ility as at that date, to contri#"te to the share capital of, or otherwise to pay money to, the companyK AProvided that this section shall not apply N GaH G#H in any case where the mem#er a rees in writin either #efore or after a partic"lar alteration is made, to #e #o"nd #y the alterationL or in any case where the company is a cl"# or the company is any other association and the alteration reD"ires the mem#er to pay rec"rrin or periodical s"#scriptions or char es at a hi her rate altho" h he does not a ree in writin to #e #o"nd #y the alteration.B

#..
G1H

Copies o! memorandum and articles, etc., to &e given to mem&ers

A company shall, on #ein so reD"ired #y a mem#er, send to him within se!en days of the reD"irement and s"#Cect to the payment of a fee of one r"pee, a copy each of the followin doc"ments as in force for the time #ein N GaH the memorand"mL G#H GdH the articles, if anyL AJJJBL and e!ery other a reement and e!ery resol"tion referred to in section 1,2, if and in so far as they ha!e not #een em#odied in the memorand"m or articles.

G2H

If a company ma;es defa"lt in complyin with the reD"irements of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le, for each offence, with fine which may extend to Afi!e h"ndred r"peesB.

'0.
G1H

Alteration o! memorandum or articles, etc., to &e noted in ever% cop%

=here an alteration is made in the memorand"m or articles of a company, 7,0AJJJB, or any resol"tion referred to in section 1,2, e!ery copy of the memorand"m, articles, a reement or resol"tion iss"ed after the date of the alteration shall #e in accordance with the alteration. If, at any time, the company iss"es any copies of the memorand"m, articles resol"tion or a reement, which are not in accordance with the alteration or alterations made therein #efore that time, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 7,*Aone h"ndred r"peesB for each copy so iss"ed.

G2H

Membership of company '1.

G1H G2H AG3H

e!inition o! $mem&er$
.he s"#scri#ers of the memorand"m of a company shall #e deemed to ha!e a reed to #ecome mem#ers of a company, and on its re istration, shall #e entered as mem#ers in its re ister of mem#ers. 1!ery other person who Aa rees in writin B to #ecome a mem#er of a company and whose name is entered in its re ister of mem#ers, shall #e a mem#er of the company. 1!ery person holdin eD"ity share capital of a company and whose name is entered as #eneficial owner in the records of the depository shall #e deemed to #e a mem#er of the concerned company.B

'2.
G1H

(em&ership o! holding compan%

1xcept in the case, mentioned in this section, a #ody corporate cannot #e a mem#er of a company which is its holdin company and any allotment or transfer of shares in a company to its s"#sidiary shall #e !oid. 4othin in this section shall apply/ GaH G#H where the s"#sidiary is concerned as the le al representati!e of a deceased mem#er of the holdin companyL or where the s"#sidiary is concerned as tr"stee, "nless the holdin company or a s"#sidiary thereof is #eneficially interested "nder the tr"st and is not so interested only #y way of sec"rity for the p"rposes of a transaction entered into #y it in the ordinary co"rse of a #"siness which incl"des the lendin of money.

G2H

G3H

.his section shall not pre!ent a s"#sidiary from contin"in to #e a mem#er of its holdin company if it was a mem#er thereof either at the commencement of this Act or #efore #ecomin a s"#sidiary of the holdin company, #"t except in the cases referred to in s"#/section G2H, the s"#sidiary shall ha!e no ri ht to !ote at meetin s of the holdin company or of any class of mem#ers thereof. S"#Cect to s"#/section G2H, s"#/sections G1H and G3H shall apply in relation to a nominee for a #ody corporate which is a s"#sidiary, as if references in the said s"#/sections G1H and G3H to s"ch a #ody corporate incl"ded references to a nominee for it. In relation to a holdin company which is either a company limited #y "arantee or an "nlimited company, the reference in this section to shares shall, whether or not the company has a share capital, #e constr"ed as incl"din a reference to the interest of its mem#ers as s"ch, whate!er the form of that interest

G$H

G'H

Private companies

'#.

ConseDuences o! de!ault in compl%ing with conditions constituting a compan% a private compan%

=here the articles of a company incl"de the pro!ision which, "nder cla"se GiiiH of s"#/section G1H of section 3, are reD"ired to #e incl"ded in the articles of a company in order to constit"te it a pri!ate company, #"t defa"lt is made in complyin with any of those pro!isions, the company shall cease to #e entitled to the pri!ile es and exemptions conferred on pri!ate companies #y or "nder this Act, and this Act shall apply to the company as if it were not a pri!ate companyK Provided that the A*entral +o!ernmentB, on #ein satisfied that the fail"re to comply with the conditions was accidental or d"e to inad!ertence or to some other s"fficient ca"se, or that on other ro"nds it is C"st and eD"ita#le to rant relief, may, on the application of the company or any other person interested and on s"ch terms and conditions as seem to the (aA*entral +o!ernmentB C"st and expedient, order that the company #e relie!ed from s"ch conseD"ences as aforesaid.

'#A. Private compan% to &ecome pu&lic compan% in certain cases

G1H Sa!e as otherwise pro!ided in this section, where not less than twenty/fi!e per cent of the paid/"p share capital of a pri!ate company ha!in a share capital, is held #y one or more #odies corporate, the pri!ate company shall,/ GaH G#H on and from the date on which the aforesaid percenta e is first held #y s"ch #ody or #odies corporate, or where the aforesaid percenta e has #een first so held #efore the commencement of the *ompanies GAmendmentH Act, 1,(0 on and from the expiry of the period of three months from the date of s"ch commencement "nless within that period the aforesaid percenta e is red"ced #elow twenty/fi!e per cent of the paid/"p share capital of the pri!ate company,

#ecome #y !irt"e of this section a p"#lic companyK Provided that e!en after the pri!ate company has so #ecome a p"#lic company, its articles of association may incl"de pro!isions relatin to the matters specified in cla"se GiiiH of s"#/section G1H of section 3 and the n"m#er of its mem#ers may #e, or may at any time #e red"ced, #elow se!enK Provided f"rther that comp"tin the aforesaid percenta e, acco"nt shall not #e ta;en of any share in the pri!ate company held #y a #an;in company if, #"t only if, the followin conditions are satisfied in respect of s"ch share, namelyK/ GaH that the share/ GiH GiiH GiiiH G#H forms part of the s"#Cect/matter of a tr"st, has not #een set apart for the #enefit of any #ody corporate, and is held #y the #an;in company either as a tr"stee of that tr"st or in its own name on #ehalf of a "tr"stee of that tr"stL or

that the share/ GiH forms part of the estate of a deceased person, GiiH GiiiH has not #een #eD"eathed #y the deceased person #y his will to any #ody corporate, and is held #y the #an;in company either as an exec"tor or administrator of the deceased person or in its own name on #ehalf of an exec"tor or administrator of the deceased personL

AG1AH

and the 8e istrar may, for the p"rpose of satisfyin himself that any share is held in the pri!ate company #y a #an;in company as aforesaid, call for at any time from the #an;in company s"ch #oo;s and papers as he considers necessaryL AExplanation / 3or the p"rposes of this s"#/section, "#odies corporate" means p"#lic companies, or pri!ate companies which had #ecome/p"#lic companies #y !irt"e of this section.B =itho"t preC"dice to the pro!isions of s"#/section G1H, where the a!era e ann"al t"rno!er of a pri!ate company, whether in existence at the commencement of the *ompanies GAmendmentH Act, 1,7$, or incorporated thereafter, is not, d"rin the rele!ant period, )'Aless than s"ch amo"nt as may #e prescri#edB, the pri!ate company shall, irrespecti!e of its paid/"p share capital, #ecome, on and from

the expiry of a period of three months from the last day of the rele!ant period d"rin which the pri!ate company had the said a!era e ann"al t"rno!er, a p"#lic company #y !irt"e of this s"#/sectionK Provided that e!en after the pri!ate company has so #ecome a p"#lic company, its articles of association may incl"de pro!isions relatin to the matters specified in cla"se GiiiH of s"#/section G1H of section 3 and the n"m#er of its mem#ers may #e, or may at any time #e red"ced, #elow se!en. G10H =here not less than twenty/fi!e per cent of the paid/"p share capital of a p"#lic company, ha!in share capital, is held #y a pri!ate company, the pri!ate company shall,/ GaH G#H on and from the date on which the aforesaid percenta e is first held #y it after the commencement of the *ompanies GAmendmentH Act, 1,7$, or where the aforesaid percenta e has #een first so held #efore the commencement of the *ompanies GAmendmentH Act, 1,7$, on and from the expiry of the period of three months from the date of s"ch commencement, "nless within that period the aforesaid percenta e is red"ced #elow twenty/fi!e per cent of the paid/"p share capital of the p"#lic company,

#ecome, #y !irt"e of this s"#/section, a p"#lic company and there"pon all other pro!ision of this section shall apply theretoK Provided that e!en after the pri!ate company has so #ecome a p"#lic company, its articles of association may incl"de pro!isions relatin to the matters specified in cla"se GiiiH of s"#/section G1H of section 3 and the n"m#er of its mem#ers may #e, or may at any time #e red"ced, #elow se!en.B =here, after the commencement of the *ompanies GAmendment H Act, 1,)), a pri!ate company accepts, after an in!itation is made #y an ad!ertisement, or renews deposits from the p"#lic, other than its mem#ers, directors or their relati!es, s"ch pri!ate company shall, on and from the date on which s"ch acceptance or renewal, as the case may #e, is first made after s"ch commencement #ecome a p"#lic company and there"pon all the pro!isions of this section shall apply theretoK Provided that e!en after the pri!ate company has so #ecome a p"#lic company, its articles of association may incl"de pro!isions relatin to the matters specified in cla"se GiiiH of s"#/section G1H of section 3 and the n"m#er of its mem#ers may #e or may at any time, #e red"ced #elow se!en.B =ithin three months from the date on which a pri!ate company #ecomes a p"#lic company #y !irt"e of this section, the company shall inform the 8e istrar that it has #ecome a p"#lic company as aforesaid, and there"pon the 8e istrar shall delete the word "&ri!ate" #efore the word "2imited" in the name of the company "pon the re ister and shall also ma;e the necessary alterations in the certificate of incorporation iss"ed to the company and in its memorand"m of association. =here a p"#lic company referred to in s"#/section G2H #ecomes a pri!ate company on or after the commencement of the *ompanies GAmendmentH Act, 2000, s"ch company shall inform the 8e istrar that it has #ecome a pri!ate company and there"pon the 8e istrar shall s"#stit"te the word Epri!ate companyE for the word Ep"#lic companyE in the name of the company "pon the re ister and shall also ma;e the necessary alterations in the certificate of incorporation iss"ed to the company and in its memorand"m of association within fo"r wee;s from the date of application made #y the company.B S"#/section G3H of section 23 shall apply to a chan e of name "nder s"#/section G2H as it applies to a chan e of name "nder section 21. A pri!ate company which has #ecome a p"#lic company #y !irt"e of this section shall contin"e to #e a p"#lic company "ntil it has, with the appro!al of the *entral +o!ernment and in accordance with the pro!isions of this Act, a ain #ecome a pri!ate company. If a company ma;es defa"lt in complyin with s"#/section G2H, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to fi!e h"ndred r"pees for e!ery day d"rin which the defa"lt contin"es. AJJJB AJJJBB 1!ery pri!ate company ha!in a share capital shall, in addition to the certificate referred to in s"#/ section G2H of section 1(1, file with the 8e istrar alon with the ann"al ret"rn a second certificate si ned #y #oth the si natories of the ret"rn, statin either/ GaH that since the date of the ann"al eneral meetin with reference to which the last ret"rn was s"#mitted, or in the case of a first ret"rn, since the date of the incorporation of the pri!ate company, no #ody or #odies corporate has or ha!e held twenty/fi!e per cent or more of its paid/ "p share capital, AJJJB AG#H JJJB,

AG1*H

G2H

AG2AH

G3H G$H

G'H

AG(H G7H G)H

AGcH

that the pri!ate company, irrespecti!e of its paid/"p share capital, did not ha!e, d"rin the rele!ant period, an a!era e ann"al t"rno!er of As"ch amo"nt as is referred to in s"#/section G1AH or moreB,

AG,H

AGdH that the pri!ate company did not accept or renew deposits from the p"#lic.B 1!ery pri!ate company, ha!in share capital, shall file with the 8e istrar alon with the ann"al ret"rn a certificate si ned #y #oth the si natories of the ret"rn, statin that since the date of the ann"al eneral meetin with reference to which the last ret"rn was s"#mitted, or in the case of a first ret"rn, since the date of the incorporation of the pri!ate company, it did not hold twenty/fi!e per cent or more of the paid/"p share capital of one or more p"#lic companies. S"#Cect to the other pro!isions of this Act, any reference in this section to acceptin , after an in!itation is made #y an ad!ertisement, or renewin deposits from the p"#lic shall #e constr"ed as incl"din a reference to acceptin , after an in!itation is made #y an ad!ertisement, or renewin deposits from any section of the p"#lic, and the pro!isions of section (7 shall, so far as may #e, apply, as if the reference to in!itation to the p"#lic to s"#scri#e for shares or de#ent"res occ"rrin in that section, incl"des a reference to in!itation from the p"#lic for acceptance of deposits.B 4othin contained in this section, except s"#/section G2AH, shall apply on and after the commencement of the *ompanies GAmendmentH Act, 2000.B Explanation/ 3or the p"rposes of this section,/ GaH "rele!ant period" means the period of three consec"ti!e financial years,/ GiH GiiH GiiiH G#H immediately precedin the commencement of the *ompanies GAmendmentH Act, 1,7$, or a part of which immediately preceded s"ch commencement and the other part of which immediately, followed s"ch commencement, or immediately followin s"ch commencement or at any time thereafterL

AG10H

AG11H

AGcH

"t"rno!er", of a company, means the a re ate !al"e of the realisation made from the sale, s"pply or distri#"tion of oods or on acco"nt of ser!ices rendered, or #oth, #y the company d"rin a financial yearLB "deposit" has the same meanin as in section ')A.B

''.

Prospectus or statement in lieu o! prospectus to &e !iled &% private compan% on ceasing to &e private compan%
If a company, #ein a pri!ate company, alters its articles in s"ch a manner that they no lon er incl"de the pro!isions which, "nder cla"se GiiiH of s"#/section G1H of section 3, are reD"ired to #e incl"ded in the articles of a company in order to constit"te it a pri!ate company, the company,/ GaH shall, as on the date of the alteration, cease to #e a pri!ate companyL and G#H shall, within a period of AthirtyB days after the said date, file with the 8e istrar either a prospect"s or a statement in lie" of prospect"s, as specified in s"#/section G2H.

G1H

G2HGaH

G#H

GcH

1!ery prospect"s filed "nder s"#/section G1H shall state the matters specified in &art I of Sched"le II and set o"t the reports specified in &art II of that Sched"le, and the said &arts I and II shall ha!e effect s"#Cect to the pro!isions contained in &art III of that Sched"le. 1!ery statement in lie" of prospect"s filed "nder s"#/section G1H shall #e in the form and contain the partic"lars set o"t in &art I of Sched"le I7, and in the cases mentioned in &art II of that Sched"le, shall set o"t the reports specified therein, and the said &arts I and II shall ha!e effect s"#Cect to the pro!isions contained in &art III of that Sched"le. =here the persons ma;in any s"ch report as is referred to in cla"se GaH or G#H ha!e made therein, or ha!e, witho"t i!in the reasons indicated therein, any s"ch adC"stments as are mentioned in cla"se 32 of Sched"le II or cla"se ' of Sched"le I7, as the case may #e, the prospect"s or statement in lie" of prospect"s filed as aforesaid, shall ha!e endorsed thereon or attached thereto, a written statement si ned #y those persons, settin o"t the adC"stments and i!in the reasons therefor. If defa"lt is made in complyin with s"#/section G1H or G2H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to ,1AAfi!e tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es. =here any prospect"s or statement in lie" of prospect"s filed "nder this section incl"des any "ntr"e statement, any person who a"thorised the filin of s"ch prospect"s or statement shall #e p"nisha#le

G3H

G$H

G'H

with imprisonment for a term which may extend to two years, or with fine which may extend to ,10 Afifty tho"sand r"peesB, or with #oth, "nless he pro!es either that the statement was immaterial or that he had reasona#le ro"nd to #elie!e, and did "p to the time of the filin of the prospect"s or statement #elie!e, that the statement was tr"e. 3or the p"rposes of this section/ GaH G#H a statement incl"ded in a prospect"s or a statement in lie" of prospect"s shall #e deemed to #e "ntr"e if it is misleadin in the form and context in which it is incl"dedL and where the omission from a prospect"s or a statement in lie" of prospect"s of any matter is calc"lated to mislead, the prospect"s or statement in lie" of prospect"s shall #e deemed, in respect of s"ch omission, to #e a prospect"s or a statement in lie" of prospect"s in which an "ntr"e statement is incl"ded.

G(H

3or the p"rposes of s"#/section G$H and cla"se GaH of s"#/section G'H, the expression "incl"ded" when "sed with reference to a prospect"s, or statement in lie" of prospect"s, means incl"ded in the prospect"s or statement in lie" of prospect"s itself or contained in any report or memorand"m appearin on the face thereof, or #y reference incorporated therein.

Reduction of number of members below legal minimum '). (em&ers severall% lia&le !or de&ts where &usiness carried on with !ewer than seven, or in the case o! a private compan%, two mem&ers

If at any time the n"m#er of mem#ers of a company, is red"ced, in the case of p"#lic company, #elow se!en, or in the case of a pri!ate company, #elow two, and the company carries on #"siness for more than six months while the n"m#er is so red"ced, e!ery person who is a mem#er of the company d"rin the time that it so carries on #"siness after those six months and is co niFant of the fact that it is carryin on #"siness with fewer than se!en mem#ers or two mem#ers, as the case may #e, shall #e se!erally lia#le for the payment of the whole de#ts of the company contracted d"rin that time, and may #e se!erally s"ed therefor.

Contracts and deeds investments seal etc! '*.

G1H

5orm o! contracts
*ontracts on #ehalf of a company may #e made as followsK/ GaH a contract which, if made #etween pri!ate persons, wo"ld #y law #e reD"ired to #e in writin si ned #y the parties to #e char ed therewith, may #e made on #ehalf of the company in writin si ned #y any person actin "nder its a"thority, express or implied, and may in the same manner #e !aried or dischar edL G#H a contract which, if made #etween pri!ate persons, wo"ld #y law #e !alid altho" h made #y parol only and not red"ced into writin , may #e made #y parol on #ehalf of the company #y any person actin "nder its a"thority, express or implied, and may in the same manner #e !aried or dischar ed. A contract made accordin to this section shall #ind the company.

G2H

'+.

2ills o! exchange and promissor% notes

A #ill of exchan e, h"ndi or promissory note shall #e deemed to ha!e #een made, accepted, drawn or endorse on #ehalf of a company if drawn, accepted, made, or endorsed in the name of, or on #ehalf or on acco"nt of, the company #y any person actin "nder its a"thority, express or implied.

',.

3xecution o! deeds

G1H

G2H

A company may, #y writin "nder its common seal, empower any person, either enerally or in respect of any specified matters, as its attorney, to exec"te deeds on its #ehalf in any place either in or o"tside India. A deed si ned #y s"ch an attorney on #ehalf of the company and "nder his seal where sealin is reD"ired, shall #ind the company and ha!e the same effect as if it were "nder its common seal.

'..
G1H

"nvestments o! compan% to &e held in its own name

Sa!e as otherwise pro!ided in s"#/sections G2H to G'H Aor any other law for the time #ein in forceB and s"#Cect to the pro!isions of s"#/sections G(H to G)H,/ GaH G#H all in!estments made #y a company on its own #ehalf shall he made and held #y it in its own nameL and

G2H

G3H

G$H G'H

where any s"ch in!estments are not so held at the commencement of this Act the company shall, within a period of one year from s"ch commencement, either ca"se them to #e transferred to, and hold them in, its own name, or dispose of them. =here the company has a ri ht to appoint any person or persons,/ or where any nominee or nominees of the company has or ha!e #een appointed, as a director or directors of any other #ody corporate, shares in s"ch other #ody corporate to an amo"nt not exceedin the nominal !al"e of the D"alification shares which are reD"ired to #e held #y a director thereof, may #e re istered or held #y s"ch company Cointly in the names of itself and of each s"ch person or nominee or in the name of each s"ch person or nominee AJJJB. A company may hold any shares in its s"#sidiary in the name or names of any nominee or nominees of the company, if and in so far as it is necessary so to do, to ens"re that the n"m#er of mem#ers of the s"#sidiary is not red"ced, where it is a p"#lic company, #elow se!en, and where it is a pri!ate company, #elow two. S"#/section G1H shall not apply to in!estments made #y a company whose principal #"siness consists of the #"yin and sellin of shares or sec"rities. 4othin in this section shall #e deemed to pre!ent a company/ GaH from depositin with a #an;, #ein the #an;ers of the company, any shares or sec"rities for the collection of any di!idend or interest paya#le thereonL or

AGaaH from depositin with, or transferrin to, or holdin in the name of, State 0an; of India or a Sched"led 0an;, #ein the #an;ers of the company, shares or sec"rities, in order to facilitate the transfer thereofK Provided that if within a period of six months from the date on which the shares or sec"rities are transferred #y the company to, or are first held #y the company in the name of, the State 0an; of India or a Sched"led 0an; as aforesaid, no transfer of s"ch shares or sec"rities ta;es place, the company shall, as soon as practica#le after the expiry of that period, ha!e the shares or sec"rities retransferred to it from the State 0an; of India or the Sched"led 0an; or, as the case may #e, a ain hold the shares or sec"rities in its own nameL orB G#H from depositin with, or transferrin to, any person any shares or sec"rities, #y way of sec"rity for the repayment of any loan ad!anced to the company or the performance of any o#li ation "nderta;en #y itL AGcH G(H from holdin in!estments in the name of a depository when s"ch in!estment are in the form of sec"rities held #y the company as a #eneficial owner.B

.he certificate or letter of allotment relatin to the shares or sec"rities in which in!estments ha!e #een made #y a company shall, except in the cases referred to in s"#/sections G$H and G'H, #e in the c"stody of s"ch company or Awith the State 0an; of India or a Sched"led 0an;B, #ein the #an;ers of the company. =here, in p"rs"ance of s"#/section G2H, G3H, G$H or G'H, and shares or sec"rities in which in!estments ha!e #een made, #y a company are not held #y it in its own name, the company shall forthwith enter in a re ister maintained #y it for the p"rpose N GaH the nat"re, !al"e, and s"ch other partic"lar as may #e necessary f"lly to identify the shares or sec"rities in D"estionL and

G7H

G#H G)H

the #an; or person in whose name or c"stody the shares or sec"rities are held.

.he re ister ;ept "nder s"#/section G7H shall #e open to the inspection of any mem#er or de#ent"re holder of the company witho"t char e, d"rin #"siness ho"rs, s"#Cect to s"ch reasona#le restrictions as the company may, #y its articles or in eneral meetin , impose, so that not less than two ho"rs in each day are allowed for inspection. If defa"lt is made in complyin with any of the reD"irements of s"#/sections G1H to G)H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. If any inspection reD"ired "nder s"#/section G)H is ref"sed, the A*entral +o!ernmentB may, #y order, direct an immediate inspection of the re ister. 4othin in this s"#/section shall #e constr"ed as preC"dicin in any way the operation of s"#/section G,H. In this section, "sec"rities" incl"de stoc; and de#ent"res.

G,H

G10H

G11H

)0.
G1H

Power !or compan% to have o!!icial seal !or use outside "ndia
A company whose o#Cects reD"ire or comprise the transaction of #"siness o"tside India may, if a"thorised #y its articles, ha!e for "se in any territory, district or place not sit"ate in India an official seal which shall #e a facsimile of the common seal of the company, with the addition on its face of the name of the territory, district or place where it is to #e "sed. A company ha!in an official seal for "se in any s"ch territory, district or place may, #y writin "nder its common seal, a"thorise any person appointed for the p"rpose in that territory, district or place to affix the official seal to any deed or other doc"ment to which the company is a party in that territory, district or place. .he a"thority of any a ent a"thorised "nder s"#/section G2H shall, as #etween the company and any person dealin with the a ent, contin"e d"rin the period, if any, mentioned in the instr"ment conferrin the a"thority, or if no period is there mentioned, "ntil notice of the re!ocation or determination of the a entEs a"thority has #een i!en to the person dealin with him. .he person affixin any s"ch official seal shall, #y writin "nder his hand, certify on the deed or other doc"ment to which the seal is affixed, the date on which and the place at which, it is affixed. A deed or other doc"ment to which an official seal is d"ly affixed shall #ind the company as if it had #een sealed with the common seal of the company.

G2H

G3H

G$H G'H

"ervice of documents )1. Service o! documents on compan%

A doc"ment may #e ser!ed on a company or an officer thereof #y sendin it to the company or officer at the re istered post, or #y lea!in it at its re istered officeK AProvided that where the sec"rities are held in a depository, the records of the #eneficial ownership may #e ser!ed #y s"ch depository on the company #y means of electronic mode or #y deli!ery of floppies or discs.B

)2.

Service o! documents on :egistrar

A doc"ment may #e ser!ed on a 8e istrar #y sendin it to him at his office #y post "nder a certificate of postin or #y re istered post, or #y deli!erin it to, or lea!in it for, him at his office.

)#.
G1H

Service o! documents on mem&ers &% compan%

A doc"ment may #e ser!ed #y a company on any mem#er thereof either personally, or #y sendin it #y post to him to his re istered address, or if he has no re istered address in India, to the address, if any, within India s"pplied #y him to the company for the i!in of notices to him. =here a doc"ment is sent #y post,/

G2H

GaH

G#H

ser!ice thereof shall #e deemed to #e effected #y properly addressin , prepayin and postin a letter containin the doc"ment, pro!ided that where a mem#er has intimated to the company in ad!ance that doc"ments sho"ld #e sent to him "nder a certificate of postin or #y re istered post with or witho"t ac;nowled ement d"e and has deposited with the company a s"m s"fficient to defray the expenses of doin so, ser!ice of the doc"ment shall not #e deemed to #e effected "nless it is sent in the manner intimated #y the mem#erL and AJJJB s"ch ser!ice shall #e deemed to ha!e #een effected/ GiH GiiH in the case of a notice of a meetin , at the expiration of forty/ei ht ho"rs after the letter containin the same is posted, and in any other case at the time at which the letter wo"ld #e deli!ered in the ordinary co"rse of post.

G3H

A doc"ment ad!ertised in a newspaper circ"latin in the nei h#o"rhood of the re istered office of the company shall #e deemed to #e d"ly ser!ed on the day on which the ad!ertisement appears, on e!ery mem#er of the company who has no re istered address in India and has not s"pplied to the company an address within India for the i!in of notices to him. A doc"ment may #e ser!ed #y the company on the Coint/holders of a share #y ser!in it on the Coint/ holder named first in the re ister in respect of the share. A doc"ment may #e ser!ed #y the company on the persons entitled to a share in conseD"ence of the death or insol!ency of a mem#er #y sendin it thro" h the post in a prepaid letter addressed to them #y name, or #y the title of representati!es of the deceased, or assi nees of the insol!ent, or #y any li;e description, at the address, if any, in India s"pplied for the p"rpose #y the persons claimin to #e so entitled, or "ntil s"ch an address has #een so s"pplied, #y ser!in the doc"ment in any manner in which it mi ht ha!e #een ser!ed if the death or insol!ency had not occ"rred.

G$H G'H

)'.

Authentication o! documents and proceedings

Sa!e as otherwise expressly pro!ided in this Act, a doc"ment or proceedin reD"irin a"thentication #y a company may #e si ned #y a director, 21AJJJB the mana er, the secretary or other a"thorised officer of the company, and need not #e "nder its common seal.

PART III:

PROSPECTUS AND ALLOTMENT, AND OTHER MATTERS RELATING TO ISSUE OF SHARES OR DEBENTURES
Prospectus

)).

ating o! prospectus

A prospect"s iss"ed #y or on #ehalf of a company or in relation to an intended company shall #e dated, and that date shall, "nless the contrary is pro!ed, #e ta;en as the date of p"#lication of the prospect"s.

))A. Powers o! Securities and 3xchange 2oard o! "ndia

.he pro!isions contained in sections '' to '), ', to )$, 10), 10,, 110, 112, 113, 11(, 117, 11), 11,, 120, 121, 122, 20(, 20(A and 207, so far as they relate to iss"e and transfer of sec"rities and non/payment of di!idend shall,M GaH G#H in case of listed p"#lic companiesL in case of those p"#lic companies which intend to et their sec"rities listed on any reco niFed stoc; exchan e in India, #e administered #y the Sec"rities and 1xchan e 0oard of IndiaL and GcH in any other case, #e administered #y the *entral +o!ernment.

Explanation .M 3or remo!al of do"#ts, it is here#y declared that all powers relatin to all other matters incl"din the matters relatin to prospect"s, statement in lie" of prospect"s, ret"rn of allotment, iss"e of shares and redemption of irredeema#le preference shares shall #e exercised #y the *entral +o!ernment, A.ri#"nalB or the 8e istrar of *ompanies, as the case may #e.B

)*.
G1H

(atters to &e stated and reports to &e set out in prospectus

1!ery prospect"s iss"ed/ GaH G#H #y or on #ehalf of a company, or #y or on #ehalf of any person who is or has #een en a ed or interested in the formation of a company, shall state the matters specified in &art I of Sched"le II and set o"t the reports specified in &art II of that Sched"leL and the said &arts I and II shall ha!e effect s"#Cect to the pro!isions contained in &art III of that Sched"le.

G2H

G3H

A condition reD"irin or #indin an applicant for shares in or de#ent"res of a company to wai!e compliance with any of the reD"irements of this section, or p"rportin to affect him with notice of any contract, doc"ment or matter not specifically referred to in the prospect"s, shall #e !oid. 4o one shall iss"e any form of application for shares in or de#ent"res of a company, "nless the form is accompanied ,(A#y a memorand"m containin s"ch salient feat"res of a prospect"s as may #e prescri#edB which complies with the reD"irements of this sectionK AProvided that a copy of the prospect"s shall, on a reD"est #ein made #y any person #efore the closin of the s"#scription list, #e f"rnished to himK Provided !urther thatB this s"#/section shall not apply if it is shown that the form of application was iss"ed either/ GaH in connection with a bona )ade in!itation to a person to enter into an "nderwritin a reement with respect to the shares or de#ent"resL or

G$H

G#H in relation to shares or de#ent"res which were not offered to the p"#lic. If any person acts in contra!ention of the pro!isions of this s"#/section, he shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. A director or other person responsi#le for the prospect"s shall not inc"r any lia#ility #y reason of any non/compliance with, or contra!ention of, any of the reD"irements of this section, if/ GaH as re ards any matter not disclosed, he pro!es that he had no ;nowled e thereofL or G#H GcH he pro!es that the non/compliance or contra!ention arose from an honest mista;e of fact on his partL or

the non/compliance or contra!ention was in respect of matters which, in the opinion of the *o"rt dealin with the case, Awere immaterialB, or was otherwise s"ch as o" ht, in the opinion of that *o"rt, ha!in re ard to all the circ"mstances of the case, reasona#ly to #e exc"sedK Provided that no director or other person shall inc"r any lia#ility in respect of the fail"re to incl"de in a prospect"s a statement with respect to the matters specified in cla"se 1) of Sched"le II, "nless it is pro!ed that he had ;nowled e of the matters not disclosed. G'H .his section shall not apply/ GaH to the iss"e to existin mem#ers or de#ent"re holders of a company of a prospect"s or form of application relatin to shares in or de#ent"res of the company, whether an applicant for shares or de#ent"res will or will not ha!e the ri ht to reno"nce in fa!o"r of other personsL or G#H to the iss"e of a prospect"s or form of application relatin to shares or de#ent"res which are, or are to #e, in all respects "niform with shares or de#ent"res pre!io"sly iss"ed and for the time #ein dealt in or D"oted on a reco nised stoc; exchan eL #"t s"#Cect as aforesaid, this section shall apply to a prospect"s or a form of application, whether iss"ed on or with reference to the formation of a company or s"#seD"ently. 4othin in this section shall limit or diminish any lia#ility which any person may inc"r "nder the eneral law or "nder this Act apart from this section.

G(H

)+.

3xpert to &e unconnected with !ormation, or management o! compan%

A prospect"s in!itin persons to s"#scri#e for shares in or de#ent"res of a company shall not incl"de a statement p"rportin to #e made #y an expert, "nless the expert is a person who is not, and has not #een, en a ed or interested in the formation or promotion, or in the mana ement, of the company.

),.

3xpertEs consent to issue o! prospectus containing statement &% him

A prospect"s in!itin persons to s"#scri#e for shares in or de#ent"res of a company and incl"din a statement p"rportin to #e made #y an expert shall not #e iss"ed, "nless/ GaH he has i!en his written consent to the iss"e thereof with the statement incl"ded in the form and context in which it is incl"ded, and has not withdrawn s"ch consent #efore the deli!ery of a copy of the prospect"s for re istrationL and a statement that he has i!en and has not withdrawn his consent as aforesaid appears in the prospect"s.

G#H

),A.
G1H

eposits not to &e invited without issuing an advertisement

.he *entral +o!ernment may, in cons"ltation with the 8eser!e 0an; of India, prescri#e the limits "p to which, the manner in which and the conditions s"#Cect to which deposits may #e in!ited or accepted #y a company either from the p"#lic or from its mem#ers. 4o company shall in!ite, or allow any other person to in!ite or ca"se to #e in!ited on its #ehalf, any deposit "nless/ GaH s"ch deposit is in!ited or is ca"sed to #e in!ited in accordance with the r"les made "nder s"#/ section G1H, AJJJB G#H an ad!ertisement, incl"din therein a statement showin the financial position of the company, has #een iss"ed #y the company in s"ch form and in s"ch manner as may #e prescri#ed A andB AGcH the company is not in defa"lt in the repayment of any deposit or part thereof and any interest there"pon in accordance with the terms and conditions of s"ch deposit.B 1!ery deposit accepted #y a company at any time #efore the commencement of the *ompanies GAmendmentH Act, 1,7$ in accordance with the directions made #y the 8eser!e 0an; of India "nder *hapter III/0 of the 8eser!e 0an; of India Act, 1,3$, shall, "nless renewed in accordance with cla"se G#H, #e repaid in accordance with the Aterms and conditions of s"ch depositB. 4o deposit referred to in cla"se GaH shall #e renewed #y the company after the expiry of the term thereof "nless the deposit is s"ch that it co"ld ha!e #een accepted if the r"les made "nder s"#/section G1H were in force at the time when the deposit was initially accepted #y the company. =here, #efore the commencement of the *ompanies GAmendmentH Act, 1,7$, any deposit was recei!ed #y a company in contra!ention of any direction made "nder *hapter III/0 of the 8eser!e 0an; of India Act, 1,3$, repayment of s"ch deposit shall #e made in f"ll on or #efore the 1st day of April, 1,7', and s"ch repayment shall #e witho"t preC"dice to any action that may #e ta;en "nder the 8eser!e 0an; of India Act, 1,3$ for the acceptance of s"ch deposit in contra!ention of s"ch direction. 1!ery deposit accepted #y a company after the commencement of the *ompanies GAmendmentH Act, 1,)), shall, "nless renewed in accordance with the r"les made "nder s"#/section G1H, #e repaid in accordance with the terms and conditions of s"ch deposit.B =here any deposit is accepted #y a company after the commencement of the *ompanies GAmendmentH Act, 1,7$, in contra!ention of the r"les made "nder s"#/section G1H, repayment of s"ch deposit shall #e made #y the company within thirty days from the date of acceptance of s"ch deposit or within s"ch f"rther time, not exceedin thirty days, as the *entral +o!ernment may, on s"fficient ca"se #ein shown #y the company, allow.

G2H

G3HGaH

G#H

GcH

AG3AH

G$H

G'H

=here a company omits or fails to ma;e repayment of a deposit in accordance with the pro!isions of cla"se GcH of s"#/section G3H, or in the case of a deposit referred to in s"#/section G$H, within the time specified in that s"#/section,/ GaH the company shall #e p"nisha#le with fine which shall not #e less than twice the amo"nt in relation to which the repayment of the deposit has not #een made, and o"t of the fine, if realised, an amo"nt eD"al to the amo"nt in relation to which the repayment of deposit has not #een made, shall #e paid #y the *o"rt, tryin the offence, to the person to whom repayment of the deposit was to #e made, and on s"ch payment, the lia#ility of the company to ma;e repayment of the deposit shall, to the extent of the amo"nt paid #y t he *o"rt, stand dischar edL e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to fi!e years and shall also #e lia#le to fine.

G#H G(H

=here a company accepts or in!ites, or allows or ca"ses any other person to accept or in!ite on its #ehalf, any deposit in excess of the limits prescri#ed "nder s"#/section G1H or in contra!ention of the manner of condition prescri#ed "nder that s"#/section or in contra!ention of the pro!isions of s"#/ section G2H, as the case may #e,/ GaH the company shall #e p"nisha#le,/ GiH where s"ch contra!ention relates to the acceptance of any deposit, with fine which shall not #e less than an amo"nt eD"al to the amo"nt of the deposit so acceptedL GiiH where s"ch contra!ention relates to the in!itation of any deposit, with fine which may extend to Aten la;h r"peesB #"t shall not #e less than Afifty tho"sand r"peesBL G#H e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to fi!e years and shall also #e lia#le to fine. 4othin contained in this section shall apply to / GiH GiiH G#H a #an;in company, or s"ch other company as the *entral +o!ernment may, after cons"ltation with the 8eser!e 0an; of India, specify in this #ehalf. 1xcept the pro!isions relatin to ad!ertisement contained in cla"se G#H of s"#/section G2H, nothin in this section shall apply to s"ch classes of financial companies as the *entral +o!ernment may, after cons"ltation with the 8eser!e 0an; of India, specify in this #ehalf. .he *entral +o!ernment may, if it considers it necessary for a!oidin any hardship or for any other C"st and s"fficient reason, #y order, iss"ed either prospecti!ely or retrospecti!ely from a date not earlier than the commencement of the *ompanies GAmendmentH Act, 1,7$, rant extension of time to a company or class of companies to comply with, or exempt any company or class of companies from, all or any of the pro!isions of this section either enerally or for any specified period s"#Cect to s"ch conditions as may #e specified in the orderK Provided that no order "nder this s"#/section shall #e iss"ed in relation to a class of companies except after cons"ltation with the 8eser!e 0an; of India.B

G7HGaH

AG)H

AG,H

=here a company has failed to repay any deposit or part thereof in accordance with the terms and conditions of s"ch deposit, the A.ri#"nalB may, if it is satisfied, either on its own motion or on the application of the depositor, that it is necessary so to do to safe "ard the interests of the company, the depositors or in the p"#lic interest, direct, #y order, the company to ma;e repayment of s"ch deposit or part thereof forthwith or within s"ch time and s"#Cect to s"ch conditions as may #e specified in the orderK Provided that the A.ri#"nalB may, #efore ma;in any order "nder this s"#/section, i!e a reasona#le opport"nity of #ein heard to the company and the other persons interested in the matter.

G10H

AG11H

=hoe!er fails to comply with any order made #y the A.ri#"nalB "nder s"#/section G,H shall #e p"nisha#le with imprisonment which may extend to three years and shall also #e lia#le to a fine of Anot less than r"pees fi!e h"ndredB for e!ery day d"rin which s"ch non/compliance contin"es.B A depositor may, at any time, ma;e a nomination and the pro!isions of sections 10,A and 10,0 shall, as far as may #e, apply to the nomination made "nder this s"#/section.B Explanation/ 3or the p"rposes of this section, "deposit" means any deposit of money with, and incl"des any amo"nt #orrowed #y, a company #"t shall not incl"de s"ch cate ories of amo"nt as may #e prescri#ed in cons"ltation with the 8eser!e 0an; of India.

),AA. Small depositors

G1H G2H 1!ery company, which accepts deposits from small depositors, shall intimate to the A.ri#"nalB any defa"lt made #y it in repayment of any s"ch deposits or part thereof or any interest there"pon. .he intimation "nder s"#/section G1H shall,M GaH G#H #e i!en within sixty days from the date of defa"ltL incl"de partic"lars in respect of the names and addresses of each small depositor, the principal s"m of deposits d"e to them and interest accr"ed there"pon. Explanation .M 3or remo!al of do"#ts, it is here#y declared that the intimation "nder this section shall #e i!en on monthly #asis. =here a company has made a defa"lt in repayment of any deposit or part thereof or any interest there"pon to a small depositor, the A.ri#"nalB, on receipt of intimation "nder s"#/section G1H shall,M GaH exercise, on its own motion, powers conferred "pon it #y s"#/section G,H of section ')AL G#H pass an appropriate order within a period of thirty days from the date of receipt of intimation "nder s"#/section G1HK

G3H

Provided that Athe .ri#"nalB may pass order after expiry of the period of thirty days, after i!in the small depositors an opport"nity of #ein heardK Provided !urther that it shall not #e necessary for a small depositor to #e present at the hearin of the proceedin "nder this s"#/section. G$H 4o company shall, at any time, accept f"rther deposits from small depositors, "nless each small depositor, whose deposit has mat"red, had #een paid the amo"nt of the deposit and the interest accr"ed there"ponK Provided that nothin contained in this s"#/section shall apply toM GaH G#H G'H any deposit which has #een renewed #y the small depositor !ol"ntarilyL or any deposit, whose repayment has #ecome impractica#le d"e to the death of the small depositor or whose repayment has #een stayed #y a competent co"rt or a"thority. 1!ery company, which has on any occasion made a defa"lt in the repayment of a deposit or part thereof or any interest there"pon to a small depositor, shall state, in e!ery f"t"re ad!ertisement and application form in!itin deposits from the p"#lic, the total n"m#er of small depositors and amo"nt d"e to them in respect of which s"ch defa"lt has #een made. =here any interest accr"ed on deposits of the small depositors has #een wai!ed, the fact of s"ch wai!er shall #e mentioned #y the company in e!ery ad!ertisement and application form in!itin deposits iss"ed after s"ch wai!er. =here a company had accepted deposits from small depositors and s"#seD"ent to s"ch acceptance of deposits, o#tains f"nds #y ta;in a loan for the p"rposes of its wor;in capital from any #an;, it shall first "tilise the f"nds so o#tained for the repayment of any deposit or any part thereof or any interest there"pon to the small depositor #efore applyin s"ch f"nds for any other p"rpose. 1!ery application form, iss"ed #y a company to a small depositor for acceptin deposits from him, shall contain a statement to the effect that the applicant had #een apprised ofM GaH e!ery past defa"lt #y the company in the repayment of deposit or interest thereon, if any, s"ch defa"lt has occ"rredL and

G(H

G7H

G)H

G,H

G10H

G11H

G#H the wai!er of interest "nder s"#/section G(H, if any, and reasons therefor. =hoe!er ;nowin ly fails to comply with the pro!isions of this section or comply with any order of the A.ri#"nalB shall #e p"nisha#le with imprisonment which may extend to three years and shall also #e lia#le to fine for not less than fi!e h"ndred r"pees for e!ery day d"rin which s"ch non/compliance contin"es. If a company or any other person contra!enes any pro!ision of this section, e!ery person, who at the time the contra!ention was committed, was a director of the company, as well as the company, shall #e deemed to #e "ilty of the offence and shall #e lia#le to #e proceeded a ainst and p"nished accordin ly. .he pro!isions of section ')A shall, as far as may #e, apply to the deposits made #y a small depositor "nder this section.

Explanation . / 3or the p"rposes of this section, "a small depositor" means a depositor who has deposited in a financial year a s"m not exceedin twenty tho"sand r"pees in a company and incl"des his s"ccessors, nominees and le al representati!es.

),AAA. e!ault in acceptance or re!und o! deposits to &e cogniFa&le

G1H 4otwithstandin anythin contained in sections (21 and (2$, e!ery offence connected with or arisin o"t of acceptance of deposits "nder section ')A or section ')AA shall #e co niFa#le offence "nder the *ode of *riminal &roced"re, 1,73. 4o co"rt shall ta;e co niFance of any offence "nder s"#/section G1H except on a complaint made #y the *entral +o!ernment or any officer a"thorised #y it in this #ehalf.B

G2H

),2. Provisions relating to prospectus to appl% to advertisement

.he pro!isions of this Act relatin to a prospect"s shall, so far as may #e, apply to an ad!ertisement referred to in section ')A.B

)..
G1H

Penalt% and interpretation

If any prospect"s is iss"ed in contra!ention of section '7 or '), the company, and e!ery person, who is ;nowin ly a party to the iss"e thereof, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. In sections '7 and '), the expression "expert" incl"des an en ineer, a !al"er, an acco"ntant and any other person whose profession i!es a"thority to a statement made #y him.

G2H

*0.
G1H

:egistration o! prospectus
4o prospect"s shall #e iss"ed #y or on #ehalf of a company or in relation to an intended company "nless, on or #efore the date of its p"#lication, there has #een deli!ered to the 8e istrar for re istration a copy thereof si ned #y e!ery person who is named therein as a director or proposed director of the company or #y his a ent a"thorised in writin , and ha!in endorsed thereon or attached thereto/ GaH G#H any consent to the iss"e of the prospect"s reD"ired #y section ') from any person as an expertL and in the case of a prospect"s iss"ed enerally, also/ GiH a copy of e!ery contract reD"ired #y cla"se 1( of Sched"le II to #e specified in the prospect"s, or, in the case of a contract not red"ced into writin , a memorand"m i!in f"ll partic"lars thereofL and GiiH where the persons ma;in any report reD"ired #y &art II of that Sched"le ha!e made therein, or ha!e, witho"t i!in the reasons, indicated therein, any s"ch adC"stments as are mentioned in cla"se 32 of that Sched"le, a written statement si ned #y those persons settin o"t the adC"stments and i!in the reasons therefor.

G2H

1!ery prospect"s to which s"#/section G1H applies shall, on the face of it,/ GaH state that a copy has #een deli!ered for re istration as reD"ired #y this sectionL and G#H specify any doc"ments reD"ired #y this section to #e endorsed on or attached to the copy so deli!ered, or refer to statements incl"ded in the prospect"s which specify those doc"ments.

AG3H

.he 8e istrar shall not re ister a prospect"s "nless the reD"irements of sections '', '(, '7 and ') and s"#/sections G1H and G2H of this section ha!e #een complied with and the prospect"s is accompanied #y the consent in writin of the person, if any, named therein as the a"ditor, le al ad!iser, attorney, solicitor, #an;er or #ro;er of the company or intended company, to act in that capacity.B

G$H

4o prospect"s shall #e iss"ed more than ninety days after the date on which a copy thereof is deli!ered for re istrationL and if a prospect"s is so iss"ed, it shall #e deemed to #e a prospect"s a copy of which has not #een deli!ered "nder this section to the 8e istrar. If a prospect"s is iss"ed witho"t a copy thereof #ein deli!ered "nder this section to the 8e istrar or witho"t the copy so deli!ered ha!in endorsed thereon or attached thereto the reD"ired consent or doc"ments, the company, and e!ery person who is ;nowin ly a party to the iss"e of the prospect"s, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB.

G'H

*0A. Shel! prospectus

G1H G2H G3H Any p"#lic financial instit"tion, p"#lic sector #an; or sched"led #an; whose main o#Cect is financin shall file a shelf prospect"s. A company filin a shelf prospect"s with the 8e istrar shall not #e reD"ired to file prospect"s afresh at e!ery sta e of offer of sec"rities #y it within a period of !alidity of s"ch shelf prospect"s. A company filin a shelf prospect"s shall #e reD"ired to file an information memorand"m on all material facts relatin to new char es created, chan es in the financial position as ha!e occ"rred #etween the first offer of sec"rities, pre!io"s offer of sec"rities and the s"cceedin offer of sec"rities within s"ch time as may #e prescri#ed #y the *entral +o!ernment, prior to ma;in of a second or s"#seD"ent offer of sec"rities "nder the shelf prospect"s. An information memorand"m shall #e iss"ed to the p"#lic alon with shelf prospect"s filed at the sta e of the first offer of sec"rities and s"ch prospect"s shall #e !alid for a period of one year from the date of openin of the first iss"e of sec"rities "nder that prospect"sK Provided that where an "pdate of information memorand"m is filed e!ery time an offer of sec"rities is made, s"ch memorand"m to ether with the shelf prospect"s shall constit"te the prospect"s. Explanation( M3or the p"rpose of this section, / GaH "financin " means ma;in loans to or s"#scri#in in the capital of, a pri!ate ind"strial enterprise en a ed in infrastr"ct"ral financin or, s"ch other company as the *entral +o!ernment may notify in this #ehalfL "shelf prospect"s" means a prospect"s iss"ed #y any financial instit"tion or #an; for one or more iss"es of the sec"rities or class of sec"rities specified in that prospect"s.

G$H

G#H

*02. "n!ormation memorandum

G1H G2H A p"#lic company ma;in an iss"e of sec"rities may circ"late information memorand"m to the p"#lic prior to filin of a prospect"s. A company in!itin s"#scription #y an information memorand"m shall #e #o"nd to file a prospect"s prior to the openin of the s"#scription lists and the offer as a red/herrin prospect"s, at least three days #efore the openin of the offer. .he information memorand"m and red/herrin prospect"s shall carry same o#li ations as are applica#le in the case of a prospect"s. Any !ariation #etween the information memorand"m and the red/herrin prospect"s shall #e hi hli hted as !ariations #y the iss"in company. Explanation( M 3or the p"rposes of s"#/sections G2H, G3H and G$H, "red/herrin prospect"s" means a prospect"s which does not ha!e complete partic"lars on the price of the sec"rities offered and the D"ant"m of sec"rities offered. 1!ery !ariation as made and hi hli hted in accordance with s"#/section G$H a#o!e shall #e indi!id"ally intimated to the persons in!ited to s"#scri#e to the iss"e of sec"rities. In the e!ent of the iss"in company or the "nderwriters to the iss"e ha!e in!ited or recei!ed ad!ance s"#scription #y way of cash or post/dated cheD"es or stoc;/in!est, the company or s"ch "nderwriters or #an;ers to the iss"e shall not encash s"ch s"#scription moneys or post/dated cheD"es or stoc;/in!est #efore the date of openin of the iss"e, witho"t ha!in indi!id"ally intimated the prospecti!e s"#scri#ers of the !ariation and witho"t ha!in offered an opport"nity to s"ch prospecti!e s"#scri#ers to withdraw their application and cancel their post/dated cheD"es or stoc;/in!est or ret"rn of s"#scription paid.

G3H G$H

G'H G(H

G7H

.he applicant or proposed s"#scri#er shall exercise his ri ht to withdraw from the application on any intimation of !ariation within se!en days from the date of s"ch intimation and shall indicate s"ch withdrawal in writin to the company and the "nderwriters. Any application for s"#scription which is acted "pon #y the company or "nderwriters or #an;ers to the iss"e witho"t ha!in i!en eno" h information of any !ariations, or the partic"lars of withdrawin the offer or opport"nity for cancellin the post/dated cheD"es or stoc; in!est or stop payments for s"ch payments shall #e !oid and the applicants shall #e entitled to recei!e a ref"nd or ret"rn of its post/ dated cheD"es or stoc;/in!est or s"#scription moneys or cancellation of its application, as if the said application had ne!er #een made and the applicants are entitled to recei!e #ac; their ori inal application and interest at the rate of fifteen per cent from the date of encashment till payment of realisation. <pon the closin of the offer of sec"rities, a final prospect"s statin therein the total capital raised, whether #y way of de#t or share capital and the closin price of the sec"rities and any other details as were not complete in the red/herrin prospect"s shall #e filed in a case of a listed p"#lic company with the Sec"rities and 1xchan e 0oard and 8e istrar, and in any other case with the 8e istrar only.B

G)H

G,H

*1.

0erms o! contract mentioned in prospectus or statement in lieu o! prospectus, not to &e varied

A company shall not, at any time, !ary the terms of a contract referred to in the prospect"s or statement in lie" of prospect"s, except s"#Cect to the appro!al of, or except an a"thority i!en #y, the company in eneral meetin .

*2.
G1H

Civil lia&ilit% !or misstatements in prospectus

S"#Cect to the pro!isions of this section, where a prospect"s in!ites persons to s"#scri#e for shares in or de#ent"res of a company, the followin persons shall #e lia#le to pay compensation to e!ery person who s"#scri#es for any shares or de#ent"res on the faith of the prospect"s for any loss or dama e he may ha!e s"stained #y reason of any "ntr"e statement incl"ded therein, that is to say,/ GaH G#H e!ery person who is a director of the company at the time of the iss"e of the prospect"sL e!ery person who has a"thorised himself to #e named and is named in the prospect"s either as a director, or as ha!in a reed to #ecome a director, either immediately or after an inter!al of timeL e!ery person who is a promoter of the companyL and e!ery person who has a"thorised the iss"e of the prospect"sK

GcH GdH

Provided that where, "nder section '), the consent of a person is reD"ired to the iss"e of a prospect"s and he has i!en that consent, or where "nder AJJJB s"#/section G3H of section (0, the consent of a person named in a prospect"s is reD"ired and he has i!en that consent, he shall not, #y reason of ha!in i!en s"ch consent, #e lia#le "nder this s"#/section as a person who has a"thorised the iss"e of the prospect"s except in respect of an "ntr"e statement, if any p"rportin to #e made #y him as an expert. G2H 4o person shall #e lia#le "nder s"#/section G1H, if he pro!es/ GaH that, ha!in consented to #ecome a director of the company, he withdrew his consent #efore the iss"e of the prospect"s, and that it was iss"ed witho"t his a"thority or consentL G#H that the prospect"s was iss"ed witho"t his ;nowled e or consent, and that on #ecomin aware of its iss"e, he forthwith a!e reasona#le p"#lic notice that it was iss"ed witho"t his ;nowled e or consentL GcH that, after the iss"e of the prospect"s and #efore allotment there"nder, he, on #ecomin aware of any "ntr"e statement therein, withdrew his consent to the prospect"s and a!e reasona#le p"#lic notice of the withdrawal and of the reason thereforL or that/ GiH as re ards e!ery "ntr"e statement not p"rportin to #e made on the a"thority of an expert or of a p"#lic official doc"ment or statement, he had reasona#le ro"nd to

GdH

GiiH

#elie!e, and did "p to the time of the allotment of the shares or de#ent"res, as the case may #e, #elie!e, that the statement was tr"eL and as re ards e!ery "ntr"e statement p"rportin to #e a statement #y an expert or contained in what p"rports to #e a copy of or an extract from a report or !al"ation of an expert, it was a correct and fair representation of the statement, or a correct copy of, or a correct and fair extract from, the report or !al"ationL and he had reasona#le ro"nd to #elie!e, and did "p to the time of the iss"e of the prospect"s #elie!e, that the person ma;in the statement was competent to ma;e it and that that person had i!en the consent reD"ired #y section ') to the iss"e of the prospect"s and had not withdrawn that consent #efore deli!ery of a copy of the prospect"s for re istration or, to the defendantIs ;nowled e, #efore allotment there"nderL and as re ards e!ery "ntr"e statement p"rportin to #e a statement made #y an official person or contained in what p"rports to #e a copy of or extract from a p"#lic official doc"ment, it was a correct and fair representation of the statement, or a correct copy of or a correct and fair extract from, the doc"mentK Provided that this s"#/section shall not apply in the case of a person lia#le, #y reason of his ha!in i!en a consent reD"ired of him #y section '), as a person who has a"thorised the iss"e of the prospect"s in respect of an "ntr"e statement, p"rportin to #e made #y him as an expert.

GiiiH

G3H

A person who, apart from this s"#/section, wo"ld, "nder s"#/section G1H, #e lia#le #y reason of his ha!in i!en a consent reD"ired of him #y section ') as a person who has a"thorised the iss"e of a prospect"s in respect of an "ntr"e statement, p"rportin to #e made #y him as an expert, shall not #e so lia#le, if he pro!es/ GaH G#H that, ha!in i!en his consent "nder section ') to the iss"e of the prospect"s, he withdrew it in writin #efore deli!ery of a copy of the prospect"s for re istrationL that, after deli!ery of a copy of the prospect"s for re istration and #efore allotment there"nder, he, on #ecomin aware of the "ntr"e statement, withdrew his consent in writin and a!e reasona#le p"#lic notice of the withdrawal and of the reason thereforL or that he was competent to ma;e the statement and that he has reasona#le ro"nd to #elie!e, and did "p to the time of the allotment of the shares or de#ent"res, #elie!e, that the statement was tr"e.

GcH

G$H

=here/ GaH the prospect"s specifies the name of a person as a director of the company, or as ha!in a reed to #ecome a director thereof, and he has not consented to #ecome a director, or has withdrawn his consent #efore the iss"e of the prospect"s, and has not a"thorised or consented to the iss"e thereofL or G#H the consent of a person is reD"ired "nder section ') to the iss"e of the prospect"s and he either has not i!en that consent or has withdrawn it #efore the iss"e of the prospect"sL the directors of the company excl"din those witho"t whose ;nowled e or consent the prospect"s was iss"ed, and e!ery other person who a"thorised the iss"e thereof, shall #e lia#le to indemnify the person referred to in cla"se GaH or cla"se G#H, as the case may #e, a ainst all dama es, costs and expenses to which he may #e made lia#le #y reason of his name ha!in #een inserted in the prospect"s or of the incl"sion therein of a statement p"rportin to #e made #y him as an expert, as the case may #e, or in defendin himself a ainst any s"it or le al proceedin #ro" ht a ainst him in respect thereofK Provided that a person shall not #e deemed for the p"rposes of this s"#/section to ha!e a"thorised the iss"e of a prospect"s #y reason only of his ha!in i!en the consent reD"ired #y section ') to the incl"sion therein of a statement p"rportin to #e made #y him as an expert. 1!ery person who, #ecomes lia#le to ma;e any payment #y !irt"e of this section, may reco!er contri#"tion, as in cases of contract, from any other person who, if s"ed separately, wo"ld ha!e #een lia#le to ma;e the same payment, "nless the former person was, and the latter person was not, "ilty of fra"d"lent misrepresentation. 3or the p"rposes of this section/ GaH the expression "promoter" means a promoter who was a party to the preparation of the prospect"s or of the portion thereof containin the "ntr"e statement, #"t does not incl"de any person #y reason of his actin in a professional capacity for persons en a ed in proc"rin the formation of the companyL and

G'H

G(H

G#H

the expression "expert" has the same meanin as in section ').

*#.
G1H

Criminal lia&ilit% !or misstatements in prospectus

=here a prospect"s iss"ed after the commencement of this Act incl"des any "ntr"e statement, e!ery person who a"thorised the iss"e of the prospect"s shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth, "nless he pro!es either that the statement was immaterial or that he had reasona#le ro"nd to #elie!e, and did "p to the time of the iss"e of the prospect"s #elie!e, that the statement was tr"e. A person shall not #e deemed for the p"rposes of this section to ha!e a"thorised the iss"e of a prospect"s #y reason only of his ha!in i!en// GaH G#H the consent reD"ired #y section ') to the incl"sion therein of a statement p"rportin to #e made #y him as an expert, or the consent reD"ired #y AJJJB s"#/section G3H of section (0.

G2H

*'.
G1H

ocument containing o!!er o! shares or de&entures !or sale to &e deemed prospectus
=here a company allots or a rees to allot any shares in or de#ent"res of the company with a !iew to all or any of those shares or de#ent"res #ein offered for sale to the p"#lic, any doc"ment #y which the offer for sale to the p"#lic is made shall, for all p"rposes, #e deemed to #e a prospect"s iss"ed #y the companyL and all enactments and r"les of law as to the contents of prospect"ses and as to lia#ility in respect of statements in and omissions from prospect"ses, or otherwise relatin to prospect"ses, shall apply with the modifications specified in s"#/sections G3H, G$H and G'H, and ha!e effect accordin ly, as if the shares or de#ent"res had #een offered to the p"#lic for s"#scription and as if persons acceptin the offer in respect of any shares or de#ent"res were s"#scri#ers for those shares or de#ent"res, #"t witho"t preC"dice to the lia#ility, if any, of the persons #y whom the offer is made in respect of misstatements contained in the doc"ment or otherwise in respect thereof. 3or the p"rposes of this Act, it shall, "nless the contrary is pro!ed, #e e!idence that an allotment of, or an a reement to allot, shares or de#ent"res was made with a !iew to the shares or de#ent"res #ein offered for sale to the p"#lic if it is shown/ GaH that an offer of the shares or de#ent"res or of any of them for sale to the p"#lic was made within six months after the allotment or a reement to allotL or G#H that at the date when the offer was made, the whole consideration to #e recei!ed #y the company in respect of the shares or de#ent"res had not #een recei!ed #y it./ Section '( as applied #y this section shall ha!e effect as if it reD"ired a prospect"s to state in addition to the matters reD"ired #y that section to #e stated in a prospect"s/ GaH the net amo"nt of the consideration recei!ed or to #e recei!ed #y the company in respect of the shares or de#ent"res to which the offer relatesL and G#H the place and time at which the contract "nder which the said shares or de#ent"res ha!e #een or are to #e allotted may #e inspected. Section (0 as applied #y this section shall ha!e effect as if the persons ma;in the offer were persons named in a prospect"s as directors of a company. =here a person ma;in an offer to which this section relates is a company or a firm, it shall #e s"fficient if the doc"ment referred to in s"#/section G1H is si ned on #ehalf of the company or firm #y two directors of the company or #y not less than one/half of the partners in the firm, as the case may #eL and any s"ch director or partner may si n #y his a ent a"thorised in writin .

G2H

G3H

G$H G'H

*).
G1H

"nterpretation o! provisions relating to prospectuses

3or the p"rposes of the fore oin pro!isions of this part/ GaH a statement incl"ded in a prospect"s shall #e deemed to #e "ntr"e, if the statement is misleadin in the form and context in which it is incl"dedL and

G#H

where the omission from a prospect"s of any matter is calc"lated to mislead, the prospect"s shall #e deemed, in respect of s"ch omission, to #e a prospect"s in which an "ntr"e statement is incl"ded.

G2H

3or the p"rposes of sections (1, (2 and (3 and cla"se GaH of s"#/section G1H of this section, the expression "incl"ded" when "sed with reference to a prospect"s, means incl"ded in the prospect"s itself or contained in any report or memorand"m appearin on the face thereof or #y reference incorporated therein or iss"ed therewith.

**.

6ewspaper advertisements o! prospectus

=here any prospect"s is p"#lished as a newspaper ad!ertisement, it shall not #e necessary in the ad!ertisement to specify the contents of the memorand"m or the si natories thereto, or the n"m#er of shares s"#scri#ed for #y them.

*+.
G1H

Construction o! re!erences to o!!ering shares or de&entures to the pu&lic, etc.

Any reference in this Act or in the articles of a company to offerin shares or de#ent"res to the p"#lic shall, s"#Cect to any pro!ision to the contrary contained in this Act and s"#Cect also to the pro!isions of s"#/sections G3H and G$H, #e constr"ed as incl"din a reference to offerin them to any section of the p"#lic, whether selected as mem#ers or de#ent"re holders of the company concerned or as clients of the person iss"in the prospect"s or in any other manner. Any reference in this Act or in the articles of a company to in!itations to the p"#lic to s"#scri#e for shares or de#ent"res shall, s"#Cect as aforesaid, #e constr"ed as incl"din a reference to in!itations to s"#scri#e for them extended to any section of the p"#lic, whether selected as mem#ers or de#ent"re holders of the company concerned or as clients of the person iss"in the prospect"s or in any other manner. 4o offer or in!itation shall #e treated as made to the p"#lic #y !irt"e of s"#/section G1H or s"#/section G2H, as the case may #e, if the offer or in!itation can properly #e re arded, in all circ"mstances/ GaH as not #ein calc"lated to res"lt, directly or indirectly, in the shares or de#ent"res #ecomin a!aila#le for s"#scription or p"rchase #y persons other than those recei!in the offer or in!itationL or G#H otherwise as #ein a domestic concern of the persons ma;in and recei!in the offer or in!itation.

G2H

G3H

AProvided that nothin contained in this s"#/section shall apply in a case where the offer or in!itation to s"#scri#e for shares or de#ent"res is made to fifty persons or moreK Provided !urther that nothin contained in the first pro!iso shall apply to the non/#an;in financial companies or p"#lic financial instit"tions specified in section $A of the *ompanies Act, 1,'(.B AG3AH 4otwithstandin anythin contained in s"#/section G3H, the Sec"rities and 1xchan e 0oard of India shall, in cons"ltation with the 8eser!e 0an; of India, #y notification in the :fficial +aFette, specify the "idelines in respect of offer or in!itation made to the p"#lic #y a p"#lic financial instit"tion specified "nder section $A or non/#an;in financial companyEs referred to in cla"se GfH of section $'/I of the 8eser!e 0an; of India Act, 1,3$.B =itho"t preC"dice to the enerality of s"#/section G3H, a pro!ision in a companyIs articles prohi#itin in!itations to the p"#lic to s"#scri#e for shares or de#ent"res shall not #e ta;en as prohi#itin the ma;in to mem#ers or de#ent"re holders of an in!itation which can properly #e re arded in the manner set forth in that s"#/section. .he pro!isions of this Act relatin to pri!ate companies shall #e constr"ed in accordance with the pro!isions contained in s"#/sections G1H to G$H.

G$H

G'H

*,.

Penalt% !or !raudulentl% inducing persons to invest mone%

Any person who, either #y ;nowin ly or rec;lessly ma;in any statement, promise or forecast which is false, decepti!e or misleadin , or #y any dishonest concealment of material facts, ind"ces or attempts to ind"ce another person to enter into, or to offer to enter into/ GaH G#H any a reement for, or with a !iew to, acD"irin , disposin of, s"#scri#in for, or "nderwritin shares or de#ent"resL or

any a reement the p"rpose or pretended p"rpose of which is to sec"re a profit to any of the parties from the yield of shares or de#ent"res, or #y reference to fl"ct"ations in the !al"e of shares or de#ent"resL shall #e p"nisha#le with imprisonment for a term which may extend to fi!e years, or with fine which may extend to Aone la;h r"peesB, or with #oth.

*,A. Personation !or acDuisition, etc., o! shares

G1H Any person who/ GaH ma;es in a fictitio"s name an application to a company for acD"irin , or s"#scri#in for, any shares therein, or G#H otherwise ind"ces a company to allot, or re ister any transfer of shares therein to him, or any other person in a fictitio"s name, shall #e p"nisha#le with imprisonment for a term which may extend to fi!e years. .he pro!isions of s"#/section G1H shall #e prominently reprod"ced in e!ery prospect"s iss"ed #y the company and in e!ery form of application for shares which is iss"ed #y the company to any person.B

G2H

*,2. "nitial o!!er o! securities to &e in dematerialised !orm in certain cases

4otwithstandin anythin contained in any other pro!isions of this Act, e!ery listed p"#lic company, ma;in initial p"#lic offer of any sec"rity for a s"m of r"pees ten crores or more, shall iss"e the same only in dematerialised form #y complyin with the reD"isite pro!isions of the Depositories Act, 1,,( and the re "lations made there"nder.B

Allotment *..
G1H

Prohi&ition o! allotment unless minimum su&scription received

4o allotment shall #e made of any share capital of a company offered to the p"#lic for s"#scription, "nless the amo"nt stated in the prospect"s as the minim"m amo"nt which, in the opinion of the 0oard of directors, m"st #e raised #y the iss"e of share capital in order to pro!ide for the matters specified in cla"se ' of Sched"le II has #een s"#scri#ed, and the s"m paya#le on application for the amo"nt so stated has #een paid to and recei!ed #y the company, whether in cash or #y a cheD"e or other instr"ment which has #een paid. .he amo"nt so stated in the prospect"s shall #e rec;oned excl"si!ely of any amo"nt paya#le otherwise than in money, and is in this Act referred to as "the minim"m s"#scription". .he amo"nt paya#le on application on each share shall not #e less than fi!e per cent of the nominal amo"nt of the share. All moneys recei!ed from applicants for shares shall #e deposited and ;ept deposited in a Sched"led 0an;/ GaH G#H "ntil the certificate to commence #"siness is o#tained "nder section 1$,, or where s"ch certificate has already #een o#tained, "ntil the entire amo"nt paya#le on applications for shares in respect of the minim"m s"#scription has #een recei!ed #y the company, and where s"ch amo"nt has not #een recei!ed #y the company within the time on the expiry of which the moneys recei!ed from the applicants for shares are reD"ired to #e repaid witho"t interest "nder s"#/

G2H G3H AG$H

section G'H, all moneys recei!ed from applicants for shares shall #e ret"rned in accordance with the pro!isions of that s"#/section. In the e!ent of any contra!ention of the pro!isions of this s"#/section, e!ery promoter, director or other person who is ;nowin ly responsi#le for s"ch contra!ention shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB.B G'H If the conditions aforesaid ha!e not #een complied with on the expiry of one h"ndred and twenty days after the first iss"e of the prospect"s, all moneys recei!ed from applicants for shares shall #e forthwith repaid to them witho"t interestL and if any s"ch money is not so repaid within one h"ndred and thirty days after the iss"e of the prospect"s, the directors of the company shall #e Cointly and se!erally lia#le to repay that money with interest at the rate of six per cent per ann"m from the expiry of the one h"ndred and thirtieth dayK Provided that a director shall not #e so lia#le if he pro!es that the defa"lt in the repayment of the money was not d"e to any miscond"ct or ne li ence on his part. G(H G7H Any condition p"rportin to reD"ire or #ind any applicant for shares to wai!e compliance with any reD"irement of this section shall #e !oid. .his section, except s"#/section G3H thereof, shall not apply in relation to any allotment of shares s"#seD"ent to the first allotment of shares offered to the p"#lic for s"#scription.

+0.

Prohi&ition o! allotment in certain cases unless statement in lieu o! prospectus delivered to :egistrar
A company ha!in a share capital, which does not iss"e a prospect"s on or with reference to its formation, or which has iss"ed s"ch a prospect"s #"t has not proceeded to allot any of the shares offered to the p"#lic for s"#scription, shall not allot any of its shares or de#ent"res "nless at least three days #efore the first allotment of either shares or de#ent"res, there has #een deli!ered to the 8e istrar for re istration a statement in lie" of prospect"s si ned #y e!ery person who is named therein as a director or proposed director of the company or #y his a ent a"thorised in writin , in the form and containin the partic"lars set o"t in &art I of Sched"le III and, in the cases mentioned in &art II of that Sched"le, settin o"t the reports specified therein, and the said &arts I and II shall ha!e effect s"#Cect to the pro!isions contained in &art III of that Sched"le. 1!ery statement in lie" of prospect"s deli!ered "nder s"#/section G1H, shall, where the persons ma;in any s"ch report as aforesaid ha!e made therein, or ha!e witho"t i!in the reasons indicated therein, any s"ch adC"stments as are mentioned in cla"se ' of Sched"le III, ha!e endorsed thereon or attached thereto a written statement si ned #y those persons, settin o"t the adC"stments and i!in the reasons thereof. .his section shall not apply to a pri!ate company. If a company acts in contra!ention of s"#/section G1H or G2H, the company, and e!ery director of the company who wilf"lly a"thorises or permits the contra!ention, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB. =here a statement in lie" of prospect"s deli!ered to the 8e istrar "nder s"#/section G1H incl"des any "ntr"e statement, any person who a"thorised the deli!ery of the statement in lie" of prospect"s for re istration shall #e p"nisha#le with imprisonment for a term which may extend to two years or with fine which may extend to Afifty tho"sand r"peesB or with #oth, "nless he pro!es either that the statement was immaterial or that he had reasona#le ro"nd to #elie!e, and did "p to the time of the deli!ery for re istration of the statement in lie" of prospect"s #elie!e, that the statement was tr"e. 3or the p"rposes of this section/ GaH a statement incl"ded in a statement in lie" of prospect"s shall #e deemed to #e "ntr"e if it is misleadin in the form and context in which it is incl"dedL and G#H where the omission from a statement in lie" of prospect"s of any matter is calc"lated to mislead, the statement in lie" of prospect"s shall #e deemed, in respect of s"ch omission, to #e a statement in lie" of prospect"s in which an "ntr"e statement is incl"ded. 3or the p"rposes of s"#/section G'H and cla"se GaH of s"#/section G(H, the expression "incl"ded", when "sed with reference to a statement in lie" of prospect"s, means incl"ded in the statement in lie" of prospect"s itself or contained in any report or memorand"m appearin on the face thereof, or #y reference incorporated therein, or iss"ed therewith.

G1H

G2H

G3H G$H

G'H

G(H

G7H

+1.
G1H

3!!ect o! irregular allotment

An allotment made #y a company to an applicant in contra!ention of the pro!isions of section (, or 70 shall #e !oida#le at the instance of the applicant/ GaH G#H within two months after the holdin of the stat"tory meetin of the company, and not later, or in any case where the company is not reD"ired to hold a stat"tory meetin or where the allotment is made after the holdin of the stat"tory meetin , within two months after the date of the allotment, and not later.

G2H G3H

.he allotment shall #e !oida#le as aforesaid, notwithstandin that the company is in co"rse of #ein wo"nd "p. If any director of a company ;nowin ly contra!enes, or wilf"lly a"thorises or permits the contra!ention of, any of the pro!isions of section (, or 70 with respect to allotment, he shall #e lia#le to compensate the company and the allottee respecti!ely for any loss, dama es or costs which the company or the allottee may ha!e s"stained or inc"rred there#yK Provided that proceedin s to reco!er any s"ch loss, dama es or costs shall not #e commenced after the expiration of two years from the date of the allotment.

+2.
G1H GaH

Applications !or, and allotment o!, shares and de&entures

4o allotment shall #e made of any shares in or de#ent"res of a company in p"rs"ance of a prospect"s iss"ed enerally, and no proceedin s shall #e ta;en on applications made in p"rs"ance of a prospect"s so iss"ed, "ntil the #e innin of the fifth day after that on which the prospect"s is first so iss"ed or s"ch later time, if any, as may #e specified in the prospect"sK Provided that where, after a prospect"s is first iss"ed enerally, a p"#lic notice is i!en #y some person responsi#le "nder section (2 for the prospect"s which has the effect of excl"din , limitin or diminishin his responsi#ility, no allotment shall #e made "ntil the #e innin of the fifth day after that on which s"ch p"#lic notice is first i!en. G#H 4othin in the fore oin pro!ision shall #e deemed to excl"de, limit or diminish any lia#ility that mi ht #e inc"rred in the case referred to therein "nder the eneral law or this Act. GcH .he #e innin of the fifth day or s"ch later time as is mentioned in the first para raph of cla"se GaH, or the #e innin of the fifth day mentioned in the second para raph of that cla"se, as the case may #e, is hereinafter in this Act referred to as "the time of the openin of the s"#scription lists." In s"#/section G1H, the reference to the day on which the prospect"s is first iss"ed enerally shall #e constr"ed as referrin to the day on which it is first so iss"ed as a newspaper ad!ertisementK Provided that, if it is not so iss"ed as a newspaper ad!ertisement #efore the fifth day after that on which it is first so iss"ed in any other manner, the said reference shall #e constr"ed as referrin to the day on which it is first so iss"ed in any manner. .he !alidity of an allotment shall not #e affected #y any contra!ention of the fore oin pro!isions of this sectionL #"t, in the e!ent of any s"ch contra!ention, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. In the application of this section to a prospect"s offerin shares or de#ent"res for sale, s"#/sections G1H to G3H shall ha!e effect with the s"#stit"tion of references to sale for references to allotment, and with the s"#stit"tion for the reference to the company and e!ery officer of the company who is in defa"lt of a reference to any person #y or thro" h whom the offer is made and who is ;nowin ly "ilty of, or wilf"lly a"thorises or permits, the contra!ention. An application for shares in, or de#ent"res of, a company, which is made in p"rs"ance of a prospect"s iss"ed enerally shall not #e re!oca#le "ntil after the expiration of the fifth day after the time of the openin of the s"#scription lists, or the i!in , #efore the expiry of the said fifth day #y some person responsi#le "nder section (2 for the prospect"s, of a p"#lic notice ha!in the effect "nder that section of excl"din , limitin or diminishin the responsi#ility of the person i!in it.

G2H

G3H

G$H

G'H

+#.

Allotment o! shares and de&entures to &e dealt in on stoc= exchange

AG1H

1!ery company, intendin to offer shares or de#ent"res to the p"#lic for s"#scription #y the iss"e of a prospect"s shall, #efore s"ch iss"e, ma;e an application to one or more reco nised stoc; exchan es for permission for the shares or de#ent"res intendin to #e so offered to #e dealt with in the stoc; exchan e or each s"ch stoc; exchan e.B

AAG1AHB =here a prospect"s, whether iss"ed enerally or not, states that an Aapplication "nder s"#/section G1H has #eenB made for permission for the shares or de#ent"res offered there#y to #e dealt in one or more reco niFed stoc; exchan es, s"ch prospect"s shall state the name of the stoc; exchan e or, as the case may #e, each s"ch stoc; exchan e, and any allotment made on an application in p"rs"ance of s"ch prospect"s shall, whene!er made, #e !oid, AJJJB if the permission has not #een ranted #y the stoc; exchan e or each s"ch stoc; exchan e, as the case may #e #efore the expiry of ten wee;s from the date of the closin of the s"#scription listsK Provided that where an appeal a ainst the decision of any reco nised stoc; exchan e ref"sin permission for the shares or de#ent"res to #e dealt in on that stoc; exchan e has #een preferred "nder section 22 of the Sec"rities *ontracts G8e "lationH Act, 1,'(, s"ch allotment shall not #e !oid "ntil the dismissal of the appeal.B G2H =here the permission has not #een Aapplied "nder s"#/section G1HB Aor, s"ch permission ha!in #een applied for, has not #een ranted as aforesaidB, the company shall forthwith repay witho"t interest all moneys recei!ed from applicants in p"rs"ance of the prospect"s, and, if any s"ch money is not repaid within ei ht days after the company #ecomes lia#le to repay it, 117Athe company and e!ery director of the company who is an officer/in/defa"lt shall, on and from the expiry of the ei hth day, #e Cointly and se!erally lia#le to repay that money with interest at s"ch rate, not less than fo"r per cent and not more than fifteen per cent, as may #e prescri#ed, ha!in re ard to the len th of the period of delay in ma;in the repayment of s"ch money.B AJJJB AG2AH =here permission has #een ranted #y the reco niFed stoc; exchan e or stoc; exchan es for dealin in any shares or de#ent"res in s"ch stoc; exchan e or each s"ch stoc; exchan e and the moneys recei!ed from applicants for shares or, de#ent"res are in excess of the a re ate of the application moneys relatin to the shares or de#ent"res in respect of which allotments ha!e #een made, the company shall repay the moneys to the extent of s"ch excess forthwith witho"t interest, and if s"ch money is not repaid within ei ht days, from the day the company #ecomes lia#le to pay it, Athe company and e!ery director of the company who is an officer in defa"lt shall, on and from the expiry of the ei hth day, #e Cointly and se!erally lia#le to repay that money with interest at s"ch rate, not less than fo"r per cent and not more than fifteen per cent, as may #e prescri#e, ha!in re ard to the len th of the period of delay in ma;in the repayment of s"ch money.B If defa"lt is made in complyin with the pro!isions of s"#/section G2AH, the company and e!ery officer of the company who is an defa"lt shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB, and where repayment is not made within six months from the expiry of the ei hth day, also with imprisonment for a term which may extend to one year.B All moneys recei!ed as aforesaid shall #e ;ept in a separate #an; acco"nt maintained with a Sched"led 0an; A"ntil the permission has #een ranted, or where an appeal has #een preferred a ainst the ref"sal to rant s"ch permission, "ntil the disposal of the appeal, and the money standin in s"ch separate acco"nt shall where the permission has not #een applied for as aforesaid or has not #een ranted, #e repaid within the time and in the manner specified in s"#/section G2HBL and if defa"lt is made in complyin with this s"#/section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. %oneys standin to the credit of the separate #an; acco"nt referred to in s"#/section G3H shall not #e "tilised for any p"rpose other than the followin p"rposes, namelyK/ GaH G#H adC"stment a ainst allotment of shares, where the shares ha!e #een permitted to #e dealt in on the stoc; exchan e or each stoc; exchan e specified in the prospect"sL or repayment of moneys recei!ed from applicants in p"rs"ance of the prospect"s, where shares ha!e not #een permitted to #e dealt in on the stoc; exchan e or each stoc; exchan e specified in the prospect"s, as the case may #e, or, where the company is for any other reason "na#le to ma;e the allotment of share.B

AJJJB G20H

G3H

AG3AH

G$H

Any condition p"rportin to reD"ire or #ind any applicant for shares or de#ent"res to wai!e compliance with any of the reD"irements of this section shall #e !oid.

AG'H

3or the p"rposes of this section, it shall #e deemed that permission has not #een ranted if the application for permission, where made, has not #een disposed of within the time specified in s"#/ section G1H.B .his section shall ha!e effect/ GaH in relation to any shares or de#ent"res a reed to #e ta;en #y a person "nderwritin an offer thereof #y a prospect"s, as if he had applied therefor in p"rs"ance of the prospect"sL and G#H in relation to a prospect"s offerin shares for sale, with the followin modification, namely,/ GiH GiiH references to sale shall #e s"#stit"ted for references to allotmentL the persons #y whom the offer is made, and not the company, shall #e lia#le "nder s"#/ section G2H to repay money recei!ed from applicants, and references to the companyIs lia#ility "nder that s"#/section shall #e constr"ed accordin lyL and for the reference in s"#/section G3H to the company and e!ery officer of the company who is in defa"lt, there shall #e s"#stit"ted a reference to any person #y or thro" h whom the offer is made and who is ;nowin ly "ilty of, or wilf"lly a"thorises or permits, the defa"lt.

G(H

GiiiH

G7H

4o prospect"s shall state that application has #een made for permission for the shares or de#ent"res offered there#y to #e dealt in on any stoc; exchan e, "nless it is a reco nised stoc; exchan e.

+'.

(anner o! rec=oning !i!th, eighth and tenth da%s in sections +2 and +#

In rec;onin for the p"rposes of sections 72 and 73, the fifth day, Aor the ei hth dayB, after another day, any inter!enin day which is a p"#lic holiday "nder the 4e otia#le Instr"ments Act, 1))1, shall #e disre arded, and if the fifth, Aor ei hth dayB Gas so rec;onedH is itself s"ch a p"#lic holiday, there shall for the said p"rposes #e s"#stit"ted the first day thereafter which is not s"ch a holiday.

+).
G1H

:eturn as to allotments
=hene!er a company ha!in a share capital ma;es any allotment of its shares, the company shall, within Athirty daysB thereafter,/ GaH file with the 8e istrar a ret"rn of the allotments, statin the n"m#er and nominal amo"nt of the shares comprised in the allotment, the names, addresses and occ"pations of the allottees, and the amo"nt, if any, paid or d"e and paya#le on each shareK AProvided that the company shall not show in s"ch ret"rn any shares as ha!in #een allotted for cash if cash has not act"ally #een recei!ed in respect of s"ch allotmentLB G#H in the case of shares Gnot #ein #on"s sharesH allotted as f"lly or partly paid "p otherwise than in cash, prod"ce for the inspection and examination of the 8e istrar a contract in writin constit"tin the title of the allottee to the allotment to ether with any contract of sale, or a contract for ser!ices or other consideration in respect of which that allotment was made, s"ch contracts #ein d"ly stamped, and file with the 8e istrar copies !erified in the prescri#ed manner of all s"ch contracts and a ret"rn statin the n"m#er and nominal amo"nt of shares so allotted, the extent to which they are to #e treated as paid "p, and the consideration for which they ha!e #een allottedL and file with the 8e istrar/ GiH in the case of #on"s shares, a ret"rn statin the n"m#er and nominal amo"nt of s"ch shares comprised in the allotment and the names, addresses and occ"pations of the allottees and a copy of the resol"tion a"thorisin the iss"e of s"ch sharesL GiiH

AGcH

G2H

in the case of iss"e of shares at a disco"nt, a copy of the resol"tion passed #y the company a"thorisin s"ch iss"e to ether with a copy of the order of the (aA.ri#"nalB sanctionin the iss"e and where the maxim"m rate of the disco"nt exceeds ten per cent, a copy of the order of the *entral +o!ernment permittin the iss"e at the hi her percenta e.B =here a contract s"ch as is mentioned in cla"se G#H of s"#/section G1H is not red"ced to writin , the company shall, within 12$Athirty daysB after the allotment, file with the 8e istrar the prescri#ed partic"lars of the contract stamped with the same stamp d"ty as wo"ld ha!e #een paya#le if the contract had #een red"ced to writin L and those partic"lars shall #e deemed to #e an instr"ment within

G3H

G$H

the meanin of the Indian Stamp Act, 1),,, and the 8e istrar may, as a condition of filin the partic"lars, reD"ire that the d"ty paya#le thereon #e adC"dicated "nder section 31 of that Act. If the 8e istrar is satisfied that in the circ"mstances of any partic"lar case of the period of 12$Athirty daysB specified in s"#/sections G1H and G2H for compliance with the reD"irements of this section 127Ais or was inadeD"ate, he may, on application made in that #ehalf #y the company, whether #efore or after the expiry of the said period, extend that period as he thin;s fitBL and if he does so, the pro!isions of s"#/sections G1H and G2H shall ha!e effect in that partic"lar case as if for the said period of 12$Athirty daysB the extended period allowed #y the 8e istrar were s"#stit"ted. If defa"lt is made in complyin with this section, e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to 127AAfi!e tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"esK AProvided that in case of contra!ention of the pro!iso to cla"se GaH of s"#/section G1H, e!ery s"ch officer, and e!ery promoter of the company who is "ilty of the contra!ention shall #e p"nisha#le with fine which may extend to 10(AAfifty tho"sand r"peesB.B 4othin in this section shall apply to the iss"e and allotment #y a company of shares which "nder the pro!isions of its articles were forfeited for non/payment of calls.

G'H

Commissions and discounts +*. Power to pa% certain commissions and prohi&ition o! pa%ment o! all other commissions, discounts, etc.
A company may pay a commission to any person in consideration of/ GaH G#H his s"#scri#in or a reein to s"#scri#e, whether a#sol"tely or conditionally, for any shares in, or de#ent"res of, the company, or his proc"rin or a reein to proc"re s"#scriptions, whether a#sol"te or conditional, for any shares in, or de#ent"res of, the company,

G1H

if the followin conditions are f"lfilled, namelyK GiH the payment of the commission is a"thorised #y the articlesL GiiH the commission paid or a reed to #e paid does not exceed in the case of shares, fi!e per cent of the price at which the shares are iss"ed or the amo"nt or rate a"thorised #y the articles, whiche!er is less, and in the case of de#ent"res, two and a half per cent of the price at which the de#ent"res are iss"ed or the amo"nt or rate a"thorised #y the articles, whiche!er is lessL the amo"nt or rate per cent of the commission paid or a reed to #e paid is/ in the case of shares or de#ent"res offered to the p"#lic for s"#scription, disclosed in the prospect"s, and in the case of shares or de#ent"res not offered to the p"#lic for s"#scription, disclosed in the statement in lie" of prospect"s, or in a statement in the prescri#ed form si ned in li;e manner as a statement in lie" of prospect"s and filed #efore the payment of the commission with the 8e istrar and, where a circ"lar or notice, not #ein a prospect"s in!itin s"#scription for the shares or de#ent"res, is iss"ed, also disclosed in that circ"lar or noticeL AJJJB the n"m#er of shares or de#ent"res which persons ha!e a reed for a commission to s"#scri#e a#sol"tely or conditionally is disclosed in the manner aforesaidL AandB a copy of the contract for the payment of the commission is deli!ered to the 8e istrar at the time of deli!ery of the prospect"s or the statement in lie" of prospect"s for re istration.B

GiiiH

Gi!H AG!H G2H

Sa!e as aforesaid and sa!e as pro!ided in section 7,, no company shall allot any of its shares or de#ent"res or apply Aany of its moneysB, either directly or indirectly, in payment of any commission, disco"nt or allowance, to any person in consideration of/ GaH his s"#scri#in or a reein to s"#scri#e, whether a#sol"tely or conditionally, for any shares in, or de#ent"res of, the company, or G#H his proc"rin or a reein to proc"re s"#scriptions, whether a#sol"te or conditional for any shares in, or de#ent"res of, the company, whether the shares, de#ent"res or money #e so allotted or applied #y #ein added to the p"rchase money of any property acD"ired #y the company to the

G3H G$H

AG$AH

contract price of any wor; to #e exec"ted for the company, or the money to #e paid o"t of the nominal p"rchase money or contract price, or otherwise. 4othin in this section shall affect the power of any company to pay s"ch #ro;era e as it has heretofore #een lawf"l for a company to pay. A !endor to, promoter of, or other person who recei!es payment in shares, de#ent"res or money from, a company shall ha!e and shall #e deemed always to ha!e had power to apply any part of the shares, de#ent"res or money so recei!ed in payment of any commission the payment of which, if made directly #y the company, wo"ld ha!e #een le al "nder this section. 3or the remo!al of do"#ts it is here#y declared that no commission shall #e paid "nder cla"se GaH of s"#/section G1H to any person on shares or de#ent"res which are not offered to the p"#lic for s"#scriptionK Provided that where a person has s"#scri#ed or a reed to s"#scri#e "nder cla"se GaH of s"#/section G1H for any shares in, or de#ent"res of, the company and #efore the iss"e of the prospect"s or statement in lie" thereof any other person or persons has or ha!e s"#scri#ed for any or all of those shares or de#ent"res and that fact to ether with the a re ate amo"nt of commission paya#le "nder this section in respect of s"ch s"#scription is disclosed in s"ch prospect"s or statement, then, the company may pay commission to the first/mentioned person in respect of s"ch s"#scription.B

G'H

If defa"lt is made in complyin with the pro!isions of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

++.

:estrictions on purchase &% compan%, or loans &% compan% !or purchase, o! its own or its holding compan%Es shares
4o company limited #y shares, and no company limited #y "arantee and ha!in a share capital, shall ha!e power to #"y its own shares, "nless the conseD"ent red"ction of capital is effected and sanctioned in p"rs"ance of sections 100 to 10$ or of section $02. 4o p"#lic company, and no pri!ate company which is a s"#sidiary of a p"#lic company, shall i!e, whether directly or indirectly, and whether #y means of a loan, "arantee, the pro!ision of sec"rity or otherwise, any financial assistance for the p"rpose of or in connection with a p"rchase or s"#scription made or to #e made #y any person of or for any shares in the company or in its holdin companyK Provided that nothin in this s"#/section shall #e ta;en to prohi#it/ GaH the lendin of money #y a #an;in company in the ordinary co"rse of its #"sinessL or G#H the pro!ision #y a company, in accordance with any scheme for the time #ein in force, of money for the p"rchase of, or s"#scription for, f"lly paid shares in the company or its holdin company, #ein a p"rchase or s"#scription #y tr"stees of or for shares to #e held #y or for the #enefit of employees of the company, incl"din any director holdin a salaried office or employment in the companyL or GcH the ma;in #y a company of loans, within the limit laid down in s"#/section G3H to persons Gother than directors AJJJB or mana ersH #ona fide in the employment of the company with a !iew to ena#lin those persons to p"rchase or s"#scri#e for f"lly paid shares in the company or its holdin company to #e held #y themsel!es #y way of #eneficial ownership. 4o loan made to any person in p"rs"ance of cla"se GcH of the fore oin shall exceed in amo"nt his salary or wa es at that time for a period of six months. If a company acts in contra!ention of s"#/sections G1H to G3H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB. 4othin in this section shall affect the ri ht of a company to redeem any shares iss"ed "nder section )0 or "nder any correspondin pro!ision in any pre!io"s companies law.

G1H

G2H

G3H G$H G'H

++A. Power o! compan% to purchase its own securities

G1H 4otwithstandin anythin contained in this Act, #"t s"#Cect to the pro!isions of s"#/section G2H of this section and section 770, a company may p"rchase its own shares or other specified sec"rities Ghereinafter referred to as "#"y/#ac;"H o"t of/

GiH GiiH GiiiH

its free reser!esL or the sec"rities premi"m acco"ntL or the proceeds of any shares or other specified sec"ritiesK

Provided that no #"y/#ac; of any ;ind of shares or other specified sec"rities shall #e made o"t of the proceeds of an earlier iss"e of the same ;ind of shares or same ;ind of other specified sec"rities. G2H 4o company shall p"rchase its own shares or other specified sec"rities "nder s"#/section G1H "nless/ GaH the #"y/#ac; is a"thorised #y its articlesL G#H a special resol"tion has #een passed in eneral meetin of the company a"thorisin the #"y/#ac; K

AProvided that nothin contained in this cla"se shall apply in any case where/ GAH the #"y/#ac; is or less than ten per cent of the total paid/"p eD"ity capital and free reser!es of the companyL and G0H s"ch #"y/#ac; has #een a"thorised #y the 0oard #y means of a resol"tion passed at its meetin K Provided !urther that no offer of #"y/#ac; shall #e made within a period of three h"ndred and sixty/fi!e days rec;oned from the date of the precedin offer of #"y/#ac;, if any. Explanation / 3or the p"rposes of this cla"se, the expression "offer of #"y/#ac;" means the offer of s"ch #"y/#ac; made in p"rs"ance of the resol"tion of the 0oard referred to in the first pro!isoLB the #"y/#ac; is or less than twenty/fi!e per cent of the total paid/"p capital and free reser!es of the companyK Provided that the #"y/#ac; of eD"ity shares in any financial year shall not exceed twenty/fi!e per cent of its total paid/"p eD"ity capital in that financial year, the ratio of the de#t owed #y the company is not more than twice the capital and its free reser!es after s"ch #"y/#ac;K Provided that the *entral +o!ernment may prescri#e a hi her ratio of the de#t than that specified "nder this cla"se for a class or classes of companies. Explanation( /3or the p"rposes of this cla"se, the expression "de#t" incl"des all amo"nts of "nsec"red and sec"red de#tsL all the shares or other specified sec"rities for #"y/#ac; are f"lly paid/"pL

GcH

GdH

GeH GfH

G3H

the #"y/#ac; of the shares or other specified sec"rities listed on any reco nised stoc; exchan e is in accordance with the re "lations made #y the Sec"rities and 1xchan e 0oard of India in this #ehalfL G H the #"y/#ac; in respect of shares or other specified sec"rities other than those specified in cla"se GfH is in accordance with the "idelines as may #e prescri#ed. .he notice of the meetin at which special resol"tion is proposed to #e passed shall #e accompanied #y an explanatory statement statin / GaH a f"ll and complete disclos"re of all material factsL G#H GcH GdH GeH the necessity for the #"y/#ac;L the class of sec"rity intended to #e p"rchased "nder the #"y/#ac;L the amo"nt to #e in!ested "nder the #"y/#ac;L and the time limit for completion of #"y/#ac;.
1(1

G$H G'H

1!ery #"y/#ac; shall #e completed within twel!e months from the date of passin the resol"tion or a resol"tion passed #y the 0oardB "nder cla"se G#H of s"#/section G2H. .he #"y/#ac; "nder s"#/section G1H may #e/ GaH from the existin sec"rity holders on a proportionate #asisL or G#H GcH

Aspecial

from the open mar;etL or from odd lots, that is to say, where the lot of sec"rities of a p"#lic company whose shares are listed on a reco nised stoc; exchan e, is smaller than s"ch mar;eta#le lot, as may #e specified #y the stoc; exchan eL or

GdH G(H

#y p"rchasin the sec"rities iss"ed to employees of the company p"rs"ant to a scheme of stoc; option or sweat eD"ity. =here a company has passed a special resol"tion "nder cla"se G#H of s"#/section G2H 1(0Aor the 0oard has passed a resol"tion "nder the first pro!iso to cla"se G#H of that s"#/sectionB to #"y/#ac; its own shares or other sec"rities "nder this section, it shall, #efore ma;in s"ch #"y/#ac;, file with the 8e istrar and the Sec"rities and 1xchan e 0oard of India a declaration of sol!ency in the form as may #e prescri#ed, and !erified #y an affida!it to the effect that the 0oard has made a f"ll inD"iry into the affairs of the company as a res"lt of which they ha!e farmed an opinion that it is capa#le of meetin its lia#ilities and will not #e rendered insol!ent within a period of one year of the date of declaration adopted #y the 0oard, and si ned #y at least two directors of the company, one of whom shall #e the mana in director, if anyK Provided that no declaration of sol!ency shall #e filed with the Sec"rities and 1xchan e 0oard of India #y a company whose shares are not listed on any reco nised stoc; exchan e.

G7H G)H

=here a company #"ys/#ac; its own sec"rities, it shall extin "ish and physically destroy the sec"rities so #o" ht/#ac; within se!en days of the last date of completion of #"y/#ac;. =here a company completes a #"y/#ac; of its shares or other specified sec"rities "nder this section, it shall not ma;e f"rther iss"e of the same ;ind of shares Gincl"din allotment of f"rther shares "nder cla"se GaH of s"#/section G1H of section )1H or other specified sec"rities 1(2Awithin a period of six monthsB except #y way of #on"s iss"e or in the dischar e of s"#sistin o#li ations s"ch as con!ersion of warrants, stoc; option schemes, sweat eD"ity or con!ersion of preference shares or de#ent"res into eD"ity shares. =here a company #"ys/#ac; its sec"rities "nder this section, it shall maintain a re ister of the sec"rities so #o" ht, the consideration paid for the sec"rities #o" ht/#ac;, the date of cancellation of sec"rities, the date of extin "ishin and physically destroyin of sec"rities and s"ch other partic"lars as may #e prescri#ed. A company shall, after the completion of the #"y/#ac; "nder this section, file with the 8e istrar and the Sec"rities and 1xchan e 0oard of India, a ret"rn containin s"ch partic"lars relatin to the #"y/ #ac; within thirty days of s"ch completion, as may #e prescri#edK Provided that no ret"rn shall #e filed with the Sec"rities and 1xchan e 0oard of India #y a company whose shares are not listed on any reco nised stoc; exchan e. If a company ma;es defa"lt in complyin with the pro!isions of this section or any r"les made there"nder, or any re "lations made "nder cla"se GfH of s"#/section G2H, the company or any officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to fifty tho"sand, r"pees, or with #oth. Explanation( /3or the p"rposes of this section,/ GaH G#H "specified sec"rities" incl"des employeesI stoc; option or other sec"rities as may #e notified #y the *entral +o!ernment from time to timeL "free reser!es" shall ha!e the meanin assi ned to it in cla"se G#H of 1xplanation to section 372A.

G,H

G10H

G11H

++AA. 0rans!er o! certain sums to capital redemption reserve account

=here a company p"rchases its own shares o"t of free reser!es, then a s"m eD"al to the nominal !al"e of the share so p"rchased shall #e transferred to the capital redemption reser!e acco"nt referred to in cla"se GdH of the pro!iso to s"#/section G1H of section )0 and details of s"ch transfer shall #e disclosed in the #alance sheet.

++2. Prohi&ition !or &u%1&ac= in certain circumstances

G1H 4o company shall directly or indirectly p"rchase its own shares or other specified sec"rities/ GaH G#H GcH thro" h any s"#sidiary company incl"din its own s"#sidiary companiesL or thro" h any in!estment company or ro"p of in!estment companiesL or if a defa"lt, #y the company, in repayment of deposit or interest paya#le thereon, redemption of de#ent"res, or preference shares or payment of di!idend to any shareholder or repayment of any term loan or interest paya#le thereon to any financial instit"tion or #an; is s"#sistin .

G2H

4o company shall directly or indirectly p"rchase its own shares or other specified sec"rities in case s"ch company has not complied with pro!isions of sections 1',, 207 and 211.B

#ssue of shares at premium and discount +,.

G1H

Application o! premiums received on issue o! 1#)GsecuritiesH

=here a company iss"es Asec"ritiesB at a premi"m, whether for cash or otherwise, a s"m eD"al to the a re ate amo"nt or !al"e of the premi"ms on those Asec"ritiesB shall #e transferred to an acco"nt, to #e called "the Asec"ritiesB premi"m acco"nt"L and the pro!isions of this Act relatin to the red"ction of the Asec"ritiesB capital of a company shall, except as pro!ided in this section, apply as if the Asec"ritiesB capital of the company. .he Asec"ritiesB premi"m acco"nt may, notwithstandin anythin in s"#/ section G1H, #e applied #y the company/ GaH in payin "p "niss"ed Asec"ritiesB of the company to #e iss"ed to mem#ers of the company as f"lly paid #on"s Asec"ritiesBL G#H in writin off the preliminary expenses of the companyL GcH GdH in writin off the expenses of, or commission paid or disco"nt allowed on, any iss"e of Asec"ritiesB or de#ent"res of the companyL or in pro!idin for the premi"m paya#le on the redemption of any redeema#le preference A sec"ritiesB or of any de#ent"res of the company.

G2H

G3H

=here a company has, #efore the commencement of this Act, iss"ed any Asec"ritiesB at a premi"m, this section shall apply as if the Asec"ritiesB had #een iss"ed after the commencement of this Act. Provided that any part of the premi"ms which has #een so applied that it does not at the commencement of this Act form an identifia#le part of the companyIs reser!es within the meanin of Sched"le 7I, shall #e disre arded in determinin the s"m to #e incl"ded in the Asec"ritiesB premi"m acco"nt.

+..
G1H G2H

Power to issue shares at a discount

A company shall not iss"e share at a disco"nt except as pro!ided in this section. A company may iss"e at a disco"nt shares in the company of a class already iss"ed, if the followin conditions are f"lfilled, namelyK/ GiH GiiH the iss"e of the shares at a disco"nt is a"thorised #y a resol"tion passed #y the company in eneral meetin and sanctioned #y the A*entral +o!ernmentBL the resol"tion specifies the maxim"m rate of disco"nt AJJJB at which the shares are to #e iss"edK AProvided that no s"ch resol"tion shall #e sanctioned #y the A*entral +o!ernmentB if the maxim"m rate of disco"nt specified in the resol"tion exceeds ten per cent. A<nless the *entral +o!ernment is of opinionB that a hi her percenta e of disco"nt may #e allowed in the special circ"mstances of the caseLB not less than one year has at the date of the iss"e elapsed since the date on which the company was entitled to commence #"sinessL and the shares to #e iss"ed at a disco"nt are iss"ed within two months after the date on which the iss"e is sanctioned #y the A*entral +o!ernmentB, or within s"ch extended time as the A*entral +o!ernmentB may allow.

GiiiH Gi!H

G3H

=here a company has passed a resol"tion a"thorisin the iss"e of shares at a disco"nt, it may apply to the A*entral +o!ernmentB for an order sanctionin the iss"eL and on any s"ch application, the A*entral +o!ernmentB, if ha!in re ard to all the circ"mstances of the case, it thin;s proper so to do, may ma;e an order sanctionin the iss"e on s"ch terms and conditions as it thin;s fit. AProvided that in the case of re!i!al and reha#ilitation of sic; ind"strial companies "nder *hapter 7IA, the pro!isions of this section shall ha!e effect as if for the words "*entral +o!ernment", the word ".ri#"nal" had #een s"#stit"ted.B

G$H

1!ery prospect"s relatin to the iss"e of the shares shall contain partic"lars of the disco"nt allowed on the iss"e of the shares or of so m"ch of that disco"nt as has not #een written off at the date of the iss"e of the prospect"s. If defa"lt is made in complyin with this s"#/section, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB.

+.A. "ssue o! sweat eDuit% shares

G1H 4otwithstandin anythin contained in section 7,, a company may iss"e sweat eD"ity shares of a class of shares already iss"ed if the followin conditions are f"lfilled, namelyK/ GaH the iss"e of sweat eD"ity shares is a"thorised #y a special resol"tion passed #y the company in the eneral meetin L G#H the resol"tion specifies the n"m#er of shares, c"rrent mar;et price, consideration, if any, and the class or classes of directors or employees to whom s"ch eD"ity shares are to #e iss"edL GcH not less than one year has, at the date of the iss"e elapsed since the date on which the company was entitled to commence #"sinessL GdH the sweat eD"ity shares of a company whose eD"ity shares are listed on a reco nised stoc; exchan e are iss"ed in accordance with the re "lations made #y the Sec"rities and 1xchan e 0oard of India in this #ehalfL Provided that in the case of a company whose eD"ity shares are not listed on any reco nised stoc; exchan e, the sweat eD"ity shares are iss"ed in accordance with the "idelines as may #e prescri#ed. Explanation I./ 3or the p"rposes of this s"#/section, the expression "a company" means the company incorporated, fanned and re istered "nder this Act and incl"des its s"#sidiary company incorporated in a co"ntry o"tside India. Explanation II./ 3or the p"rposes of this Act, the expression "sweat eD"ity shares" means eD"ity shares iss"ed #y the company to employees or directors at a disco"nt or for consideration other than cash for pro!idin ;now/how or ma;in a!aila#le ri hts in the nat"re of intellect"al property ri hts or !al"e additions, #y whate!er name called. G2H All the limitations, restrictions and, pro!isions relatin to eD"ity shares shall #e applica#le to s"ch sweat eD"ity shares iss"ed "nder s"#/section G1H.B

$#ssue and redemption of preference shares% ,0.

G1H

Power to issue redeema&le pre!erence shares

S"#Cect to the pro!isions of this section, a company limited #y shares may, if so a"thorised #y its articles, iss"e preference shares which are, or at the option of the company are to #e lia#le, to #e redeemedK Provided that/ GaH no s"ch shares shall #e redeemed except o"t of profits of the company which wo"ld otherwise #e a!aila#le for di!idend or o"t of the proceeds of a fresh iss"e of shares made for the p"rposes of the redemptionL G#H GcH GdH no s"ch shares shall #e redeemed "nless they are f"lly paidL the premi"m, if any, paya#le on redemption shall ha!e #een pro!ided for o"t of the profits of the company or o"t of the companyIs Asec"rityB premi"m acco"nt, #efore the shares are redeemedL where any s"ch shares are redeemed otherwise than o"t of the proceeds of a fresh iss"e, there shall, o"t of profits which wo"ld otherwise ha!e #een a!aila#le for di!idend, #e transferred to a reser!e f"nd, to #e called Athe capital redemption reser!e acco"ntB, a s"m eD"al to the nominal amo"nt of the shares redeemedL and the pro!isions of this Act relatin to the red"ction of the

G2H G3H G$H

share capital of a company shall, except as pro!ided in this section, apply as if Athe capital redemption reser!e acco"ntB were paid/"p share capital of the company. S"#Cect to the pro!isions of this section, the redemption of preference shares there"nder may #e effected on s"ch terms and in s"ch manner as may #e pro!ided #y the articles of the company. .he redemption of preference shares "nder this section #y a company shall not #e ta;en as red"cin the amo"nt of its a"thorised share capital. =herein p"rs"ance of this section, a company has redeemed or is a#o"t to redeem any preference shares, it shall ha!e power to iss"e shares "p to the nominal amo"nt of the shares redeemed or to #e redeemed as if those shares had ne!er #een iss"edL and accordin ly the share capital of the company shall not, for the p"rpose of calc"latin the fees paya#le "nder Asection (11B, #e deemed to #e increased #y the iss"e of shares in p"rs"ance of this s"#/sectionK Provided that, where new shares are iss"ed #efore the redemption of the old shares, the new shares shall not, so far as relates to stamp d"ty, #e deemed to ha!e #een iss"ed in p"rs"ance of this s"#/ section "nless the old shares are redeemed within one month after the iss"e of the new shares. A.he capital redemption reser!e acco"ntB may, notwithstandin anythin in this section, #e applied #y the company, in payin "p "niss"ed shares of the company to #e iss"ed to mem#ers of the company as f"lly paid #on"s shares. 4otwithstandin anythin contained in this Act, no company limited #y shares shall, after the commencement of the *ompanies GAmendmentH Act, 1,,(, iss"e any preference share which is irredeema#le or is redeema#le after the expiry of a period of twenty years from the date of its iss"e.B If a company fails to comply with the pro!isions of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB.

G'H

AG'AH

G(H

,0A. :edemption o! irredeema&le pre!erence shares, etc.

G1H 4otwithstandin anythin contained in the terms of iss"e of any preference shares, e!ery preference share iss"ed #efore the commencement of the *ompanies GAmendmentH Act, 1,)),/ GaH G#H which is irredeema#le, shall #e redeemed #y the company within a period not exceedin fi!e years from s"ch commencement, or

which is not redeema#le #efore the expiry of ten years from the date of iss"e thereon in accordance with the terms of its iss"e and which had not #een redeemed #efore s"ch commencement, shall #e redeemed #y the company on the date on which s"ch share is d"e for redemption or within a period not exceedin ten years from s"ch commencement, whiche!er is earlierK Provided that where a company is not in a position to redeem any s"ch share within the period aforesaid and to pay the di!idend, if any, d"e thereon Gs"ch shares #ein hereinafter referred to as "nredeemed preference sharesH, it may, with the consent of the (aA.ri#"nalB, on a petition made #y it in this #ehalf and notwithstandin anythin contained in this Act, iss"e f"rther redeema#le preference shares eD"al to the amo"nts d"e Gincl"din the di!idend thereonH, in respect of the "nredeemed preference shares, and on the iss"e of s"ch f"rther redeema#le preference shares, the "nredeemed shares shall #e deemed to ha!e #een redeemed. G2H 4othin contained in section 10( or any scheme referred to in sections 3,1 to 3,', or in any scheme made "nder section 3,(, shall #e deemed to confer power on any class of shareholders #y resol"tion or on Aany co"rt or the .ri#"nalB or the *entral +o!ernment to !ary or modify the pro!isions of this section. If any defa"lt is made in complyin with the pro!isions of this section,/ GaH the company ma;in s"ch defa"lt shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB for e!ery day d"rin which s"ch defa"lt contin"esL and G#H e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to three years and shall also #e lia#le to fine.B

G3H

&urther issue of capital

,1.
G1H

5urther issue o! capital

A=here at any time after the expiry of two years the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whiche!er is earlier, it is proposed to increase the s"#scri#ers capital of the company #y allotment of f"rther shares, then,/B GaH s"ch Af"rtherB shares shall #e offered to the persons who, at the date of the offer, are holders of the eD"ity shares of the company, in proportion, as nearly as circ"mstances admit, to the capital paid/"p on those shares at that dateL G#H the offer aforesaid shall #e made #y notice specifyin the n"m#er of shares offered and limitin a time not #ein less than fifteen days from the date of the offer within which the offer, if not accepted, will #e deemed to ha!e #een declinedL GcH "nless the articles of the company otherwise pro!ide, the offer aforesaid shall #e deemed to incl"de a ri ht exercisa#le #y the person concerned to reno"nce the shares offered to him or any of them in fa!o"r of any other personL and the notice referred to in cla"se G#H shall contain a statement of this ri htL GdH after the expiry of the time specified in the notice aforesaid, or on receipt of earlier intimation from the person to whom s"ch notice is i!en that he declines to accept the shares offered, the 0oard of directors may dispose of them in s"ch manner as they thin; most #eneficial to the company. Explanation ./In this s"#/section, "eD"ity share capital" and "eD"ity shares" ha!e the same meanin as in section )'. 4otwithstandin anythin contained in s"#/section G1H, the f"rther shares aforesaid may #e offered to any persons Awhether or not those persons incl"de the persons referred to in cla"se GaH of s"#/section G1HB in any manner whatsoe!er/ GaH G#H if a special resol"tion to that effect is passed #y the company in eneral meetin , or where no s"ch special resol"tion is passed, if the !otes cast Gwhether on a show of hands, or on a poll, as the case may #eH in fa!o"r of the proposal contained in the resol"tion mo!ed in that eneral meetin Gincl"din the castin !ote, if any of the *hairmanH #y mem#ers who, #ein entitled so to do, !ote in person, or where proxies are allowed, #y proxy, exceed the !otes, if any, cast a ainst the proposal #y mem#ers so entitled and !otin and the *entral +o!ernment is satisfied, on an application made #y the 0oard of directors in this #ehalf, that the proposal is most #eneficial to the company.B

AG1AH

G2H

4othin in cla"se GcH of s"#/section G1H shall #e deemed/ GaH to extend the time within which the offer sho"ld #e accepted, or G#H to a"thorise any person to exercise the ri ht of ren"nciation for a second time, on the ro"nd that the person in whose fa!o"r the ren"nciation was first made has declined to ta;e the shares comprised in the ren"nciation. 4othin in this section shall apply/ GaH G#H to a pri!ate companyL or to the increase of the s"#scri#ed capital of a p"#lic company ca"sed #y the exercise of an option attached to de#ent"res iss"ed or loans raised #y the company/ GiH to con!ert s"ch de#ent"res or loans into shares in the company, or GiiH to s"#scri#e for shares in the companyK AProvided that the terms of iss"e of s"ch de#ent"res or the terms of s"ch loans incl"de a term pro!idin for s"ch option and s"ch term/ GaH either has #een appro!ed #y the *entral +o!ernment #efore the iss"e of de#ent"res or the raisin of the loans, or is in conformity with the r"les, if any, made #y that +o!ernment in this #ehalfL and G#H in the case of de#ent"res or loans other than de#ent"res iss"ed to, or loans o#tained from, the +o!ernment or any instit"tion specified #y the *entral +o!ernment in this #ehalf, has also #een appro!ed #y a special resol"tion passed #y the company in eneral meetin #efore the iss"e of the de#ent"res or the raisin of the loans.B

AG3H

AG$H

G'H

4otwithstandin anythin contained in the fore oin pro!isions of this section, where any de#ent"res ha!e #een iss"ed to, or loans ha!e #een o#tained from, the +o!ernment #y a company, whether s"ch de#ent"res ha!e #een iss"ed or loans ha!e #een o#tained #efore or after the commencement of the *ompanies GAmendmentH Act, 1,(3, the *entral +o!ernment may, if in its opinion it is necessary in the p"#lic interest so to do, #y order, direct that s"ch de#ent"res or loans or any part thereof shall #e con!erted into shares in the company on s"ch terms and conditions as appear to that +o!ernment to #e reasona#le in the circ"mstances of the case, e!en if the terms of iss"e of s"ch de#ent"res or the terms of s"ch loans do not incl"de a term pro!idin for an option for s"ch con!ersion. In determinin the terms and conditions of s"ch con!ersion, the *entral +o!ernment shall ha!e d"e re ard to the followin circ"mstances, that is to say, the financial position of the company, the terms of iss"e of the de#ent"res or the terms of the loans, as the case may #e, the rate of interest paya#le on the de#ent"res or the loans, the capital of the company, its loan lia#ilities, its reser!es, its profits d"rin the precedin fi!e years and the c"rrent mar;et price of the shares in the company. A copy of e!ery order proposed to #e iss"ed #y the *entral +o!ernment "nder s"#/section G$H shall #e laid in draft #efore each 6o"se of &arliament while it is in session for a total period of thirty days which may #e comprised in one session or in two or more s"ccessi!e sessions. If the terms and conditions of s"ch con!ersion are not accepta#le to the company, the company may, within thirty days from the date of comm"nication to it of s"ch order or within s"ch f"rther time as may #e ranted #y the *o"rt, prefer an appeal to the *o"rt in re ard to s"ch terms and conditions and the decision of the *o"rt on s"ch appeal and, s"#Cect only to s"ch decision, the order of the *entral +o!ernment "nder s"#/section G$H shall #e final and concl"si!e.B

G(H

G7H

PART IV:

SHARE CAPITAL AND DEBENTURES

Nature numbering and certificate of shares

,2.

6ature o! shares Gor de&enturesH

.he shares Aor de#ent"resB or other interest of any mem#er in a company shall #e mo!a#le property, transfera#le in the manner pro!ided #y the articles of the company.

,#.

6um&ering o! shares

1ach share in a company ha!in a share capital shall #e distin "ished #y its appropriate n"m#erK Provided that nothin in this section shall apply to the shares held with a depository.B

,'.
AG1HB AG2H

Certi!icate o! shares
A certificate, "nder the common seal of the company, specifyin any shares held #y any mem#er, shall #e prima facie e!idence of the title of the mem#er to s"ch shares. A certificate may #e renewed on a d"plicate of a certificate may #e iss"ed if s"ch certificate/ GaH G#H is pro!ed to ha!e #een lost or destroyed, or ha!in #een defaced or m"tilated or torn is s"rrendered to the company.

G3H

If a company with intent to defra"d renews a certificate or iss"es a d"plicate thereof, the company shall #e p"nisha#le with fine which may extend to ten tho"sand r"pees and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aone la;h r"peesB, or with #oth. 4otwithstandin anythin contained in the articles of association of a company, the manner of iss"e or renewal of a certificate or iss"e of a d"plicate thereof, the form of a certificate Gori inal or renewedH or of a d"plicate thereof, the partic"lars to #e entered in the re ister of mem#ers or in the re ister of renewed or d"plicate certificates, the form of s"ch re isters, the fee on payment of which, the terms

G$H

and conditions, if any Gincl"din terms and conditions as to e!idence and indemnity and the payment of o"t/of/poc;et expenses inc"rred #y a company in in!esti atin e!idenceH on which a certificate may #e renewed or a d"plicate thereof may #e iss"ed, shall #e s"ch as may #e prescri#ed.B

'inds of share capital ,).

G1H

,). 0wo =inds o! share capital

"&reference share capital" means, with reference to any company limited #y shares, whether formed #efore or after the commencement of this Act, that part of the share capital of the company which f"lfils #oth the followin reD"irements, namelyK/ GaH G#H that as respects di!idends it carries or will carry a preferential ri ht to #e paid a fixed amo"nt or an amo"nt calc"lated at a fixed rate, which may #e either free of or s"#Cect to income/taxL and that as respect capital, it carries or will carry, on a windin "p or repayment of capital, a preferential ri ht to #e repaid the amo"nt of the capital paid/"p or deemed to ha!e #een paid "p, whether or not there is a preferential ri ht to the payment of either or, #oth of the followin amo"nts, namely/ GiH GiiH any money remainin "npaid, in respect of the amo"nts specified in cla"se GaH, "p to the date of the windin "p or repayment of capitalL and any fixed premi"m or premi"m on any fixed scale, specified in the memorand"m or articles of the company. Explanation( / *apital shall #e deemed to #e preference capital, notwithstandin that it is entitled to either or #oth of the followin ri hts, namelyK/ that, as respects di!idends, in addition to the preferential ri ht to the amo"nt specified in cla"se GaH, it has a ri ht to participate, whether f"lly or to a limited extent, with capital not entitled to the preferential ri ht aforesaidL GiiH that, as respects capital, in addition to the preferential ri ht to the repayment, on a windin "p, of the amo"nts specified in cla"se G#H, it has a ri ht to participate, whether f"lly or to a limited extent, with capital not entitled to the preferential ri ht in any s"rpl"s which may remain after the entire capital has #een repaid. "1D"ity share capital" means, with reference to any s"ch company, all share capital which is not preference share capital. .he expression "preference share" and "eD"ity share" shall #e constr"ed accordin ly. GiH

G2H G3H

,*.

6ew issues o! share capital to &e onl% o! two =inds

.he share capital of a company limited #y shares shall #e of two ;inds only, namelyKM GaH eD"ity share capital/ GiH with !otin ri htsL or GiiH G#H with differential ri hts as to di!idend, !otin or otherwise in accordance with s"ch r"les and s"#Cect to s"ch conditions as may #e prescri#edL

preference share capital.B

,+.
G1H

9oting rights
S"#Cect to the pro!isions of section ), and s"#/section G2H of section ,2/ GaH e!ery mem#er of a company limited #y shares and holdin any eD"ity share capital therein shall ha!e a ri ht to !ote, in respect of s"ch capital, on e!ery resol"tion placed #efore the companyL and G#H his !otin ri ht on a poll shall #e in proportion to his share of the paid/"p eD"ity capital of the company.

G2H GaH

S"#Cect as aforesaid and sa!e as pro!ided in cla"se G#H of this s"#/section, e!ery mem#er of a company limited #y shares and holdin any preference share capital therein shall, in respect of s"ch capital, ha!e a ri ht to !ote only on resol"tions placed #efore the company which directly affect the ri hts attached to his preference shares. Explanation( / Any resol"tion for windin "p the company or for the repayment or red"ction of its share capital shall #e deemed directly to affect the ri hts attached to preference shares within the meanin of this cla"se. S"#Cect as aforesaid, e!ery mem#er of a company limited #y shares and holdin any preference share capital therein shall, in respect of s"ch capital, #e entitled to !ote on e!ery resol"tion placed #efore the company at any meetin , if the di!idend d"e on s"ch capital or any part of s"ch di!idend has remained "npaid/ GiH GiiH in the case of c"m"lati!e preference shares, in respect of an a re ate period of not less than two years precedin the date of commencement of the meetin L and in the case of non/c"m"lati!e preference shares, either in respect of a period of not less than two years endin with the expiry of the financial year immediately precedin the commencement of the meetin or in respect of an a re ate period of not less than three years comprised in the six years endin with the expiry of the financial year aforesaid.

G#H

Explanation( /3or the p"rposes of this cla"se, di!idend shall #e deemed to #e d"e on preference shares in respect of any period, whether a di!idend has #een declared #y the company on s"ch shares for s"ch period or not,/ GaH on the last day specified for the payment of s"ch di!idend for s"ch period, in the articles or other instr"ment exec"ted #y the company in that #ehalfL or G#H in case no day is so specified, on the day immediately followin s"ch periodL GcH where the holder of any preference share has a ri ht to !ote on any resol"tion in accordance with the pro!isions of this s"#/section, his !otin ri ht on a poll, as the holder of s"ch share, shall, s"#Cect to the pro!isions of section ), and s"#/section G2H of section ,2, #e in the same proportion as the capital paid "p in respect of the preference share #ears to the total paid/"p eD"ity capital of the company.

,,.

Prohi&ition o! issue o! shares with disproportionate rights

Omitted by t e !ompanies (Amendment# A$t% 2---% '(e()( 13/12/2---+

,..
G1H

0ermination o! disproportionatel% excessive voting rights in existing companies

If at the commencement of this Act any shares, #y whate!er name called, of any existin company limited #y shares carry !otin ri hts in excess of the !otin ri hts attachin "nder s"#/section G1H of section )7 to eD"ity shares in respect of which the same amo"nt of capital has #een paid/"p, the company shall, within a period of one year from the commencement of this Act, red"ce the !otin ri hts in respect of the share first mentioned so as to #rin them into conformity with the !otin ri hts attached to s"ch eD"ity shares "nder s"#/section G1H of section )7. 0efore the !otin ri hts are #ro" ht into s"ch conformity the holders of the shares in D"estion shall not exercise in respect thereof !otin ri hts in excess of what wo"ld ha!e #een exercisa#le #y them if the capital paid/"p on their shares had #een eD"ity share capital, in respect of the followin resol"tions placed #efore the company, namelyK/ AGaH any resol"tion relatin to the appointment or reappointment of a director or to any !ariation in the terms of an a reement #etween the company and a mana in or whole/time director thereofLB any resol"tion relatin to the appointment of #"yin or sellin a entsL

G2H

G#H G3H

AJJJB. If, #y reason of the fail"re of the reD"isite proportion of any class of mem#ers to a ree, it is not fo"nd possi#le to comply with the pro!isions of s"#/ section G1H, the company shall, within one month of the expiry of the period of one year mentioned in that s"#/section, apply to the *o"rt for an order

G$H

specifyin the manner in which the pro!isions of that s"#/section shall #e complied withL and any order made #y the *o"rt in this #ehalf shall #ind the company and all its shareholders. If defa"lt is made in complyin with this s"#/section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 10)0Aten tho"sand r"peesB. .he *entral +o!ernment may, in respect of any shares iss"ed #y a company #efore the lst day of Decem#er, 1,$,, exempt the company from the reD"irements of s"#/sections G1H, G2H and G3H, wholly or in part, if in the opinion of the *entral +o!ernment the exemption is reD"ired either in the p"#lic interest or in the interest of the company or of any class of shareholders therein or of the creditors or any class of creditors thereof. 1!ery order of exemption made #y the *entral +o!ernment "nder this s"#/section shall #e laid #efore #oth 6o"ses of &arliament as soon as may #e after it is made.

.0.
G1H

Savings
4othin in sections )', )(, )) and ), shall, in the case of any shares iss"ed #y a p"#lic company #efore the commencement of this Act, affect any !otin ri hts attached to the shares sa!e as otherwise pro!ided in section ),, or any ri hts attached to the shares as to di!idend, capital or otherwise. 4othin in sections )' to ), shall apply to a pri!ate company, "nless it is a s"#sidiary of a p"#lic company. 3or the remo!al of do"#ts, it is here#y declared that on and from the commencement of the *ompanies GAmendmentH Act, 1,7$, the pro!isions of section )7 shall apply in relation to the !otin ri hts attached to preference shares iss"ed #y a p"#lic company #efore the 1st day if April, 1,'(, as they apply to the preference shares iss"ed #y a p"#lic company after that date. Explanation( /3or the p"rposes of this section, references to a p"#lic company shall #e constr"ed as incl"din references to a pri!ate company which is a s"#sidiary of a p"#lic company.B

G2H G3H

Miscellaneous provisions as to share capital .1. Calls on shares o! some class to &e made on uni!orm &asis

=here after the commencement of this Act, any calls for f"rther share capital are made on shares, s"ch calls shall #e made on a "niform #asis on all shares fallin "nder the same class. Explanation( / 3or the p"rposes of this section, shares of the same nominal !al"e on which different amo"nts ha!e #een paid/"p shall #e deemed to fall "nder the same class.

.2.
G1H

Power o! compan% to accept unpaid share capital, although not called1up

A company may, if so a"thorised #y its articles accept from any mem#er the whole or a part of the amo"nt remainin "npaid on any shares held #y him, altho" h no part of that amo"nt has #een called/ "p. .he mem#er shall not howe!er #e entitled, where the company is one limited #y shares, to any !otin ri hts in respect of the moneys so paid #y him "ntil the same wo"ld, #"t for s"ch payment, #ecome presently paya#le.

G2H

.#.

Pa%ment o! dividend in proportion to amount paid1up

A company may, if so a"thorised #y its articles, pay di!idends in proportion to the amo"nt paid/"p on each share where a lar er amo"nt is paid/"p on some shares than on others.

.'.

Power o! limited compan% to alter its share capital

G1H

A limited company ha!in a share capital, may, if so a"thorised #y its articles, alter the conditions of its memorand"m as follows, that is to say, it may/ GaH increase its share capital #y s"ch amo"nt as it thin;s expedient #y iss"in new sharesL G#H GcH GdH consolidate and di!ide all or any of its share capital into shares of lar er amo"nt than its existin sharesL con!ert all or any of its f"lly paid "p shares into stoc;, and recon!ert that stoc; into f"lly paid/ "p shares of any denominationL s"#/di!ide its shares, or any of them, into shares of smaller amo"nt than is fixed #y the memorand"m, so, howe!er, that in the s"#/di!ision the proportion #etween the amo"nt paid and the amo"nt, if any, "npaid on each red"ced share shall #e the same as it was in the case of the share from which the red"ced share is deri!edL

GeH

G2H G3H

cancel shares which, at the date of the passin of the resol"tion in that #ehalf, ha!e not #een ta;en or a reed to #e ta;en #y any person, and diminish the amo"nt of its share capital #y the amo"nt of the shares so cancelled. .he powers conferred #y this section shall #e exercised #y the company in eneral meetin and shall not reD"ire to #e confirmed #y the *o"rt. A cancellation of shares in p"rs"ance of this section shall not #e deemed to #e a red"ction of share capital within the meanin of this Act.

.'A. Share capital to stand increased where an order is made under section ,1(')
G1H 4otwithstandin anythin contained in this Act, where the *entral +o!ernment has, #y an order made "nder s"#/section G$H of section )1, directed that any de#ent"re or loan or any part thereof shall #e con!erted into shares in a company, the conditions contained in the memorand"m of s"ch company shall, where s"ch order has the effect of increasin the nominal share capital of the company stand altered and the nominal share capital of s"ch company shall stand increased #y an amo"nt eD"al to the amo"nt of the !al"e of the shares into which s"ch de#ent"res or loans or part thereof has #een con!erted. =here, in p"rs"ance of an option attached to de#ent"res iss"ed or loans raised #y the company, any p"#lic financial instit"tion proposes to con!ert s"ch de#ent"res or loans into shares in the company, the *entral +o!ernment may, on the application of s"ch p"#lic financial instit"tion, direct that the conditions contained in the memorand"m of s"ch company shall stand altered and the nominal share capital of s"ch company shall stand increased #y an amo"nt eD"al to the amo"nt of the !al"e of the shares into which s"ch de#ent"res or loans or part thereof has #een con!erted. =here the memorand"m of a company #ecomes altered, whether #y reason of an order made #y the *entral +o!ernment "nder s"#/section G$H of section )1 or s"#/section G2H of this section, the *entral +o!ernment shall send a copy of s"ch order to the 8e istrar and also to the company and on receipt of s"ch order, the company shall file in the prescri#ed form, within thirty days from the date of s"ch receipt, a ret"rn to the 8e istrar with re ard to the increase of share capital and the 8e istrar shall, on receipt of s"ch order and, ret"rn, carry o"t the necessary alterations in the memorand"m of the company.B

G2H

G3H

.).
G1H

6otice to :egistrar o! consolidation o! share capital, conversion o! shares into stoc=, etc.
If a company ha!in a share capital has/ GaH G#H GcH GdH GeH GfH consolidated and di!ided its share capital into shares of lar er amo"nt than its existin sharesL con!erted any shares into stoc;L recon!erted any stoc; into sharesL s"#/di!ided its shares or any of themL redeemed any redeema#le preference sharesL or cancelled any shares, otherwise than in connection with a red"ction of share capital "nder sections 100 to 10$L

the company shall within Athirty daysB after doin so, i!e notice thereof to the 8e istrar specifyin , as the case may #e, the shares consolidated, di!ided, con!erted, s"#/di!ided, redeemed or cancelled, or the stoc; recon!erted. G2H G3H .he 8e istrar shall there"pon record the notice, and ma;e any alterations which may #e necessary in the companyIs memorand"m or articles or #oth. If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

.*.

3!!ect o! conversion o! shares into stoc=

=here a company ha!in a share capital has con!erted any of its shares into stoc;, and i!en notice of the con!ersion to the 8e istrar, all the pro!isions of this Act which are applica#le to shares only, shall cease to apply as to so m"ch of the share capital as is con!erted into stoc;.

.+.
G1H

6otice o! increase o! share capital or o! mem&ers

=here a company ha!in a share capital, whether its shares ha!e or ha!e not #een con!erted into stoc;, has increased its share capital #eyond the a"thorised capital, and where a company, not #ein a company limited #y shares, has increased the n"m#er of its mem#ers #eyond the re istered n"m#er, it shall file with the 8e istrar, notice of the increase of capital or of mem#ers within AthirtyB days after the passin of the resol"tion a"thorisin the increaseL and the 8e istrar shall record the increase and also ma;e any alterations which may #e necessary in the companyIs memorand"m or articles or #oth. .he notice to #e i!en as aforesaid shall incl"de partic"lars of the classes of shares affected and the conditions, if any, s"#Cect to which new shares ha!e #een or are to #e iss"ed. If defa"lt is made in complyin with this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G2H G3H

.,.

Power o! unlimited compan% to provide !or reserve share capital on re1registration

An "nlimited company ha!in a share capital may, #y its resol"tion for re istration as a limited company in p"rs"ance of this Act, do either or #oth of the followin thin s, namelyK/ GaH increase the nominal amo"nt of its share capital #y increasin the nominal amo"nt of each of its shares, #"t s"#Cect to the condition that no part of the increased capital shall #e capa#le of #ein called/ "p except in the e!ent and for the p"rposes of the company #ein wo"nd/"pL pro!ide that a specified portion of its "ncalled share capital shall not #e capa#le of #ein called/"p except in the e!ent and for the p"rposes of the company #ein wo"nd/"p.

G#H

...

:eserve lia&ilit% o! limited compan%

A limited company may, #y special resol"tion, determine that any portion of its share capital which has not #een already called/"p shall not #e capa#le of #ein called/"p, except in the e!ent and for the p"rposes of the company #ein wo"nd "p, and there"pon that portion of its share capital shall not #e capa#le of #ein called/"p except in that e!ent and for those p"rposes.

Reduction of share capital 100. Special resolution !or reduction o! share capital

G1H

S"#Cect to confirmation #y (aAthe .ri#"nalB, a company limited #y shares or a company limited #y "arantee and ha!in a share capital, may, if so a"thorised #y its articles, #y special resol"tion, red"ce its share capital in any wayL and in partic"lar and witho"t preC"dice to the enerality of the fore oin power, may/ GaH extin "ish or red"ce the lia#ility on any of its shares in respect of share capital not paid/"pL G#H GcH either with or witho"t extin "ishin or red"cin lia#ility on any of its shares, cancel any paid/ "p share capital which is lost, or is "nrepresented #y a!aila#le assetsL or either with or witho"t extin "ishin or red"cin lia#ility on any of its shares, pay off any paid/ "p share capital which is in excess of the wants of the companyL

and may, if and so far as is necessary, alter its memorand"m #y red"cin the amo"nt of its share capital and of its shares accordin ly. G2H A special resol"tion "nder this section is in this Act referred to as "a resol"tion for red"cin share capital".

101.

Application to *aG0ri&unalH !or con!irming order, o&Cections &% creditors, and settlement o! list o! o&Cecting creditors
=here a company has passed a resol"tion for red"cin share capital, it may apply, #y petition, to the A.ri#"nalB for an order confirmin the red"ction. =here the proposed red"ction of share capital in!ol!es either the dimin"tion of lia#ility in respect of "npaid share capital or the payment to any shareholder of any paid/"p share capital, and in any other case if the A.ri#"nalB so directs, the followin pro!isions shall ha!e effect, s"#Cect to the pro!isions of s"#/section G3HK/ GaH e!ery creditor of the company who at the date fixed #y the A.ri#"nalB is entitled to any de#t or claim which, if that date were the commencement of the windin "p of the company, wo"ld #e admissi#le in proof a ainst the company, shall #e entitled to o#Cect to the red"ctionL the A.ri#"nalB shall settle a list of creditors so entitled to o#Cect, and for that p"rpose shall ascertain, as far as possi#le witho"t reD"irin an application from any creditor, the names of those creditors and the nat"re and amo"nt of their de#ts or claims, and may p"#lish notices fixin a day or days within which creditors not entered on the list are to claim to #e so entered or are to #e excl"ded from the ri ht of o#Cectin to the red"ctionL where a creditor entered on the list whose de#t or claim is not dischar ed or has not determined does not consent to the red"ction, the A.ri#"nalB may, if it thin;s fit, dispense with the consent of that creditor, on the company sec"rin payment of his de#t or claim #y appropriatin , as the A.ri#"nalB may direct, the followin amo"ntK/ GiH GiiH if the company admits the f"ll amo"nt of the de#t or claim, or, tho" h not admittin it, is willin to pro!ide for it, then, the f"ll amo"nt of the de#t or claimL if the company does not admit and is not willin to pro!ide for the f"ll amo"nt of the de#t or claim, or if the amo"nt is contin ent or not ascertained, then, an amo"nt fixed #y the A.ri#"nalB after the li;e inD"iry and adC"dication as if the company were #ein wo"nd/"p #y the A.ri#"nalB .

G1H G2H

G#H

GcH

G3H

=here a proposed red"ction of share capital in!ol!es either the dimin"tion of any lia#ility in respect of "npaid share capital or the payment to any shareholder of any paid/"p share capital, the A.ri#"nalB may, if, ha!in re ard to any special circ"mstances of the case, it thin;s proper so to do, direct that the pro!isions of s"#/section G2H shall not apply as re ards any class or any classes of creditors.

102.
G1H

<rder con!irming reduction and powers o! G0ri&unalH on ma=ing such order

.he A.ri#"nalB, if satisfied with respect to e!ery creditor of the company who "nder section 101 is entitled to o#Cect to the red"ction, that either his consent to the red"ction has #een o#tained or his de#t or claim has #een dischar ed, or has determined, or has #een sec"red, may ma;e an order confirmin the red"ction on s"ch terms and conditions as it thin;s fit. =here the A.ri#"nalB ma;es any s"ch order, it may/

G2H

GaH

if for any special reason it thin;s proper so to do, ma;e an order directin that the company shall, d"rin s"ch period commencin on, or at any time after, the date of the order, as is specified in the order, add to its name as the last words thereof the words "and red"ced", and ma;e an order reD"irin the company to p"#lish as the A.ri#"nalB directs the reasons for red"ction or s"ch other information in re ard thereto as the A.ri#"nalB may thin; expedient with a !iew to i!in proper information to the p"#lic, and, if the A.ri#"nalB thin;s fit, the ca"ses which led to the red"ctions.

G#H

G3H

=here a company is ordered to add to its name the words "and red"ced", those words shall, "ntil the expiration of the period specified in the order, #e deemed to #e part of the name of the company.

10#.
G1H

:egistration o! order and minute o! reduction

.he 8e istrar/ GaH G#H on prod"ction to him of an order of the A.ri#"nalB confirmin the red"ction of the share capital of a companyL and

on the deli!ery to him of a certified copy of the order and of a min"te appro!ed #y the A.ri#"nalB showin , with respect to the share capital of the company as altered #y the order, GiH the amo"nt of the share capital, GiiH the n"m#er of shares into which it is to #e di!ided, GiiiH the amo"nt of each share, and Gi!H the amo"nt, if any, at the date of the re istration deemed to #e paid/"p on each shareL shall re ister the order and min"te. G2H G3H G$H :n the re istration of the order and min"te, and not #efore the resol"tion for red"cin share capital as confirmed #y the order shall ta;e effect. 4otice of the re istration shall #e p"#lished in s"ch manner as the (aA.ri#"nalB may direct. .he 8e istrar shall certify "nder his hand the re istration of the order and min"te, and his certificate shall #e concl"si!e e!idence that all the reD"irements of this Act with respect to red"ction of share capital ha!e #een complied with, and that the share capital of the company is s"ch as is stated in the min"te. .he min"te when re istered shall #e deemed to #e s"#stit"ted for the correspondin part of the memorand"m of the company, and shall #e !alid and altera#le as if it had #een ori inally contained therein. .he s"#stit"tion of any s"ch min"te as aforesaid for part of the memorand"m of the company, shall #e deemed to #e an alteration of the memorand"m within the meanin and for the p"rposes of section $0.

G'H

G(H

10'.
G1H

4ia&ilit% o! mem&ers in respect o! reduced shares

A mem#er of the company, past or present, shall not #e lia#le, in respect of any share, to any call or contri#"tion exceedin in amo"nt the difference, if any, #etween the amo"nt paid on the share, or red"ced amo"nt, if any, which is to #e deemed to ha!e #een paid thereon, as the case may #e, and the amo"nt of the share as fixed #y the min"te of red"ctionK Provided that, if any creditor entitled in respect of any de#t or claim to o#Cect to the red"ction of share capital is, #y reason of his i norance of the proceedin s for red"ction or of their nat"re and effect with respect to his de#t or claim, not entered on the list of creditors, and after the red"ction the company is "na#le, within the meanin of section $3$, to pay the amo"nt of his de#t or claim, then/ GaH e!ery person who was a mem#er of the company at the date of the re istration of the order for red"ction and min"te, shall #e lia#le to contri#"te for the payment of that de#t or claim an amo"nt not exceedin the amo"nt which he wo"ld ha!e #een lia#le to contri#"te if the company had commenced to #e wo"nd/"p on the day immediately #efore the said dateL and G#H if the company is wo"nd/"p, the (aA.ri#"nalB, on the application of any s"ch creditor and proof of his i norance as aforesaid, may, if it thin;s fit, settle accordin ly a list of persons so lia#le to contri#"te, and ma;e and enforce calls and orders on the contri#"tories settled on the list, as if they were ordinary contri#"tories in a windin /"p. 4othin in this section shall effect the ri hts of the contri#"tories amon themsel!es.

G2H

10).

Penalt% !or concealing name o! creditor, etc.

If any officer of the company/ GaH ;nowin ly conceals the name of any creditor entitled to o#Cect to the red"ctionL G#H GcH ;nowin ly misrepresents the nat"re or amo"nt of the de#t or claim of any creditorL or a#ets or is pri!y to any s"ch concealment or misrepresentation as aforesaidL

he shall #e p"nisha#le with imprisonment for a term which may extend to one year, or with fine, or with #oth.

(ariation of shareholders) rights 10*. Alteration o! rights o! holders o! special classes o! shares

=here the share capital of a company is di!ided into different classes of shares, the ri hts attached to the shares of any class may #e !aried with the consent in writin of the holders of not less than three/fo"rths of the iss"ed shares of that class or with the sanction of a special resol"tion passed at a separate meetin of the holders of the iss"ed shares of that class/ GaH G#H if pro!ision with respect to s"ch !ariation is contained in the memorand"m or articles of the company, or in the a#sence of any s"ch pro!ision in the memorand"m or articles, if s"ch !ariation is not prohi#ited #y the terms of iss"e of the shares of that class.B

10+.
G1H

:ights o! dissentient shareholders

If, in p"rs"ance of any pro!ision s"ch as is referred to in section 10(, the ri hts attached to any s"ch class of shares are at any time !aried, the holders of not less in the a re ate than ten per cent of the iss"ed shares of that class, #ein persons who did not consent to or !ote in fa!o"r of the resol"tion for the !ariation, may apply to the A.ri#"nalB to ha!e the !ariation cancelled, and where any s"ch application is made, the !ariation shall not ha!e effect "nless and "ntil it is confirmed #y the A.ri#"nalB. An application "nder this section shall #e made within twenty/one days after the date on which the consent was i!en or the resol"tion was passed, as the case may #e, and may #e made on #ehalf of the shareholders entitled to ma;e the application #y s"ch one or more of their n"m#er as they may appoint in writin for the p"rpose. :n any s"ch application, the A.ri#"nalB, after hearin the applicant and any other persons who apply to the A.ri#"nalB to #e heard and appear to the A.ri#"nalB to #e interested in the application, may, if it is satisfied, ha!in re ard to all the circ"mstances of the case, that the !ariation wo"ld "nfairly preC"dice the shareholders of the class represented #y the applicant, disallow the !ariationL and shall, if not so satisfied, confirm the !ariation. .he decision of the A.ri#"nalB on any s"ch application shall #e final. .he company shall, within AthirtyB days after the ser!ice on the company of any order made on any s"ch application, forward a copy of the order to the 8e istrarL and if defa"lt is made in complyin with this pro!ision, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB.

G2H

G3H

G$H G'H

Transfer of shares and debentures 10,.

G1H

0rans!er not to &e registered except on production o! instrument o! trans!er

A company shall not re ister a transfer of shares in, or de#ent"res of, the company, "nless a proper instr"ment of transfer d"ly stamped and exec"ted #y or on #ehalf of the transferor and #y or on #ehalf

of the transferee and specifyin the name, address and occ"pation, if any, of the transferee, has #een deli!ered to the company alon with the certificate relatin to the shares or de#ent"res, or if no s"ch certificate is in existence, alon with the letter of allotment of the shares or de#ent"resK Provided that where, on an application in writin made to the company #y the transferee and #earin the stamp reD"ired for an instr"ment of transfer, it is pro!ed to the satisfaction of the 0oard of directors that the instr"ment of transfer si ned #y or on #ehalf of the transferor and #y or on #ehalf of the transferee has #een lost, the company may re ister the transfer on s"ch terms as to indemnity as the 0oard may thin; fitK Provided !urther that nothin in this section shall preC"dice any power of the company to re ister as shareholder or de#ent"re holder any person to whom the ri ht to any shares in, or de#ent"res of, the company has #een transmitted #y operation of law. AG1AH 1!ery instr"ment of transfer of shares shall #e in s"ch form as may #e prescri#ed, and/ GaH e!ery s"ch form shall, #efore it is si ned #y or on #ehalf of the transferor and #efore any entry is made therein, #e presented to the prescri#ed a"thority, #ein a person already in the ser!ice of the +o!ernment, who shall stamp or otherwise endorse thereon the date on which it is so presented, and G#H e!ery instr"ment of transfer in the prescri#ed form with the date of s"ch presentation stamped or otherwise endorsed thereon shall, after it is exec"ted #y or on #ehalf of the transferor and the transferee and completed in all other respects, #e deli!ered to the company,/ GiH in the case of shares dealt in or D"oted on a reco nised stoc; exchan e, at any time #efore the date on which the re ister of mem#ers is closed, in accordance with law, for the first time after the date of the presentation of the prescri#ed form to the prescri#ed a"thority "nder cla"se GaH or within Atwel!e monthsB from the date of s"ch presentation, whiche!er is laterL in any other case, within two months from the date of s"ch presentation.

GiiH G10H

4otwithstandin anythin contained in s"#/section G1AH, an instr"ment of transfer of shares, exec"ted #efore the commencement of section 13 of the *ompanies GAmendmentH Act, 1,(' or exec"ted after s"ch commencement in a form other than the prescri#ed form, shall #e accepted #y a company,/ GaH in the case of shares dealt in or D"oted on a reco nised stoc; exchan e, at any time not later than the expiry of six months from s"ch commencement or the date on which the re ister of mem#ers is closed, in accordance with law, for the first time after s"ch commencement, whiche!er is laterL G#H in any other case, at any time not later than the expiry of six months from s"ch commencement. 4othin contained in s"#/sections G1AH and G10H shall apply to/ GAH Any share/ GiH which is held #y a company in any other #ody corporate in the name of a director or nominee in p"rs"ance of s"#/section G2H, or as the case may #e, s"#/section G3H, of section $,, or which is held #y a corporation, owned or controlled #y the *entral +o!ernment or a State +o!ernment, in any other #ody corporate in the name of a director or nominee, or in respect of which a declaration has #een made to the &"#lic .r"stee "nder section 1'30, if/ G1H the company or corporation, as the case may #e, stamps or otherwise endorses, on the form of transfer in respect of s"ch share, the date on which it decides that s"ch share shall not #e held in the name of the said director or nominee or, as the case may #e, in the case of any share in respect of which any s"ch declaration has #een made to the &"#lic .r"stee, the &"#lic .r"stee stamps or otherwise endorses, on the form of transfer in respect of s"ch share "nder his seal, the date on which the form is presented to him, and the instr"ment of transfer in s"ch form, d"ly completed in all respects, is deli!ered to the/ GaH #ody corporate in whose share s"ch company or corporation has made in!estment in the name of its director or nominee, or

G1*H

GiiH GiiiH

G2H

G#H G0H

company in which s"ch share is held in tr"st,

within two months of the date so stamped or otherwise endorsedL or any share deposited #y any person with/ GiH GiiH GiiiH the State 0an; of India, or any sched"led #an;, or any #an;in company Gother than a sched"led #an;H or financial instit"tion appro!ed #y the *entral +o!ernment #y notification in the :fficial +aFette Gand any s"ch appro!al may #e accorded so as to #e retrospecti!e to any date not earlier than the 1st day of April, 1,((H, or the *entral +o!ernment or a State +o!ernment or any corporation owned or controlled #y the *entral +o!ernment or a State +o!ernment,

Gi!H

#y way of sec"rity for the repayment of any loan or ad!ance to, or for the performance of any o#li ation "nderta;en #y, s"ch person, if/ G1H the #an;, instit"tion, +o!ernment or corporation, as the case may #e, stamps or otherwise endorses on the form of transfer of s"ch share/ GaH G#H the date on which s"ch share is ret"rned #y it to the depositor, or in the case of fail"re on the part of the depositor to repay the loan or ad!ance or to perform the o#li ation, the date on which s"ch share is released for sale #y s"ch #an;, instit"tion, +o!ernment or corporation, as the case may #e, or

where the #an;, instit"tion, +o!ernment or corporation, as the case may #e, intends to et s"ch share re istered in its own name, the date on which the instr"ment of transfer relatin to s"ch share is exec"ted #y itL and G2H the instr"ment of transfer of s"ch form, d"ly completed in all respects, is deli!ered to the company within two months from the date so stamped or endorsed. Explanation( / =here any in!estment #y a company or a corporation in the name of its director or nominee referred to in cla"se GAHGiH or cla"se GAHGiiH, or any declaration referred to in cla"se GAHGiiiH, or any deposit referred to in cla"se G0H, of this s"#/section is made after the expiry of the period or date mentioned in cla"se GaH of s"#/section G10H or after the expiry of the period mentioned in cla"se G#H of that s"#/section, as the case may #e, the form of transfer, in respect of the share which is the s"#Cect of s"ch in!estment, declaration or deposit, means the prescri#ed formL or G*H any share which is held in any company #y the *entral +o!ernment or a State +o!ernment in the name of its nominee, except that e!ery instr"ment of transfer which is exec"ted on or after the 1st day of :cto#er, 1,((, in respect of any s"ch share shall #e in the prescri#ed form.B 4otwithstandin anythin in s"#/section G1AH or s"#/section G10H Aor s"#/section G1*HB where in the opinion of the *entral +o!ernment it is necessary so to do to a!oid hardship in any case, that +o!ernment may on an application made to it in that #ehalf, extend the periods mentioned in those s"#/sections #y s"ch f"rther time as it may deem fit Awhether s"ch application is made #efore or after the expiry of the periods aforesaidBL and the n"m#er of extensions ranted here"nder and the period of each s"ch extension shall #e shown in the ann"al report laid #efore the 6o"ses of &arliament "nder section (3).B In the case of a company ha!in no share capital, s"#/section G1H shall apply as if the references therein to shares were references instead of the interest of the mem#er in the company. 4othin contained in this section shall apply to transfer of sec"rity effected #y the transferor and the transferee #oth of whom are entered as #eneficial owners in the records of a depository.B

GcH

AG1DH

G2H AG3H

10,A. :estriction on acDuisition o! certain shares

G1H 1xcept with the pre!io"s appro!al of the *entral +o!ernment, no indi!id"al, firm, ro"p, constit"ent of a ro"p, #ody corporate or #odies corporate "nder the same mana ement, shall Cointly or se!erally acD"ire or a ree to acD"ire, whether in his or its own name or in the name of any other person, any eD"ity shares in a p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, if the total nominal !al"e of the eD"ity shares intended to #e so acD"ired exceeds, or wo"ld, to ether with the total nominal !al"e of any eD"ity shares already held in the company #y s"ch indi!id"al, firm,

G2H

ro"p, constit"ent of a ro"p, #ody corporate or #odies corporate "nder the same mana ement, exceed twenty/fi!e per cent of the paid/"p eD"ity share capital of s"ch company. =here any indi!id"al, firm, ro"p, constit"ent of a ro"p, #ody corporate or #odies corporate "nder the same mana ement Ghereafter in this Act referred to as the acD"irerH, is prohi#ited, #y s"#/section G1H, from acD"irin or a reein to acD"ire except with the pre!io"s appro!al of the *entral +o!ernment, any share of a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, no/ GaH G#H GcH company in which not less than fifty/one per cent of the share capital is held #y the *entral +o!ernmentL or corporation Gnot #ein a companyH esta#lished #y or "nder any *entral ActL or financial instit"tion,

shall transfer or a ree to transfer any share to s"ch acD"irer "nless s"ch acD"irer has o#tained the pre!io"s appro!al of the *entral +o!ernment for the acD"isition, or a reement for the acD"isition, of s"ch share.

10,2. :estriction on trans!er o! shares

G1H 1!ery #ody corporate or #odies corporate "nder the same mana ement, holdin , whether sin ly or in the a re ate, ten per cent or more of the nominal !al"e of the s"#scri#ed eD"ity share capital of any other company shall, #efore transferrin one or more of s"ch shares, i!e to the *entral +o!ernment an intimation, of its or their proposal to transfer s"ch share, and e!ery s"ch intimation shall incl"de a statement as to the partic"lars of the share proposed to #e transferred, the name and address of the person to whom the share is proposed to #e transferred, the shareholdin , if any, of the proposed transferee in the concerned company and s"ch other partic"lars as may #e prescri#ed. =here, on receipt of an intimation i!en "nder s"#/section G1H or otherwise, the *entral +o!ernment is satisfied that as a res"lt of s"ch transfer, a chan e in the composition of the #oard of directors of the company is li;ely to ta;e place and that s"ch chan e wo"ld #e preC"dicial to the interests of the company or to the p"#lic interest, it may, #y order, direct that/ GaH no s"ch share shall #e transferred to the proposed transfereeK Provided that no s"ch order shall precl"de the #ody corporate or #odies corporate from intimatin , in accordance with the pro!isions of s"#/section G1H, to the *entral +o!ernment its or their proposal to transfer the share to any other person, or where s"ch share is held in company en a ed in any ind"stry specified in Sched"le >7, s"ch share shall #e transferred to the *entral +o!ernment or to s"ch corporation owned or controlled #y that +o!ernment as may #e specified in the direction.

G2H

G#H

G3H

=here a direction is made #y the *entral +o!ernment "nder cla"se G#H of s"#/section G2H, the share referred to in s"ch direction shall stand transferred to the *entral +o!ernment or to the corporation specified therein, and the *entral +o!ernment or the specified corporation, as the case may #e, shall pay, in cash, to the #ody corporate or #odies corporate from which s"ch share stands transferred, an amo"nt eD"al to the mar;et !al"e of s"ch share, within the time specified in s"#/section G$H. Explanation( /In this s"#/section, "mar;et !al"e" means, in the case of a share which is D"oted on any reco nised stoc; exchan e, the !al"e D"oted at s"ch stoc; exchan e on the date immediately precedin the date on which the direction is made, and, in any other case, s"ch !al"e as may #e m"t"ally a reed "pon #etween the holder of the share and the *entral +o!ernment or the specified corporation, as the case may #e, or in the a#sence of s"ch a reement, as may #e determined #y the co"rt. .he mar;et !al"e referred to in s"#/section G3H shall #e i!en forthwith, where there is no disp"te as to s"ch !al"e or where s"ch !al"e has #een m"t"ally a reed "pon, #"t where there is a disp"te as to the mar;et !al"e, s"ch !al"e as is estimated #y the *entral +o!ernment or the corporation, as the case may #e, shall #e i!en forthwith and the #alance, if any, shall #e i!en within thirty days from the date when the mar;et !al"e is determined #y the co"rt. If the *entral +o!ernment does not ma;e any direction "nder s"#/section G2H within sixty days from the date of receipt #y it of the intimation i!en "nder s"#/section G1H, the pro!isions contained in s"#/ section G2H with re ard to the transfer of s"ch share shall not apply.

G$H

G'H

10,C. :estriction on the trans!er o! shares o! !oreign companies

4o #ody corporate or #odies corporate "nder the same mana ement, which holds, or hold in the a re ate, ten per cent or more of the nominal !al"e of the eD"ity share capital of a forei n company, ha!in an esta#lished place of #"siness in India, shall transfer any share in s"ch forei n company to any citiFen of India or any #ody corporate incorporated in India except with the pre!io"s appro!al 172 of the *entral +o!ernment and s"ch pre!io"s appro!al shall not #e ref"sed "nless the *entral +o!ernment is of opinion that s"ch transfer wo"ld #e preC"dicial to the p"#lic interest.

10, . Power o! Central -overnment to direct companies not to give e!!ect to the trans!er
G1H =here the *entral +o!ernment is satisfied that as a res"lt of the transfer of any share or #loc; of shares of a company, a chan e in the controllin interest of the company is li;ely to ta;e place and that s"ch chan e wo"ld #e preC"dicial to the interests of the company or to the p"#lic interest, that +o!ernment may direct the company not to i!e effect to the transfer of any s"ch share or #loc; of shares, and/ GaH where the transfer of s"ch share or #loc; of shares has already #een re istered, not to permit the transferee or any nominee or proxy of the transferee, to exercise any !otin or other ri hts attachin to s"ch share or #loc; of sharesL and where the transfer of s"ch share or #loc; of shares has not #een re istered, not to permit any nominee or proxy of the transferor to exercise any !otin or other ri hts attachin to s"ch share or #loc; of shares.

G#H

G2H

=here any direction is i!en #y the *entral +o!ernment "nder s"#/section G1H, the share or the #loc; of shares referred to therein shall stand retransferred to the person from whom it was acD"ired, and there"pon the amo"nt paid #y the transferee for the acD"isition of s"ch share or #loc; of shares shall #e ref"nded to him #y the person to whom s"ch share or #loc; of shares stands of stand retransferred. If the ref"nd referred to in s"#/section G2H is not made within the period of thirty days from the date of the direction referred to in s"#/section G1H, the *entral +o!ernment shall, on the application of the person entitled to et the ref"nd, direct, #y order, the ref"nd of s"ch amo"nt and s"ch order may #e enforced as if it were a decree made #y a ci!il co"rt. .he person to whom any share or #loc; of shares stands or stand retransferred "nder s"#/section G2H shall, on ma;in ref"nd "nder s"#/section G2H or s"#/section G3H, #e eli i#le to exercise !otin or other ri hts attachin to s"ch share or #loc; of shares.

G3H

G$H

10,3. 0ime within which re!usal to he communicated

1!ery reD"est made to the *entral +o!ernment for accordin its appro!al to the proposal for the acD"isition of any share referred to in section 10)A or the transfer of any share referred to in section 10)* shall #e pres"med to ha!e #een ranted "nless, within a period of sixty days from the date of receipt of s"ch reD"est, the *entral +o!ernment comm"nicates to the person #y whom the reD"est was made, that the appro!al prayed for cannot #e ranted.

10,5. 6othing in sections 10,A to 10, to appl% to -overnment companies, etc.

4othin contained in section 10)A Aexcept s"#/section G2H thereofB shall apply to the transfer of any share to, and nothin in section 10)0 or section 10)* or section 10)D shall apply to the transfer of any share #y/ GaH G#H GcH any company in which not less than fifty/one per cent of the share capital is held #y the *entral +o!ernmentL any corporation Gnot #ein a companyH esta#lished #y or "nder any *entral ActL any financial instit"tion.

10,-. Applica&ilit% o! the provisions o! sections 10,A to 10,5

.he pro!isions of sections 10)A to 10)3 G#oth incl"si!eH shall apply to the acD"isition or transfer of shares or share capital #y, or to, an indi!id"al, firm, ro"p, constit"ent of a ro"p, #ody corporate or #odies corporate "nder the same mana ement, who or which/ GaH is, in case of acD"isition of shares or share capital, the owner in relation to a dominant "nderta;in and there wo"ld #e, as a res"lt of s"ch acD"isition, any increase/ GiH in the prod"ction, s"pply, distri#"tion or control of any oods that are prod"ced, s"pplied, distri#"ted or controlled in India or any s"#stantial part thereof #y that dominant "nderta;in , or GiiH in the pro!ision or control of any ser!ices that are rendered in India or any s"#stantial part thereof #y that dominant "nderta;in L or wo"ld #e, as a res"lt of s"ch acD"isition or transfer of shares or share capital, the owner of a dominant "nderta;in L or is, in case of transfer of shares or share capital, the owner in relation to a dominant "nderta;in .

G#H GcH

10,8. Construction o! certain expressions used in sections 10,A to 10,.he expression " ro"p", "same mana ement", "financial instit"tion", "dominant "nderta;in " and "owner" "sed in sections 10)A to 10)+ G#oth incl"si!eH, shall ha!e the meanin s respecti!ely assi ned to them in the %onopolies and 8estricti!e .rade &ractices Act, 1,(,.

10,1". Penalt% !or acDuisition or trans!er o! share in contravention o! sections 10,A to 10,
G1H Any person who acD"ires any share in contra!ention of the pro!isions of section 10)A shall #e p"nisha#le with imprisonment for a term which may extend to three years, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. 1!ery #ody corporate which ma;es any transfer of shares witho"t i!in any intimation as reD"ired #y section 10)0 shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. =here any contra!ention of the pro!isions of section 10)0 has #een made #y a company, e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to three years or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. 1!ery #ody corporate which ma;es any transfer of shares in contra!ention of the pro!isions of section 10)*, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. =here any contra!ention of the pro!isions of section 10)* has #een made #y a company, e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to three years, or with fine which may extend to Afifty tho"sand r"peesB or with #oth. 1!ery person who transfers any share in contra!ention of any order made #y the *entral +o!ernment "nder section 10)0, or i!es effect to any transfer of shares made in contra!ention of any direction made #y the *entral +o!ernment "nder section 10)D, or who exercises any !otin ri ht in respect of any share in contra!ention of any direction made #y the *entral +o!ernment "nder section 10)D, shall #e p"nisha#le with imprisonment for a term which may extend to fi!e years, and shall also #e lia#le to fine. If any company i!es effect to any !otin or other ri ht exercised in relation to any share acD"ired in contra!ention of the pro!isions of section 10)0, or which i!es effect to any !otin ri ht in contra!ention of any direction made #y the *entral +o!ernment "nder section 10)D, the company shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB, and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to three years, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth.B

G2HGaH G#H

G3HGaH G#H

G$HGaH

G#H

10..

0rans!er &% legal representative

A transfer of the share or other interest in a company of a deceased mem#er thereof made #y his le al representati!e shall, altho" h the le al representati!e is not himself a mem#er, #e as !alid as if he had #een a mem#er at the time of the exec"tion of the instr"ment of transfer.

10.A. 6omination o! shares

G1H 1!ery holder of shares in, or holder of de#ent"res of, a company may, at any time, nominate, in the prescri#ed manner, a person to whom his shares in, or de#ent"res of, the company shall !est in the e!ent of his death.

G2H

=here the shares in, or de#ent"res of, a company are held #y more than one person Cointly, the Coint holders may to ether nominate, in the prescri#ed manner, a person to whom all the ri hts in the shares or de#ent"res of the company shall !est in the e!ent of death of all the Coint holders. G3H 4otwithstandin anythin contained in any other law for the time #ein in force or in any disposition, whether testamentary or otherwise, in respect of s"ch shares in, or de#ent"res of the company, where a nomination made in the prescri#ed manner p"rports to confer on any person the ri ht to !est the shares in or de#ent"res of the company, the nominee shall, on the death of the shareholder or holder of de#ent"res of the company or, as the case may #e, on the death of the Coint holders #ecome entitled to all the ri hts in the shares or de#ent"res of the company or, as the case may #e, all the Coint holders, in relation to s"ch shares in, or de#ent"res of the company to the excl"sion of all other persons, "nless the nomination is !aried or cancelled in the prescri#ed manner. G$H =here the nominee is a minor, it shall #e lawf"l for the holder of the shares, or holder of de#ent"res, to ma;e the nomination to appoint in the prescri#ed manner any person to #ecome entitled to shares in or de#ent"res of the company, in the e!ent of his death, d"rin the minority.

10.2. 0ransmission o! shares

G1H Any person who #ecomes a nominee #y !irt"e of the pro!isions of section 10,A, "pon the prod"ction of s"ch e!idence as may #e reD"ired #y the 0oard and s"#Cect as hereinafter pro!ided, elect, either/ GaH to #e re istered himself as holder of the share or de#ent"re, as the case may #eL or G#H G2H to ma;e s"ch transfer of the share or de#ent"re, as the case may #e, as the deceased shareholder or de#ent"re holder, as the case may #e, co"ld ha!e made.

If the person #ein a nominee, so #ecomin entitled, elects to #e re istered as holder of the share or de#ent"re, himself as the case may #e, he shall deli!er or send to the company a notice in writin si ned #y him statin that he so elects and s"ch notice shall #e accompanied with the death certificate of the deceased shareholder or de#ent"re holder, as the case may #e. All the limitations, restrictions and pro!isions of this Act relatin to the ri ht to transfer and the re istration of transfers of shares or de#ent"res shall #e applica#le to any s"ch notice or transfer as aforesaid as if the death of the mem#er had not occ"rred and the notice or transfer were a transfer si ned #y that shareholder or de#ent"re holder, as the case may #e. A person, #ein a nominee, #ecomin entitled to a share or de#ent"re #y reason of the death of the holder shall #e entitled to the same di!idends and other ad!anta es to which he wo"ld #e entitled if he were the re istered holder of the share or de#ent"re except that he shall not, #efore #ein re istered a mem#er in respect of his share or de#ent"re, #e entitled in respect of it to exercise any ri ht conferred #y mem#ership in relation to meetin s of the companyK Provided that the 0oard may, at any time, i!e notice reD"irin any s"ch person to elect either to #e re istered himself or to transfer the share or de#ent"re, and if the notice is not complied with within ninety days, the 0oard may thereafter withhold payment of all di!idends, #on"ses or other moneys paya#le in respect of the share or de#ent"re, "ntil the reD"irements of the notice ha!e #een complied with.B

G3H

G$H

110.
G1H G2H

Application !or trans!er

An application for the re istration of a transfer of the shares or other interest of a mem#er in a company may #e made either #y the transferor or #y the transferee. =here the application is made #y the transferor and relates to partly paid shares, the transfer shall not #e re istered, "nless the company i!es notice of the application to the transferee and the transferee ma;es no o#Cection to the transfer within two wee;s from the receipt of the notice.

G3H

3or the p"rposes of s"#/section G2H, notice to the transferee shall #e deemed to ha!e #een d"ly i!en if it is despatched #y prepaid re istered post to the transferee at the address i!en in the instr"ment of transfer, and shall #e deemed to ha!e #een d"ly deli!ered at the time at which it wo"ld ha!e #een deli!ered in the ordinary co"rse of post.

111.
G1H

Power to re!use registration and appeal against re!usal

If a company ref"ses, whether in p"rs"ance of any power of the company "nder its articles or otherwise, to re ister the transfer of, or the transmission #y operation of law f the ri ht to, any shares or interest of a mem#er in, or de#ent"res of, the company, it shall, within two months from the date on which the instr"ment of transfer, or the intimation of s"ch transmission, as the case may #e, was deli!ered to the company, send notice of the ref"sal to the transferee and the transferor or to the person i!in intimation of s"ch transmission, as the case may #e, i!in reasons for s"ch ref"sal. .he transferor or transferee, or the person who a!e intimation of the transmission #y operation of law, as the case may #e, may appeal to the (aA.ri#"nalB a ainst any ref"sal of the company to re ister the transfer or transmission, or a ainst any fail"re on its part within the period referred to in s"#/section G1H, either to re ister the transfer or transmission or to send notice of its ref"sal to re ister the same. An appeal "nder s"#/section G2H shall #e made within two months of the receipt of the notice of s"ch ref"sal or, where no notice has #een sent #y the company, within fo"r months from the date on which the instr"ment of transfer, or the intimation of transmission, as the case may #e, was deli!ered to the company. If/ GaH the name of any person/ GiH GiiH G#H is witho"t s"fficient ca"se, entered in the re ister of mem#ers of a company, or after ha!in #een entered in the re ister, is witho"t s"fficient ca"se, omitted therefromL or

G2H

G3H

G$H

defa"lt is made, or "nnecessary delay ta;es place, in enterin in the re ister the fact of any person ha!in #ecome, or ceased to #e, a mem#er Aincl"din a ref"sal "nder s"#/section G1HB,

the person a rie!ed, or any mem#er of the company, or the company, may apply to the A.ri#"nalB for rectification of the re ister. G'H .he A.ri#"nalB, while dealin with an appeal preferred "nder s"#/section G2H or an application made "nder s"#/section G$H may, after hearin the parties, either dismiss the appeal or reCect the application, or #y order/ GaH direct that the transfer or transmission shall #e re istered #y the company and the company shall comply with s"ch order within ten days of the receipt of the orderL or G#H direct rectification of the re ister and also direct the company to pay dama es, if any, s"stained #y any party a rie!ed. .he A.ri#"nalB, while actin "nder s"#/section G'H, may, at its discretion, ma;e,/ GaH G#H GcH G7H s"ch interim orders, incl"din any orders as to, inC"nction or stay, as it may deem fit and C"stL s"ch orders as to costs as it thin;s fitL and incidental or conseD"ential orders re ardin payment of di!idend or the allotment of #on"s or ri hts shares.

G(H

G)H G,H

:n any application "nder this section, the A.ri#"nalB / GaH may decide any D"estion relatin to the title of any person who is a party to the application to ha!e his name entered in, or omitted from, the re isterL G#H enerally, may decide any D"estion which it is necessary or expedient to decide in connection with the application for rectification. .he pro!isions of s"#/sections G$H to G7H shall apply in relation to the rectification of the re ister of de#ent"re holders as they apply in relation to the rectification of the re ister of mem#ers. If defa"lt is made in i!in effect to the orders of the A.ri#"nalB "nder this section, the company and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB, and with a f"rther fine which may extend to Aone tho"sand r"peesB for e!ery day after the first day after which the defa"lt contin"es.

G10H G11H

G12H

1!ery appeal or application to the A.ri#"nalB "nder s"#/section G2H or s"#/section G$H shall #e made #y a petition in writin and shall #e accompanied #y s"ch fee as may #e prescri#ed. In the case of a pri!ate company which is not a s"#sidiary of a p"#lic company, where the ri ht to any shares or interest of a mem#er in, or de#ent"res of, the company is transmitted #y a sale thereof held #y a *o"rt or other p"#lic a"thority, the pro!isions of s"#/sections G$H to G7H shall apply as if the company were a p"#lic companyK Provided that the A.ri#"nalB may, in lie" of an order "nder s"#/section G'H, pass an order directin the company to re ister the transmission of the ri ht "nless any mem#er or mem#ers of the company specified in the order acD"ire the ri ht aforesaid within s"ch time as may #e allowed for the p"rpose #y the order, on payment to the p"rchaser of the price paid #y him therefor or s"ch other s"m as the A.ri#"nalB may determine to #e a reasona#le compensation for the ri ht in all the circ"mstances of the case. If defa"lt is made in complyin with any of the pro!isions of this section, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es. 4othin in this section and section 10), 10, or 110 shall preC"dice any power of a pri!ate company "nder its articles to enforce the restrictions contained therein a ainst the ri ht to transfer the shares of s"ch company.B In this section "company" means a pri!ate company and incl"des a pri!ate company which had #ecome a p"#lic company #y !irt"e of section $3A of this Act.B

G13H

G1$H

111A. :ecti!ication o! register on trans!er

G1H G2H In this section, "nless the context otherwise reD"ires, "company" means a company other than a company referred to in s"#/section G1$H of section 111 of this Act. S"#Cect to the pro!isions of this section, the shares or de#ent"res and any interest therein of a company shall #e freely transfera#leK AProvided that if a company witho"t s"fficient ca"se ref"ses to re ister transfer of shares within two months from the date on which the instr"ment of transfer or the intimation of transfer, as the case may #e, is deli!ered to the company, the transferee may appeal to the A.ri#"nalB and it shall direct s"ch company to re ister the transfer of shares.B AG3H .he A.ri#"nalB may, on an application made #y a depository, company, participant or in!estor or the Sec"rities and 1xchan e 0oard of India, if the transfer of shares or de#ent"res is in contra!ention of any of the pro!isions of the Sec"rities and 1xchan e 0oard of India Act, 1,,2, or re "lations made there"nder or the Sic; Ind"strial *ompanies GSpecial &ro!isionsH Act, 1,)' or any other law for the time #ein in force, within two months from the date of transfer of any shares or de#ent"res held #y a depository or from the date on which the instr"ment of transfer or the intimation of the transmission was deli!ered to the company, as the case may #e, after s"ch inD"iry as it thin;s fit, direct any depository or company to rectify its re ister or records.B. .he A.ri#"nalB while actin "nder s"#/section G3H, may at its discretion ma;e s"ch interim order as to s"spend the !otin ri hts #efore ma;in or completin s"ch enD"iry. .he pro!isions of this section shall not restrict the ri ht of a holder of shares or de#ent"res, to transfer s"ch shares or de#ent"res and any person acD"irin s"ch shares or de#ent"res shall #e entitled to !otin ri hts "nless the !otin ri hts ha!e #een s"spended #y an order of the A.ri#"nalB. 4otwithstandin anythin contained in this section, any f"rther transfer, d"rin the pendency of the application with the A.ri#"nalB, of shares or de#ent"res shall entitle the transferee to !otin ri hts "nless the !otin ri hts in respect of s"ch transferee ha!e also #een s"spended. .he pro!isions of s"#/sections G'H, G7H, G,H, G10H and G12H of section 111 shall, so far as may #e, apply to the proceedin s #efore the A.ri#"nalB "nder this section as they apply to the proceedin s "nder that section.B

G$H G'H

G(H

G7H

112.

Certi!ication o! trans!ers

G1H

.he certification #y a company of any instr"ment of transfer of shares in, or de#ent"res of, the company, shall #e ta;en as a representation #y the company to any person actin on the faith of the certification that there ha!e #een prod"ced to the company s"ch doc"ments as on the face of them show a prima facie title to the shares or de#ent"res in the transferor named in the instr"ment of transfer, #"t not as a representation that the transferor has any title to the shares or de#ent"res. =here any person acts on the faith of an erroneo"s certification made #y a company ne li ently, the company shall #e "nder the same lia#ility to him as if the certification had #een made fra"d"lently. 3or the p"rposes of this section/ GaH an instr"ment of transfer shall #e deemed to #e certificated if it #ears the words "certificate lod ed" or words to the li;e effectL G#H the certification of an instr"ment of transfer shall #e deemed to #e made #y a company, if/ GiH GiiH the person iss"in the certificated instr"ment is a person a"thorised to iss"e s"ch instr"ments of transfer on the companyIs #ehalfL and

G2H G3H

GcH

the certification is si ned #y any officer or ser!ant of the company or any other person, a"thorised to certificate transfers on the companyIs #ehalf, or if a #ody corporate has #een so a"thorised, #y any officer or ser!ant of that #ody corporateL a certification shall #e deemed to #e si ned #y any person, if it p"rports to #e a"thenticated #y his si nat"re "nless it is shown that the si nat"re was placed there neither #y himself nor #y any person a"thorised to "se the si nat"re for the p"rpose of certificatin transfers on the companyIs #ehalf.

#ssue of Certificate of "hares etc! 11#.

AG1H

4imitation o! time !or issue o! certi!icate

1!ery company, "nless prohi#ited #y any pro!ision of law or of any order of any co"rt, tri#"nal or other a"thority, shall, within three months after the allotment of any of its shares, de#ent"res or de#ent"re stoc;, and within two months after the application for the re istration of the transfer of any s"ch shares, de#ent"res or de#ent"re stoc;, deli!er, in accordance with the proced"re laid down in section '3, the certificates of all shares, de#ent"res and certificates of de#ent"re stoc;s allotted or transferredK Provided that the A*entral +o!ernmentB may, on an application #ein made to it in this #ehalf #y the company, extend any of the periods within which the certificates of all de#ent"res and de#ent"re stoc;s allotted or transferred shall #e deli!ered "nder this s"#/section, to a f"rther period not exceedin nine months, if it is satisfied that it is not possi#le for the company to deli!er s"ch certificates within the said periods.B .he expression "transfer", for the p"rposes of this s"#/section, means a transfer d"ly stamped and otherwise !alid, and does not incl"de any transfer which the company is for any reason entitled to ref"se to re ister and does not re ister.

G2H

G3H

If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es. If any company on which a notice has #een ser!ed reD"irin it to ma;e ood any defa"lt in complyin with the pro!isions of s"#/section G1H, fails to ma;e ood the defa"lt within ten days after the ser!ice of the notice, the A*entral +o!ernmentB may, on the application of the person entitled to ha!e the certificates or the de#ent"res deli!ered to him, ma;e an order directin the company and any officer of the company to ma;e ood the defa"lt within s"ch time as may #e specified in the orderL and any s"ch order may pro!ide that all costs of and incidental to the application shall #e #orne #y the company or #y any officer of the company responsi#le for the defa"lt. 4otwithstandin anythin contained in s"#/section G1H, where the sec"rities are dealt with in a depository, the company shall intimate the details of allotment of sec"rities to depository immediately on allotment of s"ch sec"rities.B

AG$H

"hare warrants

11'.
G1H

"ssue and e!!ect o! share warrants to &earer

A p"#lic company limited #y shares, if so a"thorised #y its articles, may, with the pre!io"s appro!al of the *entral +o!ernment, with respect to any f"lly paid/"p shares, iss"e "nder its common seal a warrant statin that the #earer of the warrant is entitled to the shares therein specified, and may pro!ide, #y co"pons or otherwise, for the payment of the f"t"re di!idends on the shares specified in the warrant. .he warrant aforesaid is in this Act referred to as a "share warrant". A share warrant shall entitle the #earer thereof to the shares therein specified, and the shares may #e transferred #y deli!ery of the warrant.

G2H G3H

11).
G1H

Share warrants and entries in register o! mem&ers

:n the iss"e of a share warrant, the company shall stri;e o"t of its re ister of mem#ers the name of the mem#er then entered therein as holdin the shares specified in the warrant as if he had ceased to #e a mem#er, and shall enter in that re ister the followin partic"lars, namelyK/ GaH G#H the fact of the iss"e of the warrantL a statement of the shares specified in the warrant, distin "ishin each share #y its n"m#erL and

G2H

GcH the date of the iss"e of the warrant. .he #earer of a share warrant shall, s"#Cect to the articles of the company, #e entitled, on s"rrenderin the warrant for cancellation and payin s"ch fee to the company as the 0oard of Directors may from time to time determine, to ha!e his name entered as a mem#er in the re ister of mem#ers. .he company shall #e responsi#le for any loss inc"rred #y any person #y reason of the company enterin in its re ister of mem#ers the name of a #earer of a share warrant in respect of the shares therein specified, witho"t the warrant #ein s"rrendered and cancelled. <ntil the warrant is s"rrendered, the partic"lars specified in s"#/section G1H shall #e deemed to #e the partic"lars reD"ired #y this Act to #e entered in the re ister of mem#ersL and, on the s"rrender, the date of the s"rrender shall #e entered in that re ister. S"#Cect to the pro!isions of this Act, the #earer of a share warrant may, if the articles of the company so pro!ide, #e deemed to #e a mem#er of the company within the meanin of this Act, for any p"rposes defined in the articles. If defa"lt is made in complyin with any of the reD"irements of this section, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 1(1AAfi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G3H

G$H

G'H

G(H

Penalty for personation of shareholder 11*. Penalt% !or personation o! shareholder

If any person deceitf"lly personates an owner of any share or interest in a company, or of any share warrant or co"pon iss"ed in p"rs"ance of this Act, and there#y o#tains or attempts to o#tain any s"ch shares or interest or any s"ch share warrant or co"pon, or recei!es or attempts to recei!e any money d"e to any s"ch owner, he shall #e p"nisha#le with imprisonment for a term which may extend to three years and shall also #e lia#le to fine.

"pecial provisions as to debentures 11+. e&entures with voting rights not to &e issued herea!ter

4o company shall, after the commencement of this Act, iss"e any de#ent"res carryin !otin ri hts at any meetin of the company, whether enerally or in respect of partic"lar classes of #"siness.

11+A.
G1H G2H

e&enture trust deed

A tr"st deed for sec"rin any iss"e of de#ent"res shall #e in s"ch form and shall #e exec"ted within s"ch period as may #e prescri#ed. A copy of the tr"st deed shall #e open to inspection to any mem#er or de#ent"re holder of the company and he shall also #e entitled to o#tain copies of s"ch tr"st deed on payment of s"ch s"m as may #e prescri#ed. If a copy of the tr"st deed is not made a!aila#le for inspection or is not i!en to any mem#er or de#ent"re holder, the company and e!ery officer of the company who is in a defa"lt, shall #e p"nisha#le, for each offence, with fine which may extend to fi!e h"ndred r"pees for e!ery day d"rin which the offence contin"es.

G3H

11+2. Appointment o! de&enture trustees and duties o! de&enture trustees

G1H 4o company shall iss"e a prospect"s or a letter of offer to the p"#lic for s"#scription of its de#ent"res, "nless the company has, #efore s"ch iss"e, appointed one or more de#ent"re tr"stees for s"ch de#ent"res and the company has, on the face of the prospect"s or the letter of offer, stated that the de#ent"re tr"stee or tr"stees ha!e i!en their consent to the company to #e so appointedK Provided that no person shall #e appointed as a de#ent"re tr"stee, if heM GaH #eneficially holds shares in the companyL G#H GcH G2H is #eneficially entitled to moneys which are to #e paid #y the company to the de#ent"re tr"steeL has entered into any "arantee in respect of principal de#ts sec"red #y the de#ent"res or interest thereon. S"#Cect to the pro!isions of this Act, the f"nctions of the de#ent"re tr"stees shall enerally #e to protect the interest of holders of de#ent"res Gincl"din the creation of sec"rities within the stip"lated timeH and to redress the rie!ances of holders of de#ent"res effecti!ely. In partic"lar, and witho"t preC"dice to the enerality of the fore oin f"nctions, a de#ent"re tr"stee may ta;e s"ch other steps as he may deem fitM GaH G#H GcH GdH GeH G$H to ens"re that the assets of the company iss"in de#ent"res and each of the "arantors are s"fficient to dischar e the principal amo"nt at all timesL to satisfy himself that the prospect"s or the letter of offer does not contain any matter which is inconsistent with the terms of the de#ent"res or with the tr"st deedL to ens"re that the company does not commit any #reach of co!enants and pro!isions of the tr"st deedL to ta;e s"ch reasona#le steps to remedy any #reach of the co!enants of the tr"st deed or the terms of iss"e of de#ent"resL to ta;e steps to call a meetin of holders of de#ent"res as and when s"ch meetin is reD"ired to #e held.

G3H

=here at any time the de#ent"re tr"stee comes to a concl"sion that the assets of the company are ins"fficient or are li;ely to #ecome ins"fficient to dischar e the principal amo"nt as and when it #ecomes d"e, the de#ent"re tr"stee may file a petition #efore the (aA*entral +o!ernmentB and the (a A*entral +o!ernmentB may, after hearin the company and any other person interested in the matter, #y an order, impose s"ch restrictions on the inc"rrin of any f"rther lia#ilities as the (aA*entral +o!ernmentB thin;s necessary in the interests of holders of the de#ent"res. AProvided that in the case of re!i!al and reha#ilitation of a sic; ind"strial company "nder &art 7IA, the pro!isions of this section shall ha!e effect as if for the words "*entral +o!ernment", the word ".ri#"nal" had #een s"#stit"ted.B

11+C. 4ia&ilit% o! compan% to create securit% and de&enture redemption reserve

G1H

=here a company iss"es de#ent"res after the commencement of this Act, it shall create a de#ent"re redemption reser!e for the redemption of s"ch de#ent"res, to which adeD"ate amo"nts shall #e credited, from o"t of its profits e!ery year "ntil s"ch de#ent"res are redeemed. .he amo"nts credited to the de#ent"re redemption reser!e shall not #e "tilised #y the company except for the p"rpose aforesaid. .he company referred to in s"#/section G1H shall pay interest and redeem the de#ent"res in accordance with the terms and conditions of their iss"e. =here a company fails to redeem the de#ent"res on the date of mat"rity, the A.ri#"nalB may, on the application of any or all the holders of de#ent"res shall, after hearin the parties concerned, direct, #y order, the company to redeem the de#ent"res forthwith #y the payment of principal and interest d"e thereon. If defa"lt is made in complyin with the order of the A.ri#"nalB "nder s"#/section G$H, e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with imprisonment which may extend to three years and shall also #e lia#le to a fine of not less than fi!e h"ndred r"pees for e!ery day d"rin which s"ch defa"lt contin"es.B

G2H G3H G$H

G'H

11,.
G1H

:ight to o&tain copies o! and inspect trust deed

A copy of any tr"st deed for sec"rin any iss"e of de#ent"res shall #e forwarded to the holder of any s"ch de#ent"res or any mem#er of the company, at his reD"est and within se!en days of the ma;in thereof, on payment/ GaH G#H in the case of a printed tr"st deed, of As"ch s"m as may #e prescri#edBL and in the case of a tr"st deed which has not #een printed, of As"ch s"m as may #e prescri#ed,B for e!ery one h"ndred words or fractional part thereof reD"ired to #e copied. If a copy is ref"sed, or is not forwarded within the time specified in s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le, for each offence, with fine which may extend to Afi!e h"ndred r"peesB and with a f"rther fine which may extend to Atwo h"ndred r"peesB for e!ery day d"rin which the offence contin"es. .he A*entral +o!ernmentB may also, #y order, direct that the copy reD"ired shall forthwith #e sent to the person reD"irin it. .he tr"st deed referred to in s"#/section G1H shall also #e open to inspection #y any mem#er or de#ent"re holder of the company in the same manner, to the same extent, and on repayment of the same fees, as if it were the re ister of mem#ers of the company.

G2H

G3H G$H

11..
G1H

4ia&ilit% o! trustees !or de&enture holders

S"#Cect to the pro!isions of this section, any pro!ision contained in a tr"st deed for sec"rin an iss"e of de#ent"res, or in any contract with the holders of de#ent"res sec"red #y a tr"st deed, shall #e !oid in so far as it wo"ld ha!e the effect of exemptin a tr"stee thereof from, or indemnifyin him a ainst, lia#ility for #reach of tr"st, where he fails to show the de ree of care and dili ence reD"ired of him as tr"stee, ha!in re ard to the pro!isions of the tr"st deed conferrin on him any powers, a"thorities or discretions. S"#/section G1H shall not in!alidate/ GaH G#H any release otherwise !alidly i!en in respect of anythin done or omitted to #e done #y a tr"stee #efore the i!in of the releaseL or any pro!ision ena#lin s"ch a release to #e i!en/ GiH on the a reement thereto of a maCority of not less than three/fo"rths in !al"e of the de#ent"re holders present and !otin in person or, where proxies are permitted, #y proxy, at a meetin s"mmoned for the p"rposeL and

G2H

G3H

GiiH either with respect to specific acts or omissions or on the tr"stee dyin or ceasin to act. S"#/section G1H shall not operate/

GaH

to in!alidate any pro!ision in force the commencement of this Act so lon as any person then entitled to the #enefit of that pro!ision or afterwards i!en the #enefit thereof "nder s"#/section G$H remains a tr"stee of the deed in D"estionL or to depri!e any person of any exemption or ri ht to #e indemnified in respect of anythin done or omitted to #e done #y him while any s"ch pro!ision was in force.

G#H G$H

=hile any tr"stee of a tr"st deed remains entitled to the #enefit of a pro!ision sa!ed #y s"#/section G3H, the #enefit of that pro!ision may #e i!en either/ GaH G#H to all tr"stees of the deed, present and f"t"reL or to any named tr"stees or proposed tr"stees thereofL

#y a resol"tion passed #y a maCority of not less than three/fo"rths in !al"e of the de#ent"re holders present in person or, where proxies are permitted, #y proxy, at a meetin called for the p"rpose in accordance with the pro!isions of the deed or, if the deed ma;es no pro!ision for callin meetin s, at a meetin called for the p"rpose in any manner appro!ed #y the *o"rt.

120.

Perpetual de&entures

A condition contained in any de#ent"res or in any deed for sec"rin any de#ent"res, whether iss"ed or exec"ted #efore or after the commencement of this Act, shall not #e in!alid #y reason only that there#y, the de#ent"res are made irredeema#le or redeema#le only on the happenin of a contin ency, howe!er remote, or on the expiration of a period, howe!er lon .

121.
G1H

Power to re1issue redeemed de&entures in certain cases

=here either #efore or after the commencement of this Act, a company has redeemed any de#ent"res pre!io"sly iss"ed, then,/ GaH G#H "nless any pro!ision to the contrary, whether express or implied, is contained in the articles, or in the conditions of iss"e, or in any contract entered into #y the companyL or "nless the company has, #y passin a resol"tion to that effect or #y some other act, manifested its intention that the de#ent"res shall #e cancelledL

the company shall ha!e, and shall #e deemed always to ha!e had, the ri ht to ;eep the de#ent"res ali!e for the p"rposes of re/iss"eL and in exercisin s"ch a ri ht, the company shall ha!e, and shall #e deemed always to ha!e had, power to re/iss"in the de#ent"res either #y re/iss"in the same de#ent"res or #y iss"in other de#ent"res in their place. G2H G3H <pon s"ch re/iss"e, the person entitled to the de#ent"res shall ha!e, and shall #e deemed always to ha!e had, the same ri hts and priorities as if the de#ent"res had ne!er #een redeemed. =here with the o#Cect of ;eepin de#ent"res ali!e for the p"rpose of re/iss"e, they ha!e, either #efore or after the commencement of this Act, #een transferred to a nominee of the company, a transfer from that nominee shall #e deemed to #e a re/iss"e for the p"rposes of this section. =here a company, has either #efore or after the commencement of this Act, deposited any of its de#ent"res to sec"re ad!ances from time to time on c"rrent acco"nt or otherwise, the de#ent"res shall not #e deemed to ha!e #een redeemed #y reason only of the acco"nt of the company ha!in ceased to #e in de#it whilst the de#ent"res remained so deposited. .he re/iss"e of a de#ent"re or the iss"e of another de#ent"re in its place "nder the power #y this section i!en to, or deemed to ha!e #een possessed #y, a company, whether the re/iss"e or iss"e was made #efore or after the commencement of this Act, shall #e treated as the iss"e of a new de#ent"re for the p"rposes of stamp d"ty, #"t it shall not #e so treated for the p"rposes of any pro!ision limitin the amo"nt or n"m#er of de#ent"res to #e iss"edK Provided that any person lendin money on the sec"rity of a de#ent"re re/iss"ed "nder this section which appears to #e d"ly stamped may i!e the de#ent"re in e!idence in any proceedin s for enforcin his sec"rity witho"t payment of the stamp d"ty or any penalty in respect thereof, "nless he had notice or, #"t for his ne li ence, mi ht ha!e disco!ered, that the de#ent"re was not d"ly stampedL #"t in any s"ch case the company shall #e lia#le to pay the proper stamp d"ty and penalty. 4othin in this section shall preC"dice/

G$H

G'H

G(H

GaH

the operation of any decree or order of a *o"rt of competent C"risdiction prono"nced or made #efore the twenty/fifth day of 3e#r"ary, 1,10, as #etween the parties to the proceedin s in which the decree or order was madeL where an appeal has #een preferred a ainst any s"ch decree or order, the operation of any decree or order passed on s"ch appeal, as #etween the parties to s"ch an appealL or any power to iss"e de#ent"res in the place of any de#ent"res paid off or otherwise satisfied or extin "ished, reser!ed to a company #y its de#ent"res or the sec"rities for the same.

G#H GcH

122.

Speci!ic per!ormance o! contract to su&scri&e !or de&entures

A contract with a company to ta;e "p and pay for any de#ent"res of the company may #e enforced #y a decree for specific performance.

12#.

Pa%ments o! certain de&ts out o! assets su&Cect to !loating charge in priorit% to claims under the charge
=here either/ GaH G#H a recei!er is appointed on #ehalf of the holders of any de#ent"res of a company sec"red #y a floatin char eL or possession is ta;en #y or on #ehalf of those de#ent"re holders of any property comprised in or s"#Cect to the char eL

G1H

G2H

then, if the company is not at the time in co"rse of #ein wo"nd/"p, the de#ts which in e!ery windin / "p are, "nder the pro!isions of &art 7II relatin to preferential payments, to #e paid in priority to all other de#ts, shall #e paid forthwith o"t of any assets comin to the hands of the recei!er or other person ta;in possession as aforesaid in priority to any claim for principal or interest in respect of the de#ent"res. In the application of the pro!isions aforesaid, section '30 shall #e constr"ed as if the pro!ision for payment of accr"ed holiday rem"neration #ecomin paya#le on the termination of employment #efore or #y the effect of the windin "p order or resol"tion were a pro!ision for payment of s"ch rem"neration #ecomin paya#le on the termination of employment #efore or #y the effect of the appointment of the recei!er or possession #ein ta;en as aforesaid. .he periods of time mentioned in the said pro!isions of &art 7II shall #e rec;oned from the date of appointment of the recei!er or of possession #ein ta;en as aforesaid, as the case may #e. =here the date referred to in s"#/section G3H occ"rred #efore the commencement of this Act, s"#/ sections G1H and G3H shall ha!e effect with the s"#stit"tion, for references to the said pro!isions of &art 7II, of references to the pro!isions which, #y !irt"e of s"#/section G,H of section '30, are deemed to remain in force in the case therein mentioned, and s"#/section G2H shall not apply. Any payments made "nder this section shall #e reco"ped, as far as may #e, o"t of the assets of the company a!aila#le for payment of eneral creditors.

G3H G$H

G'H

PART V:
12'.

REGISTRATION OF CHARGES

$Charge$ to include mortgage in this Part

In this &art, the expression "char e" incl"des a mort a e.

12).

Certain charges to &e void against liDuidator or creditors unless registered

G1H

S"#Cect to the pro!isions of this part, e!ery char e created on or after the 1st day of April, 1,1$, #y a company and #ein a char e to which this section applies shall, so far as any sec"rity on the companyIs property or "nderta;in is conferred there#y, #e !oid a ainst the liD"idator and any creditor of the company, "nless the prescri#ed partic"lars of the char e, to ether with the instr"ment, if any, #y which the char e is created or e!idenced, or a copy thereof !erified in the prescri#ed manner, are filed with the 8e istrar for re istration in the manner reD"ired #y this Act within AthirtyB days after the date of its creationK AProvided that the 8e istrar may allow the partic"lars and instr"ment or copy as aforesaid to #e filed within thirty days next followin the expiry of the said period of thirty days on payment of s"ch additional fee not exceedin ten times the amo"nt of fee specified in Sched"le > as the 8e istrar may determine, if the company satisfies the 8e istrar that it had s"fficient ca"se for not filin the &artic"lars and instr"ment or copy within that period.B 4othin in s"#/section G1H shall preC"dice any contract or o#li ation for the repayment of the money sec"red #y the char e. =hen a char e #ecomes !oid "nder this section, the money sec"red there#y shall immediately #ecome paya#le. .his section applies to the followin char esK/ GaH G#H GcH GdH GeH GfH G H GhH GiH a char e for the p"rpose of sec"rin any iss"e of de#ent"resL a char e on "ncalled share capital of the companyL a char e on any immo!a#le property, where!er sit"ate, or any interest thereinL a char e on any #oo; de#ts of the companyL a char e, not #ein a pled e, on any mo!a#le property of the companyL a floatin char e on the "nderta;in or any property of the company incl"din stoc;/in/tradeL a char e on calls made #"t not paidL a char e on a ship or any share in a shipL a char e on oodwill, on a patent or a licence "nder a patent, on a trade mar;, or on a copyri ht or a licence "nder a copyri ht.

G2H G3H G$H

G'H

G(H

G7H

In the case of a char e created o"t of India and comprisin solely property sit"ate o"tside India, AthirtyB days after the date on which the instr"ment creatin or e!idencin the char e or a copy thereof co"ld, in d"e co"rse of post and if despatched with d"e dili ence, ha!e #een recei!ed in India, shall #e s"#stit"ted for AthirtyB days after the date of the creation of the char e, as the time within which the partic"lars and instr"ment or copy are to #e filed with the 8e istrar. =here a char e is created in India #"t comprises property o"tside India, the instr"ment creatin or p"rportin to create the char e "nder this section or a copy thereof !erified in the prescri#ed manner, may #e filed for re istration, notwithstandin that f"rther proceedin s may #e necessary to ma;e the char e !alid or effect"al accordin to the law of the co"ntry in which the property is sit"ate. =here a ne otia#le instr"ment has #een i!en to sec"re the payment of any #oo; de#ts of a company, the deposit of the instr"ment for the p"rpose of sec"rin an ad!ance to the company shall not, for the p"rposes of this section, #e treated as a char e on those #oo; de#ts. .he holdin of de#ent"res entitlin the holder to a char e on immo!a#le property shall not, for the p"rposes of this section, #e deemed to #e an interest in immo!a#le property.

G)H

12*.

ate o! notice o! charge

=here any char e on any property of a company reD"ired to #e re istered "nder section 12' has #een so re istered, any person acD"irin s"ch property or any part thereof, or any share or interest therein, shall #e deemed to ha!e notice of the char e as from the date of s"ch re istration.

12+.
G1H

:egistration o! charges on properties acDuired su&Cect to charge

=here a company acD"ires any property which is s"#Cect to a char e of any s"ch ;ind as wo"ld, if it had #een created #y the company after the acD"isition of the property, ha!e #een reD"ired to #e

re istered "nder this &art, the company shall ca"se the prescri#ed partic"lars of the char e, to ether with a copy Gcertified in the prescri#ed manner to #e a correct copyH of the instr"ment, if any, #y which the char e was created or is e!idenced, to #e deli!ered to the 8e istrar for re istration in the manner reD"ired #y this Act within AthirtyB days after the date on which the acD"isition is completedK Provided that, if she property is sit"ate, and the char e was created, o"tside India, AthirtyB days after the date on which a copy of the instr"ment co"ld, in d"e co"rse of post and if despatched with d"e dili ence, ha!e #een recei!ed in India shall #e s"#stit"ted for AthirtyB days after the completion of the acD"isition as the time within which the partic"lars and the copy of the instr"ment are to #e deli!ered to the 8e istrar. G2H If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

12,.

Particulars in case o! series o! de&entures entitling holders pari passu

=here a series of de#ent"res containin , or i!in #y reference to any other instr"ment, any char e to the #enefit of which de#ent"re holders of that series are entitled pari pass" is created #y a company, it shall, for the p"rposes of section 12', #e s"fficient, if there are filed with the 8e istrar, within 1)'AthirtyB days after the exec"tion of the deed containin the char e or, if there is no s"ch deed, after the exec"tion of any de#ent"res of the series, the followin partic"larsK/ GaH G#H GcH the total amo"nt sec"red #y the whole seriesL the dates of the resol"tions a"thorisin the iss"e of the series and the date of the co!erin deed, if any, #y which the sec"rity is created or definedL a eneral description of the property char edL and

GdH the names of the tr"stees, if any, for the de#ent"re holdersL to ether with the deed containin the char e, or a copy of the deed !erified in the prescri#ed manner, or if there is no s"ch deed, one of the de#ent"res of the seriesK Provided that, where more than one iss"e is made of de#ent"res in the series, there shall #e filed with the 8e istrar, for entry in the re ister, partic"lars of the date and amo"nt of each iss"eL #"t an omission to do this shall not affect the !alidity of the de#ent"res iss"ed.

12..

Particulars in case o! commission, etc., on de&entures

=here any commission, allowance or disco"nt has #een paid or made either directly or indirectly #y a company to any person in consideration of his s"#scri#in or a reein to s"#scri#e, whether a#sol"tely or conditionally, for any de#ent"res of the company, or proc"rin or a reein to proc"re s"#scriptions, whether a#sol"te or conditional, for any s"ch de#ent"res, the partic"lars reD"ired to #e filed for re istration "nder sections 12' and 12) shall incl"de partic"lars as to the amo"nt or rate per cent of the commission, disco"nt or allowance so paid or made #"t an omission to do this shall not affect the !alidity of the de#ent"res iss"edK Provided that the deposit of any de#ent"res as sec"rity for any de#t of the company shall not, for the p"rposes of this section, #e treated as the iss"e of the de#ent"res at a disco"nt.

1#0.
AG1H G1AH

:egister o! charges to &e =ept &% :egistrar

.he 8e istrar shall, in respect of each company, ca"se to #e ;ept a re ister containin the partic"lars of all the char es reD"irin re istration "nder this &art. 1!ery company shall forward to the 8e istrar for #ein entered in the re ister ;ept "nder s"#/section G1H the partic"lars of all the char es reD"irin re istration "nder this &art in s"ch form and manner, and after payment of, s"ch fees as may #e prescri#ed. .he partic"lars of the char es referred to in s"#/section G1H shall relate to,/ GaH G#H in the case of a char e to the #enefit of which the holders of a series of de#ent"res are entitled, s"ch partic"lars as are specified in sections 12) and 12,L in the case of any other char e,/

G10H

GiH

if the char e is a char e created #y the company, the date of its creation, and if the char e was a char e existin on property acD"ired #y the company, the date of the acD"isition of the propertyL the amo"nt sec"red #y the char eL short partic"lars of the property char edL and

GiiH GiiiH G1*H

Gi!H the persons entitled to the char e. .he pa es of the re ister shall #e consec"ti!ely n"m#ered and the 8e istrar shall,/ GaH ca"se to #e ;ept in s"ch re ister in the prescri#ed form the doc"ments of char es filed in s"ch form and manner as may #e prescri#edL and

G2H

G#H si n or initial e!ery pa e of s"ch re ister. After enterin the partic"lars of all the char es reD"ired "nder s"#/section G1H, the 8e istrar shall ret"rn the instr"ment, if any, or the !erified copy thereof, as the case may #e, filed in accordance with the pro!isions of this &art to the person filin it.B .he re ister ;ept in p"rs"ance of this section shall #e open to inspection #y any person on payment of As"ch fee as may #e prescri#edB for each inspection.

G3H

1#1.

"ndex to register o! charges

.he 8e istrar shall ;eep a chronolo ical index, in the prescri#ed form, and with the prescri#ed partic"lars, of the char es re istered with him in p"rs"ance of this &art.

1#2.

Certi!icate o! registration

.he 8e istrar shall i!e a certificate "nder his hand of the re istration of any char e re istered in p"rs"ance of this &art, statin the amo"nts there#y sec"redL and the certificate shall #e concl"si!e e!idence that the reD"irements of this &art as to re istration ha!e #een complied with.

1##.
G1H

3ndorsement o! certi!icate o! registration on de&enture or certi!icate o! de&enture stoc=

.he company shall ca"se a copy of e!ery certificate of re istration i!en "nder section 132, to #e endorsed on e!ery de#ent"re or certificate of de#ent"re stoc; which is iss"ed #y the company and the payment of which is sec"red #y the char e so re isteredK Provided that nothin in this s"#/section shall #e constr"ed as reD"irin a company to ca"se a certificate of re istration of any char e so i!en to #e endorsed on any de#ent"re or certificate of de#ent"re stoc; iss"ed #y the company #efore the char e was created. If any person ;nowin ly deli!ers, or wilf"lly a"thorises or permits the deli!ery of, any de#ent"re or certificate of de#ent"re stoc; which, "nder the pro!isions of s"#/section G1H, is referred to ha!e endorsed on it a copy of a certificate of re istration witho"t endorsed "pon it, he shall witho"t preC"dice to any other lia#ility, #e p"nisha#le with fine which may extend to 1()AAten tho"sand r"peesB.

G2H

1#'.
G1H

ut% o! compan% as regards registration and right o! interested part%

It shall #e the d"ty of a company to file with the 8e istrar for re istration the partic"lars of e!ery char e created #y the company, and of e!ery iss"e of de#ent"re of a series, reD"irin re istration "nder this &artL #"t re istration of any char e may also #e effected on the application of any person interested therein. =here re istration is effected on the application of some person other than the company, that person shall #e entitled to reco!er from the company the amo"nt of any fees properly paid #y him to the 8e istrar on the re istration.

G2H

1#).

Provisions o! Part to appl% to modi!ication o! charges

=hene!er the terms or conditions, or the extent or operation, of any char e re istered "nder this &art are or is modified, it shall #e the d"ty of the company to send to the 8e istrar the partic"lars, 1,1 of s"ch modification, and the pro!isions of this &art as to re istration of a char e shall apply to s"ch modification of the char e.

1#*.

Cop% o! instrument creating charge to &e =ept &% compan% at registered o!!ice

1!ery company shall ca"se a copy of e!ery instr"ment creatin any char e reD"irin re istration "nder this &art to #e ;ept at the re istered office of the companyK Provided that, in the case of a series of "niform de#ent"res, a copy of one de#ent"re of the series shall #e s"fficient.

1#+.
G1H

3ntr% in register o! charges o! appointment o! receiver or manager

If any person o#tains an order for the appointment of a recei!er of, or of a, person to mana er, the property of a company, or if any person appoints s"ch recei!er or person "nder any powers contained in any instr"ment, he shall, within AthirtyB days from the date of the passin of the order or of the ma;in of the appointment "nder the said powers, i!e notice of the fact to the 8e istrarL and the 8e istrar shall, on payment of the prescri#ed fee, enter the fact in the re ister of char es. =here any person so appointed "nder the powers contained in any instr"ment ceases to act as s"ch, he shall, on so ceasin , i!e to the 8e istrar notice to that effectL and the 8e istrar shall enter the notice 1,3 in the re ister of char es. If any person ma;es defa"lt in complyin with the reD"irements of s"#/section G1H or G2H, he shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G2H

G3H

1#,.
G1H

Compan% to report satis!action and procedure therea!ter

.he company shall i!e intimation to the 8e istrar of the payment or satisfaction Ain f"llB, of any char e relatin to the company and reD"irin re istration "nder this &art, within AthirtyB days from the date of s"ch payment or satisfaction. .he 8e istrar shall, on receipt of s"ch intimation, ca"se a notice to #e sent to the holder of the char e callin "pon him to show ca"se within a time Gnot exceedin fo"rteen daysH specified in s"ch notice, why payment or satisfaction sho"ld not #e recorded as intimated to the 8e istrar. If no ca"se is shown, the, 8e istrar shall order that a memorand"m of satisfaction AJJJB shall #e entered in the re ister of char es. If ca"se is shown, the 8e istrar shall record a note to that effect in the re ister, and shall inform the company that he has done so. 4othin in this section shall #e deemed to affect the power of the 8e istrar to ma;e an entry in the re ister of char es "nder section 13, otherwise than on receipt of an intimation from the company.

G2H

G3H G$H G'H

1#..

Power o! :egistrar to ma=e entries o! satis!action and release in a&sence o! intimation !rom compan%
i!en to his satisfaction with respect to any re istered char e,/

.he 8e istrar may, on e!idence #ein GaH G#H

that the de#t for which the char e was i!en has #een paid or satisfied in whole or in partL or that part of the property or "nderta;in char ed has #een released from the char e or has ceased to form part of the companyIs property or "nderta;in L enter in the re ister of char es a memorand"m of satisfaction in whole or in part, or of the fact that part of the property or "nderta;in has #een released from the char e or has ceased to form part of the companyIs property

or "nderta;in , as the case may #e, notwithstandin the fact that no intimation has #een recei!ed #y him from the company.

1'0.

Cop% o! memorandum o! satis!action to &e !urnished to compan%

=here the 8e istrar enters a memorand"m of satisfaction in whole or in part, in p"rs"ance of section 13) or 13,, he shall f"rnish the company with a copy of the memorand"m.

1'1.
G1H

:ecti!ication &% Central -overnment o! register o! charges

.he *entral +o!ernment, on #ein satisfiedM GaH that the omission to file with the 8e istrar the partic"lars of any char e created #y a company or of any char e s"#Cect to which any property has #een acD"ired #y the company or of any modification of any s"ch char e or of any iss"e of de#ent"res of a series, or that the omission to re ister any char e within the time reD"ired #y this &art or that the omission to i!e intimation to the 8e istrar of the payment or satisfaction of a char e, within the time reD"ired #y this &art, or that the omission or misstatement of any partic"lar with respect to any s"ch char e, modification or iss"e of de#ent"res of a series or with respect to any memorand"m of satisfaction or other entry made in p"rs"ance of section 13) or section 13,, was accidental or d"e to inad!ertence or some other s"fficient ca"se or is not of a nat"re to preC"dice the position of creditors or shareholders of the companyL or

G#H

G2H G3H

that on other ro"nds, it is C"st and eD"ita#le to rant relief, may on the application of the company or any person interested and on s"ch terms and conditions as it may seem to the *entral +o!ernment C"st and expedient, direct that the time for the filin of the partic"lars or for the re istration of the char e or for the i!in of intimation of payment or satisfaction shall #e extended or, as the case may reD"ire, that the omission or misstatement shall #e rectified. .he *entral +o!ernment may ma;e s"ch order as to the costs of an application "nder s"#/section G1H as it thin;s fit. =here the *entral +o!ernment extends the time for the re istration of a char e, the order shall not preC"dice any ri hts acD"ired in respect of the property concerned #efore the char e is act"ally re istered.B

1'2.
G1H

Penalties
If defa"lt is made in filin with the 8e istrar for re istration the partic"lars/ GaH of any char e created #y the companyL G#H of the payment or satisfaction AJJJB of a de#t in respect of which a char e has #een re istered "nder this &artL or

G2H

GcH of the iss"es of de#ent"res of a seriesL reD"irin re istration with the 8e istrar "nder the pro!isions of this &art, then "nless the re istration has #een effected on the application of some other person, the company, and e!ery officer of the company or other person who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es. S"#Cect as aforesaid, if any company ma;es defa"lt in complyin with any of the other reD"irements of this Act as to the re istration with the 8e istrar of any char e created #y the company or of any fact connected therewith, the company, and e!ery officer of the company who is in defa"lt, shall witho"t preC"dice to any other lia#ility, #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB.

1'#.
G1H

Compan%Is register o! charges

1!ery company shall ;eep at its re istered office a re ister of char es and enter therein all char es specifically affectin property of the company, and all floatin char es on the "nderta;in or on any property of the company, i!in in each case/

GiH GiiH GiiiH G2H

a short description of the property char edL the amo"nt of the char eL and except in the case of sec"rities of #earer, the names of the persons entitled to the char e.

If any officer of the company ;nowin ly omits, or wilf"lly a"thorises or permits the omission of, any entry reD"ired to #e made in p"rs"ance of s"#/section G1H, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

1''.
G1H

:ight to inspect copies o! instruments creating charges and compan%Is register o! charges
.he copies of instr"ments creatin char es ;ept in p"rs"ance of section 13(, and the re ister of char es ;ept in p"rs"ance of section 1$3, shall #e open d"rin #"siness ho"rs G#"t s"#Cect to s"ch reasona#le restrictions as the company in eneral meetin may impose, so that not less than two ho"rs in each day are allowed for inspectionH to the inspection of any creditor or mem#er of the company witho"t fee, at the re istered office of the company. .he re ister of char es ;ept in p"rs"ance of section 1$3 shall also #e open, d"rin #"siness ho"rs #"t s"#Cect to the reasona#le restrictions aforesaid, to the inspection of any other person on payment of a fee of As"ch s"m as may #e prescri#edB for each inspection, at the re istered office of the company. If the inspection of the said copies or re ister is ref"sed, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB and with a f"rther fine which may extend to Atwo h"ndred r"peesB for e!ery day d"rin which the ref"sal contin"es. .he A*entral +o!ernmentB may also #y order compel an immediate inspection of the said copies or re ister.

G2H

G3H

G$H

1').

Application o! Part to charges reDuiring registration under it &ut not under previous law

In respect of Aany char e created #efore and remainin "nsatisfied at, the commencement of this Act,B which, if this Act had #een in force at the rele!ant time, wo"ld ha!e had to #e re istered #y the company in p"rs"ance of this &art #"t which did not reD"ire re istration "nder the Indian *ompanies Act, 1,13, and in respect of all matters relatin to s"ch char e, the pro!isions of this &art shall apply and ha!e effect in all respects, as if the date of commencement of this Act had #een s"#stit"ted therein for the date of creation of the char e, or the date of completion of the acD"isition of the property s"#Cect to the char e as the case may #e. 4othin contained in this section shall #e deemed to affect the relati!e priorities as they existed immediately #efore the commencement of this Act, as #etween char es on the same property.

PART VI:
Chapter "J

MANAGEMENT AND ADMINISTRATION

-eneral Provisions Registered office and name

1'*.
G1H

:egistered o!!ice o! compan%

A company shall, as from the day on which it #e ins to carry on #"siness, or as from the AthirtiethB day after the date of its incorporation whiche!er is earlier, ha!e a re istered office to which all comm"nications and notices may #e addressed. 4otice of the sit"ation of the re istered office, and of e!ery chan e therein, shall #e i!en within AthirtyB days after the date of the incorporation of the company or after the date of the chan e, as the case may #e, to the 8e istrar who shall record the sameK

G2H

Provided that except on the a"thority of a special resol"tion passed #y the company, the re istered office of the company shall not #e remo!ed/ GaH in the case of an existin company, o"tside the local limits of any city, town or !illa e where s"ch office is sit"ated at the commencement of this Act, or where it may #e sit"ated later #y !irt"e of a special resol"tion passed #y the companyL and G#H in the case of any other company, o"tside the local limits of any city, town or !illa e where s"ch office is first sit"ated, or where it may #e sit"ated later #y !irt"e of a special resol"tion passed #y the company. .he incl"sion in the ann"al ret"rn of a company of a statement as to the address of its re istered office shall not #e ta;en to satisfy the o#li ation imposed #y s"#/section G2H. If defa"lt is made in complyin with the reD"irements of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 1(1AAfi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G3H G$H

1'+.
G1H

Pu&lication o! name &% compan%

1!ery company/ GaH shall paint or affix its name Aand the address of its re istered officeB, and ;eep the same painted or affixed, on the o"tside of e!ery office or place in which its #"siness is carried on, in a conspic"o"s position, in letters easily le i#leL and if the characters employed therefor are not those of the lan "a e or of one of the lan "a es in eneral "se in that locality, also in the characters of that lan "a e or of one of those lan "a esL shall ha!e its name en ra!en in le i#le characters on its sealL and shall ha!e its name Aand the address of its re istered officeB mentioned in le i#le characters in all its #"siness letters, in all its #ill heads and letter paper, and in all its notices AJJJB and other official p"#licationsL Aand also ha!e its name so mentioned in all #ills of exchan eB, h"ndies, promissory notes, endorsements, cheD"es and orders for money or oods p"rportin to #e si ned #y or on #ehalf of the company, and in all #ills of parcels, in!oices, receipts and letters of credit of the company.

G#H GcH

G2H

If a company does not paint or affix its name Aand the address of its re istered officeB, or ;eep the same painted or affixed in the manner directed #y cla"se GaH of s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for not so paintin or affixin its name Aand the address of its re istered officeB, and for e!ery day d"rin which its name Aand the address of its re istered officeB, is not so ;ept painted or affixed. If a company fails to comply with cla"se G#H or cla"se GcH of s"#/section G1H, the company shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB. If an officer of a company or any person on its #ehalf/ GaH "ses, or a"thorises the "se of, any seal p"rportin to #e a seal of the company whereon its name is not en ra!en in the manner aforesaidL G#H iss"es or a"thorises the iss"e of, any #"siness letter, #ill head, letter paper, notice AJJJB or other official p"#lication of the company wherein Aits name and the address of its re istered office areB not mentioned in the manner aforesaidL GcH si ns or a"thorises to #e si ned, on #ehalf of the company, any #ill of exchan e, h"ndi, promissory note, endorsement, cheD"e or order for money or oods wherein its name is not mentioned in the manner aforesaidL or GdH iss"es, or a"thorises the iss"e of, any #ill of parcels, in!oice, receipt or letter of credit of the company, wherein its name is not mentioned in the manner aforesaidL s"ch officer or person shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB, and shall f"rther #e personally lia#le to the holder of the #ill of exchan e, h"ndi, promissory note, cheD"e or order for money or oods, for the amo"nt thereof, "nless it is d"ly paid #y the company.

G3H G$H

1',.

Pu&lication o! authorised as well as su&scri&ed and paid1up capital

G1H

=here any notice, ad!ertisement or other official p"#lication, or any #"siness letter, #ill head or letter paper, of a company contains a statement of the amo"nt of the a"thorised capital of the company, s"ch notice, ad!ertisement or other official p"#lication, or s"ch letter, #ill head or letter paper, shall also contain a statement, in an eD"ally prominent position and in eD"ally conspic"o"s characters, of the amo"nt of the capital which has #een s"#scri#ed and the amo"nt paid/"p. If defa"lt is made in complyin with the reD"irements of s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB.

G2H

Restrictions on commencement of business 1'..

G1H

:estrictions on commencement o! &usiness

=here a company ha!in a share capital has iss"ed a prospect"s in!itin the p"#lic to s"#scri#e for its shares, the company shall not commence any #"siness or exercise any #orrowin powers, "nless/ GaH G#H shares held s"#Cect to the payment of the whole amo"nt thereof in cash ha!e #een allotted to an amo"nt not less in the whole than the minim"m s"#scriptionL e!ery director of the company has paid to the company, on each of the shares ta;en or contracted to #e ta;en #y him and for which he is lia#le to pay in cash, a proportion eD"al to the proportion paya#le on application and allotment on the shares offered for p"#lic s"#scriptionL no money is, or may #ecome, lia#le to #e repaid to applicants for any shares or de#ent"res which ha!e #een offered for p"#lic s"#scription #y reason of any fail"re to apply for, or to o#tain, permission for the shares or de#ent"res to #e dealt in on any reco nised stoc; exchan eL and there has #een filed with the 8e istrar a d"ly !erified declaration #y Aone of the directors or the secretary or, where the company has not appointed a secretary, a secretary in whole/time practiceB, in the prescri#ed form, that cla"ses GaH, G#H and GcH of this s"#/section, ha!e #een complied with.

GcH

GdH

G2H

=here a company ha!in a share capital has not iss"ed a prospect"s in!itin the p"#lic to s"#scri#e for its shares, the company shall not commence any #"siness or exercise any #orrowin powers, "nless/ GaH G#H there has #een filed with the 8e istrar a statement in lie" of the prospect"sL e!ery director of the company has paid to the company, on each of the shares ta;en or contracted to #e ta;en #y him and for which he is lia#le to pay in cash, a proportion eD"al to the proportion paya#le on application and allotment on the shares paya#le in cashL and

GcH

AG2AH

there has #een filed with 8e istrar a d"ly !erified declaration #y Aone of the directors or the secretary or, where the company has not appointed a secretary, a secretary in whole/time practiceB, in the prescri#ed form, that cla"se G#H of this s"#/section has #een complied with. =itho"t preC"dice to the pro!isions of s"#/section G1H and s"#/section G2H a company ha!in a share capital, whether or not it has iss"ed a prospect"s in!itin the p"#lic to s"#scri#e for its shares, shall not at any time commence any #"siness/ GaH if s"ch company is a company in existence immediately #efore the commencement of the *ompanies GAmendmentH Act, 1,(' in relation to any of the o#Cects stated in its memorand"m in p"rs"ance of cla"se GcH of s"#/section G1H of section 13L if s"ch company is a company formed after s"ch commencement, in relation to any of the o#Cects stated in its memorand"m in p"rs"ance of s"#/cla"se GiiH of cla"se GdH of s"#/section G1H of the said section, "nless/ GiH GiiH the company has appro!ed of the commencement of any s"ch #"siness #y a special resol"tion passed in that #ehalf #y it in eneral meetin L and there has #een filed with 8e istrar a d"ly !erified declaration #y Aone of the directors or the secretary or, where the company has not appointed a secretary, a secretary in whole/ time practiceB, in the prescri#ed form that cla"se GiH or as the case may #e, s"#/section G20H has #een complied withL

G#H

and if the company commences any s"ch #"siness in contra!ention of this s"#/section, e!ery person who is responsi#le for the contra!ention shall, witho"t preC"dice to any other lia#ility, #e

G20H

G3H

p"nisha#le with fine which may extend to 177AAfi!e tho"sand r"peesB for e!ery day d"rin which the contra!ention contin"es. Explanation( /A company shall #e deemed to commence any #"siness within the meanin of cla"se GaH if and only if it commences any new #"siness which is not ermane to the #"siness which it is carryin on at the commencement of the *ompanies GAmendmentH Act, 1,(', in relation to any of the o#Cects referred to in the said cla"se. 4otwithstandin anythin contained in s"#/section G2AH where no s"ch special resol"tion as is referred to in that s"#/section is passed #"t the !otes cast Gwhether on a show of hands or, as the case may #e, on a pollH in fa!o"r of the proposal to commence any #"siness contained in the resol"tion mo!ed in that eneral meetin Gincl"din the castin !ote, if any, of the chairmanH #y mem#ers who, #ein entitled so to do, !ote in person, or where proxies are allowed, #y proxy, exceed the !ote, if any, cast a ainst the proposal #y mem#ers so entitled and !otin , the *entral +o!ernment may on an application made to it #y the 0oard of Directors in this #ehalf allow the company to commence s"ch #"siness as if the proposal had #een passed #y a special resol"tion #y the company in eneral meetin .B .he 8e istrar shall, on the filin of a d"ly !erified declaration in accordance with the pro!isions of s"#/section G1H or s"#/section G2H, as the case may #e, and, in the case of a company which is reD"ired #y s"#/section G2H to file a statement in lie" of prospect"s, also of s"ch a statement, certify that the company is entitled to commence #"siness, and that certificate shall #e concl"si!e e!idence that the company is so entitled. Any contract made #y a company #efore the date at which it is entitled to commence #"siness shall #e pro!isional only, and shall not #e #indin on the company "ntil that date, and on that date it shall #ecome #indin . 4othin in this section shall pre!ent the sim"ltaneo"s offer for s"#scription or allotment of any shares and de#ent"res or the receipt of any money paya#le on application for de#ent"res. If any company commences #"siness or exercises #orrowin powers in contra!ention of this section, e!ery person who is responsi#le for the contra!ention shall, witho"t preC"dice to any other lia#ility, #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB for e!ery day d"rin which the contra!ention contin"es. 4othin in this section shall apply to/ GaH G#H a pri!ate companyL or a company re istered #efore the first day of April, 1,1$, which has not iss"ed a prospect"s in!itin the p"#lic to s"#scri#e for its shares.

G$H

G'H G(H

G7H

AJJJB

Registers of members and debenture holders 1)0.

G1H

:egister o! mem&ers
1!ery company shall ;eep in one or more #oo;s a re ister of its mem#ers, and enter therein the followin partic"larsK/ GaH the name and address, and the occ"pation, if any, of each mem#erL G#H in the case of a company ha!in a share capital, the shares held #y each mem#er, Adistin "ishin each share #y its n"m#er except where s"ch shares are held with a depositoryB AJJJB and the amo"nt paid or a reed to #e considered as paid on those sharesL the date at which each person was entered in the re ister as a mem#erL and

GcH

GdH the date at which any person ceased to #e a mem#erK Provided that where the company has con!erted any of its shares into stoc; and i!en notice of the con!ersion to the 8e istrar, the re ister shall show the amo"nt of stoc; held #y each of the mem#ers concerned instead of the shares so con!erted which were pre!io"sly held #y him. G2H If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

1)1.
G1H

"ndex o! mem&ers
1!ery company ha!in more than fifty mem#ers shall, "nless the re ister of mem#ers is in s"ch a form as in itself to constit"te an index, ;eep an index Gwhich may #e in the form of a card indexH of the names of the mem#ers of the company and shall, within fo"rteen days after the date on which any alteration is made in the re ister of mem#ers, ma;e the necessary alteration in the index. .he index shall, in respect of each mem#er, contain a s"fficient indication to ena#le the entries relatin to that mem#er in the re ister to #e readily fo"nd. .he index shall, at all times, #e ;ept at the same place as the re ister of mem#ers. If defa"lt is made in complyin with s"#/section G1H, G2H or G3H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB.

G2H G3H G$H

1)2.
G1H

:egister and index o! de&enture holders

1!ery company shall ;eep in one or more #oo;s a re ister of the holders of its de#ent"res and enter therein the followin partic"lars, namelyK/ GaH the name and address, and the occ"pation, if any, of each de#ent"re holderL G#H the de#ent"res held #y each holder, Adistin "ishin each de#ent"re #y its n"m#er except where s"ch de#ent"res are held with a depositoryB AJJJB and the amo"nt paid or a reed to #e considered as paid on those de#ent"resL the date at which each person was entered in the re ister as a de#ent"re holderL and

GcH G2HGaH

GdH the date at which any person ceased to #e a de#ent"re holder. 1!ery company ha!in more than fifty de#ent"re holders shall, "nless the re ister of de#ent"re holders is in s"ch a form as in itself to constit"te an index, ;eep an index Gwhich may #e in the form of a card indexH of the names of the de#ent"re holders of the company and shall, within fo"rteen days after the date on which any alteration is made in the re ister of de#ent"re holders, ma;e the necessary alteration in the index. .he index shall, in respect of each de#ent"re holder, contain a s"fficient indication to ena#le the entries relatin to that holder in the re ister to #e readily fo"nd. If defa"lt is made in complyin with s"#/section G1H or G2H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB. S"#/sections G1H to G3H shall not apply with respect to de#ent"res which, ex facie, are paya#le to the #earer thereof.

G#H G3H G$H

1)2A. :egister and index o! &ene!icial owners to &e o! de&enture holder

.he re ister and index of #eneficial owners maintained #y a depository "nder section 11 of the Depositories Act, 1,,(, shall #e deemed to #e an index of mem#ers and re ister and index of de#ent"re holders, as the case may #e, for the p"rposes of this Act.B

1)#.

0rusts not to he entered on register

4o notice of any tr"st, express, implied or constr"cti!e, shall #e entered on the re ister of mem#ers or of de#ent"re holders AJJJB.

1)#A. Appointment o! pu&lic trustee

AG1HB .he *entral +o!ernment may, #y notification in the :fficial +aFette, appoint a person as p"#lic tr"stee to dischar e the f"nctions and to exercise the ri hts and powers conferred on him #y or "nder this Act.B

AG2H

.he pro!isions of this section shall not apply on and after the commencement of the *ompanies GAmendmentH Act, 2000.B

1)#2.
G1H

eclaration as to shares and de&entures held in trust

4otwithstandin anythin contained in section 1'3, where any shares in, or de#ent"res of, a company are held in tr"st #y any person Ghereinafter referred to as the tr"steeH, the tr"stee shall, within s"ch time and in s"ch form as may #e prescri#ed, ma;e a declaration to the p"#lic tr"stee. A copy of the declaration made "nder s"#/section G1H shall #e sent #y the tr"stee to the company concerned, within twenty/one days, after the declaration has #een sent to the p"#lic tr"stee. If a tr"stee fails to ma;e a declaration as reD"ired #y this section, he shall #e p"nisha#le with fine which may extend to fi!e tho"sand r"pees and in the case of a contin"in fail"re, with a f"rther fine which may extend to one h"ndred r"pees for e!ery day d"rin which the fail"re contin"es. If a tr"stee ma;es in a declaration aforesaid any statement which is false and which he ;nows or #elie!es to #e false or does not #elie!e to #e tr"e, he shall #e p"nisha#le with imprisonment for a term which may extend to two years and also with fine. .he pro!isions of this section and section 1)70 shall not apply in relation to a tr"st/ GaH G#H where the tr"st is not created #y instr"ment in writin L or e!en if the tr"st is created #y instr"ment in writin Awhere the !al"e of the shares in, or de#ent"res of, a company, held in tr"stB GiH does not exceed one la;h of r"pees, or GiiH AGcH exceeds one la;h of r"pees #"t does not exceed either fi!e la;hs of r"pees or twenty/fi!e per cent of the paid/"p share capital of the company, whiche!er is less A, orBB

G2H G3HGaH

G#H

G$H

where the tr"st is created, to set "p a %"t"al 3"nd or 7ent"re *apital 3"nd or s"ch other f"nd as may #e appro!ed #y the Sec"rities and 1xchan e 0oard of India esta#lished "nder s"#/ section G1H of section 3 of the Sec"rities and 1xchan e 0oard of India Act, 1,,2.B AExplanation( /.he expression "the !al"e of the shares in, or de#ent"res of, a company" in cla"se G#H means,/ GiH in the case of shares or de#ent"res acD"ired #y way of allotment or transfer for consideration, the cost of acD"isition thereof, and GiiH in any other case, the paid/"p !al"e of the shares or de#ent"res.B AG'H .he pro!isions of this section shall not apply on and after the commencement of the *ompanies GAmendmentH Act, 2000.B

1)'.
G1H

Power to close register o! mem&ers or de&enture holders

A company may, after i!in not less than se!en days pre!io"s notice #y ad!ertisement in some newspaper circ"latin in the district in which the re istered office of the company is sit"ate, close the re ister of mem#ers or the re ister of de#ent"re holders for any period or periods not exceedin in the a re ate forty/fi!e in each year, #"t not exceedin thirty days at any one time. If the re ister of mem#ers or of de#ent"re holders is closed witho"t i!in the notice pro!ided, in s"#/ section G1H, or after i!in shorter notice than that so pro!ided, or for a contin"o"s or an a re ate period in excess of the limits specified in that s"#/section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sands r"peesB for e!ery day d"rin which the re ister is so closed.

G2H

1)).

Power o! Court to recti!% register o! mem&ers

Omitted by t e !ompanies (Amendment# A$t% 19AA% 'it e))e$t )rom 31st( 4ay% 1991

1)*.

6otice to :egistrar o! recti!ication o! register

Omitted by t e !ompanies (Amendment# A$t% 19AA% 'it e))e$t )rom 31st( 4ay% 1991

&oreign registers of members or debenture holders 1)+.

G1H

Power !or compan% to =eep !oreign register o! mem&ers or de&enture holders

A company which has a share capital or which has iss"ed de#ent"re may, if so a"thorised #y its articles, ;eep in any State or co"ntry o"tside India a #ranch re ister of mem#ers or de#ent"re holders resident in that State or co"ntry Gin this Act called a "forei n re ister"H. .he company shall, within Athirty daysB from the date of the openin of any forei n re ister, file with the 8e istrar notice of the sit"ation of the office where s"ch re ister is ;eptL and in the e!ent of any chan e in the sit"ation of s"ch office or of its discontin"ance, shall, within Athirty daysB from the date of s"ch chan e or discontin"ance, as the case may #e, file notice with the 8e istrar of s"ch chan e or discontin"ance. If defa"lt is made in complyin with the reD"irements of s"#/section G2H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G2H

G3H

1),.
G1H G2H

Provisions as to !oreign registers

A forei n re ister shall #e deemed to #e part of the companyIs re ister Gin this section called the "principal re ister"H of mem#ers or of de#ent"re holders, as the case may #e. A forei n re ister shall #e ;ept, shall #e open to inspection and may #e closed, and extracts may #e ta;en therefrom and copies thereof may #e reD"ired, in the same manner, m"tatis m"tandis, as is applica#le to the principal re ister "nder this Act, except that the ad!ertisement #efore closin the re ister shall #e inserted in some newspaper circ"latin in the district wherein the forei n re ister is ;ept. .he *entral +o!ernment may, #y notification in the :fficial +aFette, direct that the pro!isions of cla"se G#H shall apply, or cease to apply, to forei n re isters ;ept in any State or co"ntry o"tside India. If a forei n re ister is ;ept #y a company in any State or co"ntry to which a direction "nder cla"se GaH applies for the time #ein , the decision of any competent *o"rt in that State or co"ntry in re ard to the rectification of the re ister shall ha!e the same force and effect as if it were the decision of a competent *o"rt in India. .he company shall/ GaH transmit to its re istered office in India a copy of e!ery entry in any forei n re ister as soon as may #e after the entry is madeL and

G3HGaH G#H

G$H

G'H G(H

G#H ;eep at s"ch office a d"plicate of e!ery forei n re ister d"ly entered "p from time to time. 1!ery s"ch d"plicate shall, for all the p"rposes of this Act, #e deemed to #e part of the principal re ister. S"#Cect to the pro!isions of this section with respect to d"plicate re isters, the shares or de#ent"res re istered in any forei n re ister shall #e distin "ished from the shares or de#ent"res re istered in the principal re ister and in e!ery other forei n re isterL and no transaction with respect to any shares or de#ent"res re istered in a forei n re ister shall, d"rin the contin"ance of that re istration, #e re istered in any other re ister. .he company may discontin"e the ;eepin of any forei n re isterL and there"pon all entries in that re ister shall #e transferred to some other forei n re ister ;ept #y the company in the same part of the world or to the principal re ister. S"#Cect to the pro!isions of this Act, a company may, #y its articles, ma;e s"ch re "lations as it thin;s fit in re ard to its forei n re isters. If defa"lt is made in complyin with s"#/section G$H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB.

G7H

G)H G,H

Annual Returns

1)..
G1H

Annual return to &e made &% compan% having a share capital

1!ery company ha!in a share capital shall, within AsixtyB days from the day on which each of the ann"al eneral meetin s referred to in section 1(( is held, prepare and file with the 8e istrar a ret"rn containin the partic"lars specified in &art I of Sched"le 7, as they stood on that day, re ardin / GaH its re istered office, G#H GcH GdH GeH the re ister of its mem#ers, the re ister of its de#ent"re holders, its shares and de#ent"res, its inde#tedness,

GfH its mem#ers and de#ent"re holders, past and present, and G H its directors, mana in directors, AJJJB Amana ers and secretariesB, past and presentK AProvided that if Aany of the fi!eB immediately precedin ret"rns has i!en as at the date of the ann"al eneral meetin with reference to which it was s"#mitted the f"ll partic"lars reD"ired as to past and present mem#ers and the shares held and transferred #y them, the ret"rn in D"estion may contain only s"ch of the partic"lars as relate to persons ceasin to #e or #ecomin mem#ers since that date and to shares transferred since that date or to chan es as compared with that date in the n"m#er or shares held #y a mem#er. Explanation( /Any reference in this section or in section 1(0 or 1(1 or in any other section or in Sched"le 7 to the day on which an ann"al eneral meetin is held or to the date of the ann"al eneral meetin shall, where the ann"al eneral meetin for any year has not #een held, #e constr"ed as a reference to the latest day on or #efore which that meetin sho"ld ha!e #een held in accordance with the pro!isions of this Act.B .he said ret"rn shall #e in the form set o"t in &art II of Sched"le 7 or as near thereto as circ"mstances admit Aand where the ret"rn is filed e!en tho" h the ann"al eneral meetin has not #een held on or #efore the latest day #y which it sho"ld ha!e #een held in accordance with the pro!isions of this Act, the company shall file with the ret"rn a statement specifyin the reasons for not holdin the ann"al eneral meetin BK Provided that where the company has con!erted any of its shares into stoc; and i!en notice of the con!ersion to the 8e istrar, the list referred to in para raph ' of &art I of Sched"le 7 shall state the amo"nt of stoc; held #y each of the mem#ers concerned instead of the shares so con!erted pre!io"sly held #y him.

G2H

1*0.
G1H

Annual return to &e made &% compan% not having a share capital
1!ery company not ha!in a share capital shall, within AsixtyB days from the day on which each of the ann"al eneral meetin referred to in section 1(( is held, prepare and file with the 8e istrar a ret"rn statin the followin partic"lars as they stood on that dayK/ GaH the address of the re istered office of the company AGaaH the names of mem#ers and the respecti!e date on which they #ecame mem#ers and the names of persons who ceased to #e mem#ers since the date of the ann"al eneral meetin of the immediately precedin year, and the dates on which they so ceasedKB G#H all s"ch partic"lars with respect to the persons who, at the date of the ret"rn, were the directors of the company, AJJJB Aits mana er and its secretaryB as are set o"t in section 303.

G2H

.here shall #e annexed to the ret"rn a statement containin partic"lars of the total amo"nt of the inde#tedness of the company as on the day aforesaid in respect of all char es which are or were reD"ired to #e re istered with the 8e istrar "nder this Act or "nder any pre!io"s companies law, or which wo"ld ha!e #een reD"ired to #e re istered "nder this Act if they had #een created after the commencement of this Act.

1*1.

5urther provisions regarding annual return and certi!icate to &e annexed thereto

G1H

.he *opy of the ann"al ret"rn filed with the 8e istrar "nder section 1', or 1(0, as the case may #e, shall #e si ned #oth #y a director and #y the AJJJB mana er or secretary of the company, or where there is no AJJJB mana er or secretary, #y two directors of the company, one of whom shall #e the mana in director where there is oneK AProvided that where the ann"al ret"rn is filed #y a company whose shares are listed on a reco nised stoc; exchan e, the copy of s"ch ann"al ret"rn shall also #e si ned #y a secretary in whole/time practice.B .here shall also #e filed with the 8e istrar alon with the ret"rn a certificate si ned #y Athe si natoriesB of the ret"rn, statin / GaH that the ret"rn states the facts as they stood on the day of the ann"al eneral meetin aforesaid, correctly and completelyL AJJJB AGaaH that since the date of the last ann"al ret"rn the transfer of all shares and de#ent"res and the iss"e of all f"rther certificates of shares and de#ent"res ha!e #een appropriately recorded in the #oo;s maintained for the p"rposeL andB G#H in the case of a pri!ate company also, GiH that the company has not, since the date of the ann"al eneral meetin with reference to which the last ret"rn was s"#mitted, or in the case of a first ret"rn, since the date of the incorporation of the company, iss"ed any in!itation to the p"#lic to s"#scri#e for any shares or de#ent"res of the company, and GiiH that, where the ann"al ret"rn discloses the fact that the n"m#er of mem#ers of the company exceeds fifty, the excess consists wholly of persons who "nder s"#/cla"se G#H of cla"se GiiiH of s"#/section G1H of section 3 are not to #e incl"ded in rec;onin the n"m#er of fifty.

G2H

1*2.
G1H

Penalt% and interpretation

If a company fails to comply with any of the pro!isions contained in section 1',, 1(0 or 1(1, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es. 3or the p"rposes of this section and section 1',, 1(0 and 1(1, the expressions "officer" and "director" shall incl"de any person in accordance with whose directions or instr"ctions the 0oard of directors of the company is acc"stomed to act.

G2H

*eneral provisions regarding registers and returns 1*#.

G1H

Place o! =eeping, and inspection o!, registers and returns

.he re ister of mem#ers commencin from the date of the re istration of the company, the index of mem#ers, the re ister and index of de#ent"re holders, and copies of all ann"al ret"rns prepared "nder sections 1', and 1(0, to ether with the copies of certificates and doc"ments reD"ired to #e annexed thereto "nder sections 1(0 and 1(1, shall #e ;ept at the re istered office of the companyK AProvided that s"ch re isters, indexes, ret"rns and copies of certificates and doc"ments or any or more of them may, instead of #ein ;ept at the re istered office of the company, #e ;ept at any other place within the city, town or !illa e in which the re istered office is sit"ate, if/ GiH AGiiH GiiiH s"ch other place has #een appro!ed for this p"rpose #y a special resol"tion passed #y the company in eneral meetin , AandB JJJB the 8e istrar has #een i!en in ad!ance a copy of the proposed special resol"tion.B

AG1AH

G2H

4otwithstandin anythin contained in s"#/section G1H, the *entral +o!ernment may ma;e r"les for the preser!ation and for the disposal whether #y destr"ction or otherwise, of the re isters, indexes, ret"rns and copies of certificates and other doc"ments referred to in s"#/section G1H.B .he re isters, indexes, ret"rns, and copies of certificates and other doc"ments referred to in s"#/section G1H shall, except when the re ister of mem#ers or de#ent"re holders is closed "nder the pro!isions of

this Act, #e open d"rin #"siness ho"rs Gs"#Cect to s"ch reasona#le restrictions, as the company may impose, so that not less than two ho"rs in each day are allowed for inspectionH to the inspection/ GaH of any mem#er or de#ent"re holder, witho"t feeL and G3H G#H of any other person, on payment of As"ch s"m as may #e prescri#edB for each inspection. Any s"ch mem#er, de#ent"re holder or other person may/ GaH G#H ma;e extracts from any re ister, index, or copy referred to in s"#/section G1H witho"t fee or additional fee, as the case may #e, or

G$H

reD"ire a copy of any s"ch re ister, index, or copy or of any part thereof, on payment of As"ch s"m as may #e prescri#edB for e!ery one h"ndred words or fractional part thereof reD"ired to #e copied. .he company shall ca"se any copy reD"ired #y any person "nder cla"se G#H of s"#/section G3H to #e sent to that person within a period of ten days, excl"si!e of non/wor;in days, commencin on the day next after the day on which the reD"irement is recei!ed #y the company. If any inspection, or the ma;in of any extract reD"ired "nder this section, is ref"sed, or if any copy reD"ired "nder this section is not sent within the period specified in s"#/section G$H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le, in respect of each offence, with fine which may extend to 1(1AAfi!e h"ndred r"peesB for e!ery day d"rin which the ref"sal or defa"lt contin"es. .he A*entral +o!ernmentB may also, #y order, compel an immediate inspection of the doc"ment, or direct that the extract reD"ired shall forthwith #e allowed to #e ta;en #y the person reD"irin it, or that the copy reD"ired shall forthwith #e sent to the person reD"irin it, as the case may #e.

G'H

G(H

1*'.

:egisters, etc. to &e evidence

.he re ister of mem#ers, the re ister of de#ent"re holders, and the ann"al ret"rns, certificates and statements referred to in sections 1',, 1(0 and 1(1 shall #e prima facie e!idence of any matters directed or a"thorised to #e inserted therein #y this Act.

Meetings and proceedings 1*).

G1H

Statutor% meeting and statutor% report o! compan%

1!ery company limited #y shares, and e!ery company limited #y "arantee and ha!in a share capital, shall, within a period of not less than one month nor more than six months from the date at which the company is entitled to commence #"siness, hold a eneral meetin of the mem#ers of the company, which shall #e called "the stat"tory meetin ". .he 0oard of directors shall, at least twenty/one days #efore the day on which the meetin is held, forward a report Gin this Act referred to as "the stat"tory report"H to e!ery mem#er of the companyK Provided that if the stat"tory report is forwarded later than is reD"ired a#o!e, it shall, notwithstandin that fact, #e deemed to ha!e #een d"ly forwarded if it is so a reed to #y all the mem#ers entitled to attend and !ote at the meetin . .he stat"tory report shall set o"t/ GaH the total n"m#er of shares allotted, distin "ishin shares allotted as f"lly or partly paid/"p otherwise than in cash, and statin in the case of shares partly paid/"p, the extent to which they are so paid/"p, and in either case, the consideration for which they ha!e #een allottedL G#H GcH the total amo"nt of cash recei!ed #y the company in respect of all the shares allotted, distin "ished as aforesaidL an a#stract of the receipts of the company and of the payments made thereo"t, "pto a date within se!en days of the date of the report, exhi#itin "nder distincti!e headin s the receipts of the company from shares and de#ent"res and other so"rces, the payments made thereo"t, and partic"lars concernin the #alance remainin in hand, and an acco"nt or estimate of the preliminary expenses of the company, showin separately any commission or disco"nt paid or to #e paid on the iss"e or sale of shares or de#ent"resL

G2H

G3H

GdH

GeH

the names, addresses and occ"pations of the directors of the company and of its a"ditorsL and also, if there #e any, of its AJJJB mana er and secretaryL and the chan es, if any, which ha!e occ"rred in s"ch names, addresses and occ"pations since the date of the incorporation of the companyL the partic"lars of any contract which, or the modification or the proposed modification of which, is to #e s"#mitted to the meetin for its appro!al, to ether in the latter case with the partic"lars of the modification or proposed modificationL the extent, if any, to which each "nderwritin contract, if any, has not #een carried o"t, and the reasons thereforL

GfH AG H AGhH G$H

the arrears, if any, d"e on calls from e!ery director and from the mana erL andB the partic"lars of any commission or #ro;era e paid or to #e paid in connection with the iss"e or sale of shares or de#ent"res to any director or to the mana erB. .he stat"tory report shall #e certified as correct #y not less than two directors of the company one of whom shall #e a mana in director, where there is one. After the stat"tory report has #een certified as aforesaid, the a"ditors of the company shall, in so far as the report relates to the shares allotted #y the company, the cash recei!ed in respect of s"ch shares and the receipts and payments of the company AJJJB, certify it as correct. .he 0oard shall ca"se a copy of the stat"tory report certified as is reD"ired #y this section to #e deli!ered to the 8e istrar for re istration forthwith, after copies thereof ha!e #een sent to the mem#ers of the company. .he 0oard shall ca"se a list showin the names, addresses and occ"pations of the mem#ers of the company, and the n"m#er of shares held #y them respecti!ely, to #e prod"ced at the commencement of the stat"tory meetin , and to remain open and accessi#le to any mem#er of the company d"rin the contin"ance of the meetin . .he mem#ers of the company present at the meetin shall #e at li#erty to disc"ss any matter relatin to the formation of the company or arisin o"t of the stat"tory report, whether pre!io"s notice has #een i!en or notL #"t no resol"tion may #e passed of which notice has not #een i!en in accordance with the pro!isions of this Act. .he meetin may adCo"rn from time to time, and at any adCo"rned meetin , any resol"tion of which notice has #een i!en in accordance with the pro!isions of this Act, whether #efore or after the former meetin , may #e passedL and the adCo"rned meetin shall ha!e the same powers as an ori inal meetin . If defa"lt is made in complyin with the pro!isions of this section, e!ery director or other officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to 177AAfi!e tho"sand r"peesB. .his section shall not apply to a pri!ate company.

G'H

G(H

G7H

G)H

G,H

G10H

1**.
AG1H

Annual general meeting

1!ery company shall in each year hold in addition to any other meetin s a eneral meetin as its ann"al eneral meetin and shall specify the meetin as s"ch in the notices callin itL and not more than fifteen months shall elapse #etween the date of one ann"al eneral meetin of a company and that of the nextK Provided that a company may hold its first ann"al eneral meetin within a period of not more than ei hteen months from the date of its incorporationL and if s"ch eneral meetin is held within that period, it shall not #e necessary for the company to hold any ann"al eneral meetin in the year of its incorporation or in the followin yearL Provided !urther that the 8e istrar may, for any special reason, extend the time within which any ann"al eneral meetin Gnot #ein the first ann"al eneral meetin H shall #e held, #y a period not exceedin three months.B 1!ery ann"al eneral meetin shall #e called for a time d"rin #"siness ho"rs, on a day that is not a p"#lic holiday, and shall #e held either at the re istered office of the company or at some other place within the city, town or !illa e in which the re istered office of the company is sit"ate AJJJBK

G2H

AProvided that the *entral +o!ernment may exempt any class of companies from the pro!isions of this s"#/section s"#Cect to s"ch conditions as it may imposeK Provided !urther that/ GaH a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, may #y its articles fix the time for its ann"al eneral meetin s and may also #y a resol"tion passed in one ann"al eneral meetin fix the time for its s"#seD"ent ann"al eneral meetin sL and a pri!ate company which is not a s"#sidiary of a p"#lic company, may in li;e manner and also #y a resol"tion a reed to #y all the mem#ers thereof, fix the times as well as the place for its ann"al eneral meetin .B

G#H

1*+.
G1H

Power o! Central -overnment to call annual general meeting

If defa"lt is made in holdin an ann"al eneral meetin in accordance with section 1((, the *entral +o!ernment may, notwithstandin anythin contained in this Act or in the articles of the company, on the application of any mem#er of the company, call, or direct the callin of, a eneral meetin of the company and i!e s"ch ancillary or conseD"ential directions as the *entral +o!ernment thin;s expedient in relation to the callin , holdin and cond"ctin of the meetin . Explanation(=.he directions that may #e i!en "nder this s"#/section may incl"de a direction that one mem#er of the company present in person or #y proxy shall #e deemed to constit"te a meetin .

G2H

A eneral meetin held in p"rs"ance of s"#/section G 1H shall, s"#Cect to any directions of the *entral +o!ernment, #e deemed to #e an ann"al eneral meetin of the companyK Provided that in the case of re!i!al and reha#ilitation of sic; ind"strial companies "nder *hapter 7IA, the pro!isions of this section shall ha!e effect as if for the words "*entral +o!ernment", the word ".ri#"nal" had #een s"#stit"ted.B

1*,.

Penalt% !or de!ault in compl%ing with section 1** or 1*+

If defa"lt is made in holdin a meetin of the company in accordance with section 1((, or in complyin with any directions of Athe .ri#"nal or the *entral +o!ernment, as the case may #eB "nder s"#/section G1H of section 1(7, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB Aand in the case of a contin"in defa"lt, with a f"rther fine which may extend to Atwo tho"sand fi!e h"ndred r"peesB for e!ery day after the first d"rin which s"ch defa"lt contin"esB.

1*..
G1H

Calling o! extraordinar% general meeting on reDuisition

.he 0oard of directors of a company shall, on the reD"isition of s"ch n"m#er of mem#ers of the company as is specified in s"#/section G$H, forthwith proceed d"ly to call an extraordinary eneral meetin of the company. .he reD"isition shall set o"t the matters for the consideration of which the meetin is to #e called, shall #e si ned #y the reD"isitionists, and shall #e deposited at the re istered office of the company. .he reD"isition may consist of se!eral doc"ments in li;e form each si ned #y one or more reD"isitionists. .he n"m#er of mem#ers entitled to reD"isition a meetin in re ard to any matter shall #e/ GaH in the case of a company ha!in a share capital, s"ch n"m#er of them as hold at the date of the deposit of the reD"isition, not less than one/tenth of s"ch of the paid/"p capital of the company as at that date carries the ri ht of the !otin in re ard to that matterL in the case of a company not ha!in a share capital, s"ch n"m#er of them as ha!e at the date of deposit of the reD"isition not less than one/tenth of the total !otin power of all the mem#ers ha!in at the said date a ri ht to !ote in re ard to that matter.

G2H G3H G$H

G#H

G'H

=here two or more distinct matters are specified in the reD"isition, the pro!isions of s"#/section G$H shall apply separately in re ard to each s"ch matterL and the reD"isition shall accordin ly #e !alid only in respect of those matters in re ard to which the condition specified in that s"#/section is f"lfilled.

G(H

If the 0oard does not, within twenty/one days from the date of the deposit of a !alid reD"isition in re ard to any matters, proceed d"ly to call a meetin for the consideration of those matters on a day not later than forty/fi!e days from the date of the deposit of the reD"isition, the meetin may #e called/ GaH G#H #y the reD"isitionists themsel!esL in the case of a company ha!in a share capital, #y s"ch of the reD"isitionists as represent either a maCority in !al"e of the paid/"p share capital held #y all of them or not less than one/tenth of s"ch of the paid/"p share capital of the company as is referred to in cla"se GaH of s"#/section G$H, whiche!er is lessL or in the case of a company not ha!in a share capital, #y s"ch of the reD"isitionists as represent not less than one/tenth of the total !otin power of all the mem#ers of the company referred to in cla"se G#H of s"#/section G$H.

GcH

G7H

Explanation3 3or the p"rposes of this s"#/section, the 0oard shall, in the case of a meetin at which a resol"tion is to #e proposed as a special resol"tion, #e deemed not to ha!e d"ly con!ened the meetin if they do not i!e s"ch notice thereof as is reD"ired #y s"#/section G2H of section 1),. A meetin called "nder s"#/section G(H #y the reD"isitionists or any of them/ GaH G#H shall #e called in same manner, as nearly as possi#le, as that in which meetin s are to #e called #y the 0oardL #"t shall not #e held after the expiration of three months from the date of the deposit of the reD"isition.

G)H

Explanation3 4othin in cla"se G#H shall #e deemed to pre!ent a meetin d"ly commenced #efore the expiry of the period of three months aforesaid, from adCo"rnin to some day after the expiry of that period. =here two or more persons hold any shares or interest in a company Cointly, a reD"isition, or a notice callin a meetin , si ned #y one or some only of them shall, for the p"rposes of this section, ha!e the same force and effect as if it had #een si ned #y all of them. Any reasona#le expenses inc"rred #y the reD"isitionists #y reason of the fail"re of the 0oard d"ly to call a meetin shall #e repaid to the reD"isitionists #y the companyL and any s"m so repaid shall #e retained #y the company o"t of any s"m d"e or to #ecome d"e from the company #y way of fees or other rem"neration for their ser!ices to s"ch of the directors as were in defa"lt.

G,H

1+0.
G1H

Sections 1+1 to 1,* to appl% to meetings

.he pro!isions of sections 171 of 1)(/ GiH shall, notwithstandin anythin to the contrary in the articles of the company, apply with respect to eneral meetin s of a p"#lic company, and of a pri!ate company which is a s"#sidiary of a p"#lic companyL and shall, "nless otherwise specified therein or "nless the articles of the company otherwise pro!ide, apply with respect to eneral meetin s of a pri!ate company which is not a s"#sidiary of a p"#lic company.

GiiH

G2HGaH

G#H

Section 17(, with s"ch adaptations and modifications, if any, as may #e prescri#ed, shall apply with respect to meetin s of any class of mem#ers, or of de#ent"re holders or any class of de#ent"re holders, of a company, in li;e manner as it applies with respect to eneral meetin s of the company. <nless the articles of the company or a contract #indin on the persons concerned otherwise pro!ide, sections 171 to 17' and sections 177 to 1)( with s"ch adaptations and modifications, if any, as may #e prescri#ed, shall apply with respect to meetin s of any class of mem#ers, or of de#ent"re holders or any class of de#ent"re holders, of a company, in li;e manner as they apply with respect to eneral meetin s of the company.

1+1.
G1H

4ength o! notice !or calling meeting

A eneral meetin of a company may #e called #y i!in not less than twenty/one days E notice in writin ,

G2H

A eneral meetin may #e called after i!in shorter notice than that specified in s"#/section in s"#/ section G1H, if consent 2'1 is accorded thereto/ GiH in the case of an ann"al eneral meetin , #y all the mem#ers entitled to !ote thereatL and GiiH in the case of any other meetin , #y mem#ers of the company GaH holdin if the company has a share capital, not less than ,' per cent of s"ch part of the paid/"p share capital of the company as i!es a ri ht to !ote at the meetin , or G#H ha!in , if the company has no share capital, not less than ,' per cent of the total !otin power exercisa#le at that meetin sK

Provided that where any mem#ers of a company are entitled to !ote only on some resol"tion or resol"tions to #e mo!ed at a meetin and not on the others, those mem#ers shall #e ta;en into acco"nt for the p"rposes of this s"#/section in respect of the former resol"tion or resol"tions and not in respect of the latter.

1+2.
G1H G2H

Contents and manner o! service o! notice and persons on whom it is to &e served
1!ery notice of a meetin of a company shall specify the place and the day and ho"r of the meetin , and shall contain a statement of the #"siness to #e transacted thereat. 4otice of e!ery meetin of the company shall #e i!en/ GiH GiiH to e!ery mem#er of the company, in any manner a"thorised #y s"#/section G1H to G$H of section '3L to the persons entitled to a share in conseD"ence of the death or insol!ency of a mem#er, #y sendin it thro" h the post in a prepaid letter addressed to them #y name, or #y the title of representati!es of the deceased, or assi nees of the insol!ent, or #y any li;e description, at the address, if any, in India s"pplied for the p"rpose #y the persons claimin to #e so entitled, or "ntil s"ch an address has #een so s"pplied, #y i!in the notice in any manner in which it mi ht ha!e #een i!en if the death or insol!ency had not occ"rredL and to the a"ditor or a"ditors for the time #ein of the company, in any manner a"thorised #y section '3 in the case of any mem#er of mem#ers of the companyK

GiiiH

G3H

AProvided that where the notice of a meetin is i!en #y ad!ertisin the same in a newspaper circ"latin in the nei h#o"rhood of the re istered office of the company "nder s"#/section G3H of section '3, the statement of material facts referred to in section 173 need not #e annexed to the notice as reD"ired #y that section #"t it shall #e mentioned in the ad!ertisement that the statement has #een forwarded to the mem#ers of the company.B .he accidental omission to i!e notice to, or the non/receipt of notice #y, any mem#er or other person to whom it sho"ld #e i!en shall not in!alidate the proceedin s at the meetin .

1+#.
G1H

3xplanator% statement to &e annexed to notice

3or the p"rposes of this section/ GaH in the case of an ann"al eneral meetin , all #"siness to #e transacted at the meetin shall #e deemed special, with the exception of #"siness relatin to GiH the consideration of the acco"nts, #alance sheet and the reports of the 0oard of directors and a"ditors, GiiH the declaration of a di!idend, GiiiH the appointment of directors in the place of those retirin , and Gi!H the appointment of, and the fixin of the rem"neration of the a"ditorsL and G#H in the case of any other meetin , all #"siness shall #e deemed special. =here any items of #"siness to #e transacted at the meetin are deemed to #e special as aforesaid, there shall #e annexed to the notice of the meetin a statement settin o"t all material facts concernin each s"ch item of #"siness, incl"din in partic"lar Athe nat"re of the concern or interestB, if any, therein, of e!ery director AJJJB and the mana er, if anyK AProvided that where any item of special #"siness as aforesaid to #e transacted at a meetin of a company relates to, or affects, any other company, the extent of shareholdin interest in that other company of e!ery director AJJJB and the mana er, if any, of the first mentioned company shall also #e set o"t in the statement if the extent of s"ch shareholdin interest is not less than twenty per cent of the paid/"p share capital of that other company.B

G2H

G3H

=here any item of #"siness consists of the accordin of appro!al to any doc"ment #y the meetin , the time and place where the doc"ment can #e inspected shall #e specified in the statement aforesaid.

1+'.
G1H

7uorum !or meeting

<nless the articles of the company pro!ide for a lar er n"m#er, fi!e mem#ers personally present in the case of Ap"#lic company Gother than a p"#lic company which has #ecome s"ch #y !irt"e of section $3AH, and two mem#ers personally present in the case of any other company,B shall #e the D"or"m for a meetin of the company. <nless the articles of the company otherwise pro!ide, the pro!isions of s"#/sections G3H, G$H and G'H shall apply with respect to the meetin s of a p"#lic or pri!ate company. If within half an ho"r from the time appointed for holdin a meetin of a company, a D"or"m is not present, the meetin , if called "pon the reD"isition of mem#ers, shall stand dissol!ed. In any other case, the meetin shall stand adCo"rned to the same day in the next wee;, at the same time and place, or to s"ch other day and at s"ch other time and place as the 0oard may determine. If at the adCo"rned meetin also, a D"or"m is not present within half an ho"r from the time appointed for holdin the meetin , the mem#ers present shall #e a D"or"m.

G2H G3H G$H G'H

1+).
G1H G2H

Chairman o! meeting
<nless the articles of the company otherwise pro!ide, the mem#ers personally present at the meetin shall elect one of themsel!es to #e the chairman thereof on a show of hands. If a poll is demanded on the election of the chairman, it shall #e ta;en forthwith in accordance with the pro!isions of this Act, the chairman elected on a show of hands exercisin all the powers of the chairman "nder the said pro!isions. If some other person is elected chairman as a res"lt of the poll, he shall #e chairman for the rest of the meetin .

G3H

1+*.
G1H

Proxies
Any mem#er of a company entitled to attend and !ote at a meetin of the company shall #e entitled to appoint another person Gwhether a mem#er or notH as his proxy to attend and !ote instead of himselfL #"t a proxy so appointed shall not ha!e any ri ht to spea; at the meetin K Provided that, "nless the articles otherwise pro!ide/ GaH this s"#/section shall not apply in the case of a company not ha!in a share capitalL G#H a mem#er of a pri!ate company shall not #e entitled to appoint more than one proxy to attend on the same occasionL and

G2H

AG3H

GcH a proxy shall not #e entitled to !ote except on a poll. In e!ery notice callin a meetin of a company which has a share capital, or the articles of which pro!ide for !otin #y proxy at the meetin , there shall appear with reasona#le prominence a statement that a mem#er entitled to attend and !ote is entitled to appoint a proxy, or, where that is allowed, one or more proxies, to attend and !ote instead of himself, and that a proxy need not #e a mem#er. If defa"lt is made in complyin with this s"#/section as respects any meetin , e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB. Any pro!ision contained in the articles of a p"#lic company or of a pri!ate company which is a s"#sidiary of a p"#lic company which specifies or reD"ires a lon er period than forty/ei ht ho"rs #efore a meetin of the company, for depositin with the company or any other person any instr"ment appointin a proxy or any other doc"ment necessary to show the !alidity or otherwise relatin to the appointment of a proxy in order that the appointment may #e effecti!e at s"ch meetin , shall ha!e effect as if a period of forty/ei ht ho"rs had #een specified in or reD"ired #y s"ch pro!ision for s"ch deposit.B G$H If for the p"rpose of any meetin of a company, in!itations to appoint as proxy a person or one of a

G'H

n"m#er of persons specified in the in!itations are iss"ed at the companyIs expense to any mem#er entitled to ha!e a notice of the meetin sent to him and to !ote thereat #y proxy, e!ery officer of the company who ;nowin ly iss"es the in!itations as aforesaid or wilf"lly a"thorises or permits their iss"e shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesBK Provided that an officer shall not #e p"nisha#le "nder this s"#/section #y reason only of the iss"e to a mem#er at his reD"est in writin of a form of appointment namin the proxy, or of a list of persons willin to act as proxies, if the form or list is a!aila#le on reD"est in writin to e!ery mem#er entitled to !ote at the meetin #y proxy. .he instr"ment appointin a proxy shall/ GaH G#H #e in writin L and #e si ned #y the appointer or his attorney d"ly a"thorised in writin or, if the appointer is a #ody corporate, #e "nder its seal or #e si ned #y an officer or an attorney d"ly a"thorised #y it. An instr"ment appointin a proxy, if in any of the forms set o"t in Sched"le I>, shall not #e D"estioned on the ro"nd that it fails to comply with any special reD"irements specified for s"ch instr"ment #y the articles. 1!ery mem#er entitled to !ote at a meetin of the company, or on any resol"tion to #e mo!ed thereat, shall #e entitled d"rin the period #e innin twenty/fo"r ho"rs #efore the time fixed for the commencement of the meetin and endin with the concl"sion of the meetin , to inspect the proxies lod ed, at any time d"rin the #"siness ho"rs of the company, pro!ided not less than three daysE notice in writin of the intention so to inspect is i!en to the company.

G(H

G7H

1++.

9oting to &e &% show o! hands in !irst instance

At any eneral meetin , a resol"tion p"t to the !ote of the meetin shall, "nless a poll is demanded "nder section 17,, #e decided on a show of hands.

1+,.

ChairmanEs declaration o! result o! voting &% show o! hands to &e conclusive

A declaration #y the chairman in p"rs"ance of section 177 that on a show of hands, a resol"tion has or has not #een carried, or has or has not #een carried either "nanimo"sly or #y a partic"lar maCority, and an entry to that effect in the #oo;s containin the min"tes of the proceedin s of the company, shall #e concl"si!e e!idence of the fact, witho"t proof of the n"m#er or proportion of the !otes cast in fa!o"r of or a ainst s"ch resol"tion.

1+..
G1H

emand !or poll

0efore or on the declaration of the res"lt of the !otin on any resol"tion on a show of hands, a poll may #e ordered to #e ta;en #y the chairman of the meetin of his own motion, and shall #e ordered to #e ta;en #y him on a demand made in that #ehalf #y the persons or person specified #elow, that is to say,/ AGaH in the case of a p"#lic company ha!in a share capital #y, any mem#er or mem#ers present in person or #y proxy and holdin shares in the company/ GiH which confer a power to !ote on the resol"tion not #ein less than one/tenth of the total !otin power in respect of the resol"tion, or

G2H

GiiH on which an a re ate s"m of not less than fifty tho"sand r"pees has #een paid/"p, G#H in the case of a pri!ate company ha!in a share capital, #y one mem#er ha!in the ri ht to !ote on the resol"tion and present in person or #y proxy if not more than se!en s"ch mem#ers are personally present, and #y two s"ch mem#ers present in person or #y proxy, if more than se!en s"ch mem#ers are personally present, GcH in the case of any other company, #y any mem#er or mem#ers present in person or #y proxy and ha!in not less than one/tenth of the total !otin power in respect of the resol"tion.B .he demand for a poll may #e withdrawn at any time #y the person or persons who made the demand.

1,0.
G1H G2H

0ime o! ta=ing poll

A poll demanded on a D"estion of adCo"rnment shall #e ta;en forthwith. A poll demanded on any other D"estion Gnot #ein a D"estion relatin to the election of a chairman which is pro!ided for in section 17'H shall #e ta;en at s"ch time not #ein later than forty/ei ht ho"rs from the time when the demand was made, as the chairman may direct.

1,1.

:estriction on exercise o! voting right o! mem&ers who have not paid calls, etc.

4otwithstandin anythin contained in this Act, the articles of a company may pro!ide that no mem#er shall exercise any !otin ri ht in respect of any shares re istered in his name on which any calls or other s"ms presently paya#le #y him ha!e not #een paid, or in re ard to which the company has and has exercised any ri ht of lien.

1,2.

:estrictions on exercise o! voting right in other cases to &e void

A p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, shall not prohi#it any mem#er from exercisin his !otin ri ht on the ro"nd that he has not held his share or other interest in the company for any specified period precedin the date on which the !ote is ta;en, or on any other ro"nd not #ein a ro"nd set o"t in section 1)1.

1,#.

:ight o! mem&er to use his votes di!!erentl%

:n a poll ta;en at a meetin of a company, a mem#er entitled to more than one !ote, or his proxy, or other person entitled to !ote for him, as the case may #e, need not, if he !otes, "se all his !otes or cast in the same way all the !otes he "ses.

1,'.
G1H G2H

Scrutineers at poll
=here a poll is to #e ta;en, the chairman of the meetin shall appoint two scr"tineers to scr"tinise the !otes i!en on the poll and to report thereon to him. .he chairman shall ha!e power, at any time #efore the res"lt of the poll is declared, to remo!e a scr"tineer from office and to fill !acancies in the office of scr"tineer arisin from s"ch remo!al or from any other ca"se. :f the two scr"tineers appointed "nder this section, one shall always #e a mem#er Gnot #ein an officer or employee of the companyH present at the meetin , pro!ided s"ch a mem#er is a!aila#le and willin to #e appointed.

G3H

1,).
G1H G2H

(anner o! ta=ing poll and result thereo!

S"#Cect to the pro!isions of this Act, the chairman of the meetin shall ha!e power to re "late the manner in which a poll shall #e ta;en. .he res"lt of the poll shall #e deemed to #e the decision of the meetin on the resol"tion on which the poll was ta;en.

1,*.
G1H

Power o! 0ri&unal to order meeting to &e called

If for any reason it is impractica#le to call a meetin of a company, other than an ann"al eneral meetin , in any manner in which meetin s of the company may #e called, or to hold or cond"ct the meetin of the company in the manner prescri#ed #y this Act or the articles, the .ri#"nal may, either

of its own motion or on the application of any director of the company, or of any mem#er of the company who wo"ld #e entitled to !ote at the meetin ,M GaH order a meetin of the company to #e called, held and cond"cted in s"ch manner as the .ri#"nal thin;s fitL and G#H i!e s"ch ancillary or conseD"ential directions as the .ri#"nal thin;s expedient, incl"din directions modifyin or s"pplementin in relation to the callin , holdin and cond"ctin of the meetin , the operation of the pro!isions of this Act and of the companyIs articles. Explanation( M.he directions that may #e i!en "nder this s"#/section may incl"de a direction that one mem#er of the company present in person or #y proxy shall #e deemed to constit"te a meetin . G2H Any meetin called, held and cond"cted in accordance with any s"ch order shall, for all p"rposes, #e deemed to #e a meetin of the company d"ly called, held and cond"cted.B

1,+.
G1H

:epresentation o! corporations at meetings o! companies and o! creditors

A #ody corporate Gwhether a company within the meanin of this Act or notH may/ GaH if it is a mem#er of a company within the meanin of this Act, #y resol"tion of its 0oard of directors or other o!ernin #ody, a"thorise s"ch person as it thin;s fit to act as its representati!e at any meetin of the company, or at any meetin of any class of mem#ers of the company K

G#H

G2H

if it is a creditor Gincl"din a holder of de#ent"resH of a company within the meanin of this Act, #y resol"tion of its directors or other o!ernin #ody, a"thorise s"ch person as it thin;s fit to act as its representati!e at any meetin of any creditors of the company held in p"rs"ance of this Act or of any r"les made there"nder, or in p"rs"ance of the pro!isions contained in any de#ent"re or tr"st deed, as the case may #e. A person a"thorised #y resol"tion as aforesaid shall #e entitled to exercise the same ri hts and powers Gincl"din the ri ht to !ote #y proxyH on #ehalf of the #ody corporate which he represents as that #ody co"ld exercise if it were 3Aan indi!id"al mem#erB, creditor or holder of de#ent"res of the company.

1,+A. :epresentation o! the President and -overnors in meetings o! companies o! which the% are mem&ers
G1H .he &resident of India or the +o!ernor of a State, if he is a mem#er of a company, may appoint s"ch person as he thin;s fit to act as his representati!e at any meetin of the company or at any meetin of any class of mem#ers of the company. A person appointed to act as aforesaid shall, for the p"rposes of this Act, #e deemed to #e a mem#er of s"ch a company and shall #e entitled to exercise the same ri hts and powers Gincl"din the ri ht to !ote #y proxyH as the &resident or, as the case may #e, the +o!ernor co"ld exercise as a mem#er of the company.B

G2H

1,+2. 3xercise o! voting rights in respect o! shares held in trust

G1H Sa!e as otherwise pro!ided in section 1'30 #"t notwithstandin anythin contained in any other pro!isions of this Act or any other law or any contract, memorand"m or articles, where any shares in a company are held in tr"st #y a person Ghereinafter referred to as tr"steeH, the ri hts and powers Gincl"din the ri ht to !ote #y proxyH exercisa#le at any meetin of the company or at any meetin of any class of mem#ers of the company #y the tr"stee as a mem#er of the company shall/ GaH cease to #e exercisa#le #y the tr"stee as s"ch mem#er, and G#H #ecome exercisa#le #y the p"#lic tr"stee. .he p"#lic tr"stee may, instead of himself attendin the meetin , and exercisin the ri hts and powers, as aforesaid, appoint as his proxy an officer of +o!ernment or the tr"stee himself to attend s"ch meetin and to exercise s"ch ri hts and powers in accordance with the directions of the p"#lic tr"stee K

G2H

Provided that where the tr"stee is appointed #y the p"#lic tr"stee as his proxy, the tr"stee shall #e entitled, notwithstandin anythin contained in any other pro!isions of this Act, to exercise s"ch ri hts and powers in the same manner as he wo"ld ha!e #een #"t for the pro!isions of this section. G3H .he p"#lic tr"stee may a#stain from exercisin the ri hts and powers conferred on him #y this section if in his opinion the o#Cects of the tr"st or the interests of the #eneficiaries of the tr"st are not li;ely to #e ad!ersely affected #y s"ch a#stention. If for any reason the tr"stee considers that the p"#lic tr"stee sho"ld not a#stain from exercisin the ri hts and powers conferred on him #y this section and the exercise of s"ch ri hts and powers is necessary in order to safe "ard the o#Cects of the tr"st or the interests of the #eneficiaries of the tr"st, he may #y writin comm"nicate his !iews in this #ehalf to the p"#lic tr"stee #"t the p"#lic tr"stee may in his discretion either accept s"ch !iews or reCect the same. 4o s"it, prosec"tion or other le al proceedin shall lie a ainst the p"#lic tr"stee at the instance of the tr"stee or any person on his #ehalf or any other person on the ro"nd that the p"#lic tr"stee has a#stained from exercisin the ri hts and powers conferred on him #y this section. In order to ena#le the p"#lic tr"stee to exercise the ri hts and powers aforesaid, the p"#lic tr"stee shall also #e entitled to recei!e and inspectGin respect/#are actH all #oo;s and papers "nder this Act, which a mem#er is entitled to recei!e and inspect.B .he pro!isions of this section shall not apply on and after the commencement of the *ompanies GAmendmentH Act, 2000.B

G$H

G'H

G(H

AG7H

1,+C.
G1H

eclaration &% persons not holding &ene!icial interest in an% share

4otwithstandin anythin contained in section 1'0, section 1'30 or section 1)70, a person, whose name is entered, at the commencement of the *ompanies GAmendmentH Act, 1,7$, or at any time thereafter, in the re ister of mem#ers of a company as the holder of a share in that company #"t who does not hold the #eneficial interest in s"ch share, shall, within s"ch time and in s"ch form as may #e prescri#ed, ma;e a declaration to the company specifyin the name and other partic"lars of the person who holds the #eneficial interest in s"ch share. 4otwithstandin anythin contained elsewhere in this Act, a person who holds a #eneficial interest in a share or a class of shares of a company shall, within thirty days from the commencement of the *ompanies GAmendmentH Act, 1,7$, or within thirty days after his #ecomin s"ch #eneficial owner, whiche!er is later, ma;e a declaration to the company specifyin the nat"re of his interest, partic"lars of the person in whose name the shares stand re istered in the #oo;s of the company and s"ch other partic"lars as may #e prescri#ed. =hene!er there is a chan e in the #eneficial interest in s"ch shares the #eneficial owner shall, within thirty days from the date of s"ch chan e, ma;e a declaration to the company in s"ch form and containin s"ch partic"lars as may #e prescri#ed. 4otwithstandin anythin contained in section 1'3 where any declaration referred to in s"#/section G1H, s"#/section G2H or s"#/section G3H is made to a company, the company shall ma;e a note of s"ch declaration, in its re ister of mem#ers and shall file, within thirty days from the date of receipt of the declaration #y it, a ret"rn in the prescri#ed form with the 8e istrar with re ard to s"ch declaration. If any person, #ein reD"ired #y the pro!isions of s"#/section G1H, s"#/section G2H or s"#/section G3H, to ma;e a declaration, fails, witho"t any reasona#le exc"se, to do so, he shall #e p"nisha#le with fine which may extend to one tho"sand r"pees for e!ery day d"rin which the fail"re contin"es. If a company fails to comply with the pro!isions of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to one h"ndred r"pees for e!ery day d"rin which the defa"lt contin"es. Any char e, promissory note or any other collateral a reement, created, exec"ted or entered into in relation to any share, #y the ostensi#le owner thereof, or any hypothecation #y the ostensi#le owner of any share, in respect of which a declaration is reD"ired to #e made "nder the fore oin pro!isions of this section, #"t not so declared, shall not #e enforcea#le #y the #eneficial owner or any person claimin thro" h him. 4othin in this section shall #e deemed to preC"dice the o#li ation of a company to pay di!idend in accordance with the pro!isions of section 20(, and the o#li ation shall, on s"ch payment, stand dischar ed.

G2H

G3H

G$H

G'HGaH

G#H

G(H

G7H

AG)H

.he pro!isions of this section shall not apply to the tr"stee referred to in section 1)70 on and after the commencement of the *ompanies GAmendmentH Act, 2000.B

1,+ . "nvestigation o! &ene!icial ownership o! shares in certain cases

=here it appears to the *entral +o!ernment that there are ood reasons so to do, it may appoint one or more Inspectors to in!esti ate and report as to whether the pro!isions of section 1)7* ha!e #een complied with re ard to any share, and there"pon the pro!isions of section 2$7 shall, as far as may #e, apply to s"ch in!esti ation as if it were an in!esti ation ordered "nder that section.B

1,,.
G1H

Circulation o! mem&ersI resolutions

S"#Cect to the pro!isions of this section, a company shall, on the reD"isition in writin of s"ch n"m#er of mem#ers as is hereinafter specified and G"nless the company otherwise resol!esH at the expense of the reD"isitionists,/ GaH i!e to mem#ers of the company entitled to recei!e notice of the next ann"al eneral meetin , notice of any resol"tion which may properly #e mo!ed and is intended to #e mo!ed at that meetin L circ"late to mem#ers entitled to ha!e notice of any eneral meetin sent to them, any statement of not more than one tho"sand words with respect to the matter referred to in any proposed resol"tion, or any #"siness to #e dealt with at that meetin .

G#H

G2H

.he n"m#er of mem#ers necessary for a reD"isition "nder s"#/section G1H shall #e/ GaH s"ch n"m#er of mem#ers as represent not less than one/twentieth of the total !otin power of all the mem#ers ha!in at the date of the reD"isition a ri ht to !ote on the resol"tion or #"siness to which the reD"isition relatesL or G#H not less than one h"ndred mem#ers ha!in the ri ht aforesaid and holdin shares in the company on which there has #een paid/"p an a re ate s"m of not less than one la;h of r"pees in all. 4otice of any s"ch resol"tion #e i!en, and any s"ch statement shall #e circ"lated, to mem#ers of the company entitled to ha!e notice of the meetin sent to them, #y ser!in a copy of the resol"tion or statement on each mem#er in any manner permitted for ser!ice of notice of the meetin L and notice of any s"ch resol"tion shall #e i!en to any other mem#er of the company #y i!in notice of the eneral effect of the resol"tion in any manner permitted for i!in him notice of meetin s of the company K Provided that the copy shall #e ser!ed, or notice of the effect of the resol"tion shall #e i!en, as the case may #e, in the same manner and, so far as practica#le, at the same time as notice of the meetin , and where it is not practica#le for it to #e ser!ed or i!en at that time, it shall #e ser!ed or i!en as soon as practica#le thereafter.

G3H

G$H

A company shall not #e #o"nd "nder this section to i!e notice of any resol"tion or to circ"late any statement "nless/ GaH a, copy of the reD"isition si ned #y the reD"isitionists Gor two or more copies which #etween them contain the si nat"res of all the reD"isitionistsH is deposited at the re istered office of the company/ GiH in the case of a reD"isition reD"irin notice of a resol"tion, not less than six wee;s #efore the meetin L GiiH in the case of any other reD"isition, not less than two wee;s #efore the meetin L and there is deposited or tendered with the reD"isition a s"m reasona#ly s"fficient to meet the companyIs expenses in i!in effect thereto K

G#H

Provided that if, after a copy of a reD"isition reD"irin notice of a resol"tion has #een deposited at the re istered office of the company, an ann"al eneral meetin is called for a date six wee;s or less after the copy has #een deposited, the copy, altho" h not deposited within the time reD"ired #y this s"#/ section, shall #e deemed to ha!e #een properly deposited for the p"rposes thereof. G'H .he company shall also not #e #o"nd "nder this section to circ"late any statement if, on the application either of the company or of any other person who claims to #e a rie!ed, the A*entral +o!ernmentB is satisfied that the ri hts conferred #y this section are #ein a#"sed to sec"re needless p"#licity for

defamatory matterL and the A*entral +o!ernmentB may order the companyIs costs on an application "nder this section to #e paid in whole or in part #y the reD"isitionists, notwithstandin that they are not parties to the application. G(H G7H A #an;in company shall not #e #o"nd to circ"late any statement "nder this section, if, in the opinion of its 0oard of directors, the circ"lation will inC"re the interests of the company. 4otwithstandin anythin in the companyIs articles, the #"siness which may #e dealt with at an ann"al eneral meetin shall incl"de any resol"tion of which notice is i!en in accordance with this section, and for the p"rposes of this s"#/section, notice shall #e deemed to ha!e #een so i!en, notwithstandin the accidental omission, in i!in it, of one or more mem#ers. If defa"lt is made in complyin with the pro!isions of this section, e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB.

G)H

1,..
G1H

<rdinar% and special resolutions

A resol"tion shall #e an ordinary resol"tion when at a eneral meetin of which the notice reD"ired "nder this Act has #een d"ly i!en, the !otes cast Gwhether on a show of hands, or on a poll, as the case may #e,H in fa!o"r of the resol"tion Gincl"din the castin !ote, if any, of the chairmanH #y mem#ers who, #ein entitled so to do, !ote in person, or where proxies are allowed, #y proxy, exceed the !otes, if any, cast a ainst the resol"tion #y mem#ers so entitled and !otin . A resol"tion shall #e a special resol"tion when/ GaH the intention to propose the resol"tion as a special resol"tion has #een d"ly specified in the notice callin the eneral meetin or other intimation i!en to the mem#ers of the resol"tionL G#H the notice reD"ired "nder this Act has #een d"ly i!en of the eneral meetin L and GcH the !otes cast in fa!o"r of the resol"tion Gwhether on a show of hands, or on a poll, as the case may #eH, #y mem#ers who, #ein entitled so to do, !ote in person, or where proxies are allowed, #y proxy, are not less than three times the n"m#er of the !otes, if any, cast a ainst the resol"tion #y mem#ers so entitled and !otin .

G2H

1.0.
G1H

:esolutions reDuiring special notice

=here, #y any pro!ision contained in this Act or in the articles, special notice is reD"ired of any resol"tion, notice of the intention to mo!e the resol"tion shall #e i!en to the company not less then Afo"rteen daysB #efore the meetin at which it is to #e mo!ed, excl"si!e of the day on which the notice is ser!ed or deemed to #e ser!ed and the day of meetin . .he company shall, immediately after the notice of the intention to mo!e any s"ch resol"tion has #een recei!ed #y it, i!e its mem#ers notice of the resol"tion in the same manner as it i!es notice of the meetin , or if that is not practica#le, shall i!e them notice thereof, either #y ad!ertisement in a newspaper ha!in an appropriate circ"lation or in any other mode allowed #y the articles, not less than se!en days #efore the meetin .B

AG2H

1.1.

:esolutions passed at adCourned meetings

=here a resol"tion is passed at an adCo"rned meetin of/ GaH G#H a companyL the holders of any class of shares in a companyL or

GcH the 0oard of directors of a companyL the resol"tion shall, for all p"rposes, #e treated as ha!in #een passed on the date on which it was in fact passed, and shall not #e deemed to ha!e #een passed on any earlier date.

1.2.

:egistration o! certain resolutions and agreements

G1H

A copy of e!ery resol"tion AGto ether with a copy of the statement of material facts annexed "nder section 173 to the notice of the meetin in which s"ch resol"tion has #een passedHB or a reement to which this section applies shall, within AthirtyB days after the passin or ma;in thereof, #e printed or typewritten and d"ly certified "nder the si nat"re of an officer of the company and filed with the 8e istrar who shall record the same. =here articles ha!e #een re istered, Aa copy of e!ery resol"tion referred to in s"#/section G1H which has the effect of alterin the articles and a copy of e!ery a reement referred to in that s"#/sectionB for the time #ein in force shall #e em#odied in or annexed to e!ery copy of the articles iss"ed after the passin of the resol"tion or the ma;in of the a reement. =here articles ha!e not #een re istered, a printed copy of e!ery Aresol"tion or a reement referred to in s"#/section G1HB shall #e forwarded to any mem#er at his reD"est, on payment of one r"pee. .his section shall apply to/ GaH special resol"tionsL G#H resol"tions which ha!e #een a reed to #y all the mem#ers of a company, #"t which, if not so a reed to, wo"ld not ha!e #een effecti!e for their p"rpose "nless they had #een passed as special resol"tionsL any resol"tion of the 0oard of directors of a company or a reement exec"ted #y a company, relatin to the appointment, re/appointment or renewal of the appointment, or !ariation of the terms of appointment, of a mana in directorL

G2H

G3H G$H

GcH

GeH

resol"tions, or a reements which ha!e #een a reed to #y all the mem#ers of any class of shareholders #"t which, if not so a reed to, wo"ld not ha!e #een effecti!e for their p"rpose "nless they had #een passed #y some partic"lar maCority or otherwise in some partic"lar mannerL and all resol"tions or a reements which effecti!ely #ind all the mem#ers of any class of shareholders tho" h not a reed to #y all those mem#ersL AJ J JB. AGeeH resol"tions passed #y a company/ GiH accordin consent to the exercise #y its 0oard of directors of any of the powers "nder cla"se GaH, cla"se GdH and cla"se GcH of s"#/section G1H of section 2,3L

G'H

GiiH appro!in the appointment of sole sellin a ents "nder Asection 2,$ or section 2,$AABL GfH resol"tions reD"irin a company to #e wo"nd "p !ol"ntarily passed in p"rs"ance of s"#/section G1H of section $)$L and AG H copies of the terms and conditions of appointment of a sole sellin a ent appointed "nder section 2,$ or of a sole sellin a ent or other person appointed "nder section 2,$AA.B If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Atwo h"ndred r"peesB for e!ery day d"rin which the defa"lt, contin"es. If defa"lt is made in complyin with s"#/section G2H or G3H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aone h"ndred r"peesB for each copy in respect of which defa"lt is made. 3or the p"rposes of s"#/sections G'H and G(H, the liD"idator of a company shall #e deemed to #e an officer of the company.

G(H

G7H

1.2A. Passing o! resolutions &% postal &allot

G1H 4otwithstandin anythin contained in the fore oin pro!isions of this Act, a listed p"#lic company may, and in the case of resol"tions relatin to s"ch #"siness as the *entral +o!ernment may, #y notification, declare to #e cond"cted only #y postal #allot, shall, et any resol"tion passed #y means of a postal #allot, instead of transactin the #"siness in eneral meetin of the company. =here a company decides to pass any resol"tion #y resortin to postal #allot, it shall send a notice to all the shareholders, alon with a draft resol"tion explainin the reasons therefor, and reD"estin them to send their assent or dissent in writin on a postal #allot within a period of thirty days from the date of postin of the letter. .he notice shall #e sent #y re istered post ac;nowled ement d"e, or #y any other method as may #e prescri#ed #y the *entral +o!ernment in this #ehalf, and shall incl"de with the notice, a posta e pre/

G2H

G3H

G$H G'H

G(H

paid en!elope for facilitatin the comm"nication of the assent or dissent of the shareholder to the resol"tion within the said period. If a resol"tion is assented to #y a reD"isite maCority of the shareholders #y means of postal #allot, it shall #e deemed to ha!e #een d"ly passed at a eneral meetin con!ened in that #ehalf. If a shareholder sends "nder s"#/section G2H his assent or dissent in writin on a postal #allot and thereafter any person fra"d"lently defaces or destroys the #allot paper or declaration of identify of the shareholder, s"ch person shall #e p"nisha#le with imprisonment for a term which may extend to six months or with fine or with #oth. If a defa"lt is made in complyin with s"#/sections G1H to G$H, the company and e!ery officer of the company, who is in defa"lt shall #e p"nisha#le with fine which may extend to fifty tho"sand r"pees in respect of each s"ch defa"lt. Explanation( / 3or the p"rposes of this section, "postal #allot" incl"des !otin #y electronic mode.B

1.#.
AG1H

(inutes o! proceedings o! general meetings and o! 2oard and other meetings

1!ery company shall ca"se min"tes of all proceedin s of e!ery eneral meetin and of all proceedin s of e!ery meetin of its 0oard of directors or of e!ery committee of the 0oard, to #e ;ept #y ma;in within AthirtyB days of the concl"sion of e!ery s"ch meetin concerned, entries thereof in #oo;s ;ept for that p"rpose with their pa es consec"ti!ely n"m#ered. 1ach pa e of e!ery s"ch #oo; shall #e initialled or si ned and the last pa e of the record of proceedin s of each meetin in s"ch #oo;s shall #e dated and si ned/ GaH G#H in the case of min"tes of proceedin s of a meetin of the 0oard or of a committee thereof, #y the chairman of the said meetin or the chairman of the next s"cceedin meetin L

G1AH

G10H G2H G3H G$H

in the case of min"tes of proceedin s of a eneral meetin , #y the chairman of the same meetin within the aforesaid period of AthirtyB days or in the e!ent of the death or ina#ility of that chairman within that period, #y a director d"ly a"thorised #y the 0oard for the p"rpose. In no case the min"tes of proceedin s of a meetin shall #e attached to any s"ch #oo; as aforesaid #y pastin or otherwise.B .he min"tes of each meetin shall contain a fair and correct s"mmary of the proceedin s thereat. All appointments of officers made at any of the meetin s aforesaid shall #e incl"ded in the min"tes of the meetin . In the case of a meetin of the 0oard of directors or of a committee of the 0oard, the min"tes shall also contain/ GaH G#H the names of the directors present at the meetin L and in the case of each resol"tion passed at the meetin , the names of the directors, if any, dissentin from, or not conc"rrin in, the resol"tion. 4othin contained in s"#/sections G1H to G$H shall #e deemed to reD"ire the incl"sion in any s"ch min"tes of any matter which, in the opinion of the chairman of the meetin / GaH is, or co"ld reasona#ly #e re arded as, defamatory of any personL G#H GcH is irrele!ant or immaterial to the proceedin sL or is detrimental to the interests of the company.

G'H

Explanation( / .he chairman shall exercise an a#sol"te discretion in re ard to the incl"sion or non/ incl"sion of any matter in the min"tes on the ro"nds specified in this s"#/section. G(H If defa"lt is made in complyin with the fore oin pro!isions of this section in respect of any meetin , the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB.

1.'.

(inutes to &e evidence

%in"tes of meetin s ;ept in accordance with the pro!isions of section 1,3 shall #e e!idence of the proceedin s recorded therein.B

1.).

Presumptions to &e drawn where minutes dul% drawn and signed

=here min"tes of proceedin s of any eneral meetin of the company or of any meetin of its 0oard of directors or of a committee of the 0oard Aha!e #een ;ept in accordance with the pro!isions of section 1,3B, then, "ntil the contrary is pro!ed, the meetin shall #e deemed to ha!e #een d"ly called and held, and all proceedin s thereat to ha!e d"ly ta;en place, and in partic"lar, all appointments of directors or liD"idators made at the meetin shall #e deemed to #e !alid.

1.*.
G1H

"nspection o! minute &oo=s o! general meetings

.he #oo;s containin the min"tes of the proceedin s of any eneral meetin of a company held on or after the 1'th day of -an"ary, 1,37, shall/ GaH G#H #e ;ept at the re istered office of the company, and #e open, d"rin #"siness ho"rs, to the inspection of any mem#er witho"t char e, s"#Cect to s"ch reasona#le restrictions as the company may, #y its articles or in eneral meetin impose, so howe!er that not less than two ho"rs in each day are allowed for inspection.

G2H

G3H

G$H

Any mem#er shall #e entitled to #e f"rnished, within se!en days after he has made a reD"est in that #ehalf to the company, with a copy of any min"tes referred to in s"#/section G1H, on payment of As"ch s"m as may #e prescri#edB for e!ery one h"ndred words or fractional part thereof reD"ired to #e copied. If any inspection reD"ired "nder s"#/section G1H is ref"sed, or if any copy reD"ired "nder s"#/section G2H is not f"rnished within the time specified therein, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB in respect of each offence. In the case of any s"ch ref"sal or defa"lt, the A*entral +o!ernmentB may, #y order, compel an immediate inspection of the min"te #oo;s or direct that the copy reD"ired shall forthwith #e sent to the person reD"irin it.

1.+.
G1H

Pu&lication o! reports o! proceedings o! general meetings

4o doc"ment p"rportin to #e a report of the proceedin s of any eneral meetin of a company shall #e circ"lated or ad!ertised at the expense of the company, "nless it incl"des the matters reD"ired #y section 1,3 to #e contained in the min"tes of the proceedin s of s"ch meetin . If any report is circ"lated or ad!ertised in contra!ention of s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le, in respect of each offence, with fine which may extend to Afi!e tho"sand r"peesB.

G2H

Prohibition of simultaneous appointment of different categories of managerial personnel 1.+A. Compan% not to appoint or emplo% certain di!!erent categories o! managerial personnel at the same time
4otwithstandin anythin contained in this Act or any other law or any a reement or instr"ment, no company shall, after the commencement of the *ompanies GAmendmentH Act, 1,(0 G(' to 1,(0H, appoint or employ at the same time, or after the expiry of six months from s"ch commencement, contin"e the appointment or employment at the same, of more than one of followin cate ories of mana erial personnel, namelyK/ GaH mana in director, G#H GcH GdH AJ J JB, AJ J JB, and mana er.B

Managerial remuneration etc! 1.,. <verall maximum managerial remuneration and managerial remuneration in case o! a&sence or inadeDuac% o! pro!its
.he total mana erial rem"neration paya#le #y a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, to its directors and its AJ J JB mana er in respect of any financial year shall not exceed ele!en per cent of the net profits of that company for that financial year comp"ted in the manner laid down in sections 3$, Aand 3'0B, except that the rem"neration of the directors shall not #e ded"cted from the ross profits K .he percenta e aforesaid shall #e excl"si!e of any fees paya#le to directors "nder s"#/section G2H of section 30,. =ithin the limits of the maxim"m rem"neration specified in s"#/section G1H, a company may pay a monthly rem"neration to its mana in or whole/time director in accordance with the pro!isions of section 30, or to its mana er in accordance with the pro!isions of section 3)7. 4otwithstandin anythin contained in s"#/section G1H to G3H, #"t s"#Cect to the pro!isions of section 2(,, read with Sched"le >III, if, in any financial year, a company has no profits or its profits are inadeD"ate, the company shall not pay to its directors, incl"din any mana in or wholetime director or mana er, #y way of rem"neration any s"m Aexcl"si!e of any fees paya#le to directors "nder s"#/ section G2H of section 30,B, except with the pre!io"s appro!al of the *entral +o!ernment.B Explanation( /3or the p"rposes of this section and sections 30,, 310, 311, AJ J JB 3)1 and 3)7, "rem"neration" shall incl"de,/ GaH any expendit"re inc"rred #y the company in pro!idin any rent free accommodation, or any other #enefit or amenity in respect of accommodation free of char e, to any of the persons specified in s"#/section G1HL any expendit"re inc"rred #y the company in pro!idin any other #enefit or amenity free of char e or at a concessional rate to any of the persons aforesaidL any expendit"re inc"rred #y the company in respect of any o#li ation or ser!ice, which, #"t for s"ch expendit"re #y the company, wo"ld ha!e #een inc"rred #y any of the persons aforesaidL and any expendit"re inc"rred #y the company to effect any ins"rance on the life of, or to pro!ide any pension, ann"ity or rat"ity for, any of the persons aforesaid or his spo"se or child.B

G1H

AJ J JB G2H G3H

AG$H

G#H GcH

GdH

1...
G1H

Calculation o! commission, etc., in certain cases

=here any commission or other rem"neration paya#le to any officer or employee of a company Gnot #ein a director AJ J JB or a mana erH is fixed at a percenta e of, or is otherwise #ased on, the net profits of the company, s"ch profits shall #e calc"lated in the manner set o"t in sections 3$, Aand 3'0B. Any pro!ision in force at the commencement of this Act for the payment of any commission or other rem"neration in any manner #ased on the net profits of a company, shall contin"e to #e in force for a period of one/year from s"ch commencementL and thereafter shall #ecome s"#Cect to the pro!isions of s"#/section G1H.

G2H

200.
G1H

Prohi&ition o! tax1!ree pa%ments

4o company shall pay to any officer or employee thereof, whether in his capacity as s"ch or otherwise, rem"neration free of any tax, or otherwise calc"lated #y reference to, or !aryin with, any tax paya#le #y him, or the rate or standard rate of any s"ch tax, or the amo"nt thereof. Explanation( /In this s"#/section, the expression "tax" comprises any ;ind of income/tax incl"din s"per/tax.

G2H

G3H

=here #y !irt"e of any pro!ision in force immediately #efore the commencement of this Act, whether contained in the companyIs articles, or in any contract made with the company, or in any resol"tion passed #y the company in eneral meetin or #y the companyIs 0oard of directors, any officer or employee of the company holdin any office at the commencement of the Act is entitled to rem"neration in any of the modes prohi#ited #y s"#/section G1H, s"ch pro!ision shall ha!e effect d"rin the resid"e of the term for which he is entitled to hold s"ch office at s"ch commencement, as if it pro!ided instead for the payment of a ross s"m s"#Cect to the tax in D"estion, which, after ded"ctin s"ch tax, wo"ld yield the net s"m act"ally specified in s"ch pro!ision. .his section shall not apply to any rem"neration/ GaH G#H which fell d"e #efore the commencement of this Act, or which may fall d"e after the commencement of this Act, in respect of any period #efore s"ch commencement.

201.
G1H

Avoidance o! provisions relieving lia&ilit% o! o!!icers and auditors o! compan%

Sa!e as pro!ided in this section, any pro!ision, whether contained in the articles of a company or in an a reement with a company or in any other instr"ment, for exemptin any officer of the company or any person employed #y the company as a"ditor from, or indemnifyin him a ainst, any lia#ility which, #y !irt"e of any r"le of law, wo"ld otherwise attach to him in respect of any ne li ence, defa"lt, misfeasance, #reach of d"ty or #reach of tr"st of which he may #e "ilty in relation to the company, shall #e !oid K Provided that a company may, in p"rs"ance of any s"ch pro!ision as aforesaid, indemnify any s"ch officer or a"ditor a ainst any lia#ility inc"rred #y him in defendin any proceedin s, whether ci!il or criminal, in which C"d ment is i!en in his fa!o"r or in which he is acD"itted or dischar ed or in connection with any application "nder section (33 in which relief is ranted to him #y the *o"rt.

G2H

AJ J JB.

Prevention of management by undesirable persons 202.

G1H

>ndischarged insolvent not to manage companies

If any person, #ein an "ndischar ed insol!ent,/ GaH dischar es any of the f"nctions of a director, or acts as or dischar es any of the f"nctions of the AJ J JB mana er, of any companyL or G#H directly or indirectly ta;es part or is concerned in the promotion, formation or mana ement of any companyL he shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. In this section, "company" incl"des/ GaH G#H an "nre istered companyL and a #ody corporate incorporated o"tside India, which has an esta#lished place of #"siness within India.

G2H

20#.
G1H

Power to restrain !raudulent persons !rom managing companies

=here/ GaH a person is con!icted of any offence in connection with the promotion, formation or mana ement of a companyL or G#H in the co"rse of windin /"p a company it appears that a person/ GiH has #een "ilty of any offence for which he is p"nisha#le Gwhether he has #een con!icted or notH "nder section '$2L or

G2H

has otherwise #een "ilty, while an officer of the company, of any fra"d or misfeasance in relation to the company or of any #reach of his d"ty to the companyL the A*o"rt or the .ri#"nal, as the case may #eB may ma;e an order that that person shall not, witho"t the lea!e of the A*o"rt or the .ri#"nal, as the case may #eB, #e a director of, or in any way, whether directly or indirectly, #e concerned or ta;e part in the promotion, formation or mana ement of a company, for s"ch period not exceedin fi!e years as may #e specified in the order. In s"#/section G1H, the expression "the co"rt",/ GaH in relation to the ma;in of an order a ainst any person #y !irt"e of cla"se GaH thereof, Aincl"des the *o"rt or the .ri#"nal #y which he is con!icted, as well as any *o"rt or the .ri#"nal ha!in C"risdiction to wind "pB the company as respects which the offence was committedL and G#H in relation to the rantin of lea!e, means any A*o"rt or the .ri#"nalB ha!in C"risdiction to wind "p the company as respects which lea!e is so" ht. A person intendin to apply for the ma;in of an order "nder this section #y the A*o"rt or the .ri#"nal ha!in C"risdiction to wind "p a companyB shall i!e not less than ten daysI notice of his intention to the person a ainst whom the order is so" ht, and at the hearin of the application, the last/mentioned person may appear and himself i!e e!idence or call witnesses. An application for the ma;in of an order "nder this section #y the A*o"rt or the .ri#"nal ha!in C"risdiction to wind "p a companyB may #e made #y the :fficial 2iD"idator, or #y the liD"idator of the company, or #y any person who is or has #een a mem#er or creditor of the company. :n the hearin of any application for an order "nder this section #y the :fficial 2iD"idator or the liD"idator, or of any application for lea!e "nder this section #y a person a ainst whom an order has #een made on the application of the :fficial 2iD"idator or liD"idator, the :fficial 2iD"idator or liD"idator shall appear and call the Aattention of the *o"rt or the .ri#"nal, as the case may #e,B to any matters which seem to him to #e rele!ant, and may himself i!e e!idence or call witnesses. An order may #e made #y !irt"e of s"#/cla"se GiiH of cla"se G#H of s"#/section G1H, notwithstandin that the person concerned may #e criminally lia#le in respect of the matters on the ro"nd of which the order is to #e made. AJ J JB. If any person acts in contra!ention of an order made "nder this section, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term, which may extend to two years, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. .he pro!isions of this section shall #e in addition to, and witho"t preC"dice to the operation of, any other pro!ision contained in this Act.

GiiH

G3H

G$H

G'H

G(H

G7H

G)H

Restriction on appointment of firms and bodies corporate to offices 20'. :estriction on appointment o! !irm or &od% corporate to o!!ice or place o! pro!it under a compan%
Sa!e as pro!ided in s"#/section G2H, no company shall, after the commencement of this Act, appoint or employ any firm or #ody corporate to or in any office or place of profit "nder the company, other than the office of AJ J JB tr"stee for the holders of de#ent"res of the company, for a term exceedin fi!e years at a time K Provided that the initial appointment or employment of a firm or #ody corporate to or in any office or place of profit as aforesaid may, with the appro!al of the *entral +o!ernment, #e made for a term not exceedin ten years.B J J JB Any firm or #ody corporate holdin at the commencement of this Act any office or place of profit "nder the company shall, "nless its term of office expires earlier, #e deemed to ha!e !acated its office immediately on the expiry of fi!e years from the commencement of this Act. 4othin contained in s"#/section G1H shall #e deemed to prohi#it the reappointment, re/employment, or extension of the term of office, of any firm or #ody corporate #y f"rther periods not exceedin fi!e years on each occasionK Provided that any s"ch re/appointment, re/employment or extension shall not #e sanctioned earlier than two years from the date on which it is to come into force.

AG1H

AG2H G3H

G$H

G'H

G(H

Any office or place in a company shall #e deemed to #e an office or place of profit "nder the company, within the meanin of this section, if the person holdin it 32Ao#tains from the company anythin B #y way of rem"neration, whether as salary, fees, commission, perD"isites, the ri ht to occ"py free of rent any premises as a place of residence, or otherwise. .his section shall not apply to a pri!ate company, "nless it is a s"#sidiary of a p"#lic company.

20'A. GK K KH +ividends and manner and time of payment thereof 20).

G1H

ividend to &e paid onl% out o! pro!its

4o di!idend shall #e declared or paid #y a company for any financial year except o"t of the profits of the company for that year arri!ed at after pro!idin for depreciation in accordance with the pro!isions of s"#/section G2H or o"t of the profits of the company for any pre!io"s financial year or years arri!ed at after pro!idin for depreciation in accordance with those pro!isions and remainin "ndistri#"ted or o"t of #oth or o"t of moneys pro!ided #y the *entral +o!ernment or a State +o!ernment for the payment of di!idend in p"rs"ance of a "arantee i!en #y that +o!ernment K Provided that / GaH if the company has not pro!ided for depreciation for any pre!io"s financial year or years which falls or fall after the commencement of the *ompanies GAmendmentH Act, 1,(0 it shall, #efore declarin or payin di!idend for any financial year pro!ide for s"ch depreciation o"t of the profits of that financial year or o"t of the profits of any other pre!io"s financial year or yearsL if the company has inc"rred any loss in any pre!io"s financial year or years, which falls or fall after the commencement of the *ompanies GAmendmentH Act, 1,(0 then, the amo"nt of the loss or an amo"nt which is eD"al to the amo"nt pro!ided for depreciation for that year or those years whiche!er is less, shall #e set off a ainst the profits of the company for the year for which di!idend is proposed to #e declared or paid or a ainst the profits of the company for any pre!io"s financial year or years, arri!ed at in #oth cases after pro!idin for deprecation in accordance with the pro!isions of s"#/section G2H or a ainst #othL the *entral +o!ernment may, if it thin;s necessary so to do in the p"#lic interest, allow any company to declare or pay di!idend for any financial year o"t of the profits of the company for that year or any pre!io"s financial year or years witho"t pro!idin for depreciation K

G#H

GcH

AG1AH

Provided !urther that it shall not #e necessary for a company to pro!ide for depreciation as aforesaid where di!idend for any financial year is declared or paid o"t of the profits of any pre!io"s financial year or years which falls or fall #efore the commencement of the *ompanies GAmendmentH Act, 1,(0. .he 0oard of directors may declare interim di!idend and the amo"nt of di!idend incl"din interim di!idend shall #e deposited in a separate #an; acco"nt within fi!e days from the date of declaration of s"ch di!idend. .he amo"nt of di!idend incl"din interim di!idend so deposited "nder s"#/section G1AH shall #e "sed for payment of interim di!idend. .he pro!isions contained in sections 20', 20'A, 20'*, 20(, 20(A and 207 shall, as far as may #e, also apply to any interim di!idend.B 3or the p"rpose of s"#/section G1H, depreciation shall #e pro!ided either/ GaH to the extent specified in section 3'0L or G#H in respect of each item of deprecia#le asset, for s"ch an amo"nt as is arri!ed at #y di!idin ninety/fi!e per cent of the ori inal cost thereof to the company #y the specified period in respect of s"ch assetL or on any other #asis appro!ed #y the *entral +o!ernment which has the effect of writin off #y the way of depreciation ninety/fi!e per cent of the ori inal cost to the company of each s"ch deprecia#le asset on the expiry of the specified periodL or as re ards any other deprecia#le asset for which no rate of depreciation has #een laid down #y Athis Act or any r"les made there"nderB, on s"ch #asis as may #e appro!ed #y the *entral

G10H G1*H G2H

GcH

GdH

AG2AH

+o!ernment #y any eneral order p"#lished in the :fficial +aFette or #y any special order in any partic"lar case K Provided that where depreciation is pro!ided for in the manner laid down in cla"se G#H or cla"se GcH, then, in the e!ent of the deprecia#le asset #ein sold, discarded, demolished or destroyed the written down !al"e thereof at the end of the financial year in which the asset is sold, discarded, demolished or destroyed, shall #e written off in accordance with the pro!iso to section 3'0. 4otwithstandin anythin contained in s"#/section G1H, on and from the commencement of the *ompanies GAmendmentH Act, 1,7$, no di!idend shall #e declared or paid #y a company for any financial year o"t of the profits of the company for that year arri!ed at after pro!idin for depreciation in accordance with the pro!isions of s"#/section G2H, except after the transfer to the reser!es of the company of s"ch percenta e of its profits for that year, not exceedin ten per cent, as may #e prescri#edK Provided that nothin in this s"#/section shall #e deemed to prohi#it the !ol"ntary transfer #y a company of a hi her percenta e of its profits to the reser!es in accordance with s"ch r"les as may #e made #y the *entral +o!ernment in this #ehalf.B A company which fails to comply with the pro!isions of section )0A shall not, so lon as s"ch fail"re contin"es, declare any di!idend on its eD"ity shares.B 4o di!idend shall #e paya#le except in cash K Provided that nothin in this s"#/section shall #e deemed to prohi#it the capitaliFation of profits or reser!es of a company for the p"rpose of iss"in f"lly paid/"p #on"s shares or payin "p any amo"nt, for the time #ein "npaid, on any shares held #y the mem#ers of the company. 4othin in this section shall #e deemed to affect in any manner the operation of section 20). 3or the p"rposes of this section/ GaH "specified period" in respect of any deprecia#le asset shall mean the n"m#er of years at the end of which at least ninety/fi!e per cent of the ori inal cost of that asset to the company will ha!e #een pro!ided for #y way of depreciation if depreciation were to #e calc"lated in accordance with the pro!isions of section 3'0L any di!idend paya#le in cash may #e paid #y cheD"e or warrant sent thro" h the post directed to the re istered address of the shareholder entitled to the payment of the di!idend, or in the case of Coint shareholder, to the re istered address of that one of the Coint shareholders which is first named on the re ister of mem#ers, or to s"ch person and to s"ch address as the shareholders or the Coint shareholders may in writin direct.B

AG20H G3H

G$H G'H

G#H

20)A. >npaid dividend to &e trans!erred to special dividend account

G1H =here, after the commencement of the *ompanies GAmendmentH Act, 1,7$, a di!idend has #een declared #y a company #"t has not #een paid, Aor claimedB, within Athirty daysB from the date of the declaration, to any shareholder entitled to the payment of the di!idend, the company shall, within se!en days from the date of expiry of the said period of Athirty daysB, transfer the total amo"nt of di!idend which remains "npaid Aor "nclaimedB within the said period of Athirty daysB, to a special acco"nt to #e opened #y the company in that #ehalf in any sched"led #an;, to #e called "<npaid Di!idend Acco"nt of .................*ompany 2imitedO *ompany G&ri!ateH 2imited". AExplanation( / In this s"#/section, the expression "di!idend which remains "npaid" means any di!idend the warrant in respect thereof has not #een encashed or which has otherwise not #een paid or claimed.B =here the whole or any part of any di!idend, declared #y a company #efore the commencement of the *ompanies GAmendmentH Act, 1,7$, remains "npaid at s"ch commencement, the company shall within a period of six months from s"ch commencement, transfer s"ch "npaid amo"nt to the acco"nt referred to in s"#/section G1H. =here, owin to inadeD"acy or a#sence of profits in any year, any company proposes to declare di!idend o"t of the acc"m"lated profits earned #y the company in pre!io"s years and transferred #y it to the reser!es, s"ch declaration of di!idend shall not #e made except in accordance with s"ch r"les as may #e made #y the *entral +o!ernment in this #ehalf, and, where any s"ch declaration is not in accordance with s"ch r"les, s"ch declaration shall not #e made except with the pre!io"s appro!al of the *entral +o!ernment.

G2H

G3H

G$H

If the defa"lt is made in transferrin the total amo"nt referred to in s"#/section G1H or any part thereof to the "npaid di!idend acco"nt of the concerned company, the company shall pay, from the date of s"ch defa"lt, interest on so m"ch of the amo"nt as has not #een transferred to the said acco"nt, at the rate of twel!e per cent per ann"m and the interest accr"in on s"ch amo"nt shall ens"re to the #enefit of the mem#ers of the company, in proportion to the amo"nt remainin "npaid to them. Any money transferred to the "npaid di!idend acco"nt of a company in p"rs"ance of this section which remains "npaid or "nclaimed for a period of se!en years from the date of s"ch transfer shall #e transferred #y the company to the 3"nd esta#lished "nder s"#/section G1H of section 20'*.B .he company shall, when ma;in any transfer "nder s"#/section G'H to the A3"nd esta#lished "nder section 20'*B any "npaid or "nclaimed di!idend, f"rnish Ato s"ch a"thority or committee as the *entral +o!ernment may appointB in this #ehalf a statement in the prescri#ed form settin forth in respect of all s"ms incl"ded in s"ch transfer, the nat"re of the s"ms, the names and last ;nown addresses of the persons entitled to recei!e the s"m, the amo"nt to which each person is entitled and the nat"re of his claim thereto, and s"ch other partic"lars as may #e prescri#ed. .he company shall #e entitled to a receipt from the a"thority or committee "nder s"#/section G$H of section 20'* for any money transferred #y it to the 3"nd and s"ch a receipt shall #e an effect"al dischar e of the company in respect thereof.B If a company fails to comply with any of the reD"irements of this section, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB for e!ery day d"rin which the fail"re contin"es.B

AG'H

G(H

AG7H

G)H

G20)2. Pa%ment o! unpaid or unclaimed dividend

Any person claimin to #e entitled to any money transferred "nder s"#/section G'H of section 20'A to the eneral re!en"e acco"nt of the *entral +o!ernment, may apply to the *entral +o!ernment for an order for payment of the money claimedL and the *entral +o!ernment may, if satisfied, whether on a certificate #y the company or otherwise, that s"ch person is entitled to the whole or any part of the money claimed, ma;e an order for the payment to that person of the s"m d"e to him after ta;in s"ch sec"rity from him as it may thin; fit KB AProvided that nothin contained in this section shall apply to any person claimin to #e entitled to any money transferred to the f"nd referred to in section 20'* on and after the commencement of the *ompanies GAmendmentH Act, 1,,,.B.

G20)C. 3sta&lishment o! "nvestor 3ducation and Protection 5und

G1H G2H .he *entral +o!ernment shall esta#lish a f"nd to #e called the In!estor 1d"cation and &rotection 3"nd Ghereafter in this section referred to as the "3"nd"H. .here shall #e credited to the 3"nd the followin amo"nts, namely K/ GaH amo"nts in the "npaid di!idend acco"nts of companiesL G#H GcH GdH GeH GfH the application moneys recei!ed #y companies for allotment of any sec"rities and d"e for ref"ndL mat"red deposits with companiesL mat"red de#ent"res with companiesL the interest accr"ed on the amo"nts referred to in cla"ses GaH to GdHL rants and donations i!en to the 3"nd #y the *entral +o!ernment, State +o!ernments, companies or any other instit"tions for the p"rposes of the 3"ndL and

G H the interest or other income recei!ed o"t of the in!estments made from the 3"ndK Provided that no s"ch amo"nts referred to in cla"ses GaH to GdH shall form part of the 3"nd "nless s"ch amo"nts ha!e remained "nclaimed and "npaid for a period of se!en years from the date they #ecame d"e for payment. Explanation( /3or the remo!al of do"#ts, it is here#y declared that no claims shall lie a ainst the 3"nd or the company in respect of indi!id"al amo"nts which were "nclaimed and "npaid for a period of se!en years from the dates that they first #ecame d"e for payment and no payment shall #e made in respect of any s"ch claims.

G3H G$H

G'H

.he 3"nd shall #e "tilised for promotion of in!estor awareness and protection of the interests of in!estors in accordance with s"ch r"les as may #e prescri#ed. .he *entral +o!ernment shall, #y notification in the :fficial +aFette, specify an a"thority or committee, with s"ch mem#ers as the *entral +o!ernment may appoint, to administer the 3"nd, and maintain separate acco"nts and other rele!ant records in relation to the 3"nd in s"ch form as may #e prescri#ed in cons"ltation with the *omptroller and A"ditor/+eneral of India. It shall #e competent for the a"thority or committee appointed "nder s"#/section G$H to spend moneys o"t of the 3"nd for carryin o"t the o#Cects for which the 3"nd has #een esta#lished.B

20*.

ividend not to he paid except to registered shareholders or to their order or to their &an=ers
4o di!idend shall #e paid #y a company in respect of any share therein, except/ GaH G#H to the re istered holder of s"ch share or to his order or to his #an;ersL or in case a share warrant has #een iss"ed in respect of the share in p"rs"ance of section 11$, to the #earer of s"ch warrant or to his #an;ers. 4othin contained in s"#/section G1H shall #e deemed to reD"ire the #an;ers of a re istered shareholder to ma;e a separate application to the company for the payment of the di!idend.

G1H

G2H

20*A. :ight to dividend, rights shares, and &onus shares to &e held in a&e%ance pending registration o! trans!er o! shares
=here any instr"ment of transfer of shares has #een deli!ered to any company for re istration and the transfer of s"ch shares has not #een re istered #y the company, it shall, notwithstandin anythin contained in any other pro!ision of this Act,/ GaH transfer the di!idend in relation to s"ch shares to the special acco"nt referred to in section 20'A "nless the company is a"thorised #y the re istered holder of s"ch share in writin to pay s"ch di!idend to the transferee specified in s"ch instr"ment of transferL and ;eep in a#eyance in relation to s"ch shares any offer of ri hts shares "nder cla"se GaH of s"#/section G1H of section )1 and any iss"e of f"lly paid/"p #on"s shares in p"rs"ance of s"#/section G3H of section 20'.B

G#H

20+.

Penalt% !or !ailure to distri&ute dividends within thirt% da%s

=here a di!idend has #een declared #y a company #"t has not #een paid, or the warrant in respect thereof has not #een posted, within thirty days from the date of declaration, to any shareholder entitled to the payment of the di!idend, e!ery director of the company shall, if he is ;nowin ly a party to the defa"lt, #e p"nisha#le with simple imprisonment for a term which may extend to three years and shall also #e lia#le to a fine of one tho"sand r"pees for e!ery day d"rin which s"ch defa"lt contin"es and the company shall #e lia#le to pay simple interest at the rate of ei hteen per cent per ann"m d"rin the period for which s"ch defa"lt contin"esK &ro!ided that no offence shall #e deemed to ha!e #een committed within the meanin of the forei n pro!isions in the followin cases, namelyKM GaH where the di!idend co"ld not #e paid #y reason of the operation of any lawL G#H GcH GdH GeH where a shareholder has i!en directions to the company re ardin the payment of the di!idend and those directions cannot #e complied withL where there is a disp"te re ardin the ri ht to recei!e the di!idendL where the di!idend has #een lawf"lly adC"sted #y the company a ainst any s"m d"e to it from the shareholderL or where, for any other reason, the fail"re to pay the di!idend or to post the warrant within the period aforesaid was not d"e to any defa"lt on the part of the company.B

Payments of interest out of capital 20,.

G1H

Power o! compan% to pa% "nterest out o! capital in certain cases

=here any shares in a company are iss"ed for the p"rpose of raisin money to defray the expenses of the constr"ction of any wor; or #"ildin , or the pro!ision of any plant, which cannot #e made profita#le for a len thy period, the company may/ GaH G#H pay interest on so m"ch of that share capital as is for the time #ein paid "p, for the period and s"#Cect to the conditions and restrictions mentioned in s"#/sections G2H to G7HL and char e the s"m so paid #y way of interest, to capital as part of the cost of constr"ction of the wor; or #"ildin , or the pro!ision of the plant.

G2H G3H

4o s"ch payment shall #e made "nless it is a"thorised #y the articles or #y a special resol"tion. 4o s"ch payment, whether a"thorised #y the articles or #y special resol"tion, shall #e made witho"t the pre!io"s sanction of the *entral +o!ernment. .he rant of s"ch sanction shall #e concl"si!e e!idence, for the p"rposes of this section, that the shares of the company, in respect of which s"ch sanction is i!en, ha!e #een iss"ed for a p"rpose specified in this section. 0efore sanctionin any s"ch payment, the *entral +o!ernment may, at the expense of the company, appoint a person to inD"ire into and report to the *entral +o!ernment on, the circ"mstances of the caseL and may, #efore ma;in the appointment, reD"ire the company to i!e sec"rity for the payment of the costs of the inD"iry. .he payment of interest shall #e made only for s"ch period as may #e determined #y the *entral +o!ernmentL and that period shall in no case extend #eyond the close of the half/year next after the half/year d"rin which the wor; or #"ildin has #een act"ally completed or the plant pro!ided. .he rate of interest shall, in no case, exceed fo"r per cent per ann"m or s"ch other rate as the *entral +o!ernment may, #y notification in the :fficial +aFette, direct. .he payment of the interest shall not operate as a red"ction of the amo"nt paid/"p on the shares in respect of which it is paid. 4othin in this section shall effect any company to which the Indian 8ailway *ompanies Act, 1),', or the Indian .ramways Act, 1,02 applies.

G$H

G'H

G(H G7H G)H

Accounts 20..
AG1H

2oo=s o! account to &e =ept &% compan%

1!ery company shall ;eep at its re istered office proper #oo;s of acco"nt with respect to/ GaH all s"ms of money recei!ed and expended #y the company and the matters in respect of which the receipt and expendit"re ta;e placeL G#H all sales and p"rchases of oods #y the companyL AJ J JB GcH the assets and lia#ilities of the companyL AandB AGdH in the case of a company pertainin to any class of companies en a ed in prod"ction, processin , man"fact"rin or minin acti!ities, s"ch partic"lars relatin to "tilisation of material or la#o"r or to other items of cost as may #e prescri#ed, if s"ch class of companies is reD"ired #y the *entral +o!ernment to incl"de s"ch partic"lars in the #oo;s of acco"ntKB Provided that all or any of the #oo;s of acco"nt aforesaid may #e ;ept at s"ch other place in India as the 0oard of directors may decide and when the 0oard of directors so decides, the company shall, within se!en days of the decision, file with the 8e istrar a notice '3 in writin i!in the f"ll address of that other place.B =here a company has a #ranch office, whether in or o"tside India, the company shall #e deemed to ha!e complied with the pro!isions of s"#/section G1H, if proper #oo;s of acco"nt relatin to the transactions effected at the #ranch office are ;ept at that office and proper s"mmarised ret"rns, made

G2H

AG3H

AG$H AJJJB AG$AH

"p to dates at inter!als of not more than three months, are sent #y the #ranch office to the company at its re istered office or the other place referred to in s"#/section G1H. 3or the p"rposes of s"#/sections G1H and G2H, proper #oo;s of acco"nt shall not #e deemed to #e ;ept with respect to the matters specified therein,/ GaH if there are not ;ept s"ch #oo;s as are necessary to i!e a tr"e and fair !iew of the state of the affairs of the company or #ranch office, as the case may #e, and to explain its transactionsL and G#H If s"ch #oo;s are not ;ept on accr"al #asis and accordin to the do"#le entry system of acco"ntin .B AJJJB .he #oo;s of acco"nt and other #oo;s and papers shall #e open to inspection #y any director d"rin #"siness ho"rs. .he #oo;s of acco"nt of e!ery company relatin to a period of not less than ei ht years immediately precedin the c"rrent year Ato ether with the !o"chers rele!ant to any entry in s"ch #oo;s of acco"ntB shall #e preser!ed in ood order K Provided that in the case of a company incorporated less than ei ht years #efore the c"rrent year, the #oo;s of acco"nt for the entire period precedin the c"rrent year Ato ether with the !o"chers rele!ant to any entry in s"ch #oo;s of acco"ntB shall #e so preser!ed.B If any of the persons referred to in s"#/section G(H fails to ta;e all reasona#le steps to sec"re compliance #y the company with the reD"irements of this section, or has #y his own wilf"l act #een the ca"se of any defa"lt #y the company there"nder, he shall, in respect of each offence, #e p"nisha#le with Aimprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #othB K Provided that in any proceedin s a ainst a person in respect of an offence "nder this section consistin of a fail"re to ta;e reasona#le steps to sec"re compliance #y the company with the reD"irements of this section, it shall #e a defence to pro!e AJ J JB that a competent and relia#le person was char ed with the d"ty of seein that those reD"irements were complied with and was in a position to dischar e that d"ty K AProvided !urther that no person shall #e sentenced to imprisonment for any s"ch offence, "nless it was committed wilf"lly.B

G'H

G(H

.he persons referred to in s"#/section G'H are the followin namely K/ AGaH where the company has a mana in director or mana er, s"ch mana in director or mana er and all officers and other employees of the companyL andLB AJJJBL AJJJBL AGdH where the company has neither a mana in director nor mana er, e!ery director of the companyLB AJJJB

G7H

If any person, not #ein a person referred to in s"#/section G(H, ha!in #een char ed #y the AJ J JB Amana in director, mana erB or 0oard of directors, as the case may #e, with the d"ty of seein that the reD"irements of this section are complied with, ma;es a defa"lt in doin so, he shall, in respect of each offence, #e p"nisha#le with Aimprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #othB.

20.A. "nspection o! &oo=s o! account, etc., o! companies

G1H .he #oo;s of acco"nt and other #oo;s and papers of e!ery company shall #e open to inspection d"rin #"siness ho"rs/ GiH AGiiH GiiiH #y the 8e istrar, or #y s"ch officer of the +o!ernment as may #e a"thorised #y the *entral +o!ernment in this #ehalfL #y s"ch officer of the Sec"rities and 1xchan e 0oard of India may #e a"thorised #y itK

Provided that s"ch inspection may #e made witho"t i!in any pre!io"s notice to the company or any officer thereofK

G2H

Provided !urther that the inspection #y the Sec"rities and 1xchan e 0oard of India shall #e made in respect of matters co!ered "nder sections referred to in section ''ALB It shall #e the d"ty of e!ery director, other officer or employee of the company to prod"ce to the person ma;in inspection "nder s"#/section G1H, all s"ch #oo;s of acco"nt and other #oo;s and papers of the company in his c"stody or control and to f"rnish him with any statement, information or explanation relatin to the affairs of the company as the said person may reD"ire of him within s"ch time and at s"ch place as he may specify. It shall also #e the d"ty of e!ery director, other officer or employee of the company to i!e to the person ma;in inspection "nder this section all assistance in connection with the inspection which the company may #e reasona#ly expected to i!e. .he person ma;in the inspection "nder this section may, d"rin the co"rse of inspection,/ GiH GiiH ma;e or ca"se to #e made copies of #oo;s of acco"nt and other #oo;s and papers, or place or ca"se to #e placed any mar;s of identification thereon in to;en of the inspection ha!in #een made. 4otwithstandin anythin contained in any other law for the time #ein in force or any contract to the contrary, any person ma;in an inspection "nder this section shall ha!e the same powers as are !ested in a *i!il *o"rt "nder the *ode of *i!il &roced"re, 1,0), while tryin a s"it, in respect of the followin matters, namely K/ GiH the disco!ery and prod"ction of #oo;s of acco"nt and other doc"ments, at s"ch place and s"ch time as may #e specified #y s"ch personL GiiH s"mmonin and enforcin the attendance of persons and examinin them on oathL GiiiH inspection of any #oo;s, re isters and other doc"ments of the company at any place. =here an inspection of the #oo;s of acco"nt and other #oo;s and papers of the company has #een made "nder this section, the person ma;in the inspection shall ma;e a report to the *entral +o!ernment Aor the Sec"rities and 1xchan e 0oard of India in respect of inspection made #y its officersB. Any officer a"thorised to ma;e an inspection "nder this section shall ha!e all the powers that a 8e istrar has "nder this Act in relation to the ma;in of inD"ires. If defa"lt is made in complyin with the pro!isions of this section, e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which shall not #e less than Afifty tho"sand r"peesB, and also with imprisonment for a term not exceedin one year. =here a director or any other officer of a company has #een con!icted of an offence "nder this section he shall, on and from the date on which he is so con!icted, #e deemed to ha!e !acated his office as s"ch and on s"ch !acation of office, shall #e disD"alified for holdin s"ch office in any company, for a period of fi!e years from s"ch date.B

G3H

G$H

G'H

G(H

G7H G)H

G,H

210.
G1H

Annual accounts and &alance sheet

At e!ery ann"al eneral meetin of a company held in p"rs"ance of section 1((, the 0oard of directors of the company shall lay #efore the company/ GaH a #alance sheet as at the end of the period specified in s"#/section G3HL and G#H a profit and loss acco"nt for that period. In the case of a company not carryin on #"siness for profit, an income and expendit"re acco"nt shall #e laid #efore the company at its ann"al eneral meetin instead of a profit and loss acco"nt, and all references to "profit and loss acco"nt", "profit" and "loss" in this section and elsewhere in this Act, shall #e constr"ed, in relation to s"ch a company, as references respecti!ely to the "income and expendit"re acco"nt", "the excess of income o!er expendit"re", and "the excess of expendit"re o!er income". .he profit and loss acco"nt shall relate/ GaH in the case of the first ann"al eneral meetin of the company, to the period #e innin with the incorporation of the company and endin with a day which shall not precede the day of the meetin #y more than nine monthsL and

G2H

G3H

AG#H

in the case of any s"#seD"ent ann"al eneral meetin of the company, to the period #e innin with the day immediately after the period for which the acco"nt was last s"#mitted and endin with a day which shall not precede the day of the meetin #y more than six months, or in cases where an extension of time has #een ranted for holdin the meetin "nder the second pro!iso to s"#/section G1H of section 1((, #y more than six months and the extension so ranted.B

G$H

.he period to which the acco"nt aforesaid relates is referred to in this Act as a "financial year" and it may #e less or more than a calendar year, #"t it shall not exceed fifteen months K Provided that it may extend to ei hteen months where special permission has #een ranted in that #ehalf #y the 8e istrar.

G'H

If any person, #ein a director of a company, fails to ta;e all reasona#le steps to comply with the pro!isions of this section, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #oth K Provided that in any proceedin s a ainst a person in respect of an offence "nder this section, it shall #e a defence to pro!e AJ J JB that a competent and relia#le person was char ed with the d"ty of seein that the pro!isions of this section were complied with and was in a position to dischar e that d"ty K Provided !urther that no person shall #e sentenced to imprisonment for any s"ch offence "nless it was committed wilf"lly. If any person, not #ein a director of the company, ha!in #een char ed #y the 0oard of directors with the d"ty of seein that the pro!isions of this section are complied with, ma;es defa"lt in doin so, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #oth K Provided that no person shall #e sentenced to imprisonment for any s"ch offence "nless it was committed wilf"lly.

G(H

210A. Constitution o! 6ational Advisor% Committee on Accounting Standards

G1H .he *entral +o!ernment may, #y notification in the :fficial +aFette, constit"te an Ad!isory *ommittee to #e called the 4ational Ad!isory *ommittee on Acco"ntin Standards Ghereafter in this section referred to as the "Ad!isory *ommittee"H to ad!ise the *entral +o!ernment on the form"lation and layin down of acco"ntin policies and acco"ntin standards for adoption #y companies or class of companies "nder this Act. .he Ad!isory *ommittee shall consist of the followin mem#ers, namely K/ GaH G#H a *hairperson who shall #e a person of eminence well !ersed in acco"ntancy, finance, #"siness administration, #"siness law, economics or similar disciplineL one mem#er each nominated #y the Instit"te of *hartered Acco"ntants of India constit"ted "nder the *hartered Acco"ntants Act, 1,$,, the Instit"te of *ost and =or;s Acco"ntants of India constit"ted "nder the *ost and =or;s Acco"ntants Act, 1,', and the Instit"te of *ompany Secretaries of India constit"ted "nder the *ompany Secretaries Act, 1,)0L one representati!e of the *entral +o!ernment to #e nominated #y itL one representati!e of the 8eser!e 0an; of India to #e nominated #y itL one representati!e of the *omptroller and A"ditor/+eneral of India to #e nominated #y himL a person who holds or has held the office of professor in acco"ntancy, finance or #"siness mana ement in any "ni!ersity or deemed "ni!ersityL the *hairman of the *entral 0oard of Direct .axes constit"ted "nder the *entral 0oards of 8e!en"e Act, 1,(3 or his nomineeL two mem#ers to represent the cham#ers of commerce and ind"stry to #e nominated #y the *entral +o!ernment, and one representati!e of the Sec"rities and 1xchan e 0oard of India to #e nominated #y it.

G2H

GcH GdH GeH GfH G H GhH GiH G3H G$H

.he Ad!isory *ommittee shall i!e its recommendations to the *entral +o!ernment on s"ch matters of acco"ntin policies and standards and a"ditin as may #e referred to it for ad!ice from time to time. .he mem#ers of the Ad!isory *ommittee shall hold office for s"ch terms as may #e determined #y the *entral +o!ernment at the time of their appointment and any !acancy in the mem#ership in the

G'H

*ommittee shall #e filled #y the *entral +o!ernment in the same manner as the mem#er whose !acancy occ"rred was filled. .he non/official mem#ers of the Ad!isory *ommittee shall #e entitled to s"ch fees, tra!ellin , con!eyance and other allowances as are admissi#le to the officers of the *entral +o!ernment of the hi hest ran;.B

211.
AG1H

5orm and contents o! &alance sheet and pro!it and loss account
1!ery #alance sheet of a company shall i!e a tr"e and fair !iew of the state of affairs of the company as at the end of the financial year and shall, s"#Cect to the pro!isions of this section, #e in the form set o"t in &art I of Sched"le 7I, or as near thereto as circ"mstances admit or in s"ch other form as may #e appro!ed #y the *entral +o!ernment either enerally or in any partic"lar caseL and in preparin the #alance sheet d"e re ard shall #e had, as far as may #e, to the eneral instr"ctions for preparation of #alance sheet "nder the headin "4otes" at the end of that &art K Provided that nothin contained in this s"#/section shall apply to any ins"rance or #an;in company or any company en a ed in the eneration or s"pply of electricity or to any other class of company for which a form of #alance sheet has #een specified in or "nder the Act o!ernin s"ch class of company.B 1!ery profit and loss acco"nt of a company shall i!e a tr"e and fair !iew of the profit or loss of the company for the financial year and shall, s"#Cect as aforesaid, comply with the reD"irements of &art II of Sched"le 7I, so far as they are applica#le thereto K Provided that nothin contained in this s"#/section shall apply to any ins"rance or #an;in company 70 Aor any company en a ed in the eneration or s"pply of electricityB, or to any other class of company for which a form of profit and loss acco"nt has #een specified in or "nder the Act o!ernin s"ch class of company.

G2H

G3H

AG3AH G30H

.he *entral +o!ernment may, #y notification in the :fficial +aFette, exempt any class of companies from compliance with any of the reD"irements in Sched"le 7I if, in its opinion, it is necessary to rant the exemption in the Ap"#lic interestB. Any s"ch exemption may #e ranted either "nconditionally or s"#Cect to s"ch conditions as may #e specified in the notification. 1!ery profit and loss acco"nt and #alance sheet of the company shall comply with the acco"ntin standards. =here the profit and loss acco"nt and the #alance sheet of the company do not comply with the acco"ntin standards, s"ch companies shall disclose in its profit and loss acco"nt and #alance sheet, the followin , namely K/ GaH G#H the de!iation from the acco"ntin standardsL the reasons for s"ch de!iationL and

G3*H

GcH the financial effect, if any, arisin d"e to s"ch de!iation. 3or the p"rposes of this section, the expression "acco"ntin standards" means the standards of acco"ntin recommended #y the Instit"te of *hartered Acco"ntants of India constit"ted "nder the *hartered Acco"ntants Act, 1,$, as may #e prescri#ed #y the *entral +o!ernment in cons"ltation with the 4ational Ad!isory *ommittee on Acco"ntin Standards esta#lished "nder s"#/section G1H of section 210A K Provided that the standard of acco"ntin specified #y the Instit"te of *hartered Acco"ntants of India shall #e deemed to #e the Acco"ntin Standards "ntil the acco"ntin standards are prescri#ed #y the *entral +o!ernment "nder this s"#/section.B .he *entral +o!ernment may, on the application, or with the consent of the 0oard of directors of the company, #y order, modify in relation to that company any of the reD"irements of this Act as to the matters to #e stated in the companyIs #alance sheet or profit and loss acco"nt for the p"rpose of adaptin them to the circ"mstances of the company. .he #alance sheet and the profit and loss acco"nt of a company shall not #e treated as not disclosin a tr"e and fair !iew of the state of affairs of the company, merely #y reason of the fact that they do not disclose/

G$H

G'H

GiH GiiH GiiiH

in the case of an ins"rance company, any matters which are not reD"ired to #e disclosed #y the Ins"rance Act, 1,3)L in the case of a #an;in company, any matters which are not reD"ired to #e disclosed #y the 0an;in *ompanies Act, 1,$,L in the case of a company en a ed in the eneration or s"pply of electricity, any matters which are not reD"ired to #e disclosed #y 72A#oth the Indian 1lectricity Act, 1,10, and the 1lectricity GS"pplyH Act, 1,$)BL in the case of a company o!erned #y any other special Act for the time #ein in force, any matters which are not reD"ired to #e disclosed #y that special ActL or

Gi!H G!H

G(H

G7H

G)H

in the case of any company, any matters which are not reD"ired to #e disclosed #y !irt"e of the pro!isions contained in Sched"le 7I or #y !irt"e of a notification iss"ed "nder s"#/section G3H or an order iss"ed "nder s"#/section G$H. 3or the p"rposes of this section, except where the context otherwise reD"ires, any reference to a #alance sheet or profit and loss acco"nt shall incl"de any notes thereon or doc"ments annexed thereto, i!in information reD"ired #y this Act, and allowed #y this Act to #e i!en in the form of s"ch notes or doc"ments. If any s"ch person as is referred to in s"#/section G(H of section 20, fails to ta;e all reasona#le steps to sec"re compliance #y the company, as respects any acco"nts laid #efore the company in eneral meetin , with the pro!isions of this section and with the other reD"irements of this act as to the matters to #e stated in the acco"nts, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #oth K Provided that in any proceedin s a ainst a person in respect of an offence "nder this section, it shall #e a defence to pro!e AJ J JB that a competent and relia#le person was char ed with the d"ty of seein that the pro!isions of this section and the other reD"irements aforesaid were complied with and was in a position to dischar e that d"ty K Provided !urther that no person shall #e sentenced to imprisonment for any s"ch offence, "nless it was committed wilf"lly. If any person, not #ein a person referred to in s"#/section G(H of section 20,, ha!in #een char ed #y the AJ J JB Amana in director or mana er,B or 0oard of directors, as the case may #e, with the d"ty of seein that the pro!isions of this section and the other reD"irements aforesaid are complied with, ma;es defa"lt in doin so, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months or with fine which may extend to Aten tho"sand r"peesB, or with #othK Provided that no person shall #e sentenced to imprisonment for any s"ch offence, "nless it was committed wilf"lly.

212.
G1H

2alance sheet o! holding compan% to include certain particulars as to its su&sidiaries

.here shall #e attached to the #alance sheet of holdin company ha!in a s"#sidiary or s"#sidiaries at the end of the financial year as at which the holdin companyIs #alance sheet is made o"t, the followin doc"ments in respect of s"ch s"#sidiary or of each s"ch s"#sidiary, as the case may #e K/ GaH a copy of the #alance sheet of the s"#sidiaryL G#H GcH GdH GeH GfH G H a copy of its profit and loss acco"ntL a copy of the report of its 0oard of directorsL a copy of the report of its a"ditorsL a statement of the holdin companyIs interest in the s"#sidiary as specified in s"#/section G3HL the statement referred to in s"#/section G'H, if anyL and report referred to in s"#/section G(H, if any.

G2HAGaH .he #alance sheet referred to in cla"se GaH of s"#/section G1H shall #e made o"t in accordance with the reD"irements of this Act,/ GiH as at the end of the financial year of the s"#sidiary, where s"ch financial year coincides with the financial year of the holdin companyL

GiiH G#H

as at the end of the financial year of the s"#sidiary last #efore that of the holdin company where the financial year of the s"#sidiary does not coincide with that of the holdin company.B .he profit and loss acco"nt and the reports of the 0oard of directors and of the a"ditors, referred to in cla"ses G#H, GcH and GdH of s"#/section G1H, shall #e made o"t, in accordance with the reD"irements of this Act, for the financial year of the s"#sidiary referred to in cla"se GaH. 7'A=here the financial year of the s"#sidiary does not coincide with that of the holdin company, the financial year aforesaidB of the s"#sidiary shall not end on a day which precedes the day on which the holdin companyIs financial year ends #y more than six months. =here the financial year of a s"#sidiary is shorter in d"ration than that of its holdin company, references to the financial year of the s"#sidiary in cla"ses GaH, G#H and GcH shall #e constr"ed as references to two or more financial years of the s"#sidiary, the d"ration of which, in the a re ate, is not less than the d"ration of the holdin companyIs financial year. .he statement referred to in cla"se GeH of s"#/section G1H shall specify/ GaH G#H the extent of the holdin companyIs interest in the s"#sidiary at the end of the financial year or of the last of the financial years of the s"#sidiary referred to in s"#/section G2HL the net a re ate amo"nt, so far as it concerns mem#ers of the holdin company and is not dealt with in the companyIs acco"nts, of the s"#sidiaryIs profits after ded"ctin its losses or !ice !ersa/ GiH for the financial year or years of the s"#sidiary aforesaidL and GiiH GcH for the pre!io"s financial years of the s"#sidiary since it #ecame the holdin companyIs s"#sidiaryL the net a !ersa/ GiH GiiH re ate amo"nt of the profits of the s"#sidiary after ded"ctin its losses or !ice

GcH

GdH

G3H

G$H

for the financial year or years of the s"#sidiary aforesaidL and for the pre!io"s financial years of the s"#sidiary since it #ecame the holdin companyIs s"#sidiaryL so far as those profits are dealt with, or pro!ision is made for those losses, in the companyIs acco"nts. *la"ses G#H and GcH of s"#/section G3H shall apply only to profits and losses of the s"#sidiary which may properly #e treated in the holdin companyIs acco"nts as re!en"e profits or losses, and the profits or losses attri#"ta#le to any shares in a s"#sidiary for the time #ein held #y the holdin company or any other of its s"#sidiaries shall not Gfor that or any other p"rposeH #e treated as aforesaid so far as they are profits or losses for the period #efore the date on or as from which the shares were acD"ired #y the company or any of its s"#sidiaries, except that they may in a proper case #e so treated where/ GaH the company is itself the s"#sidiary of another #ody corporateL and G#H the shares were acD"ired from that #ody corporate or a s"#sidiary of itL and for the p"rpose of determinin whether any profits or losses are to #e treated as profits or losses for the said period, the profit or loss for any financial year of the s"#sidiary may, if it is not practica#le to apportion it with reasona#le acc"racy #y reference to the facts, #e treated as accr"in from day to day d"rin that year and #e apportioned accordin ly. =here the financial year or years of a s"#sidiary referred to in s"#/section G2H do not coincide with the financial year of the holdin company, a statement containin information on the followin matters shall also #e attached to the #alance sheet of the holdin company K/ GaH whether there has #een any, and, if so, what chan e in the holdin companyIs interest in the s"#sidiary #etween the end of the financial year or of the last of the financial years of the s"#sidiary and the end of the holdin companyIs financial yearL details of any material chan es which ha!e occ"rred #etween the end of the financial year or of the last of the financial years of the s"#sidiary and the end of the holdin companyIs financial year in respect of/ GiH GiiH GiiiH Gi!H the s"#sidiaryIs fixed assetsL its in!estmentsL the moneys lent #y itL the moneys #orrowed #y it for any p"rpose other than that of meetin c"rrent lia#ilities.

G'H

G#H

G(H

If, for any reason, the 0oard of directors of the holdin company is "na#le to o#tain information on any of the matters reD"ired to #e specified #y s"#/section G$H, a report in writin to that effect shall #e attached to the #alance sheet of the holdin company. .he doc"ments referred to in cla"ses GeH, GfH and G H of s"#/section G1H shall #e si ned #y the persons #y whom the #alance sheet of the holdin company is reD"ired to #e si ned. .he *entral +o!ernment may, on the application or with the consent of the 0oard of directors of the company, direct that in relation to any s"#sidiary, the pro!isions of this section shall not apply, or shall apply only to s"ch extent as may #e specified in the direction. If any s"ch person, as is referred to in s"#/section G(H of section 20,, fails to ta;e all reasona#le steps to comply with the pro!isions of this section, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #oth K Provided that in any proceedin s a ainst a person in respect of an offence "nder this section, it shall #e a defence to pro!e, AJ J JB that a competent and relia#le person was char ed with the d"ty of seein that pro!isions of this section were complied with and was in a position to dischar e that d"ty K Provided !urther that no person shall #e sentenced to imprisonment for any s"ch offence "nless it was committed wilf"lly.

G7H G)H

G,H

G10H

If any person, not #ein a person referred to in s"#/section G(H of section 20,, ha!in #een char ed #y the AJ J JB Amana in director, mana er,B or 0oard of directors, as the case may #e, with the d"ty of seein that the pro!isions of this section are complied with, ma;es defa"lt in doin so, he shall, in respect of each offence #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #oth K Provided that no person shall #e sentenced to imprisonment for any s"ch offence "nless it was committed wilf"lly.

21#.
G1H

5inancial %ear o! holding compan% and su&sidiar%

=here it appears to the *entral +o!ernment desira#le for a holdin company or a holdin companyIs s"#sidiary, to extend its financial year so that the s"#sidiaryIs financial year may end with that of the holdin company, and for that p"rpose to postpone the s"#mission of the rele!ant acco"nts to a eneral meetin , the *entral +o!ernment may, on the application or with the consent of the 0oard of directors of the company whose financial year is to #e extended, direct that in the case of that company, the s"#mission of acco"nts to a eneral meetin , the holdin of an ann"al eneral meetin or the ma;in of an ann"al ret"rn, shall not #e reD"ired to #e s"#mitted, held or made, earlier than the dates specified in the direction, notwithstandin anythin to the contrary in this Act or in any other Act for the time #ein in force. .he *entral +o!ernment shall, on the application of the 0oard of directors of a holdin company or a holdin companyIs s"#sidiary, exercise the powers conferred on that +o!ernment #y s"#/section G1H if it is necessary so to do, in order to sec"re that the end of the financial year of the s"#sidiary does not precede the end of the holdin companyIs financial year #y more than six months, where that is not the case at the commencement of this Act, or at the date on which the relationship of holdin company and s"#sidiary comes into existence, where that date is later than the commencement of this Act.

G2H

21'.
G1H

:ights o! holding compan%Is representative and mem&ers

A holdin company may, #y resol"tion, a"thorise representati!es named in the resol"tion to inspect the #oo;s of acco"nt ;ept #y any of its s"#sidiariesL and the #oo;s of acco"nt of any s"ch s"#sidiary shall #e open to inspection #y those representati!es at any time d"rin #"siness ho"rs. .he ri hts conferred #y section 23' "pon mem#ers of a company may #e exercised, in respect of any s"#sidiary, #y mem#ers of the holdin company as if they alone were mem#ers of the s"#sidiary.

G2H

21).

Authentication o! &alance sheet and pro!it and loss account

G1H

G2H

G3H

Sa!e as pro!ided #y s"#/section G2H, e!ery #alance sheet and e!ery profit and loss acco"nt of a company shall #e si ned on #ehalf of the 0oard of directors/ GiH in the case of #an;in company, #y the persons specified in cla"se GaH or cla"se G#H, as the case may #e, of s"#/section G2H of section 2, of the 0an;in *ompanies Act, 1,$,.B GiiH in the case of any other company, #y its AJ J JB mana er or secretary, if any, and #y not less than two directors of the company one of whom shall #e a mana in director where there is one. In the case of a company not #ein a #an;in company, when only one of its directors is for the time #ein in India, the #alance sheet and the profit and loss acco"nt shall #e si ned #y s"ch directorL #"t in s"ch a case there shall #e attached to the #alance sheet and the profit and loss acco"nt a statement si ned #y him explainin the reason for non/compliance with the pro!isions of s"#/section G1H. .he #alance sheet and the profit and loss acco"nt shall #e appro!ed #y the 0oard of directors #efore they are si ned on #ehalf of the 0oard in accordance with the pro!isions of this section and #efore they are s"#mitted to the a"ditors for their report thereon.

21*.

Pro!it and loss account to &e annexed and auditorsE report to &e attached to &alance sheet

.he profit and loss acco"nt shall #e annexed to the #alance sheet and the a"ditorsE report AGincl"din the a"ditorsE separate, special or s"pplementary report, if anyHB shall #e attached thereto.

21+.
G1H

2oardIs report
.here shall #e attached to e!ery #alance sheet laid #efore a company in eneral meetin , a report #y its 0oard of directors, with respect to/ GaH G#H GcH the state of the companyIs affairsL the amo"nts, if any which it proposes to carry to any reser!es AJ J JB in s"ch #alance sheet AJ J JBL the amo"nt, if any, which it recommends sho"ld #e paid #y way of di!idendL

G2H

AGdH material chan es and commitments, if any, affectin the financial position of the company which ha!e occ"rred #etween the end of the financial year of the company to which the #alance sheet relates and the date of the reportLB AGeH the conser!ation of ener y, technolo y a#sorption, forei n exchan e earnin s and o"t o, in s"ch manner as may #e prescri#edB. .he 0oardEs report shall, so far as is material for the appreciation of the state of the companyEs affairs #y its mem#ers and will not in the 0oardEs opinion #e harmf"l to the #"siness of the company or of any of its s"#sidiaries deal with any chan es which ha!e occ"rred d"rin the financial year/ GaH G#H in the nat"re of the companyIs #"sinessL in the companyIs s"#sidiaries or in the nat"re of the #"siness carried on #y themL and

GcH enerally in the classes of #"siness in which the company has an interest. AG2AHGaH .he 0oardIs report shall also incl"de a statement showin the name of e!ery employee of the company who/ GiH if employed thro" ho"t the financial year, was in receipt of rem"neration for that year which, in the a re ate, was not less than )'As"ch s"m as may #e prescri#edBL orB GiiH if employed for a part of the financial year, was in receipt of rem"neration for any part of that year, at a rate which, in the a re ate, was not less than As"ch s"m per month as may #e prescri#edL orB AGiiiH if employed thro" ho"t the financial year or part thereof, was in receipt of rem"neration in that year which, in the a re ate, or as the case may #e, at a rate which, in the a re ate, is in excess of that drawn #y the mana in director or whole/time director or mana er and holds #y himself or alon with his spo"se and dependent children, not less than two per cent, of the eD"ity shares of the company.B G#H .he statement referred to in cla"se GaH shall also indicate,/

GiH GiiH

whether any s"ch employee is a relati!e of any director or mana er of the company and if so, the name of s"ch director, and s"ch other partic"lars, as may #e prescri#ed.

Explanation( / "8em"neration" has the meanin assi ned to it in the 1xplanation to section 1,).B AG2AAH .he 0oardEs report shall also incl"de a DirectorsE 8esponsi#ility, Statement, indicatin therein,/ GiH GiiH that in the preparation of the ann"al acco"nts, the applica#le acco"ntin standards had #een followed alon with proper explanation relatin to material depart"resL that the directors had selected s"ch acco"ntin policies and applied them consistently and made C"d ments and estimates that are reasona#le and pr"dent so as to i!e a tr"e and fair !iew 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 periodL that the directors had ta;en proper and s"fficient care for the maintenance of adeD"ate acco"ntin records in accordance with the pro!isions of this Act for safe "ardin the assets of the company and for pre!entin and detectin fra"d and other irre "laritiesL that the directors had prepared the ann"al acco"nts on a oin concern #asis.B

GiiiH

Gi!H AG20H G3H

.he 0oardIs report shall also specify the reasons for the fail"re, if any, to complete the #"y/#ac; within the time specified in s"#/section G$H of section 77A.B .he 0oard shall also #e #o"nd to i!e f"llest information and explanations in its report aforesaid, or, in cases fallin "nder the pro!iso to section 222, in an addend"m to that report on e!ery reser!ation, D"alification or ad!erse remar; contained in the a"ditorsI report. .he 0oardIs report and any addend"m thereto shall #e si ned #y its chairman if he is a"thorised in that #ehalf #y the 0oardL and where he is not so a"thorised, shall #e si ned #y s"ch n"m#er of directors as are reD"ired to si n the #alance sheet and the profit and loss acco"nt of the company #y !irt"e of s"#/sections G1H and G2H of section 21'. If any person, #ein a director of a company, fails to ta;e all reasona#le steps to comply with the pro!isions of s"#/sections G1H to G3H, or #ein the chairman, si ns the 0oardIs report otherwise than in conformity with the pro!isions of s"#/section G$H, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to )70 Atwenty tho"sand r"peesB, or with #oth K Provided that no person shall #e sentenced to imprisonment for any s"ch offence "nless it was committed wilf"lly K Provided !urther that in any proceedin s a ainst a person in respect of an offence "nder s"#/section G1H, it shall #e a defence to pro!e, AJ J JB that a competent and relia#le person was char ed with the d"ty of seein that the pro!isions of that s"#/section were complied with and was in a position to dischar e that d"ty.

G$H

G'H

G(H

If any person, not #ein a director, ha!in #een char ed #y the 0oard of directors with the d"ty of seein that the pro!isions of s"#/sections G1H to G3H are complied with, ma;es defa"lt in doin so, he shall, in respect of each offence, #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Atwenty tho"sand r"peesB, or with #oth K Provided that no person shall #e sentenced to imprisonment for any s"ch offence "nless it was committed wilf"lly.

21,.

Penalt% !or improper issue, circulation or pu&lication o! &alance sheet or pro!it and loss account
If any copy of a #alance sheet or profit and loss acco"nt which has not #een si ned as reD"ired #y section 21' is iss"ed, circ"lated or p"#lishedL or If any copy of a #alance sheet is iss"ed, circ"lated or p"#lished witho"t there #ein annexed or attached thereto, as the case may #e, a copy each of GiH the profit and loss acco"nt, GiiH any acco"nts, reports or statements which, #y !irt"e of section 212, are reD"ired to #e attached to the #alance sheet, GiiiH the a"ditors report, and Gi!H the 0oardIs report referred to in section 217L

GaH G#H

the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

21..
G1H

:ight o! mem&ers to copies o! &alance sheet and auditorsI report.

A copy of e!ery #alance sheet Gincl"din the profit and loss acco"nt, the a"ditorsI report and e!ery other doc"ment reD"ired #y law to #e annexed or attached, as the case may #e, to the #alance sheetH which is to #e laid #efore a company in eneral meetin shall, not less than twenty/one days #efore the date of the meetin , #e sent to e!ery mem#er of the company, Ato e!ery tr"stee for the holders of any de#ent"res iss"ed #y the company, whether s"ch mem#er or tr"stee is or is not entitled to ha!e notices of eneral meetin s of the company sent to him, and to all persons other than s"ch mem#er or tr"stee, #ein persons so entitled KB Provided that/ GaH in the case of a company not ha!in a share capital, this s"#/section shall not reD"ire the sendin of a copy of the doc"ments aforesaid to a mem#er, or holder of de#ent"res, of the company who is not entitled to ha!e notices of eneral meetin s of the company sent to himL G#H this s"#/section shall not reD"ire a copy of the doc"ments aforesaid to #e sent/ GiH to a mem#er, or holder of de#ent"res, of the company, who is not entitled to ha!e notices of eneral meetin s of the company sent to him and of whose address the company is "nawareL GiiH GiiiH to more than one of the Coint holders of any shares or de#ent"res none of whom is entitled to ha!e s"ch notices sent to himL AJ J JB

in the case of Coint holders of any shares or de#ent"res some whom are and some of whom are not entitled to ha!e s"ch notices sent to them, to those who are not so entitledL AJ J JB AGi!H in the case of a company whose shares are listed on a reco nised stoc; exchan e, if the copies of the doc"ments aforesaid are made a!aila#le for inspection at its re istered office d"rin wor;in ho"rs for a period of twenty/one days #efore the date of the meetin and a statement containin the salient feat"res of s"ch doc"ments in the prescri#ed form or copies of the doc"ments aforesaid, as the company may deem fit, is sent to e!ery mem#er of the company and to e!ery tr"stee for the holders of any de#ent"re iss"ed #y the company not less than twenty/one days #efore the date of the meetin LB GcH if the copies of the doc"ments aforesaid are sent less than twenty/one days #efore the date of the meetin , they shall, notwithstandin that fact, #e deemed to ha!e #een d"ly sent if it is so a reed #y all the mem#ers entitled to !ote at the meetin L Any mem#er or holder of de#ent"res of a company and any person from whom the company has accepted a s"m of money #y way of deposit shall, on demand, #e entitled to #e f"rnished free of cost, with a copy of the last #alance sheet of the company and of e!ery doc"ment reD"ired #y law to #e annexed or attached thereto, incl"din the profit and loss acco"nt and the a"ditorsI report.B If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB. If, when any person ma;es a demand for a copy of any doc"ment with which he is entitled to #e finished #y !irt"e of s"#/section G2H, defa"lt is made in complyin with the demand within se!en days after the ma;in thereof, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB, "nless it is pro!ed that that person had already made a demand for and #een f"rnished with a copy of the doc"ment. .he A*entral +o!ernmentB may also, #y order, direct that the copy demanded shall forthwith #e f"rnished to the person concerned. G'H S"#/sections G1H to G$H shall not apply in relation to a #alance sheet of a pri!ate company laid #efore it #efore the commencement of this ActL and in s"ch a case the ri ht of any person to ha!e sent to him or to #e f"rnished with a copy of the #alance sheet, and the lia#ility of the company in respect of a fail"re to satisfy that ri ht, shall #e the same as they wo"ld ha!e #een if this Act had not #een passed.

AG2H

G3H G$H

220.
G1H

0hree copies o! &alance sheet, etc., to &e !iled with :egistrar

After the #alance sheet and the profit and loss acco"nt ha!e #een laid #efore a company at an ann"al eneral meetin as aforesaid, there shall #e filed with the 8e istrar Awithin thirty days from the date on which the #alance sheet and the profit and loss acco"nt were so laidB Aor where the ann"al eneral

meetin of a company for any year has not #een held, there shall #e filed with the 8e istrar within thirty days from the latest day on or #efore which that meetin sho"ld ha!e #een held in accordance with the pro!isions of this Act,B/ GaH AJ J JB three copies of the #alance sheet and the profit and loss acco"nt, si ned #y the mana in director, AJ J JB mana er, or secretary of the company, or if there #e none of these, #y a director of the company, to ether with three copies of all doc"ments which are reD"ired #y this Act to #e annexed or attached to s"ch #alance sheet or profit and loss acco"nt K AProvided that in the case of a pri!ate company, copies of the #alance sheet and copies of the profit and loss acco"nt shall #e filed with the 8e istrar separately KB AJ J JB AProvided !urther that,/ in the case of a pri!ate company which is not a s"#sidiary of a p"#lic company, or in the case of a pri!ate company of which the entire paid/"p share capital is held #y one or more #odies corporate incorporated o"tside India, or GiiiH in the case of a company which #ecomes a p"#lic company #y !irt"e of section $3A, if the *entral +o!ernment directs that it is not in the p"#lic interest that any person other than a mem#er of the company shall #e entitled to inspect, or o#tain copies of, the profit and loss acco"nt of the company, no person other than a mem#er of the company concerned shall #e entitled to inspect, or o#tain copies of, the profit and loss acco"nt of that company "nder section (10.B If the ann"al eneral meetin of a AJ J JB company #efore which a #alance sheet is laid as aforesaid does not adopt the #alance sheetB Aor is adCo"rned witho"t adoptin the #alance sheetB ,7A, or, if the ann"al eneral meetin of a company for any year has not #een held,B a statement of that fact and of the reasons therefor shall #e annexed to the #alance sheet and to the copies thereof reD"ired to #e filed with the 8e istrar. If defa"lt is made in complyin with the reD"irements of s"#/sections G1H and G2H, the company, and e!ery officer of the company who is in defa"lt, shall #e lia#le to the li;e p"nishment as is pro!ided #y section 1(2 for a defa"lt in complyin with the pro!isions of sections 1',, 1(0 or 1(1. GiH GiiH

G2H

G3H

221.
G1H

ut% o! o!!icer to ma=e disclosure o! pa%ments, etc

=here any partic"lars or information is reD"ired to #e i!en in the #alance sheet or profit and loss acco"nt of a company or in any doc"ment reD"ired to #e annexed or attached thereto, it shall #e the d"ty of the concerned officer of the company to f"rnish witho"t delay to the company, and also to the companyIs a"ditor, whene!er he so reD"ires, those partic"lars or that information in as f"ll a manner as possi#le. AJ J JB. .he partic"lars or information referred to in s"#/section G1H may relate to payments made to any director, AJ J JB or other person #y any other company, #ody corporate, firm or person. If any person ;nowin ly ma;es defa"lt in performin the d"ty cast on him #y the fore oin pro!isions of this section, he shall #e p"nisha#le with imprisonment which may extend to six months, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth.

G2H G3H G$H

222.

Construction o! re!erences to documents annexed to accounts

8eferences in this Act to doc"ments annexed or reD"ired to #e annexed to a companyIs acco"nts or any of them shall not incl"de the 0oardIs report, the a"ditorsI report or any doc"ment attached or reD"ired to #e attached to those acco"nts K Provided that any information which is reD"ired #y this Act to #e i!en in the acco"nts, and is allowed #y it to #e i!en in a statement annexed to the acco"nts, may #e i!en in the 0oardIs report instead of in the acco"ntsL and if any s"ch information is so i!en, the report shall #e annexed to the acco"nts and this Act shall apply in relation thereto accordin ly, except that the a"ditors shall report thereon only in so far as it i!es the said information.

22#.
G1H

Certain companies to pu&lish statement in the 5orm in 0a&le 5 in Schedule "

1!ery company which is a limited #an;in company, an ins"rance company, or a deposit, pro!ident, or #enefit society, shall, #efore it commences #"siness and also on the first %onday in 3e#r"ary and the first %onday in A" "st in e!ery year d"rin which it carries on #"siness, ma;e a statement in the 3orm in .a#le 3 in Sched"le I, or in a 3orm as near thereto as circ"mstances admit. A copy of the statement, to ether with a copy of the last a"dited #alance sheet laid #efore the mem#ers of the company, shall #e displayed and "ntil the display of the next followin statement, shall #e ;ept, displayed, in a conspic"o"s place in the re istered office of the company, and in e!ery #ranch office or place where the #"siness of the company is carried on. 1!ery mem#er, and e!ery creditor, of the company shall #e entitled, on payment of a s"m of ei ht annas, to #e f"rnished with a copy of the statement, within se!en days of s"ch payment. If defa"lt is made in complyin with any of the reD"irements of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 21AAfi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es. .his, section shall not apply to a life ass"rance company or pro!ident ins"rance society to which the pro!isions of the Ins"rance Act, 1,3), as to the ann"al statements to #e made #y s"ch company or society, apply, with or witho"t modifications, if the company or society complies with those pro!isions.

G2H

G3H G$H

G'H

Audit 22'.
AG1H

Appointment and remuneration o! auditors

1!ery company shall, at each ann"al eneral meetin , appoint an a"ditor or a"ditors to hold office from the concl"sion of that meetin "ntil the concl"sion of the next ann"al eneral meetin and shall, within se!en days of the appointment, i!e intimation thereof to e!ery a"ditor so appointed AJ J JBL AProvided that #efore any appointment or re/appointment of a"ditor or a"ditors is made #y any company at any ann"al eneral meetin , a written certificate shall #e o#tained #y the company from the a"ditor or a"ditors proposed to #e so appointed to the effect that the appointment or re/ appointment, if made, will #e in accordance with the limits specified in s"#/section G10H.B

G1AH

AG10H

1!ery a"ditor appointed "nder s"#/section G1H, AJ J JB shall within thirty days of the receipt from the company of the intimation of his appointment, inform the 8e istrar in writin that he has accepted, or ref"sed to accept, the appointment.B :n and from the financial year next followin the commencement of the *ompanies GAmendmentH Act, 1,7$, no company or its 0oard of directors shall appoint or re/appoint any person Awho is in f"ll/ time employment elsewhereB or firm as its a"ditors if s"ch person or firm is, at the date of s"ch appointment or re/appointment, holdin appointment as a"ditor of the specified n"m#er of companies or more than the specified n"m#er of companies K AProvided that in the case of a firm of a"ditors, "specified n"m#er of companies" shall #e constr"ed as the n"m#er of companies specified for e!ery partner of the firm who is not in f"ll/time employment elsewhereB K Provided !urther that where any partner of the firm is also a partner of any other firm or firms of a"ditors, the n"m#er of companies which may #e ta;en into acco"nt, #y all the firms to ether, in relation to s"ch partner shall not exceed the specified n"m#er, in the a re ateB K Provided also that where any partner of a firm of a"ditors is also holdin office, in his indi!id"al capacity, as the a"ditor of one or more companies, the n"m#er of companies which may #e ta;en into acco"nt in his case shall not exceed the specified n"m#er, in the a re ate. AProvided also that the pro!isions of this s"#/section shall not apply, on and after the commencement of the *ompanies GAmendmentH Act, 2000, to a pri!ate company.B 3or the p"rposes of ena#lin a company to comply with the pro!isions of s"#/section G10H, a person or firm holdin , immediately #efore the commencement of the *ompanies GAmendmentH Act, 1,7$, appointment as the a"ditor of a n"m#er of companies exceedin the specified n"m#er, shall, within sixty days from s"ch commencement, intimate his or its "nwillin ness to #e re/appointed as the a"ditor

AG1*H

from the financial year next followin s"ch commencement, to the company or companies of which he or it is not willin to #e re/appointed as the a"ditorL and shall sim"ltaneo"sly intimate to the 8e istrar the names of the companies of which he or it is willin to #e re/appointed as the a"ditor and forward a copy of the intimation to each of the companies referred to therein. Explanation I(/3or the p"rposes of s"#/sections G10H and G1*H, "specified n"m#er" means,/ GaH G#H in the case of a person or firm holdin appointment as a"ditor of a n"m#er of companies each of which has a paid/"p share capital of less than r"pees twenty/fi!e la;hs, twenty s"ch companiesL in any other case, twenty companies, o"t of which not more than ten shall #e companies each of which has a paid/"p share capital of r"pees twenty/fi!e la;hs or more.

G2H

Explanation II(/In comp"tin the specified n"m#er, the n"m#er of companies in respect of which or any part of which any person or firm has #een appointed as an a"ditor, whether sin ly or in com#ination with any other person or firm, shall #e ta;en into acco"nt. AS"#Cect to the pro!isions of s"#/section G10H and section 22$A, at any ann"al eneral meetin B, a retirin a"ditor, #y whatsoe!er a"thority appointed, shall #e re/appointed, "nless/ GaH he is not D"alified for re/appointmentL G#H GcH GdH he has i!en the company notice in writin of his "nwillin ness to #e re/appointedL a resol"tion has #een passed at that meetin appointin some#ody instead of him or pro!idin expressly that he shall not #e re/appointedL or where notice has #een i!en of an intended resol"tion to appoint some person or persons in the place of a retirin a"ditor, and #y reason of the death, incapacity or disD"alification of that person or of all those persons, as the case may #e, the resol"tion cannot #e proceeded with.

G3H G$H

=here at an ann"al eneral meetin no a"ditors are appointed or re/appointed, the *entral +o!ernment may appoint a person to fill the !acancy. .he company shall, within se!en days of the *entral +o!ernmentIs power "nder s"#/section G3H, #ecomin exercisa#le, i!e notice of that fact to that +o!ernmentL and, if a company fails to i!e s"ch notice, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le, with fine which may extend to Afi!e tho"sand r"peesB. .he first a"ditor or a"ditors of a company shall #e appointed #y the 0oard of directors within one month of the date of re istration of the companyL and the a"ditor or a"ditors so appointed shall hold office "ntil the concl"sion of the first ann"al eneral meetin K Provided that/ GaH the company may, at a eneral meetin , remo!e any s"ch a"ditor or all or any of s"ch a"ditors and appoint in his or their places any other person or persons who ha!e #een nominated for appointment #y any mem#er of the company and of whose nomination notice has #een i!en to the mem#ers of the company not less than fo"rteen days #efore the date of the meetin L and if the 0oard fails to exercise its powers "nder this s"#/section, the company in eneral meetin may appoint the first a"ditor or a"ditors.

G'H

G#H G(HGaH

.he 0oard may fill any cas"al !acancy in the office of an a"ditorL #"t while any s"ch !acancy contin"es, the remainin a"ditor or a"ditors, if any, may act K Provided that where s"ch !acancy is ca"sed #y the resi nation of an a"ditor, the !acancy shall only #e filled #y the company in eneral meetin .

G#H G7H

Any a"ditor appointed in a cas"al !acancy shall hold office "ntil the concl"sion of the next ann"al eneral meetin . 1xcept as pro!ided in the pro!iso to s"#/section G'H, any a"ditor appointed "nder this section may #e remo!ed from office #efore the expiry of his term only #y the company in eneral meetin , after o#tainin the pre!io"s appro!al of the *entral +o!ernment in that #ehalf. .he rem"neration of the a"ditors of a company/ GaH in the case of an a"ditors appointed #y the 0oard or the *entral +o!ernment, may #e fixed #y the 0oard or the *entral +o!ernment, as the case may #eL and

G)H

AGaaH in the case of an a"ditor appointed "nder section (1, #y the *omptroller and A"ditor/+eneral of India, shall #e fixed #y the company in eneral meetin or in s"ch manner as the company in eneral meetin may determine.B

G#H

s"#Cect to cla"se GaH, shall #e fixed #y the company in eneral meetin or in s"ch manner as die company in eneral meetin may determine. 3or the p"rposes of this s"#/section, any s"ms paid #y the company in respect of the a"ditorsI expenses shall #e deemed to #e incl"ded in the expression "rem"neration".

22'A. Auditor not to &e appointed except with the approval o! the compan% &% special resolution in certain cases
G1H In the case of a company in which not less than twenty/fi!e per cent of the s"#scri#ed share capital is held, whether sin ly or in any com#ination, #y/ GaH a p"#lic financial instit"tion or a +o!ernment company or *entral +o!ernment or any State +o!ernment, or G#H any financial or other instit"tion esta#lished #y any &ro!incial or State Act in which a State +o!ernment holds not less than fifty/one per cent of the s"#scri#ed share capital, or GcH a nationalised #an; or an ins"rance company carryin on eneral ins"rance #"siness, the appointment or re/appointment at each ann"al eneral meetin of an a"ditor or a"ditors shall #e made #y a special resol"tion. =here any company referred to in s"#/section G1H omits or fails to pass at its ann"al eneral meetin any special resol"tion appointin an a"ditor or a"ditors, it shall #e deemed that no a"ditor or a"ditors had #een appointed #y the company at its ann"al eneral meetin , and there"pon the pro!isions of s"#/ section G3H of section 22$ shall #ecome applica#le in relation to s"ch company. Explanation( /3or the p"rposes of this section,/ GaH " eneral ins"rance #"siness" has the meanin assi ned to it in the +eneral Ins"rance G1mer ency &ro!isionsH Act, 1,71L G#H "nationalised #an;" means a correspondin new #an; as defined in the 0an;in *ompanies GAcD"isition and .ransfer of <nderta;in sH Act, 1,70 113Aor in the 0an;in *ompanies GAcD"isition and .ransfer of <nderta;in sH Act, 1,)0.B

G2H

22).
G1H

Provisions as to resolutions !or appointing or removing auditors

Special notice shall #e reD"ired for a resol"tion at an ann"al eneral meetin appointin as a"ditor a person other than a retirin a"ditor, or pro!idin expressly that a retirin a"ditor shall not #e re/ appointed. :n receipt of notice of s"ch a resol"tion, the company shall forthwith send a copy thereof to the retirin a"ditor. =here notice is i!en of s"ch a resol"tion and the retirin a"ditor ma;es with respect thereto representations in writin to the company Gnot exceedin a reasona#le len thH and reD"ests their notification to mem#ers of the company, the company shall, "nless the representations are recei!ed #y it too late for it to do so,/ GaH G#H in any notice of the resol"tion i!en to mem#ers of the company, state the fact of the representations ha!in #een made, and send a copy of the representations to e!ery mem#er of the company to whom notice of the meetin is sent, whether #efore or after the receipt of the representations #y the companyL

G2H G3H

and if a copy of the representations is not sent as aforesaid #eca"se they were recei!ed too late or #eca"se of the companyIs defa"lt the a"ditor may Gwitho"t preC"dice to his ri ht to #e heard orallyH reD"ire that the representations shall #e read o"t at the meetin K Provided that copies of the representations need not #e sent o"t and the representations need not #e read o"t at the meetin if, on the application either of the company or of any other person who claims to #e a rie!ed, the A*entral +o!ernmentB is satisfied that the ri hts conferred #y this s"#/section are #ein a#"sed to sec"re needless p"#licity for defamatory matterL and the (aA*entral +o!ernmentB may order the companyIs costs on s"ch an application to #e paid in whole or in part #y the a"ditor, notwithstandin that he is not a party to the application.

G$H

S"#/sections G2H and G3H shall apply to a resol"tion to remo!e the first a"ditors or any of them "nder s"#/section G'H of section 22$ or to the remo!al of any a"ditor or a"ditors "nder s"#/section G7H of that section, as they apply in relation to a resol"tion that a retirin a"ditor shall not #e re/appointed.

22*.
G1H

7uali!ications and disDuali!ications o! auditors

A person shall not #e D"alified for appointment as a"ditor of a company "nless he is a chartered acco"ntant within the meanin of the *hartered Acco"ntants Act, 1,$, K Provided that a firm whereof all the partners practisin in India are D"alified for appointment as aforesaid may #e appointed #y its firm name to #e a"ditor of a company, in which case any partner so practisin may act in the name of the firm. 4otwithstandin anythin contained in s"#/section G1H, #"t s"#Cect to the pro!isions of any r"les made "nder cla"se G#H, the holder of a certificate ranted "nder a law in force in the whole or any portion of a &art 0 State immediately #efore the commencement of the &art 0 States G2awsH Act, 1,'1 Aor of the -amm" and 9ashmir G1xtension of 2awsH Act, 1,'(, as the case may #e,B entitlin him to act as an a"ditor of companies Ain the territories which, immediately #efore the 1st 4o!em#er, 1,'(, were comprised in that StateB or any portion thereof, shall #e entitled to #e appointed to act as an a"ditor of companies re istered anywhere in AIndiaB. .he *entral +o!ernment may, #y notification in the :fficial +aFette, ma;e r"les pro!idin for the rant, renewal, s"spension or cancellation of a"ditorsI certificates to persons in Athe territories which, immediately #efore the 1st 4o!em#er, 1,'(, were comprised in &art 0 StatesB for the p"rposes of cla"se GaH, and prescri#in conditions and restrictions for s"ch rant, renewal, s"spension or cancellation. 4one of the followin persons shall #e D"alified for appointment as a"ditor of a company/ GaH a #ody corporateL G#H GcH GdH an officer or employee of the companyL a person who is a partner, or who is in the employment, of an officer or employee of the companyL a person who is inde#ted to the company for an amo"nt exceedin one tho"sand r"pees, or who has i!en any "arantee or pro!ided any sec"rity in connection with the inde#tedness of any third person to the company for an amo"nt exceedin one tho"sand r"peesL a person holdin any sec"rity of that company after a period of one year from the date of commencement of the *ompanies GAmendmentH Act, 2000.

G2HGaH

G#H

G3H

AGeH

Explanation( /3or the p"rposes of this section, "sec"rity" means and instr"ment which carries !otin ri hts.B Provided that any shares held #y s"ch person as nominee or tr"stee for any third person and in which the holder has no #eneficial interest shall #e excl"ded in comp"tin the percenta e of shares held #y him for the p"rpose of this cla"se. Explanation( / 8eferences in this s"#/section to an officer or employee shall #e constr"ed as not incl"din references to an a"ditor. A person shall also not #e D"alified for appointment as a"ditor of a company if he is, #y !irt"e of s"#/ section G3H, disD"alified for appointment as a"ditor of any other #ody corporate which is that companyIs s"#sidiary holdin company, or a s"#sidiary of that companyEs holdin company, or wo"ld #e so disD"alified if the #ody corporate were a company. If an a"ditor #ecomes s"#Cect, after his appointment, to any of the disD"alifications specified in s"#/ sections G3H and G$H, he shall #e deemed to ha!e !acated his office as s"ch.

G$H

G'H

22+.
G1H

Powers and duties o! auditors

1!ery a"ditor of a company shall ha!e a ri ht of access at all times to the #oo;s and acco"nts and !o"chers of the company, whether ;ept at the head office of the company or elsewhere, and shall #e entitled to reD"ire from the officers of the company s"ch information and explanations as the a"ditor may thin; necessary for the performance of his d"ties as a"ditor.

AG1AH

=itho"t preC"dice to the pro!isions of s"#/section G1H, the a"ditor shall inD"ire/ GaH whether loans and ad!ances made #y the company on the #asis of sec"rity ha!e #een properly sec"red and whether the terms on which they ha!e #een made are not preC"dicial to the interests of the company or its mem#ersL where transactions of the company which are represented merely #y #oo; entries are not preC"dicial to the interests of the companyL where the company is not an in!estment company within the meanin of section 372 or a #an;in company, whether so m"ch of the assets of the company as consist of shares, de#ent"res and other sec"rities ha!e #een sold at a price less than that at which they were p"rchased #y the companyL whether loans and ad!ances made #y the company ha!e #een shown as depositsL

G#H GcH

GdH GeH GfH

G2H

whether personal expenses ha!e #een char ed to re!en"e acco"ntL where it is stated in the #oo;s and papers of the company that any shares ha!e #een allotted for cash, whether cash has act"ally #een recei!ed in respect of s"ch allotment, and if no cash has act"ally #een so recei!ed, whether the position as stated in the acco"nt #oo;s and the #alance sheet is correct, re "lar and not misleadin .B .he a"ditor shall ma;e a report to the mem#ers of the company on the acco"nts examined #y him, and on e!ery #alance sheet and profit and loss acco"nt and on e!ery other doc"ment declared #y this Act to #e part of or annexed to the #alance sheet or profit and loss acco"nt, which are laid #efore the company in eneral meetin d"rin his ten"re of office, and the report shall state whether, in his opinion and to the #est of his information and accordin to the explanations i!en to him, the said acco"nts i!e the information reD"ired #y this Act in the manner so reD"ired and i!e a tr"e and fair !iew/ GiH in the case of the #alance sheet, of the state of the companyIs affairs as at the end of its financial yearL and GiiH in the case of the profit and loss acco"nt, of the profit or loss for its financial year. .he a"ditorIs report shall also state/ GaH whether he has o#tained all the information and explanations which to the #est of his ;nowled e and #elief were necessary for the p"rposes of his a"ditL G#H whether, in his opinion, proper #oo;s of acco"nt as reD"ired #y law ha!e #een ;ept #y the company so far as appears from his examination of those #oo;s, and proper ret"rns adeD"ate for the p"rposes of his a"dit ha!e #een recei!ed from #ranches not !isited #y himL AG##H whether the report on the acco"nts of any #ranch office a"dited "nder section 22) #y a person other than the companyIs a"ditor has #een forwarded to him as reD"ired #y cla"se GcH of s"#/ section G3H of that section and how he has dealt with the same in preparin the a"ditorIs reportLB GcH whether the companyIs #alance sheet and profit and loss acco"nt dealt with #y the report are in a reement with the #oo;s of acco"nt and ret"rnsL AGdH whether, in his opinion, the profit and loss acco"nt and #alance sheet complied with the acco"ntin standards referred to in s"#/section G3*H of section 211.B AGeH in thic; type or in italics the o#ser!ations or comments of the a"ditors which ha!e any ad!erse effect on the f"nctionin of the companyL GfH whether any director is disD"alified from #ein appointed as director "nder cla"se G H of s"#/ section G1H of section 27$.B AG2H whether the cess paya#le "nder section $$1A has #een paid and if not, the details of amo"nt of cess not so paid.B. =here any of the matters referred to in cla"ses GiH and GiiH of s"#/section G2H or in cla"ses GaH, G#H, A, G##HB AGcH and GdHB of s"#/section G3H is answered in the ne ati!e or with a D"alification, the a"ditorIs report shall state the reason for the answer. .he *entral +o!ernment may, #y eneral or special order, direct that, in the case of s"ch class or description of companies as may #e specified in the order, the a"ditorIs report shall also incl"de a statement on s"ch matters as may he specified therein K Provided that #efore ma;in any s"ch order the *entral +o!ernment may cons"lt the Instit"te of *hartered Acco"ntants of India constit"ted "nder the *hartered Acco"ntants Act, 1,$,, in re ard to the class or description of companies and other ancillary matters proposed to #e specified therein

G3H

G$H

AG$AH

AG'H

"nless the +o!ernment decides that s"ch cons"ltation is not necessary or expedient in the circ"mstances of the case.B .he acco"nts of a company shall not #e deemed as not ha!in #een, and the a"ditorIs report shall not state that those acco"nts ha!e not #een, properly drawn "p on the ro"nd merely that the company has not disclosed certain matters if/ GaH G#H .hose matters are s"ch as the company is not reD"ired to disclose #y !irt"e of any pro!isions contained in this or any other Act, and .hose pro!isions are specified in the #alance sheet and profit and loss acco"nt of the company.B

22,.
G1H

Audit o! accounts o! &ranch o!!ice o! compan%

=here a company has a #ranch office, the acco"nts of that office shall, 1A#e a"dited #y the companyEs a"ditor appointed "nder section 22$ orB #y a person D"alified for appointment as a"ditor of the company "nder section 22(, or where the #ranch office is sit"ate in a co"ntry o"tside India, either 2A#y the companyEs a"ditor or a person D"alified as aforesaidB or #y an acco"ntant d"ly D"alified to act as an a"ditor of the acco"nts of the #ranch office in accordance with the laws of that co"ntry. =here the acco"nts of any #ranch office are Aa"dited #y a person other than the companyEs a"ditorB the companyEs a"ditor/ GaH shall #e entitled to !isit the #ranch office, if he deems it necessary to do so for the performance of his d"ties as a"ditor, and G#H shall ha!e a ri ht of access at all times to the #oo;s and acco"nts and !o"chers of the company maintained at the #ranch office K Provided that in the case of a #an;in company ha!in a #ranch office o"tside India, it shall #e s"fficient if the a"ditor is allowed access to s"ch copies of, and extracts from, the #oo;s and acco"nts of the #ranch as ha!e #een transmitted to the principle office of the company in India.

G2H

AG3HGaH =here a company in eneral meetin decides to ha!e the acco"nts of a #ranch office a"dited otherwise than #y the companyEs a"ditor, the company in that meetin shall for the a"dit of those acco"nts appoint a person D"alified for appointment as a"ditor of the company "nder section 22(, or where the #ranch office is sit"ate in a co"ntry o"tside India, a person who is either D"alified as aforesaid or an acco"ntant d"ly D"alified to act as an a"ditor of the acco"nts of the #ranch office in accordance with the laws of the co"ntry, or a"thorise the 0oard of directors to appoint s"ch a person in cons"ltation with the companyEs a"ditorL G#H the person so appointed Ghereafter in this section referred to as the #ranch a"ditorH shall ha!e the same powers and d"ties in respect of a"dit of the acco"nts of the #ranch office as the companyEs a"ditor has in respect of the sameL GcH the #ranch a"ditor shall prepare a report on the acco"nts of the #ranch office examined #y him and forward the same to the companyEs a"ditor who shall in preparin the a"ditorEs report, deal with the same in s"ch manner as he considers necessaryL GdH the #ranch a"ditor shall recei!e s"ch rem"neration and shall hold his appointment s"#Cect to s"ch terms and conditions as may #e fixed either #y the company in eneral meetin or #y the 0oard of directors if so a"thorised #y the company in eneral meetin . G$H 4otwithstandin anythin contained in the fore oin pro!isions of this section, the *entral +o!ernment Amay ma;e r"les pro!idin for the exemption ofB any #ranch office from the pro!isions of this section to the extent specified in the r"les and in ma;in s"ch r"les the *entral +o!ernment shall ha!e re ard to all or any of the followin matters, namely K/ GaH the arran ement made #y the company for the a"dit of acco"nts of the #ranch office #y a person otherwise D"alified for appointment as #ranch a"ditor e!en tho" h s"ch person may #e an officer or employee of the companyL the nat"re and D"ant"m of acti!ity carried on at the #ranch office d"rin a period of three years immediately precedin the date on which the #ranch office is exempted from the pro!isions of this sectionL the a!aila#ility at a reasona#le cost of a #ranch a"ditor for the a"dit of acco"nts of the #ranch officeL

G#H

GcH

GdH

any other matter which in the opinion of the *entral +o!ernment C"stifies the rant of exemption to the #ranch office from the pro!isions of this section.B

22..

Signature o! audit report, etc

:nly the person appointed as a"ditor of the company, or where a firm is so appointed in p"rs"ance of the pro!iso to s"#/section G1H of section 22(, only a partner in the firm practisin in India, may si n the a"ditors report, or si n or a"thenticate any other doc"ment of the company reD"ired #y law to #e si ned or a"thenticated #y the a"ditor.

2#0.

:eading and inspection o! auditorEs report

.he a"ditorEs report shall #e read #efore the company in eneral meetin and shall #e open to inspection #y any mem#er of the company.

2#1.

:ight o! auditor to attend general meeting

All notices of, and other comm"nications relatin to, any eneral meetin of a company which any mem#er of the company is entitled to ha!e sent to him shall also #e forwarded to the a"ditor of the companyL and the a"ditor shall #e entitled to attend any eneral meetin and to #e heard at any eneral meetin which he attends on any part of the #"siness which concerns him as a"ditor.

2#2.

Penalt% !or non1compliance with sections 22) to 2#1

If defa"lt is made #y a company in complyin with any of the pro!isions contained in section 22' to 231, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

2##.

Penalt% !or non1compliance &% auditor with sections 22+ and 22.

If any a"ditorEs report is made, or any doc"ment of the company is si ned or a"thenticated, otherwise than in conformity with the reD"irements of sections 227 and 22,, the a"ditor concerned, and the person, if any, other than the a"ditor who si ns the report or si ns or a"thenticates the doc"ment, shall, if the defa"lt is wilf"l, #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB.

2##A. Power o! Central -overnment to direct special audit in certain cases

G1H =here the *entral +o!ernment is of the opinion/ GaH that the affairs of any company are not #ein mana ed in accordance with so"nd #"siness principles or pr"dent commercial practicesL or G#H that any company is #ein mana ed in a manner li;ely to ca"se serio"s inC"ry or dama e to the interests of the trade, ind"stry or #"siness to which it pertainsL or GcH that the financial position of any company is s"ch as to endan er its sol!encyL the *entral +o!ernment may at any time #y order direct that a special a"dit of the companyEs acco"nts for s"ch period or periods as may #e specified in the order, shall #e cond"cted and may #y the same or a different order appoint either a chartered acco"ntant as defined in cla"se G#H of s"#/section G1H of section 2 of the *hartered Acco"ntants Act, 1,$, Gwhether or not s"ch chartered acco"ntant is a chartered acco"ntant in practice within the meanin of that ActH or the companyEs a"ditor himself to cond"ct s"ch special a"dit. G2H .he chartered acco"ntant or the companyEs a"ditor appointed "nder s"#section G1H to cond"ct a special a"dit as aforesaid is hereafter in this section referred to as the special a"ditor.

G3H

G$H

.he special a"ditor shall ha!e the same powers and d"ties in relation to the special a"dit as an a"ditor of a company has "nder section 227. Provided that the special a"ditor shall, instead of ma;in his report to the mem#ers of the company, ma;e the same to the *entral +o!ernment. .he report of the special a"ditor shall, as far as may #e, incl"de all the matters reD"ired to #e incl"ded in an a"ditorEs Kreport "nder section 227 and, if the *entral +o!ernment so directs, shall also incl"de a statement on any other matter which may #e referred to him #y that +o!ernment. .he *entral +o!ernment may #y order direct any person specified in the order to f"rnish to the special a"ditor within s"ch time as may #e specified therein s"ch information or additional information as may #e reD"ired #y the special a"ditor in connection with the special a"ditL and on fail"re to comply with s"ch order s"ch person shall #e p"nisha#le with fine which may extend to 'AAfi!e tho"sand r"peesB. :n receipt of the report of the special a"ditor, the *entral +o!ernment may ta;e s"ch action on the report as it considers necessary in accordance with the pro!isions of this Act or any other law for the time #ein in forceK Provided that if the *entral +o!ernment does not ta;e any action on the report within fo"r months from the date of its receipt, that +o!ernment shall send to the company either a copy of, or rele!ant extract from, the report with its comments thereon and reD"ire the company either to circ"late that copy or those extracts to the mem#ers or to ha!e s"ch copy or extracts read #efore the company at its next eneral meetin . .he expenses of, and incidental to, any special a"dit "nder this section Gincl"din the rem"neration of the special a"ditorH shall #e determined #y the *entral +o!ernment Gwhich determination shall #e finalH and paid #y the company and in defa"lt of s"ch payment shall #e reco!era#le from the company as an arrear of land re!en"e.

G'H

G(H

G7H

2##2. Audit o! cost accounts in certain cases

G1H =here in the opinion of the *entral +o!ernment it is necessary so to do in relation to any company reD"ired "nder cla"se GdH of s"#/section G1H of section 20, to incl"de in its #oo;s of acco"nt the partic"lars referred to therein, the *entral +o!ernment may, #y order direct that an a"dit of cost acco"nts of the company shall #e cond"cted in s"ch manner as may #e specified in the order #y an a"ditor Awho shall #e a cost acco"ntant within the meanin of the *ost and =or;s Acco"ntants Act, 1,',B K Provided that if the *entral +o!ernment is of opinion that s"fficient n"m#er of cost acco"ntants within the meanin of the *ost and =or;s Acco"ntants Act, 1,', are not a!aila#le for cond"ctin the a"dit of the cost acco"nts of companies enerally, that +o!ernment may, #y notification in the :fficial +aFette, direct that, for s"ch period as may #e specified in the said notification, s"ch *hartered Acco"ntant within the meanin of the *hartered Acco"ntants Act, 1,$,, as possesses the prescri#ed D"alifications, may also cond"ct the a"dit of the cost acco"nts of companies, and there"pon a *hartered Acco"ntant possessin the prescri#ed D"alifications may #e appointed to a"dit the cost acco"nts of the company.B AG2H .he a"ditor "nder this section shall #e appointed #y the 0oard of directors of the company in accordance with the pro!isions of s"#/section G10Hof section 22$ and with the pre!io"s appro!al 10 of the *entral +o!ernment K Provided that #efore the appointment of any a"ditor is made #y the 0oard, a written certificate shall #e o#tained #y the 0oard from the a"ditor proposed to #e so appointed to the effect that the appointment, if made, will #e in accordance with the pro!isions of s"#/section G10H of section 22$.B An a"dit cond"cted #y an a"ditor "nder this section shall #e in addition to an a"dit cond"cted #y an a"ditor appointed "nder section 22$. An a"ditor shall ha!e the same powers and d"ties in relation to an a"dit cond"cted #y him "nder this section as an a"ditor of a company has "nder s"#section G1H of section 227 and s"ch a"ditor shall ma;e his report to the 11A*entral +o!ernmentB in s"ch form and within s"ch time as may #e prescri#ed and shall also at the same time forward a copy of the report to the company.B

G3H G$H

AG'HGaH A person referred to in s"#/section G3H or s"#/section G$H of section 22( shall not #e appointed or re/ appointed for cond"ctin the a"dit of the cost acco"nts of a company.

G#H A person appointed, "nder section 22$, as an a"ditor of a company, shall not #e appointed or re/ appointed for cond"ctin the a"dit of the cost acco"nts of that company. GcH If a person, appointed for cond"ctin the a"dit of cost acco"nts of a company, #ecomes s"#Cect, after his appointment, to any of the disD"alifications specified in cla"se GaH or cla"se G#H of this s"#/section, he shall on and from the date on which he #ecomes so s"#Cect, cease to cond"ct the a"dit of the cost acco"nts of the company. G(H <pon receipt of an order "nder s"#/section G1H, it shall #e the d"ty of the company to i!e all facilities and assistance to the person appointed for cond"ctin the a"dit of the cost acco"nts of the company. G7H .he company shall, within thirty days from the date of receipt of a copy of the report referred to in s"#/ section G$H, f"rnish the *entral +o!ernment with f"ll information and explanations on e!ery reser!ation or D"alification contained in s"ch report. G)H If, after considerin the report referred to in s"#/section G$H and the information and explanations f"rnished #y the company "nder s"#/section G7H, the *entral +o!ernment is of opinion that any f"rther information or explanation is necessary that +o!ernment may call for s"ch f"rther information and explanation and there"pon the company shall f"rnish the same within s"ch time as may #e specified #y that +o!ernment. :n receipt of the report referred to in s"#/section G$H and the informations and explanations f"rnished #y the company "nder s"#/section G7H and s"#/section G)H, the *entral +o!ernment may ta;e s"ch action on the report, in accordance with the pro!isions of this Act or any other law for the time #ein in force, as it may consider necessary. .he *entral +o!ernment may direct the company whose cost acco"nts ha!e #een a"dited "nder this section to circ"late to its mem#ers, alon with the notice of the ann"al eneral meetin to #e held for the first time after the s"#mission of s"ch report, the whole or s"ch portion of the said report as it may specify in this #ehalf. If defa"lt is made in complyin with the pro!isions of this section, the company shall #e lia#le to #e p"nished with fine which may extend to fi!e tho"sand r"pees, and e!ery officer of the company who is in defa"lt, shall #e lia#le to #e p"nished with imprisonment for a term which may extend to three years, or with fine which may extend to 12AAfifty tho"sand r"peesB, or with #oth.B

G,H

G10H

G11H

Power of registrar to call for information etc! 2#'.

G1H

Power o! :egistrar to call !or in!ormation or explanation

=here, on per"sin any doc"ment which a company is reD"ired to s"#mit to him "nder this Act, the 8e istrar is of opinion that any information or explanation is necessary Awith respect to any matter to which s"ch doc"mentH p"rports to relate, he may, #y a written order, call on the company s"#mittin the doc"ment to f"rnish in writin s"ch information or explanation, within s"ch time as he may specify in the order. :n receipt #y the company of an order "nder s"#/section G1H, it shall #e the d"ty of the company, and of all persons who are officers of the company, to f"rnish s"ch information or explanation to the #est of their power. :n receipt of a copy of an order "nder s"#/section G1H, it shall also #e the d"ty of e!ery person who has #een an officer of the company to f"rnish s"ch information or explanation to the #est of his power. If no information or explanation is f"rnished within the time specified or if the information or explanation f"rnished is, in the opinion of the 8e istrar, inadeD"ate, the 8e istrar may #y another written order call on the company to prod"ce #efore him for his inspection s"ch #oo;s and papers as he considers necessary within s"ch time as he may specify in the orderL and it shall #e the d"ty of the company, and of all persons who are officers of the company, to prod"ce s"ch #oo;s and papers.B If the company, or any s"ch person as is referred to in s"#/section G2H or G3H, ref"ses or ne lects to f"rnish any s"ch information or explanation Aor if the company or any s"ch person as is referred to in s"#/section G3AH ref"ses or ne lects to prod"ce any s"ch #oo;s and papersB,/ AGaH the company and each s"ch person shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB and in the case of a contin"in offence, with an additional fine which may extend to Afi!e h"ndred r"peesB for e!ery day after the first d"rin which the offence contin"esL and

G2H

G3H AG3AH

G$H

G#H

AG'H

the co"rt tryin the offence may, on the application of the 8e istrar and after notice to the company, ma;e an order on the company for prod"ction #efore the 8e istrar of s"ch #oo;s and papers as in the opinion of the *o"rt, may reasona#ly #e reD"ired #y the 8e istrar for the p"rpose referred to in s"#/section G1H.B :n receipt of any writin containin the information or explanation referred to in s"#/section G1H, or of any #oo; or paper prod"ced whether in p"rs"ance of an order of the 8e istrar "nder s"#/section G3AH or of an order of the *o"rt "nder s"#/section G$H, the 8e istrar may annex that writin , #oo; or paper, or where that #oo; or paper is reD"ired #y the company, any copy or extract thereof, to the doc"ment referred to in s"#/section G1HL and any writin or any #oo; or paper or copy or extract thereof so annexed shall #e s"#Cect to the li;e pro!isions as to inspection, the ta;in of extracts and the f"rnishin of copies, as that doc"ment is s"#Cect.B If s"ch information or explanation is not f"rnished within the specified time or if after per"sal of s"ch information or explanation or of the #oo;s and papers prod"ced whether in p"rs"ance of an "nder of the 8e istrar "nder s"#section G3AH or of an order of the *o"rt "nder s"#/section G$H, the 8e istrar is of opinion that the doc"ment referred to in s"#/section G1H, to ether with s"ch information or explanation or s"ch #oo;s and papers discloses an "nsatisfactory state of affairs or does not disclose a f"ll and fair statement o any matter to which the doc"ment p"rports to relate, the 8e istrar shall report in writin the circ"mstances of the case to the *entral +o!ernment.B If it is represented to the 8e istrar on materials placed #efore him #y any contri#"tory or creditor or any other person interested that the #"siness of a company is #ein carried on in fra"d of its creditors or of persons dealin with the company or otherwise for a fra"d"lent or "nlawf"l p"rpose, he may, after i!in the company an opport"nity of #ein heard, #y a written order, call on the company to f"rnish in writin any information or explanation on matters specified in the order, within s"ch time as he may specify thereinL and pro!isions of s"#sections G2H, G3H, AG3AHB, G$H and G(H of this section shall apply to s"ch order. If "pon inD"iry the 8e istrar is satisfied that any representation on which he too; action "nder this s"#/section was fri!olo"s or !exatio"s, he shall disclose the identity of his informant to the company.

AG(H

G7H

G)H

.he pro!isions of this section shall apply m"tatis m"tandis to doc"ments which a liD"idator, or a forei n company within the meanin of section ',1, is reD"ired to file "nder this Act.

2#'A. SeiFure o! documents &% :egistrar

G1H =here, "pon information in his possession or otherwise, the 8e istrar has reasona#le ro"nd to #elie!e that #oo;s and papers of, or relatin to, any company or other #ody corporate AJJJB or mana in director or mana er of s"ch company or other #ody corporate AJJJB may #e destroyed, m"tilated, altered, falsified or secreted, the 8e istrar may ma;e an application AJJJB to the %a istrate of the 3irst *lass or as the case may #e, the &residency %a istrate ha!in C"risdiction for an order for the seiF"re of s"ch #oo;s and papers. After considerin the application and hearin the 8e istrar, if necessary, the A%a istrateB may, #y order, a"thorise the 8e istrar/ GaH to enter, with s"ch assistance as may #e reD"ired the place or places where s"ch #oo;s and papers are ;eptL G#H to search that place or those places in the manner specified in the orderL and GcH to seiFe s"ch #oo;s and papers as he considers necessary. .he 8e istrar shall ret"rn the #oo;s and papers seiFed "nder this section as soon as may #e, and in any case not later than the thirtieth day, after s"ch seiF"re, In the company or the other #ody corporate or, as the case may #e, to AJJJB the mana in director or the mana er or any other person, from whose c"stody or power they were seiFed and inform the A%a istrateB of s"ch ret"rnK Provided that the 8e istrar may, #efore ret"rnin s"ch #oo;s and papers as aforesaid, ta;e copies of, or extracts from them Aor place identification mar;s on them or any part thereofB or deal with the same in s"ch other manner as he considers necessary. Sa!e as otherwise pro!ided in this section, e!ery search Aor seiF"reH made "nder this section shall #e carried o"t in accordance with the pro!isions of the *ode of *riminal &roced"re, 1),) relatin to searches Aor seiF"res made "nder that *ode.B

G2H

G3H

G$H

#nvestigation 2#).
G1H

"nvestigation o! the a!!airs o! a compan%

.he *entral +o!ernment may, where a report has #een made #y the 8e istrar "nder s"#/section G(H of section 23$ , or "nder s"#/section G7H of that section, read with s"#/section G(H thereof, appoint one or more competent persons as inspectors to in!esti ate the affairs of a company and to report thereon in s"ch manner as the *entral +o!ernment may direct. =here/ GaH in the case of a company ha!in a share capital, an application has #een recei!ed from not less than two h"ndred mem#ers or from mem#ers holdin not less than one/tenth of the total !otin power therein, and G#H in the case of a company ha!in no share capital, an application has #een recei!ed from not less than one/fifth of the persons on the companyEs re ister of mem#ers, the A.ri#"nalB may, after i!in the parties an opport"nity of #ein heard, #y order, declare that the affairs of the company o" ht to he in!esti ated #y an inspector or inspectors, and on s"ch a declaration #ein made, the *entral +o!ernment shall appoint one or more competent persons as inspectors to in!esti ate the affairs of the company and to report thereon in s"ch manner as the *entral +o!ernment may directB.

G2H

2#*.

Application &% mem&ers to &e supported &% evidence and power to call !or securit%

An application #y mem#ers of a company A"nder s"#/section G2H of section 23'B shall #e s"pported #y s"ch e!idence as Athe A.ri#"nalB may reD"ireB for the p"rpose of showin that the applicants ha!e ood reason for reD"irin the in!esti ationL and the *entral +o!ernment may, #efore appointin an inspector, reD"ire the applicants to i!e sec"rity, for s"ch amo"nt not exceedin one tho"sand r"pees as it may thin; fit, for payment of the costs of the in!esti ation.

2#+.

"nvestigation o! compan%Es a!!airs in other cases

=itho"t preC"dice to its powers "nder section 23', the *entral +o!ernment/ GaH shall appoint one or more competent persons as inspectors to in!esti ate the affairs of a company and to report thereon in s"ch manner as the *entral +o!ernment may direct, if/ GiH GiiH the company, #y special resol"tionL or the *o"rt, #y orderL

declares that the affairs of the company o" ht to #e in!esti ated #y an inspector appointed #y the *entral +o!ernmentL and G#H may do so Ain its opinion or in the opinion of the .ri#"nalB, there are circ"mstances s" estin / GiH that the #"siness of the company is #ein cond"cted with intent to defra"d its creditors, mem#ers or any other persons, or otherwise for a fra"d"lent or "nlawf"l p"rpose, or in a manner oppressi!e of any of its mem#ers, or that the company was formed for any fra"d"lent or "nlawf"l p"rposeL GiiH that persons concerned in the formation of the company or the mana ement of its affairs ha!e in connection therewith #een "ilty of fra"d, misfeasance or other miscond"ct towards the company or towards any of its mem#ersL or GiiiH that the mem#ers of the company ha!e not #een i!en all the information with respect to its affairs which they mi ht reasona#ly expect, incl"din information relatin to the calc"lation of the commission paya#le to a mana in or other director AJJJB or the mana er of the company.

2#,.

5irm, &od% corporate or association not to &e appointed as inspector

4o firm, #ody corporate or other association shall #e appointed as an inspector "nder section 23' or 237.

2#..
G1H

Power o! inspectors to carr% investigation into a!!airs o! related companies 21GKKKH, etc.
If an inspector appointed "nder section 23' or 237 to in!esti ate the affairs of a company thin;s it necessary for the p"rposes of his in!esti ation to in!esti ate also the affairs of/ GaH any other #ody corporate which is, or has at any rele!ant time #een the companyEs s"#sidiary or holdin company, or a s"#sidiary of its holdin company, or a holdin company of its s"#sidiaryL AG#H any other #ody corporate which is, or has at any rele!ant time #een mana ed #y any person as mana in director or as mana er, who is, or was, at the rele!ant time, the mana in director or the mana er of the company, orB any other #ody corporate which is, or has at any rele!ant time #een, mana ed #y the company or whose 0oard of directors comprises of nominees of the company or is acc"stomed to act in accordance with the directions or instr"ctions of/ GiH GiiH GiiiH AGdH the company, or any of the directors of the company, or any company, any of whose directorships is held #y the employees or nominees of those ha!in the control and mana ement of the first mentioned companyL or

GcH

any person who is or has at any rele!ant time #een the companyEs mana in director or mana er,B

Athe inspector shall, s"#Cect to the pro!isions of s"#/section G2H, ha!e power so to do and shall report on the affairs of the other #ody corporate or of the mana in director or mana er, so far as he thin;s that the res"lts of his in!esti ation thereof are rele!ant to the in!esti ation of the affairs of the first/ mentioned company.B G2H In the case of any #ody corporate or person referred to in cla"se G#HGiiH, G#HGiiiH, GcH or GdH of s"#/section G1H, the inspector shall not exercise his power of in!esti atin into, and reportin on, its or his affairs witho"t first ha!in o#tained the prior appro!al of the *entral +o!ernment thereto K Provided that #efore accordin appro!al "nder this s"#/section, the *entral +o!ernment shall i!e the #ody corporate or person a reasona#le opport"nity to show ca"se why s"ch appro!al sho"ld not #e accorded.B

2'0.
AG1H

Production o! documents and evidence

It shall #e the d"ty of all officers and other employees and a ents of the company, and where the affairs of any other #ody corporate are in!esti ated #y !irt"e of section 23,, of all officers and other employees and a ents of s"ch #ody corporate/ GaH to preser!e and to prod"ce to an inspector or any person a"thorised #y him in this #ehalf with the pre!io"s appro!al of the *entral +o!ernment, all #oo;s and papers of, or relatin to, the company or, as the case may #e, or of relatin to the other #ody corporate, which are in their c"stody or powerL and otherwise to i!e to the inspector all assistance in connection with the in!esti ation which they are reasona#ly a#le to i!e.B

G#H AG1AH

G10H

.he inspector may, with the pre!io"s appro!al of the *entral +o!ernment, reD"ire any #ody corporate Aother than s"#/section G1HB to f"rnish s"ch information to, or prod"ce s"ch #oo;s and #efore, him or any person a"thorised #y him in this #ehalf 3(A with the pre!io"s appro!al of that +o!ernmentH as he may consider necessary if the f"rnishin of s"ch information or the prod"ction of s"ch #oo;s and papers is rele!ant or necessary for the p"rposes of his in!esti ation. .he inspector may ;eep in his c"stody any #oo;s and papers prod"ced "nder s"#/section G1H or s"#/ section G1AH for six months and thereafter shall ret"rn the same to the company, #ody corporate, firm or indi!id"al #y whom or on whose #ehalf the #oo;s, and papers are prod"ced K Provided that the inspector may call for the #oo;s and papers if they are needed a ain K

AG2H

Provided !urther that if certified copies of the #oo;s and papers prod"ced "nder s"#/section G1AH are f"rnished to the inspector, he shall ret"rn those #oo;s and papers to the #ody corporate concerned.B An inspector may examine on oath/ GaH G#H any of the persons referred to in s"#/section G1HL and with the pre!io"s appro!al of the *entral +o!ernment, any other person, in relation to the affairs of the company, 3$Aor other #ody corporateB and may administer an oath accordin ly and for that p"rpose may reD"ire any of those persons to appear #efore him personally.

G3H

If any person fails witho"t reasona#le ca"se or ref"ses/ GaH to prod"ce to an inspector or any person a"thorised #y him in this #ehalf with the pre!io"s appro!al of the *entral +o!ernment any #oo; or paper which it is his d"ty "nder s"#/section G1H or s"#/section G1AH to prod"ceL or G#H GcH GdH to f"rnish any information which it is his d"ty "nder s"#/section G1AH to f"rnishL or to appear #efore the inspector personally when reD"ired to do so "nder s"#/section G2H or to answer any D"estion which is p"t to him #y the inspector in p"rs"ance of that s"#/sectionL or to si n the notes of any examination referred to in s"#/section G'H,

he shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine, which may extend to Atwenty tho"sand r"peesB, or with #oth, and also with a f"rther fine which may extend to Atwo tho"sand r"peesB for e!ery day after the first d"rin which the fail"re or ref"sal contin"es.B AG$H G'H G(H JJJB 4otes of any examination "nder s"#/section G2H AJJJB shall #e ta;en down in writin and shall #e read o!er to or #y, and si ned #y, the person examined, and may thereafter #e "sed in e!idence a ainst him. In this section/ GaH G#H the expression "officers", in relation to any company or #ody corporate, incl"des tiny tr"stee for the de#ent"re holders of s"ch company or #ody corporateL the expression "a ent", in relation to any company, #ody corporate or person, means any one actin or p"rportin to act for or on #ehalf of s"ch company, #ody corporate or person, and incl"des the #an;ers and le al ad!isers of, and persons employed as a"ditors #y, s"ch company, #ody corporate or personL and any reference to Aofficers and other employeesB, a ents or partners shall #e constr"ed as a reference to past as well as present Aofficers and other employeesB, a ents or partners, as the case may #e.

GcH

2'0A. SeiFure o! documents &% inspector

G1H =here in the co"rse of in!esti ation "nder section 23' or section 237 or section 23, or section 2$7, the inspector has reasona#le ro"nd to #elie!e that the #oo;s and papers of, or relatin to, any company or other #ody corporate if AJJJB or mana in director or mana er of s"ch company or other #ody corporate AJJJB may #e destroyed, m"tilated, altered, falsified or secreted, the inspector may ma;e an application AJJJB to the %a istrate of the 3irst *lass or, as the case may #e, the &residency %a istrate, ha!in C"risdiction for an order for the seiF"re of s"ch #oo;s and papers. After considerin the application and hearin the inspector, if necessary, the A%a istrateB may #y order a"thorise the inspector/ GaH G#H GcH G3H to enter, with s"ch assistance, as may #e reD"ired, the place or places where s"ch #oo;s and papers are ;eptL to search that place or those places in the manner specified in the orderL and to seiFe #oo;s and papers he considers necessary for the p"rposes of his in!esti ation.

G2H

.he inspector shall ;eep in his c"stody the #oo;s and papers seiFed "nder this section for s"ch period not later than the concl"sion of the in!esti ation as he considers necessary and thereafter shall ret"rn the same to the company or the other #ody corporate, or, as the case may #e, to AJJJB the mana in director or the mana er or any other person, from whose c"stody or power they were seiFed and inform the A%a istrateB of s"ch ret"rn K

G$H

AProvided that the inspector may, #efore ret"rnin s"ch #oo;s and papers as aforesaid, place identification mar;s on them or any part thereof.B Sa!e as otherwise pro!ided in this section, e!ery search Aor seiF"reB made "nder this section shall #e carried o"t in accordance with the pro!isions of the *ode of *riminal &roced"re, 1),) relatin to searches Aor seiF"resB made "nder that *ode.B

2'1.
G1H

"nspectors$ report
.he inspectors may, and if so directed #y the *entral +o!ernment shall, ma;e interim reports to that +o!ernment, and on the concl"sion of the in!esti ation, shall ma;e a final report to the *entral +o!ernment. Any s"ch report shall #e written or printed, as the *entral +o!ernment may direct. .he *entral +o!ernment/ GaH shall forward a copy of any report AGother than an interim reportHB made #y the inspectors to the company at its re istered office, and also to any #ody corporate 20AJJJB dealt with in the report #y !irt"e of section 23,L may, if it thin;s fit, f"rnish a copy thereof, on reD"est and on payment of the prescri#ed fee, to any person/ AGiH who is a mem#er of the company or other #ody corporate dealt with in the report #y !irt"e of section 23,L orB GiiH AJJJBL GiiiH GcH whose interests as a creditor of the company, other #ody corporate, AJJJB aforesaid appear to the *entral +o!ernment to #e affectedL

G2H

G#H

shall, where the inspectors are appointed Ain p"rs"ance of the pro!isions of s"#/section G2HB of section 23', f"rnish, at the reD"est of the applicants for the in!esti ation, a copy of the report to themL GdH shall, where the inspectors are appointed "nder section 237 in p"rs"ance of an order of the *o"rt, f"rnish a copy of the report to the *o"rtL AJJJB AGddH shall, where the inspectors are appointed in p"rs"ance of the pro!isions of s"#/section G2H of section 23', f"rnish a copy of the report to the A.ri#"nalBL andB GeH may also ca"se the report to #e p"#lished.

2'2.
G1H

Prosecution
If, from any report made "nder section 2$1, it appears to the *entral +o!ernment that any person has, in relation to the company or in relation to any other #ody corporate, AJJJB whose affairs ha!e #een in!esti ated #y !irt"e of section 23,, #een "ilty of any offence for which he is criminally lia#le, the *entral +o!ernment may, after ta;in s"ch le al ad!ice as it thin;s fit, prosec"te s"ch person for the offenceL and it shall #e the d"ty of Aall officers and other employeesB and Aa ents of the company or #ody corporateB, as the case may #e Gother than the acc"sed in the proceedin sH, to i!e the *entral +o!ernment all assistance in connection with the prosec"tion which they are reasona#ly a#le to i!e. S"#/section G(H of section 2$0 shall apply for the p"rposes of this section, as it applies for the p"rposes of that section.

G2H

2'#.

Application !or winding up o! compan% or an order under section #.+ or #.,

If any s"ch company or other #ody corporate AJJJB is lia#le, to #e wo"nd "p "nder this Act and it appears to the *entral +o!ernment from any s"ch report as aforesaid that it is expedient so to do #y reason of any s"ch circ"mstances as are referred to in s"#/cla"se GiH or GiiH of cla"se G#H of section 237, the *entral +o!ernment may, "nless Athe company or #ody corporateB is already #ein wo"nd "p #y the A.ri#"nalB, ca"se to #e presented to the A.ri#"nalB #y any person a"thorised #y the *entral +o!ernment in this #ehalf./

GaH G#H GcH

a petition for the windin "p of Athe company or #ody corporateB on the ro"nd that it is C"st and eD"ita#le that it sho"ld #e wo"nd/"pL an application for an order "nder section 3,7 or 3,)L or #oth a petition and an application as aforesaid.

2''.
G1H

Proceedings !or recover% o! damages or propert%

If from any s"ch report as aforesaid, it appears to the *entral +o!ernment that proceedin s o" ht, in the p"#lic interest to #e #ro" ht #y the company or any #ody corporate whose affairs ha!e #een in!esti ated in p"rs"ance of cla"se GaH, G#H or GcH of section 23,./ GaH for the reco!ery of dama es in respect of any fra"d, misfeasance or other miscond"ct in connection with the promotion or formation, or the mana ement of the affairs, of s"ch company or #ody corporateL or G#H for the reco!ery of any property of s"ch company, or #ody corporate, which has #een misapplied or wron f"lly retainedL

the *entral +o!ernment may itself #rin proceedin s for that p"rpose in the name of s"ch company or #ody corporate. G2H .he *entral +o!ernment shall indemnify s"ch company or #ody corporate a ainst any costs or expenses inc"rred #y it in, or in connection with, any proceedin s #ro" ht #y !irt"e of s"#/section G1H.

2').
G1H

3xpenses o! investigation
.he expenses of and incidental to an in!esti ation #y an inspector appointed #y the *entral +o!ernment "nder section 23' or 237 shall #e defrayed in the first instance #y the *entral +o!ernmentL #"t the followin persons shall, to the extent mentioned #elow, #e lia#le to reim#"rse the *entral +o!ernment in respect of s"ch expenses K/ GaH any person who is con!icted on a prosec"tion instit"ted in p"rs"ance of section 2$2, or who is ordered to pay dama es or restore any property in proceedin s #ro" ht #y !irt"e of section 2$$, may, in the same proceedin s, #e ordered to pay the said expenses to s"ch extent as may #e specified #y the *o"rt con!ictin s"ch person, or orderin him to pay s"ch dama es or restore s"ch property, as the case may #eL G#H any company or #ody corporate in whose name proceedin s are #ro" ht as aforesaid shall #e lia#le, to the extent of the amo"nt or !al"e of any s"ms or property reco!ered #y it as a res"lt of the proceedin sL and "nless, as a res"lt of the in!esti ation, a prosec"tion is instit"ted in p"rs"ance of section 2$2,/ AGiH any company, #ody corporate, AJJJB mana in director or mana er dealt with #y the report of the inspector shall #e lia#le to reim#"rse the *entral +o!ernment in respect of the whole of the expenses, "nless and except in so far as, the *entral +o!ernment otherwise directsL andB

GcH

G2H AG3H

G$H

the applicants for the in!esti ation, where the inspector was appointed Ain p"rs"ance of the pro!isions of s"#/section G2HB of section 23' shall #e lia#le to s"ch extent, if any, as the *entral +o!ernment may direct. Any amo"nt for which a company or #ody corporate is lia#le #y !irt"e of cla"se G#H of s"#/section G1H shall #e a first char e on the s"ms or property mentioned in that cla"se. amo"nt of expenses in respect of which any company, #ody corporate, AJJJB mana in director or mana er is lia#le "nder s"#/section G1H of cla"se GcH of s"#/section G1H to reim#"rse the *entral +o!ernment shall #e reco!era#le from that company, #ody corporate AJJJB mana in director or mana er, as an arrear of land re!en"e.B 3or the p"rposes of this section, any costs or expenses inc"rred #y the *entral +o!ernment in or in connection with proceedin s #ro" ht #y !irt"e of section 2$$ Aincl"din expenses inc"rred #y !irt"e of s"#/ section G2H thereofB shall #e treated as expenses of the in!esti ation i!in rise to the proceedin s.

GiiH

G'HGaH

Any lia#ility to reim#"rse the *entral +o!ernment imposed #y cla"ses GaH and G#H of s"#/section G1H shall, s"#Cect to satisfaction of the ri ht of the *entral +o!ernment to reim#"rsement, #e a lia#ility also to indemnify all persons a ainst lia#ility "nder cla"se GcH of that s"#/section. Any s"ch lia#ility imposed #y the said cla"se GaH shall, s"#Cect as aforesaid, #e a lia#ility also to indemnify all persons a ainst lia#ility "nder the said cla"se G#H. Any person lia#le "nder the said cla"se GaH or G#H or s"#/cla"se GiH or GiiH of the said cla"se GcH shall #e entitled to contri#"tion from any other person lia#le "nder the same cla"se or s"#/cla"se, as the case may #e, accordin to the amo"nt of their respecti!e lia#ilities there"nder. In so far as the expenses to #e defrayed #y the *entral +o!ernment "nder this section are not reco!ered there"nder, they shall #e paid o"t of moneys pro!ided #y parliament.

G#H GcH

G(H

2'*.

"nspectorsE report to he evidence

A copy of any report of any inspector or inspectors appointed "nder section 23' or 237 a"thenticated in s"ch manner, if any, as may #e prescri#ed, shall #e admissi#le in any le al proceedin as e!idence of the opinion of the inspector or inspectors in relation to any matter contained in the report.

2'+.
G1H

"nvestigation o! ownership o! compan%

=here it appears to the *entral +o!ernment that there is ood reason so to do, it may appoint one or more inspectors to in!esti ate and report on the mem#ership of any company and other matters relatin to the company, for the p"rpose of determinin the tr"e persons/ GaH who are or ha!e #een financially interested in the s"ccess or fail"re, whether real or apparent, of the companyL or G#H who are or ha!e #een a#le to control or materially to infl"ence the policy of the company. =itho"t preC"dice to its powers "nder this section, the *entral +o!ernment shall appoint one or more inspectors "nder s"#/section G1H, if the A.ri#"nalB, in the co"rse of any proceedin s #efore it, declares #y an order that the affairs of the company o" ht to #e in!esti ated as re ards the mem#ership of the company and other matters relatin to the company, for the p"rpose of determinin the tr"e persons/ GaH who are or ha!e #een financially interested in the s"ccess or fail"re, whether real or apparent, of the companyL or

AG1AH

G2H

G#H who are or ha!e #een a#le to control or materially to infl"ence the policy of the company.B =hen appointin an inspector "nder s"#/section G1H, the *entral +o!ernment may define the scope of his in!esti ation, whether as respects the matters or the period to which it is to extend or otherwise, and in partic"lar, may limit the in!esti ation to matters connected with partic"lar shares or de#ent"res. S"#Cect to the terms of an inspectorEs appointment, his powers shall extend to the in!esti ation of any circ"mstances s" estin the existence of any arran ement or "nderstandin which, tho" h not le ally #indin , is or was o#ser!ed or is li;ely to #e o#ser!ed in practice and which is rele!ant to the p"rposes of his in!esti ation. 3or the p"rposes of any in!esti ation "nder this section, sections 23,, 2$0 and 2$1 shall apply with the necessary modifications of references to the affairs of the company or to those of any other #ody corporate AJJJB K Provided that the said sections shall apply in relation to all persons Gincl"din persons concerned only on #ehalf of othersH who are or ha!e #een, or whom the inspector has reasona#le ca"se to #elie!e to #e or to ha!e #een,/ GiH financially interested in the s"ccess or fail"re, or the apparent s"ccess or fail"re, of the company, of any other #ody corporate AJJJB whose mem#ership or constit"tion is in!esti ated with that of the companyL or a#le to control or materially to infl"ence the/policy of s"ch company, #ody corporate AJJJB,

G3H

G$HG'H

GiiH

as they apply in relation to Aofficers and other employees and a entsB of the company of the other #ody corporate, AJJJB as file case may #e K Provided !urther that the *entral +o!ernment shall not #e #o"nd to f"rnish the company or any other person with a copy of any report #y an inspector appointed "nder this section or with a complete copy

G(H

thereof, if it is of opinion that there is ood reason for not di!"l in the contents of the report or of parts thereofL #"t in s"ch a case, the *entral +o!ernment shall ca"se to #e ;ept #y the 8e istrar a copy of any s"ch report, or as the case may #e, of the parts thereof, as respects which it is not of that opinion. .he expenses of any in!esti ation "nder this section shall #e defrayed #y the *entral +o!ernment o"t of moneys pro!ided #y &arliament, "nless the *entral +o!ernment directs that the expenses or any part thereof sho"ld #e paid #y the persons on whose application the in!esti ation was ordered.

2',.
Omitted by t e !o@s (Ammendment#A$t% 2--- '(e() 13H12H2---

2)0.

"mposition o! restrictions upon shares and de&entures and prohi&ition o! trans!er o! shares or de&entures in certain cases
A=here it appears to the A.ri#"nalB, whether on a reference made to it #y the *entral +o!ernment in connection with any in!esti ation "nder section 2$7 AJJJB or on a complaint made #y any person in this #ehalf that there is ood reason to find o"t the rele!ant facts a#o"t any shares Gwhether iss"ed or to #e iss"edH and the A.ri#"nalB is of the opinion that s"ch facts cannot #e fo"nd o"t "nless the restrictions specified in s"#/section G2H are imposed, the A.ri#"nalB may, #y order, direct that the shares shall #e s"#Cect to the restrictions imposed #y s"#/section G2H for s"ch period not exceedin three years as may #e specified in the order. So lon as any shares are directed to #e s"#Cect to the restrictions imposed #y this s"#/section/ GaH any transfer of those shares shall #e !oidL G#H GcH GdH where those shares are to #e iss"ed, they shall not #e iss"edL and any iss"e thereof or any transfer of the ri ht to #e iss"ed therewith, shall #e !oidL no !otin ri ht shall #e exercisa#le in respect of those sharesL no f"rther shares shall #e iss"ed in ri ht of those shares or in p"rs"ance of any offer made to the holder thereof., and any iss"e of s"ch shares or any transfer of the ri ht to #e iss"ed therewith, shall #e !oidL and except in a liD"idation, no payment shall #e made of any s"ms d"e from the company on those shares, whether in respect of di!idend, capital or otherwise.

G1H

G2H

GeH AG3H

=here a transfer of shares in a company has ta;en place and as a res"lt thereof the chan e in the composition of the 0oard of directors of the company is opinion that any s"ch order, direct that/ GaH G#H the !otin ri hts in respect of those shares shall not #e exercisa#le for s"ch period not exceedin three years as may #e specified in the orderL no resol"tion passed or action ta;en to effect a chan e in the composition of the 0oard of directors #efore the date of the order shall ha!e effect "nless contin"ed #y the A.ri#"nalB.

G$H

G'H AG(H AG7H G)H G,H

=here the A.ri#"nalB has reasona#le ro"nd to #elie!e that a transfer of shares in a company is li;ely to ta;e place where#y a chan e in the composition of the 0oard of directors of the company is li;ely to ta;e place and the A.ri#"nalB is of the opinion that any s"ch chan e wo"ld #e preC"dicial to the p"#lic interest, the A.ri#"nalB may, #y order, direct that any transfer of shares in the company d"rin s"ch period not exceedin three years as may #e specified in the order, shall #e !oid.H .he A.ri#"nalB may, #y order at any time, !ary or rescind any order made #y it "nder s"#/section G1H or s"#/section G3H or s"#/section G$H. JJJB JJJB. Any order made #y the A.ri#"nalB "nder s"#/section G'H shall #e ser!ed on the company within fo"rteen days of the ma;in of the order. Any person who/ GaH exercises or p"rports to exercise any ri ht to dispose of any shares or of any ri ht to #e iss"ed with any s"ch shares when to his ;nowled e he is not entitled to do so #y reason of any of the said restrictions applica#le to the case "nder s"#/section G2HL or

G#H

GcH GdH

!otes in respect of any shares whether as holder or proxy, or appoints a proxy to !ote in respect thereof, when to his ;nowled e he is not entitled to do so #y reason of any of the said restrictions applica#le to the case "nder s"#/section G2H or #y reason of any order made "nder s"#/section G3HL or transfers any shares in contra!ention of any order made "nder s"#/section G$HL or #ein the holder of any shares in respect of which an order "nder s"#section G2H or s"#/section G3H has #een made, fails to i!e notice of the fact of their #ein s"#Cect to any s"ch order to any person whom he does not ;now to #e aware of that fact #"t whom he ;nows to #e otherwise entitled to !ote in respect of those shares, whether as holder or as a proxy,

shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Afifty tho"sand r"peesB, or with #othL G10H =here shares in any company are iss"ed in contra!ention of s"ch of the restrictions as may #e applica#le to the case "nder s"#/section G2H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. A prosec"tion shall not #e instit"ted "nder this section except #y, or with the consent of, the *entral +o!ernment. .his section shall apply in relation to de#ent"res as it applies in relation to shares.B

G11H G12H

2)0A. 9oluntar% winding1up o! compan%, etc., not to stop investigation proceedings

An in!esti ation may #e initiated "nder sections 23', 237, 23, Aor 2$7B notwithstandin that/ GaH G#H an application has #een made for an order "nder section 3,7 or section 3,)Lor the company has passed a special resol"tion for !ol"ntary windin "p,

and no in!esti ation so initiated shall #e stopped or s"spended #y reason only of the fact that an application referred to in cla"se GaH has #een made or a special resol"tion referred to in cla"se G#H has #een passed.B

2)1.

Saving !or legal advisers and &an=ers

4othin in sections A23$ to 2$7 and 2'0B shall reD"ire the disclos"re to A A.ri#"nalB or to the *entral +o!ernment or to the 8e istrar or to an Inspector appointed #y *entral +o!ernment.B GaH #y a le al ad!iser, of any pri!ile ed comm"nication made to him in that capacity, except as respects the name and address of his clientL or G#H #y the #an;ers of any company, #ody corporate AJJJB or other person, referred to in the sections aforesaid, as s"ch #an;ers, of any information as to the affairs of any of their c"stomers other than s"ch company, #ody corporate AJJJB or person.

Chapter "" J irectors Constitution of board of directors 2)2.

G1H

(inimum num&er o! directors

1!ery Ap"#lic company Gother than a p"#lic company which has #ecome s"ch #y !irt"e of section $3AHB AJJJB shall ha!e at least three directors. A&ro!ided that a p"#lic company ha!in ,/ GaH G#H a paid/"p capital of fi!e crore r"pees or moreL one tho"sand or more small shareholders,

may ha!e a director elected #y s"ch small shareholders in the manner as may #e prescri#ed.

Explanation( / 3or the p"rposes of this s"#/section "small shareholders" means a shareholder holdin shares of nominal !al"e of twenty tho"sand r"pees or less in a p"#lic company to which this section applies.B G2H G3H 1!ery AotherB company AJJJB shall ha!e at least two directors. .he directors of a company collecti!ely are referred to in this Act as the "0oard of directors" or "0oard".

2)#.

<nl% individuals to &e directors

4o #ody corporate, association or 3irm shall he appointed director of a AJJJB company, and only an indi!id"al shall #e so appointed.

2)'.

Su&scri&ers o! memorandum deemed to &e directors

In defa"lt of and s"#Cect to any re "lations in the articles of a company, s"#scri#ers of the memorand"m who are indi!id"als, shall #e deemed to #e the directors of the company, "ntil the directors are d"ly appointed in accordance with section 2''.

2)).
G1H

Appointment o! directors and proportion o! those who are to retire &% rotation
A<nless the articles pro!ide for the retirement of all directors at e!ery ann"al eneral meetin , not less than two/thirdsB of the total n"m#er of directors of a p"#lic company, or of a pri!ate company which is a s"#sidiary of a p"#lic company, shall/ GaH #e persons whose period of office is lia#le to determination #y retirement of directors #y rotationL and G#H sa!e as otherwise expressly pro!ided in this Act, #e appointed #y the company in eneral meetin . .he remainin directors in the case of any s"ch company, and the directors enerally in the case of a pri!ate company which is not a s"#sidiary of a p"#lic company, shall, in defa"lt of and s"#Cect to any re "lations in the articles of the company, also #e appointed #y the company in eneral meetin .

G2H

2)*.
G1H

Ascertainment o! directors retiring &% rotation and !illing o! vacancies

At the first ann"al eneral meetin of a p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, held next after the date of the eneral meetin at which the first directors are appointed in accordance with section 2'' and at e!ery s"#seD"ent ann"al eneral meetin , one/third of s"ch of the directors for the time #ein as are lia#le to retire #y rotation, or if their n"m#er is not three or a m"ltiple of three, then, the n"m#er nearest to one/third, shall retire from office. .he directors to retire #y rotation at e!ery ann"al eneral meetin shall #e those who ha!e #een lon est in office since their last appointment, #"t as #etween persons who #ecame directors on the same day, those who are to retire shall, in defa"lt of and s"#Cect to any a reement amon themsel!es, #e determined #y lot. At the ann"al eneral meetin at which a director retires as aforesaid, the company may fill "p the !acancy #y appointin the retirin director or some other person thereto. If the place of the retirin director is not so filled "p and the meetin has not expressly resol!ed not to fill the !acancy, the meetin shall stand adCo"rned till the same day in the next wee;, at the same time and place, or if that day is a p"#lic holiday, till the next s"cceedin day which is not a p"#lic holiday, at the same time and place. If at the adCo"rned meetin also, the place of the retirin director is not filled "p and that meetin also has not expressly resol!ed not to fill the !acancy, the retirin director shall #e deemed to ha!e #een re/ appointed at the adCo"rned meetin , "nless/ GiH at that meetin or at the pre!io"s meetin a resol"tion for the reappointment of s"ch Director has #een p"t to the meetin and lostL

G2H

G3H G$HGaH

G#H

GiiH

the retirin director has, #y a notice in writin addressed to the company or its 0oard of directors, expressed his "nwillin ness to #e so re/appointedL GiiiH he is not D"alified or is disD"alified for appointmentL Gi!H a resol"tion, whether special or ordinary, is reD"ired for his appointment or reappointment in !irt"e of any pro!isions of this ActL or G!H the pro!iso to s"#/section G2H of section 2(3 AJJJB is applica#le to the case. AJJJB AExplanation( /In this section and in section 2'7, the expression "retirin director" means a director retirin #y rotation.B

2)+.
G1H

:ight o! persons other than retiring directors to stand !or directorship

A person who is not a retirin director shall, s"#Cect to the pro!isions of this Act, #e eli i#le for appointment to the office of director at any eneral meetin , if he or some mem#er intendin to propose him has, not less than fo"rteen days #efore the meetin , left at the office of the company a notice in writin "nder his hand si nifyin his candidat"re for the office of director or the intention of s"ch mem#er to propose him as a candidate for that office, as the case may #e, Aalon with a deposit of fi!e h"ndred r"pees which shall #e ref"nded to s"ch person or, as the case may #e, to s"ch mem#er, if the person s"cceeds in ettin elected as a director.B .he company shall inform its mem#ers of the candidat"re of a person for the office of director or the intention of a mem#er to propose s"ch person as a candidate for that office, #y ser!in indi!id"al notices on the mem#ers not less than se!en days #efore the meetin K Provided that it shall not #e necessary for the company to ser!e indi!id"al notices "pon the mem#ers as aforesaid if the company ad!ertises s"ch candidat"re or intention not less than se!en days #efore the meetin in at least two newspapers circ"latin in the place where the re istered office of the company is located, of which one is p"#lished in the 1n lish lan "a e and the other in the re ional lan "a e of that place.B S"#/section G1H shall not apply to a pri!ate company, "nless it is a s"#sidiary of a p"#lic company.

AG1AH

G2H

2),.

:ight o! compan% to increase or reduce the num&er o! directors

AJJJB S"#Cect to the pro!isions of sections 2'2, 2'' and 2',, a company in eneral meetin may, #y ordinary resol"tion, increase or red"ce the n"m#er of its directors within the limits fixed in that #ehalf #y its articles.

2)..

"ncrease in num&er o! directors to reDuire -overnment sanction

In the case of a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, any increase in the n"m#er of its directors, except/ GaH in the case of a company which was in existence on the 21st day of -"ly, 1,'1, an increase which was within the permissi#le maxim"m "nder its articles as in force on that date, and G#H in the case of a company which came or may come into existence after that date, an increase which is within the permissi#le maxim"m "nder its articles as first re istered, shall not ha!e any effect "nless appro!ed #y the *entral +o!ernmentL and shall #ecome !oid if, and in so far as, it is disappro!ed #y that +o!ernment K AProvided that where s"ch permissi#le maxim"m is twel!e or less than twel!e, no appro!al of the *entral +o!ernment shall #e reD"ired if the increase in the n"m#er of its directors does not ma;e the total n"m#er of its directors more than twel!e.B

2*0.

Additional directors

4othin in section 2'', 2') or 2', shall affect any power conferred on the 0oard of directors #y the articles to appoint additional directors K Provided that s"ch additional directors shall hold office only "p to the date of the next ann"al eneral meetin of the companyK Provided !urther that the n"m#er of the directors and additional directors to ether shall not exceed the maxim"m stren th fixed for the 0oard #y the articles.

2*1.
Omitted by t e !o@s (Ammendment#A$t% 2--- '(e() 13H12H2---+

2*2.
G1H

5illing o! casual vacancies among directors

In the case of a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, if the office of any director appointed #y the company in eneral meetin is !acated #efore his term of office will expire in the normal co"rse, the res"ltin cas"al !acancy may, in defa"lt of and s"#Cect to any re "lations in the articles of the company, #e filled #y the 0oard of directors at a meetin of the 0oard. Any person so appointed shall hold office only "p to the date "p to which the director in whose place he is appointed wo"ld ha!e held office if it had not #een !acated as aforesaid.

G2H

2*#.
G1H

Appointment o! directors to &e voted on individuall%

At a eneral meetin of a p"#lic company or of a pri!ate company which is a s"#sidiary of a p"#lic company, a motion shall not #e made for the appointment of two or more persons as directors of the company #y a sin le resol"tion, "nless a resol"tion that it shall #e so made has first #een a reed to #y the meetin witho"t any !ote #ein i!en a ainst it. A resol"tion mo!ed in contra!ention of s"#/section G1H shall #e !oid, whether or not o#Cection was ta;en at the time to its #ein so mo!ed K Provided that where a resol"tion so mo!ed is passed, no pro!ision for the a"tomatic re/appointment of Athe director retirin #y rotationB in defa"lt of another appointment shall apply.

G2H

G3H

3or the p"rposes of this section, a motion for appro!in a personEs appointment, or for nominatin a person for appointment, shall #e treated as a motion for his appointment.

2*#A. Sections 1++, 2)), 2)* and 2*# not to appl% in relation to companies not carr%ing &usiness !or pro!it, etc.
4othin contained in sections 177, 2'', 2'( and 2(3 shall affect any pro!ision in the articles of a company for the election #y #allot of all its directors at each ann"al eneral meetin if s"ch company does not carry on #"siness for profit or prohi#its the payment of a di!idend to its mem#ers.B

2*'.

Consent o! candidate !or directorship to &e !iled with the compan% and consent to act as director to &e !iled with the :egistrar
1!ery person Aother than a director retirin #y rotation or otherwise or a personB who has left at the office of the company a notice "nder section 2'7 si nifyin his candidat"re for the office of a directorH proposed as a candidate for the office of a director shall si n, and file with the company, his consent in writin to act as a director, if appointed. A person other than/ GaH a director re/appointed after retirement #y rotation or immediately on the expiry of his term of office, or

G1H

AG2H

G#H

an additional or alternate director, or a person fillin a cas"al !acancy in the office of a director "nder section 2(2, appointed as a director or re/appointed as an additional or alternate director, immediately on the expiry of his term of office, or

G3H

GcH a person named as a director of the company "nder its articles as first re istered, shall not act as a director of the company "nless he has within thirty days of his appointment si ned and filed with the 8e istrar his consent in writin to act as s"ch director.B .his section shall not apply to a pri!ate company "nless it is a s"#sidiary of a p"#lic company.B

2*).

<ption to compan% to adopt proportional representation !or the appointment o! directors

4otwithstandin anythin contained in this Act, the articles of a company may pro!ide for the appointment of not less than two/thirds of the total n"m#er of the directors of a p"#lic company or of a pri!ate company which is a s"#sidiary of a p"#lic company, accordin to the principle of proportional representation, whether #y the sin le transfera#le !ote or #y a system of c"m"lati!e !otin or otherwise, the appointments #ein made once in e!ery three years and interim cas"al !acancies #ein filled in accordance with the pro!isions, m"tatis m"tandis, of section 2(2.

2**.
G1H

:estrictions on appointment or advertisement o! director

A person shall not #e capa#le of #ein appointed director of a company #y the articles, and shall not #e named as a director or proposed director of a company in a prospect"s iss"ed #y or on #ehalf of the company or as proposed director of an intended company in a prospect"s iss"ed in relation to that intended company, or in a statement in lie" of prospect"s filed with the 8e istrar #y or on #ehalf of a company, "nless, #efore the re istration of the articles, the p"#lication of the prospect"s, or the filin of the statement in lie" of prospect"s, as the case may #e, he has, #y himself or #y his a ent a"thorised in writin ,/ GaH si ned and filed with the 8e istrar a consent in writin to act as s"ch directorL and G#H either/ GiH si ned the memorand"m for shares not #ein less in n"m#er or !al"e than that of his D"alification shares, if anyL or GiiH ta;en his D"alification shares, if any from the company and paid or a reed to pay for themL or GiiiH si ned and filed with the 8e istrar an "nderta;in in writin to ta;e from the company his D"alification shares, if any, and pay for themL or Gi!H made and filed with the 8e istrar an affida!it to the effect that shares, not #ein less in n"m#er of !al"e than that of his D"alification shares if any, are re istered in his name. =here a person has si ned and filed as aforesaid an "nderta;in to ta;e and pay of his D"alification shares, he shall, as re ards those shares, #e in the #e in the same position as if he had si ned the memorand"m for shares of that n"m#er of !al"e. 8eferences in this section to the share D"alification of a director or proposed director shall #e constr"ed as incl"din only a share D"alification reD"ired within a period determined #y reference to the time of appointment, and references therein to D"alification shares shall #e constr"ed accordin ly. :mitted #y the *oIs GAmmendmentHAct, 2000 w.e.f 13O12O2000 JJJB .his section shall not apply to / GaH a company not ha!in a share capitalL G#H GcH GdH a pri!ate companyL a company which was a pri!ate company #efore #ecomin a p"#lic companyL or a prospect"s iss"ed #y or on #ehalf of a company after the expiry of one year from the date on which the company was entitled to commence #"siness.

G2H

G3H

AG$H G'H

Managing directors etc!

2*+.

Certain persons not to &e appointed managing directors.

4o company shall, after the commencement of this Act, appoint or employ, or contin"e the appointment or employment of, any person as its mana in or whole/time director who/ GaH G#H GcH is an "ndischar ed insol!ent, or has at any time #een adC"d ed an insol!entL s"spends, or has at any time s"spended, payment to his creditors, or ma;es, or has at any time made, a composition with themL or is, or has at any time #een, con!icted #y a *o"rt AJJJB of an offence in!ol!in moral t"rpit"de.

2*,.

Amendment o! provision relating to managing, whole1time or non1rotational directors to reDuire -overnment approval

In the case of a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, an amendment of any pro!ision relatin to the appointment or reappointment of a mana in or whole/time director or of a director not lia#le to retire #y rotation, whether that pro!ision #e contained in the companyEs memorand"m or articles, or in an a reement entered into #y it, or in any resol"tion passed #y the company in eneral meetin or #y its 0oard of directors, shall not ha!e any effect "nless appro!ed #y the *entral +o!ernmentL and the amendment shall #ecome !oid if, and in so far as, it is disappro!ed #y that +o!ernment.

2*..

Appointment o! managing or whole1time director or manager to reDuire -overnment approval onl% in certain cases
:n and from the commencement of the *ompanies GAmendmentH Act, 1,)), e!ery p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, ha!in a paid/"p share capital of s"ch s"m as may #e prescri#ed, shall ha!e a mana in or whole/time director or a mana er. :n and from the commencement of the *ompanies GAmendmentH Act, 1,)), no appointment of a person as a mana in or whole/time director or a mana er in a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company shall #e made except with the appro!al of the *entral +o!ernment "nless s"ch appointment is made in accordance with the conditions specified in &arts I and II of Sched"le >III Gthe said &arts #ein s"#Cect to the pro!isions of &art III of that Sched"leH and a ret"rn in the prescri#ed form is filed within ninety days from the date of s"ch appointment. 1!ery application see;in appro!al to the appointment of a mana in or whole/time director or a mana er shall #e made to the *entral +o!ernment within a period of ninety days from the date of s"ch appointment. .he *entral +o!ernment shall not accord its appro!al to an application made "nder s"#/section G3H, if it is satisfied that/ GaH the mana in or whole/time director or the mana er appointed is, in its opinion, not a fit and proper person to #e appointed as s"ch or s"ch appointment is not in the p"#lic interestL or G#H the terms and conditions of the appointment of mana in or whole/time director or the mana er are not fair and reasona#le. It shall #e competent for the *entral +o!ernment while accordin appro!al to an appointment "nder s"#/section G3H to accord appro!al for a period lesser than the period for which the appointment is proposed to #e made. If the appointment of a person as a mana in or whole/time director or a mana er is not appro!ed #y the *entral +o!ernment "nder s"#/section G$H, the person so appointed shall !acate his office as s"ch mana in or whole/time director or mana er on the date on which the decision of the *entral +o!ernment is comm"nicated to the company, and if he omits or fails to do so, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB for e!ery day d"rin which he omits or fails to !acate s"ch office. =here the *entral +o!ernment s"o mot" or on any information recei!ed #y it is, prima facie, of the opinion that any appointment made "nder s"#/section G2H witho"t the appro!al of the *entral +o!ernment has #een made in contra!ention of the reD"irements of Sched"le >III, it shall #e competent for the *entral +o!ernment to refer the matter to the A.ri#"nalB for decision.

G1H

G2H

G3H

G$H

G'H

G(H

G7H

G)H

.he A.ri#"nalB shall, on receipt of a reference "nder s"#/section G7H, iss"e a notice to the company, the mana in or whole/time director or the mana er, as the case may #e, and the director or other officer responsi#le for complyin with the reD"irements of Sched"le >III, to show ca"se as to why s"ch appointment shall not #e terminated and the penalties pro!ided "nder s"#/section G10H shall not #e imposed. .he A.ri#"nalB shall, if, after i!in a reasona#le opport"nity to the company, the mana in or whole/ time director or the mana er, or the officer who is in defa"lt, as the case may #e comes to the concl"sion that the appointment has #een made in contra!ention of the reD"irements of Sched"le >III, ma;e an order declarin that a contra!ention of the reD"irements of Sched"le >III has ta;en place. :n the ma;in of an order #y the A.ri#"nalB "nder s"#/section G,H / GaH the company shall #e lia#le to a fine which may extend to Afifty tho"sand r"peesBL G#H GcH e!ery officer of the company who is in defa"lt shall #e lia#le to a fine of Aone la;h r"peesBL and the appointment of the mana in or whole/time director or mana er, as the case may #e, shall #e deemed to ha!e come to an end and the person so appointed shall, in addition to #ein lia#le to pay a fine of Aone la;h r"peesB, ref"nd to the company the entire amo"nt of salaries, commissions and perD"isites recei!ed or enCoyed #y him #etween the date of his appointment and the passin of s"ch order.

G,H

G10H

G11H

G12H

If a company contra!enes the pro!isions of s"#/section G10H or any direction i!en #y the A.ri#"nalB "nder that s"#/section, e!ery officer of the company who is in defa"lt and the mana in or whole/time director or the mana er, as the case may #e, shall #e p"nisha#le with imprisonment for a term which may extend to three years and shall also #e lia#le to a from which may extend to Afi!e h"ndred r"peesB for e!ery day of defa"lt. All acts done #y a mana in or whole/time director or a mana er, as the case may #e, p"rportin to act in s"ch capacity and whose appointment has #een fo"nd to #e in contra!ention of Sched"le >III, shall, if the acts so done are !alid otherwise, #e !alid notwithstandin any order made #y the A.ri#"nalB "nder s"#/section G,H. Explanation ./In this section "appointment" incl"des re/appointment and "whole/time director" incl"des a director in the whole/time employment of the company.B

"hare ,ualifications 2+0.

G1H

0ime within which share Duali!ication is to &e o&tained and maximum amount thereto
=itho"t preC"dice to the restrictions imposed #y section 2((, it shall #e the d"ty of e!ery director who is reD"ired #y the articles of the company to hold a specified share D"alification and who is not already D"alified in that respect, to o#tain his D"alification within two months after his appointment as director. Any pro!ision in the articles of the company Gwhether made #efore or after the commencement of this ActH shall #e !oid in so far as it reD"ires a person to hold the D"alification shares #efore his appointment as a director or to o#tain them within a shorter time than two months after his appointment as s"ch. .he nominal !al"e of the D"alification shares shall not exceed fi!e tho"sand r"pees, or the nominal !al"e of one share where it exceeds fi!e tho"sand r"pees. 3or the p"rpose of any pro!ision in the articles reD"irin a director to hold a specified shall D"alification, the #earer of a share warrant shall not #e deemed to #e the holder of the shares specified in the warrant.

G2H

G3H G$H

2+1.

5iling o! declaration o! share Duali!ication &% director

Gepealed by t e !ompanies (Amendment# A$t% 196C% se$tion 34 'it e))e$t )rom 1Ct ( O$tober% 196C(+

2+2.

Penalt%

If, after the expiry of the said period of two months, any person acts as a director of the company when he does not hold the D"alification shares referred to in section 270, he shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day #etween s"ch expiry and the last day on which he acted as a director.

2+#.

Saving

Sections 270 Aand 272B shall not apply to a pri!ate company, "nless it is a s"#sidiary of a p"#lic company.

+is,ualifications of directors 2+'.

G1H

isDuali!ications o! directors
A person shall not #e capa#le of #ein appointed director of a company, if/ GaH G#H GcH GdH he has #een fo"nd to #e of "nso"nd mind #y a *o"rt of competent C"risdiction and the findin is in forceL he is an "ndischar ed insol!entL he has applied to #e adC"dicated as an insol!ent and his application is pendin L he has #een con!icted #y a *o"rt AJJJB of any offence in!ol!in moral t"rpit"de and sentenced in respect thereof to imprisonment for not less to six months, and a period of fi!e years has not elapsed from the date of expiry of the sentenceL he has not paid any call in respect of shares of the company held #y him, whether alone or Cointly with others, and six months ha!e elapsed from the last day fixed for the payment of the callL or an order disD"alifyin him for appointment as director has #een passed #y a *o"rt in p"rs"ance of section 203 and is in force, "nless the lea!e of the *o"rt has #een o#tained for his appointment in p"rs"ance of that section. s"ch person is already a director of a p"#lic company which,/ GAH G0H has not filed the ann"al acco"nts and ann"al ret"rns for any contin"o"s three financial years commencin on and after the first date of April, 1,,,L or has failed to repay its deposit or interest thereon on d"e date or redeem its de#ent"res on done date or pay di!idend and s"ch fail"re contin"es for one year or more K

GeH

GfH

AG H

Provided that s"ch person shall not #e eli i#le to #e appointed as a director of any other p"#lic company for a period of fi!e years from the date on which s"ch p"#lic company, in which he is a director, failed to file ann"al acco"nts and ann"al ret"rns "nder s"#/cla"se GaH or has failed to repay its deposit or interest or redeem its de#ent"res on d"e date or pay di!idend referred to in cla"se G#H.B G2H .he *entral +o!ernment may, #y notification in the :fficial +aFette, remo!e/ GaH the disD"alification inc"rred #y any person in !irt"e of cla"se GdH of s"# section G1H, either enerally or in relation to any company or companies specified in the notificationL or G#H the disD"alification inc"rred #y any person in !irt"e of cla"se GeH of s"#section G1H. A pri!ate company which is not a s"#sidiary of a p"#lic company may, #y its articles, pro!ide that a &erson shall #e disD"alified for appointment as a director on any ro"nds in addition to those specified in s"#section G1H.

G3H

Restrictions on number of directorships 2+). 6o person to &e a director o! more than G!i!teen companiesH

After the commencement of this Act, no person shall, sa!e as otherwise pro!ided in section 27(, hold office at the same time as director in more than Afifteen companiesB.

2+*.
G1H

Choice to &e made &% director o! more than G!i!teenH companies at commencement o! Act
Any person holdin office as director in more than AfifteenB companies immediately #efore the commencement of Athe *ompanies GAmendmentH Act, 2000B shall, within two months from s"ch commencement,/ GaH choose not more than AfifteenB of those companies, as companies in which he wishes to contin"e to hold the office of directorL G#H resi n his office as director in the other companiesL and GcH intimate the choice made #y him "nder cla"se GaH to each of the companies in which he was holdin the office of director #efore s"ch commencement, to the 8e istrar ha!in C"risdiction in respect of each s"ch company, and also to the *entral +o!ernment. Any resi nation made in p"rs"ance of cla"se G#H of s"#/section G1H shall #ecome effecti!e immediately on the despatch thereof to the company concerned. 4o s"ch person shall act as director/ GaH G#H in more than AfifteenB companies, after the expiry of two months from the commencement of Athe *ompanies GAmendmentH Act, 2000BL or of any company after dispatchin the resi nation of his office as director thereof, in p"rs"ance of cla"se G#H of s"#/section G1H.

G2H G3H

2++.

Choice &% person &ecoming director o! more than G!i!teen companiesH a!ter commencement o! Act
=here a person already holdin the office of director in Afifteen companiesB is appointed, after the commencement of Athe *ompanies GAmendmentH Act, 2000,B as a director of any other company, the appointment/ GaH shall not ta;e effect "nless s"ch person has, within fifteen days thereof, effecti!ely !acated his office as director in any of the companies in which he was already a directorL and G#H shall #ecome !oid immediately on the expiry of the fifteen days if he has not, #efore s"ch expiry, effecti!ely !acated his office as director in any of the other companies aforesaid. =here a person already holdin the office of director in 102Afo"rteen companiesB or less is appointed, after the commencement of Athe *ompanies GAmendmentH Act, 2000,B as a director of other companies, ma;in the total n"m#er of his directorships more than AfifteenB, he shall choose the directorships which he wishes to contin"e to hold or to accept, so howe!er that the total n"m#er of the directorships, old and new, held #y him shall not exceed AfifteenB. 4one of the new appointments of director shall ta;e effect "ntil s"ch choice is madeL and all the new appointments shall #ecome !oid if the choice is not made within fifteen days of the day on which the last of them was made.

G1H

G2H

2+,.
G1H

3xclusion o! certain directorships !or the purposes o! sections 2+), 2+* and 2++
In calc"latin , for the p"rposes of sections 27', 27( and 277, the n"m#er of companies of which a person may #e a director, the followin companies shall #e excl"ded, namely K/ GaH G#H GcH GdH a pri!ate company which is neither a s"#sidiary nor a holdin company of a p"#lic companyL an "nlimited companyL

G2H

an association not carryin on #"siness for profit or which prohi#its the payment of a di!idendL a company in which s"ch person is only an alternate director, that is to say, a director who is only D"alified to act as s"ch d"rin the a#sence or incapacity of some other director. In ma;in the calc"lation aforesaid, any company referred to in cla"ses GaH, G#H and GcH of s"#/section G1H shall #e excl"ded for a period of three months from the date on which the company ceases to fall within the p"r!iew of those cla"ses.

2+..

Penalt%

Any person who holds office, or acts, as a director of more than Afifteen companiesB in contra!ention of the fore oin pro!isions shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB in respect or each of those companies after the first twenty.

Retiring age of directors

ASections 2)0, 2)1 and 2)2/ 8epealed #y the *ompanies GAmendmentH Act, 1,(', w.e.f. 1'th. :cto#er, 1,('B

(acation of office by directors 2,#. 9acation o! o!!ice &% directors

G1H A.he office of a director shall #ecome !acant if/B GaH he fails to o#tain within the time specified in s"#/section G1H of section 270, or at any time thereafter ceases to hold, the share D"alification, if any, reD"ired of him #y the articles of the companyL G#H GcH GdH AGeH GfH he is fo"nd to #e of "nso"nd mind #y a *o"rt of competent C"risdictionL he applies to #e adC"dicated an insol!entL he is adC"d ed an insol!entL he is con!icted #y a *o"rt of any offence in!ol!in moral t"rpit"de and sentenced in respect thereof to imprisonment for not less than six monthsLB he fails to pay any call in respect of shares of the company held #y him, whether alone or Cointly with others, within six months from the last date fixed for the payment of the call A"nless the *entral +o!ernment has, #y notification in the :fficial +aFette, remo!ed the disD"alification inc"rred #y s"ch fail"reLB he a#sents himself from three consec"ti!e meetin s of the 0oard of directors, or from all meetin s of the 0oard for a contin"o"s period of three months, whiche!er is lon er, witho"t o#tainin lea!e of a#sence from the 0oardL Ahe Gwhether #y himself or #y any person for his #enefit or on his acco"ntH, or any firm in whichB he is a partner or any pri!ate company of which he is a director, accepts a loan, or any "arantee or sec"rity for a loan, from the company in contra!ention of section 2,'L he acts in contra!ention of section 2,,L he #ecomes disD"alified #y an order of *o"rt "nder section 203L AJJJB he is remo!ed in p"rs"ance of section 2)$L or ha!in #een appointed a director #y !irt"e of his holdin any office or other employment in the company AJJJB he ceases to hold s"ch office or other employment in the company AJJJB

G H

GhH

GiH GCH G;H GlH G2H

4otwithstandin anythin in cla"ses GdH, GeH and GiH of s"#/section G1H, the disD"alification referred to in those cla"ses shall not ta;e effect/ GaH G#H for thirty days from the date of the adC"dication, sentence or orderL where any appeal or petition is preferred within the thirty days aforesaid a ainst the adC"dication, sentence or con!iction res"ltin in the sentence, or order "ntil the expiry of se!en days from the date on which s"ch appeal or petition is disposed of, or

GcH

AG2AH

where within the se!en days aforesaid, any f"rther appeal or petition is preferred in respect of the adC"dication, sentence, con!iction, or order, and the appeal or petition, if allowed, wo"ld res"lt in the remo!al of the disD"alification, "ntil s"ch f"rther appeal or petition is disposed of. S"#Cect to the pro!isions of s"#/sections G1H and G2H, if a person f"nctions as a director when he ;nows that the office of director held #y him has #ecome !acant on acco"nt of any of the disD"alifications,

G3H

specified in the se!eral cla"ses of s"#/section G1H, he shall #e p"nisha#le with fine/which may extend to Afi!e tho"sand r"peesB for each day on which he so f"nctions as a director.B A pri!ate company which is not a s"#sidiary of a p"#lic company may, #y its articles, pro!ide, that the office of director shall #e !acated on any ro"nds in addition to those specified in s"#/section G1H.

2,'. :emoval o! directors

G1H A company may, #y ordinary resol"tion, remo!e a director Gnot #ein a director appointed #y the *entral +o!ernment in p"rs"ance of section $0)H #efore the expiry of his period of office K Provided that this s"#/section shall not, in the case of a pri!ate company, a"thorise the remo!al of a director holdin office for life on the 1st day ofL April, 1,'2, whether or not he is s"#Cect to retirement "nder an a e limit #y !irt"e of the articles or otherwise K Provided !urther that nothin contained in this s"#/section shall apply where the company has a!ailed itself of the option i!en to it "nder section 2(' to appoint not less than two/thirds of the total n"m#er of directors accordin to the principle of proportional representation. G2H G3H Special notice shall #e reD"ired of any resol"tion to remo!e a director "nder this section, or to appoint some#ody instead of a director so remo!ed at the meetin at which he is remo!ed. :n receipt of notice of a resol"tion to remo!e a director "nder this section, the company shall forthwith send a copy thereof to the director concerned, and the director Gwhether or not he is a mem#er of the companyH shall #e entitled to #e heard on the resol"tion at the meetin . =here notice is i!en of a resol"tion to remo!e a director "nder this section and the director concerned ma;es with respect thereto representations in writin to the company Gnot exceedin a reasona#le len thH and reD"ests their notification to mem#ers of the company .he company/shall "nless the representations are recei!ed #y it too late for it to do so,/ GaH in any notice of the resol"tion i!en to mem#ers of the company, state the fact of the representations ha!in #een madeL and G#H send a copy of the representations to e!ery mem#er of the company to whom notice of the meetin is sent Gwhether #efore or after receipt of the representations #y the companyHL and if a copy of the representations is not sent as aforesaid #eca"se they were recei!ed too late or #eca"se of the companyEs defa"lt, the director may Gwitho"t preC"dice to his ri ht to #e heard orallyH reD"ire that the representations shall #e read o"t at the meetin K Provided that copies of the representations need not #e sent o"t and the representations need not #e read o"t at the meetin if, on the application either of the company or of any other person who claims to #e a rie!ed, the (aA*entral +o!ernmentB is satisfied that the ri hts conferred #y this s"#/section are #ein a#"sed to sec"re needless p"#licity for defamatory matterL and the (aA*entral +o!ernmentB may order the companyEs costs on the application to #e paid in whole or in part #y the director notwithstandin that he is not a party to it. G'H A !acancy created #y the remo!al of a director "nder this section may, if he had #een appointed #y the company in eneral meetin or #y the 0oard in p"rs"ance of section 2(2, #e filled #y the appointment of another director in his stead #y the meetin at which he is remo!ed, pro!ided special notice of the intended appointment has #een i!en "nder s"#/section G2H. A director so appointed shall hold office "ntil the date "p to which his predecessor wo"ld ha!e held office if he had not #een remo!ed as aforesaid. G(H If the !acancy is not filled "nder s"#/section G'H, it may #e filled as a cas"al !acancy in accordance with the pro!isions, so far as they may #e applica#le, of section 2(2, and all the pro!isions of that section shall apply accordin ly K Provided that the director who was remo!ed from office shall not #e re/appointed as a director #y the 0oard of directors. 4othin in this section shall #e ta;en/ GaH as depri!in a person remo!ed there"nder of any compensation or dama es paya#le to him in respect of the termination of his appointment as director or of any appointment terminatin with that as directorL or as dero atin from any power to remo!e a director which may exist apart from this section.

G$H

G7H

G#H

Meetings of -oard 2,). 2oard to meet at least once in ever% three calendar months
In the case of e!ery company, a meetin of its 0oard of directors shall #e held at least once in e!ery Athree months and at least fo"r s"ch meetin s shall #e hold in e!ery yearB K Provided that the *entral +o!ernment may, #y notification in the :fficial +aFette, direct that the pro!isions of this section shall not apply in relation to any class of companies or shall apply in relation thereto s"#Cect to s"ch exceptions, modifications or conditions as may #e specified in the notification.B

2,*. 6otice o! meetings

G1H G2H 4otice of e!ery meetin of the 0oard of directors of a company shall #e i!en in writin to e!ery director for the time #ein in India, and at his "s"al address in India to e!ery other director. 1!ery officer of the company whose d"ty it is to i!e notice as aforesaid and who fails to do so shall #e p"nisha#le with fine which may extend to Aone tho"sand r"peesB.

2,+. 7uorum !or meetings

G1H In this section/ GaH "total stren th" means the total stren th of the 0oard of directors of a company as determined in p"rs"ance of this Act, after ded"ctin therefrom the n"m#er of the directors, if any, whose places may #e !acant at the timeL and "interested director" means any director whose presence cannot, #y reason of section 300, co"nt for the p"rpose of formin a D"or"m at a meetin of the 0oard, at the time of the disc"ssion or !ote on any matter.

G#H

G2H

.he D"or"m for a meetin of the 0oard of directors of a company shall #e one/third of its total stren th Gany fraction contained in that one/third #ein ro"nded off as oneH, or two directors, whiche!er is hi herK Provided that where at any time the n"m#er of interested directors exceeds or is eD"al to two/thirds of the total stren th, the n"m#er of the remainin directors, that is to say, the n"m#er of the directors who are not interested Apresent at the meetin #ein not less than twoB, shall #e the D"or"m d"rin s"ch time.

2,,. Procedure where meeting adCourned !or want o! Duorum

G1H If a meetin of the 0oard co"ld not #e held for want of D"or"m, then, "nless the articles otherwise pro!ide, the meetin shall a"tomatically stand adCo"rned till the same day in the next wee;, at the same time and place, or if that day is a p"#lic holiday, till the next s"cceedin day which is not a p"#lic holiday, at the same time and place. .he pro!isions of section 2)' shall not #e deemed to ha!e #een contra!ened merely #y reason of the fact that a meetin of the 0oard which had #een called in compliance with the terms of that section co"ld not #e held for want of a D"or"m.

G2H

2,.. Passing o! resolutions &% circulation

4o resol"tion shall #e deemed to ha!e #een d"ly passed #y the 0oard or #y a committee thereof #y circ"lation, "nless the resol"tion has #een circ"lated in draft, to ether with the necessary papers, if any, to all the directors, or to all the mem#ers of the committee, then in India Gnot #ein less in n"m#er than the D"or"m fixed for a meetin of the 0oard or committee, as the case may #eH, and to all other directors or mem#ers at their "s"al

address in India, and has #een appro!ed #y s"ch of the directors as are then in India, or #y a maCority of s"ch of them, as are entitled to !ote on the resol"tion.

2.0. 9alidit% o! acts o! directors

Acts done #y a person as a director shall #e !alid, notwithstandin that it may afterwards #e disco!ered that his appointment was in!alid #y reason of any defect or disD"alification or had terminated #y !irt"e of any pro!ision contained in this Act or in the articles K Provided that nothin in this section shall #e deemed to i!e !alidity to acts done #y a director after his appointment has #een shown to the company to #e in!alid or to ha!e terminated.

-oard.s powers and restrictions thereon 2.1. -eneral powers o! 2oard

G1H S"#Cect to the pro!isions of this Act, the 0oard of directors of a company shall #e entitled to exercise all s"ch powers, and to do all s"ch acts and thin s, as the company is a"thorised to exercise and do K Provided that the 0oard shall not exercise any power or do any act or thin which is directed or reD"ired, whether #y this or any other Act or #y the memorand"m or articles of the company or otherwise, to #e exercised or done #y the company in eneral meetin K Provided !urther that in exercisin any s"ch power or doin any s"ch act or thin , the 0oard shall #e s"#Cect to the pro!isions contained in that #ehalf in this or any other Act, or in the memorand"m or articles of the company, or in any re "lations not inconsistent therewith and d"ly made there"nder, incl"din re "lations made #y the company in eneral meetin . 4o re "lation made #y the company in eneral meetin shall in!alidate any prior act of the 0oard which wo"ld ha!e #een !alid if that re "lation had not #een made.

G2H

2.2. Certain powers to he exercised &% 2oard onl% at meeting

G1H .he 0oard of directors of a company shall exercise the followin powers on #ehalf of the company, and it shall do so only #y means of resol"tions passed at meetin s of the 0oard K/ GaH the power to ma;e calls on shareholders in respect of money "npaid on their sharesL AGaaH the power to a"thorise the #"y/#ac; referred to in the first pro!iso to cla"se G#H of s"#/section G2H of section 77ALB G#H the power to iss"e de#ent"resL GcH GdH the power to #orrow moneys otherwise than on de#ent"resL the power to in!est the f"nds of the companyL and

GeH the power to ma;e loans K AProvided that the 0oard may, #y a resol"tion passed at a meetin , dele ate to any committee of directors, the mana in director, AJJJB the mana er or any other principal officer of the company or in the case of a #ranch office of the company, a principal officer of the #ranch office, the powers specified in cla"ses GcH, GdH and GeH to the extent specified in s"#/sections G2H, G3H and G$H respecti!ely, on s"ch conditions as the 0oard may prescri#eK Provided !urther that the acceptance #y a #an;in company in the ordinary co"rse of its #"siness of deposits of money from the p"#lic repaya#le on demand or otherwise and withdrawa#le #y cheD"e, drafts, order or otherwise, or the placin of moneys on deposit #y a #an;in company with another #an;in company on s"ch conditions as the 0oard may prescri#e, shall not #e deemed to #e a #orrowin of moneys or, as the case may #e, a ma;in of loans #y a #an;in company within the meanin of this section.

Explanation I./ 4othin in cla"se GcH of s"#/section G1H shall apply to #orrowin s #y a #an;in company from other #an;in companies or from the 8eser!e 0an; of India, the State 0an; of India or any other #an;s esta#lished #y or "nder any Act. Explanation II./ In respect of dealin s #etween a company and its #an;ers, the exercise #y the company of the power specified in cla"se GcH of s"#/section G1H shall mean the arran ement made #y the company with its #an;ers for the #orrowin of money #y way of o!erdraft or cash credit or otherwise and not the act"al day to day operation on o!erdraft, cash credit or other acco"nts #y means of which the arran ement so made is act"ally a!ailed of.B 1!ery resol"tion dele atin the power referred to in cla"se GcH of s"#section G1H shall specify the total amo"nt Ao"tstandin at any one timeB "p to which money may he #orrowed #y the dele ate. 1!ery resol"tion dele atin the power referred to in cla"se GdH of s"#/sectionG1H shall specify the total amo"nt "p to which the f"nds may #e in!ested, and the nat"re of the in!estments which may #e made, #y the dele ate. 1!ery resol"tion dele atin the power referred to in cla"se GeH of s"#/section G1H shall specify the total amo"nt "p to which loans may #e made #y the dele ate, the p"rposes for which the loans may #e made, and the maxim"m amo"nt of loans which may #e made for each s"ch p"rpose in indi!id"al cases. 4othin in this section shall #e deemed to affect the ri ht of the company in eneral meetin to impose restrictions and conditions on the exercise #y the 0oard of any of the powers specified in s"#/section G1H.

G2H G3H

G$H

G'H

2.2A. Audit Committee

G1H 1!ery p"#lic company ha!in paid/"p capital of not less than fi!e crores of r"pees shall constit"te a committee of the 0oard ;nows as "A"dit *ommittee" which shall consist of not less than three directors and s"ch n"m#er of other directors as the 0oard may determine of which two thirds of the total n"m#er of mem#ers shall #e directors, other than mana in or whole/time directors. 1!ery A"dit *ommittee constit"ted "nder s"#/section G1H shall act in accordance with terms of reference to #e specified in writin #y the 0oard. .he mem#ers of the A"dit *ommittee shall elect a chairman from amon st themsel!es. .he ann"al report of the company shall disclose the composition of the A"dit *ommittee. .he a"ditors, the internal a"ditor, if any, and the director/in/char e of finance shall attend and participate at meetin s of the A"dit *ommittee #"t shall not ha!e the ri ht to !ote. .he A"dit *ommittee sho"ld ha!e disc"ssions with the a"ditors periodically a#o"t internal control systems, the scope of a"dit incl"din the o#ser!ations of the a"ditors and re!iew the half/yearly and ann"al financial statements #efore s"#mission to the 0oard and also ens"re compliance of internal control systems. .he A"dit *ommittee shall ha!e a"thority to in!esti ate into any matter in relation to the items specified in this section or referred to it #y the 0oard and for this p"rpose, shall ha!e f"ll access to information contained in the records of the company and external professional ad!ice, if necessary. .he recommendations of the A"dit *ommittee on any matter relatin to financial mana ement, incl"din the a"dit report, shall #e #indin on the 0oard. If the 0oard does not accept the recommendations of the A"dit *ommittee, it shall record the reasons therefor and comm"nicate s"ch reasons to the shareholders. .he chairman of the A"dit *ommittee shall attend the ann"al eneral meetin s of the company to pro!ide any clarification on matters relatin to a"dit. If a defa"lt is made in complyin with the pro!isions of this section, the company, and e!ery officer who is in defa"lt, shall #e p"nisha#le with imprisonment for a term which may extend to one year, or with fine which may extend to fifty tho"sand r"pees, or with #oth.B

G2H G3H G$H G'H G(H

G7H

G)H G,H G10H G11H

2.#. :estrictions on powers o! 2oard

G1H

.he 0oard of directors of a p"#lic company, or of a pri!ate company which is a s"#sidiary of a p"#lic company, shall not, except with the consent of s"ch p"#lic company or s"#sidiary in eneral meetin ,/ GaH sell, lease or otherwise dispose of the whole, or s"#stantially the whole, of the "nderta;in of the company, or where the company owns more than one "nderta;in , of the whole, or s"#stantially the whole, of any s"ch "nderta;in L G#H remit, or i!e time for the repayment of, any de#t d"e #y a director Aexcept in the case of renewal or contin"ance of an ad!ance made #y a #an;in company to its director in the ordinary co"rse of #"sinessLB in!est, otherwise than in tr"st sec"rities, Athe amo"nt of compensation recei!ed #y the company in respect of the comp"lsory acD"isition, after the commencement of this ActB, of any s"ch "nderta;in as is referred to in cla"se GaH, or of any premises or properties "sed for any s"ch "nderta;in and witho"t which it cannot #e carried on or can #e carried on only with diffic"lty or only after a considera#le timeL #orrow moneys after the commencement of this Act, where the moneys to #e #orrowed, to ether with the moneys already #orrowed #y the company Gapart from temporary loans o#tained from the companyEs #an;ers in the ordinary co"rse of #"sinessH, will exceed the a re ate of the paid/ "p capital of the company and its free reser!es, that is to say, reser!es not set apart for any specific p"rposeL or contri#"te, after the commencement of this Act, to charita#le and other f"nds not directly relatin to the #"siness of the company or the welfare of its employees, any amo"nts the a re ate of which will, in any financial year, exceed Afifty tho"sand r"peesB, or fi!e per cent, of its a!era e net profits as determined in accordance with the pro!isions of sections 3$, and 3'0 d"rin the three financial years immediately precedin , whiche!er is reater.

GcH

GdH

GeH

AExplanation I./1!ery resol"tion passed #y the company in eneral meetin in relation to the exercise of the power referred to in cla"se GdH or in cla"se GeH shall specify the total amo"nt "p to which moneys may #e #orrowed #y the 0oard of directors "nder cla"se GdH or as the case may #e, the total amo"nt which may #e contri#"ted to charita#le and other f"nds in any financial year "nder cla"se GeH. Explanation II(/.he expression "temporary loans" in cla"se GdH means loans repaya#le on demand or within six months from the date of the loan s"ch as short term, cash credit arran ements, the disco"ntin of #ills and the iss"e of other short term loans of a seasonal character, #"t does not incl"de loans raised for the p"rpose of financin expendit"re of a capital nat"re.B Explanation [III+ ./=here a portion of a financial year of the company falls #efore the commencement of this Act, and a portion falls after s"ch commencement, the later portion shall #e deemed to #e a financial year within the meanin , and for the p"rposes, of cla"se GeH. 4othin contained in cla"se GaH of s"#/section G1H shall affect/ GaH G#H G3H the title of a #"yer or other person who #"ys or ta;es a lease of any s"ch "nderta;in as is referred to in that cla"se, in ood faith and after exercisin d"e care and ca"tionL or the sellin or leasin of any property of the company, where the ordinary #"siness of the company consists of, or comprises, s"ch sellin or leasin .

G2H

Any resol"tion passed #y the company permittin any transaction s"ch as is referred to in cla"se GaH of s"#/section G1H may attach s"ch conditions to the permission as may #e specified in the resol"tion, incl"din conditions re ardin the "se, disposal or in!estment of the sale proceeds which may res"lt from the transaction K Provided that this s"#/section shall not #e deemed to a"thorise the company to effect any red"ction in its capital except in accordance with the pro!isions contained in that #ehalf in this Act.

G$H

.he acceptance #y a #an;in company, in the ordinary co"rse of its #"siness, of deposit of money from the p"#lic, repaya#le on demand or otherwise, and with draft, order or otherwise, shall not #e deemed to #e a #orrowin of moneys #y the #an;in company within the meanin of cla"se GdH of s"#/section G1H 4o de#t inc"rred #y the company in excess of the limit imposed #y cla"se GdH of s"#/section G1H shall #e !alid or effect"al, "nless the lender pro!es that he ad!anced the loan in ood faith and witho"t ;nowled e that the limit imposed #y that cla"se had #een exceeded.

G'H

Political contributions

2.#A. Prohi&itions and restrictions regarding political contri&utions

G1H 4otwithstandin anythin contained in any other pro!ision of this ActK/ GaH G#H no o!ernment companyL and no other company which has #een in existence for less than three financial years,

shall contri#"te any amo"nt or amo"nts, directly or indirectly,/ GiH to any political partyL or G2H GiiH for any political p"rpose to any person. A company, not #ein a company referred to in cla"se GaH or cla"se G#H of s"#/section G1H, may contri#"te any amo"nt or amo"nts, directly or indirectly,/ GaH to any political partyL or G#H for any political p"rpose to any personK Provided that the amo"nt or, as the case may #e, the a re ate of the amo"nts which may #e so contri#"ted #y a company in any financial year shall not exceed fi!e per cent of its a!era e net profits determined in accordance with the pro!isions of sections 3$, and 3'0 d"rin the three immediately precedin financial years K Provided !urther that no s"ch contri#"tion shall #e made #y a company "nless a resol"tion a"thorisin the ma;in of s"ch contri#"tion is passed at a meetin of the 0oard of Directors and s"ch resol"tion shall, s"#Cect to the other pro!isions of this section, #e deemed to #e C"stification in law for the ma;in and the acceptance of the contri#"tion a"thorised #y it. Explanation ./=here a portion of a financial year of the company falls #efore the commencement of the *ompanies GAmendmentH Act, 1,)', and a portion falls after s"ch commencement, the latter portion shall #e deemed to #e a financial year within the meanin and for the p"rposes, of this s"#/section. G3H =itho"t preC"dice to the enerality of the pro!isions of s"#/sections G1H and G2H/ GaH a donation or s"#scription or payment ca"sed to #e i!en #y a company on its #ehalf or on its acco"nt to a person who, to its ;nowled e, is carryin on any acti!ity which, at the time at which s"ch donation or s"#scription or payment was i!en or made, can reasona#ly #e re arded as li;ely to effect p"#lic s"pport for a political party shall also #e deemed to #e contri#"tion of the amo"nt of s"ch donation, s"#scription or payment to s"ch person for a political p"rposeL G#H the amo"nt of expendit"re inc"rred, directly or indirectly, #y a company on ad!ertisement in any p"#lication G#ein a p"#lication in the nat"re of a so"!enir, #roch"re, tract, pamphlet or the li;eH #y or on #ehalf of a political party or for its ad!anta e shall also #e deemed,/ GiH where s"ch p"#lication is #y or on #ehalf of a political party, to #e a contri#"tion of s"ch amo"nt to s"ch political party, and GiiH where s"ch p"#lication is not #y or on #ehalf of #"t for the ad!anta e of a political party, to #e a contri#"tion for a political p"rpose to the person p"#lishin it. 1!ery company shall disclose in its profit and loss acco"nt any amo"nt or amo"nts contri#"ted #y it to any political party or for any political p"rpose to any person d"rin the financial year to which that acco"nt relates, i!in partic"lars of the total amo"nt contri#"ted and the name of the party or person to which or to whom s"ch amo"nt has #een contri#"ted. If a company ma;es any contri#"tion in contra!ention of the pro!isions of this section,/ GaH G#H the company shall #e p"nisha#le with fine which may extend to three times the amo"nt so contri#"tedL and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment for a term which may extend to three years and shall also #e lia#le to fine.B

G$H

G'H

2.#2. Power o! 2oard and other persons to ma=e contri&utions to the 6ational e!ence 5und, etc.
G1H .he 0oard of directors of any company or any person or a"thority exercisin the powers of the 0oard of directors of a company, or of the company in eneral meetin , may, notwithstandin anythin contained in sections 2,3 and 2,3A or any other pro!ision of this Act or in the memorand"m, articles

or any other instr"ment relatin to the company, contri#"te s"ch amo"nt as it thin;s fit to the 4ational Defence 3"nd or any other 3"nd appro!ed #y the *entral +o!ernment for the p"rpose of national defence. G2H 1!ery company shall disclose in its profits and loss acco"nt the total amo"nt or amo"nts contri#"ted #y it to the 3"nd referred to in s"#/section G1H d"rin the financial year to which the amo"nt relates.B

Appointment of sole selling agents 2.'. Appointment o! sole selling agents to reDuire approval o! compan% in general meeting
AG1H 4o company shall, after the commencement of the *ompanies GAmendmentH Act, 1,(0, appoint a sole sellin a ent for any area for a term exceedin fi!e years at a timeK Provided that nothin in this s"#/section shall #e deemed to prohi#it the reappointment, or the extension of the term of office, of any sole sellin a ent #y f"rther periods not exceedin fi!e years on each occasion. After the commencement of the *ompanies GAmendmentH Act, 1,(0 the 0oard of directors of a company shall not appoint a sole sellin a ent for any area except s"#Cect to the condition that the appointment shall cease to #e !alid if it is not appro!ed #y the company in the first eneral meetin held after the date on which the appointment is made. If the company in eneral meetin as aforesaid disappro!es the appointment, it shall cease to #e !alid with effect from the date of that eneral meetin .B =here #efore the commencement of this Act, a company has appointed a sole sellin a ent for any area for a period of not less than fi!e years, the appointment shall #e placed #efore the company in eneral meetin within a period of six months from s"ch commencementL and the company in eneral meetin may, #y resol"tion,/ GaH if the appointment was made on or after the 1'th day of 3e#r"ary, 1,'', terminate the appointment forthwith or with effect from s"ch later date as may #e specified in the resol"tionL and G#H if the appointment was made #efore the date specified in cla"se GaH, terminate the appointment with effect from s"ch date as may #e specified in the resol"tion, not #ein earlier than fi!e years from the date on which the appointment was made, or the expiry of one year from the commencement of this Act, whiche!er is later. AJJJomitted #y the *oIs GAmmendmentHAct, 2000 w.e.f 13O12O2000B =here a company has a sole sellin a ent G#y whate!er name calledH for an area and it appears to the *entral +o!ernment that there is ood reason so to do, the *entral +o!ernment may reD"ire the company to f"rnish to it s"ch information re ardin the terms and conditions of the appointment of the sole sellin a ent as it considers necessary for the p"rpose of determinin whether or not s"ch terms and conditions are preC"dicial to the interests of the companyL if the company ref"ses or ne lects to f"rnish any s"ch information, the *entral +o!ernment may appoint a s"ita#le person to in!esti ate and report on the terms and conditions of appointment of the sole sellin a ent. if after per"sal of the information f"rnished #y the company or, as the case may #e, the report s"#mitted #y the person appointed "nder cla"se G#H, the *entral +o!ernment is of the opinion that the terms and conditions of appointment of the sole sellin a ent are preC"dicial to the interests of the company, the *entral +o!ernment may, #y order, ma;e s"ch !ariations in those terms and conditions as wo"ld in its opinion ma;e them no lon er preC"dicial to the interests of the companyL as from s"ch date as may #e specified #y the *entral +o!ernment in the order aforesaid, the appointment of the sole sellin a ent shall #e re "lated #y the terms and conditions as !aried #y the *entral +o!ernment. =here a company has more sellin a ents than one G#y whate!er name calledH in any area or areas and it appears to the *entral +o!ernment that there is ood reason so to do, the *entral +o!ernment may reD"ire the company to f"rnish to it s"ch information re ardin the terms and conditions of appointment of all the sellin a ents as it considers necessary for the p"rpose of determinin whether any of those sellin a ents sho"ld #e declared to #e the sole sellin a ent for s"ch area or any of s"ch areasL

G2H

G2AH G3H

G$H G'HGaH

G#H

GcH

GdH

G(HGaH

G#H

if the company ref"ses or ne lects to f"rnish any s"ch information, the *entral +o!ernment may appoint a s"ita#le person to in!esti ate and report on the terms and conditions of appointment of all the sellin a entsL if after per"sal of the information f"rnished #y the company or, as the case may #e, the report s"#mitted #y the person appointed "nder cla"se G#H, the *entral +o!ernment is of the opinion that ha!in re ard to the terms and conditions of appointment of any of the sellin a ents and to any other rele!ant factors, that sellin a ent is to all intents and p"rposes the sole sellin a ent for s"ch area, altho" h there may #e one or more other sellin a ents of the company operatin in that area, the *entral +o!ernment may #y order declare that sellin a ent to #e the sole sellin a ent of the company for that area with effect from s"ch date as may #e specified in the order and may ma;e s"ita#le !ariations in s"ch of the terms and conditions of appointment of that sellin a ent as are in the opinion of the *entral +o!ernment preC"dicial to the interests of the companyL as from the date specified in cla"se GcH the appointment of the sellin a ent declared to #e the sole sellin a ent shall #e re "lated #y the terms and conditions as !aried #y the *entral +o!ernment. It shall #e the d"ty of the company/ GaH to prod"ce to the person appointed "nder cla"se G#H of s"#/section G'H or cla"se G#H of s"#/ section G(H, all, #oo;s and papers of, or relatin to, the company which are in its c"stody or powerL and G#H otherwise to i!e to that person all assistance in connection with the in!esti ation which the company is reasona#ly a#le to i!e. If a company ref"ses or ne lects/ GaH G#H to f"rnish the information reD"ired #y the *entral +o!ernment "nder cla"se GaH of s"#/section G'H or cla"se GaH of s"#/section G(H, or

GcH

GdH G7H

G)H

to prod"ce to the person appointed "nder cla"se G#H of s"#/section G'H or cla"se G#H of s"#/ section G(H any #oo;s and papers which are in its c"stody or power or otherwise to i!e to that person any assistance which it is reasona#ly a#le to i!e, the company and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB and with a f"rther fine of not less than Afi!e h"ndred r"peesB for e!ery day after the first d"rin which soon ref"sal or ne lect contin"es.

2.'A. Prohi&ition o! pa%ment o! compensation to sole selling agents !or loss o! o!!ice in certain cases
G1H A company shall not pay or #e lia#le to pay to its sole sellin a ent any compensation for the loss of his office in the followin casesK/ GaH G#H where the appointment of the sole sellin a ent ceases to #e !alid #y !irt"e of s"#/section G2AH of section 2,$L where the sole sellin a ent resi ns his office in !iew of the reconstr"ction of the company or of its amal amation with any other #ody corporate or #odies corporate and its appointed as the sole sellin a ent of the reconstr"cted company or of the #ody corporate res"ltin from the amal amationL where the sole sellin a ent resi ns his office, otherwise than on the reconstr"ction of the company or its amal amation as aforesaidL where the sole sellin a ent has #een "ilty of fra"d or #reach of tr"st in relation to, or of ross ne li ence in, the cond"ct of his d"ty as the sole sellin a entL where the sole sellin a ent has insti ated, or has ta;en part directly or indirectly in #rin in a#o"t, the termination of the sole sellin a ency.

GcH GdH GeH G2H

.he compensation which may #e paid #y a company to its sole sellin a ent for loss of office shall not exceed the rem"neration which he wo"ld ha!e earned if he had #een in office for the "nexpired resid"e of his term, or for three years whiche!er is shorter, calc"lated on the #asis of the a!era e rem"neration act"ally earned #y him d"rin a period of three years immediately precedin the date on which his/ office ceased or was terminated, or where he held his office for a lesser period than three years, d"rin s"ch period.B

2.'AA. Power o! Central -overnment to prohi&it the appointment o! sole selling agents in certain cases
G1H =here the *entral +o!ernment is of opinion that the demand for oods of any cate ory, to #e specified #y that +o!ernment, is s"#stantially in excess of the prod"ction or s"pply of s"ch oods and that the ser!ices of sole sellin a ents, will not #e necessary to create a mar;et for s"ch oods, the *entral +o!ernment may, #y notification in the :fficial +aFette, declare that sole sellin a ents shall not #e appointed #y a company for the sale of s"ch oods for s"ch period as may #e specified in the declaration. 4o company shall appoint any indi!id"al, firm or #ody corporate, who or which has a s"#stantial interest in the company, as sole sellin a ent of that company "nless s"ch appointment has #een pre!io"sly appro!ed #y the *entral +o!ernment. 4o company ha!in a paid/"p share capital of r"pees fifty la;hs or more shall appoint a sole sellin a ent except with the consent of the company accorded #y a special resol"tion and the appro!al of the *entral +o!ernment. .he pro!isions of s"#/sections G'H, G(H and G7H of section 2,$ shall so far as may #e, apply to the sole sellin , or the sole p"rchasin or #"yin , a ents of a company. A company see;in appro!al "nder this section shall f"rnish s"ch partic"lars as may #e prescri#ed. =here any appointment has #een made of a sole sellin a ent #y a company #efore the commencement of the *ompanies GAmendmentH Act, 1,7$ and the appointment is s"ch that it co"ld not ha!e #een made except on the a"thority of a special resol"tion passed #y the company and the appro!al of the *entral +o!ernment, if s"#/section G2H, s"#/section G3H and s"#/section G)H, were in force at the time of s"ch appointment, the company shall o#tain s"ch a"thority and appro!al within six months from s"ch commencementL and if s"ch a"thority and appro!al are not so o#tained, the appointment of the sole sellin a ent shall stand terminated on the expiry of six months from s"ch commencement. If the company in eneral meetin disappro!es the appointment referred to in s"#/section G3H, s"ch appointment shall, notwithstandin anythin contained in S"#/section G(H, cease to ha!e effect from the date of the eneral meetin . .he pro!isions of this section except those of s"#/section G1H, shall apply so far as may #e to the appointment #y a company of a sole a ent for the #"yin or p"rchasin of oods on #ehalf of the company/ Explanation( /In this section,/ GaH "appointment" incl"des "re/appointment", G#H "s"#stantial interest",/ GiH in relation to an indi!id"al, means the #eneficial interest held #y s"ch indi!id"al or any of his relati!es, whether sin ly or ta;en to ether, in the shares of the company, the a re ate amo"nt paid/"p on which exceeds fi!e la;hs of r"pees or fi!e per cent of the paid/"p share capital of the company, whiche!er is the lesserL GiiH in relation to a firm, means the #eneficial interest held #y one or more partners of the firm or any relati!e of s"ch partner, whether sin ly or ta;en to ether, in the shares of the company, the a re ate amo"nt paid/"p on which exceeds fi!e la;hs of r"pees or fi!e per cent of the paid/"p share capital of the company whiche!er is the lesserL GiiiH in relation to a #ody corporate, means the #eneficial interest held #y s"ch #ody corporate or one or more of its directors or any relati!e of s"ch director, whether sin ly or ta;en to ether, in the shares of the company, the a re ate amo"nt paid/"p on which exceeds fi!e la;hs of r"pees or fi!e per cent of the paid/"p share capital of the company, whiche!er is the lesser.B

G2H

G3H

G$H G'H G(H

G7H

G)H

2.). 4oans to directors, etc.

G1H Sa!e as otherwise pro!ided in s"#section G2H no company Ghereinafter in this section referred to as "the lendin company" Awitho"t o#tainin the pre!io"s appro!al of the *entral +o!ernment in that #ehalf shall, directly or indirectly,B ma;e any loan to, or i!e any "arantee or pro!ide any sec"rity in connection with a loan made #y any other person to, or to any other person #y,

GaH G#H GcH GdH

any director of the lendin company, or of a company which is its holdin company or any partner or relati!e of any s"ch directorL any firm in which any s"ch director or relati!e is a partnerL any pri!ate company of which any s"ch director is a director or mem#erL any #ody corporate at a eneral meetin of which not less than twenty/fi!e per cent of the total !otin power may #e exercised or controlled #y any s"ch director, or #y two or more s"ch directors, to etherL or

GeH

AG2H

any #ody corporate, the 0oard of directors, mana in director AJJJB or mana er whereof is acc"stomed to act in accordance with the directions or instr"ctions of the 0oard, or of any director or directors, of the lendin company. S"#/section G1H shall not apply to/ GaH any loan made, "arantee i!en or sec"rity pro!ided/ GiH #y a pri!ate company "nless it is a s"#sidiary of a p"#lic company, or GiiH #y a #an;in companyL any loan made #y a holdin company to its s"#sidiary companyLB any "arantee i!en or sec"rity pro!ided #y a holdin company in respect of any loan made to its s"#sidiary company.B

AG#H AGcH G3H

G$H

=here any loan made, "arantee i!en or sec"rity pro!ided #y a lendin company and o"tstandin at the commencement of this Act co"ld not ha!e #een made, i!en or pro!ided, witho"t the pre!io"s appro!al of the *entral +o!ernment, if this section has then #een in force, the lendin company shall, within six months from the commencement of this Act or s"ch f"rther time not exceedin six months as the *entral +o!ernment may rant for that p"rpose, either o#tain the appro!al of the *entral +o!ernment to the transaction or enforce the repayment of the loan made, or in connection with which the "arantee was i!en or the sec"rity was pro!ided, notwithstandin any a reement to the contrary. 1!ery person who is ;nowin a party to any contra!ention of s"#/section G1H or G3H, incl"din in partic"lar any person to whom the loan is made or who has ta;en the loan is respect of which the "arantee is i!en or the sec"rity is pro!ided, shall #e p"nisha#le either with fine which may extend to Afifty tho"sand r"peesB or with simple imprisonment for a term which may extend to six months. Provided that where any s"ch loan, or any loan in connection with which any s"ch "arantee of sec"rity has #een i!en or pro!ided #y the lendin company, has #een repaid in f"ll, no p"nishment #y way of imprisonment shall #e imposed "nder this s"#/sectionL and where the loan has #een repaid in part, the maxim"m p"nishment which may #e imposed "nder this s"#/section #y way of imprisonment shall #e proportionately red"ced. All persons who are ;nowin ly parties to any contra!ention of s"#/section G1H or G3H shall #e lia#le, Cointly and se!erally, to the lendin company for the repayment of the loan or for ma;in ood the s"m which the lendin company may ha!e #een called "pon to pay in !irt"e of the "arantee i!en of the sec"rity pro!ided #y s"ch company. 4o officer of the lendin company or of the #orrowin #ody corporate shall #e p"nisha#le "nder s"#/ section G$H or shall inc"r the lia#ility referred to it s"#/section G'H in respect of any loan made, "arantee i!en or sec"rity pro!ided 10Aafter the 1st day of April, 1,'(B in contra!ention of cla"se GdH or GeH of s"#/section G1H "nless at the time when the loan was made, the "arantee was i!en or the sec"rity was pro!ided #y the lendin company, he ;new or had express notice that that cla"se was #ein contra!ened there#y.

G'H

G(H

2.*. Application o! section 2.) to &oo= de&ts in certain cases

Section 2,' shall apply to any transaction represented #y a #oo; de#t which was from its inception in the nat"re of a loan or an ad!ance.B

2.+. 2oardEs sanction to &e reDuired !or certain contracts in which particular directors are interested

G1H

1xcept with the consent of the 0oard of directors of a company, a director of the company or his relati!e, a firm in which s"ch a director or relati!e is a partner, any other partner in s"ch a firm, or a pri!ate company of which the director is a mem#er or director, shall not enter into any contract with the company/ GaH for the sale, p"rchase or s"pply of any oods, material or ser!icesL or G#H after the commencement of this Act, for "nderwritin the s"#scription of any shares in, or de#ent"res of, the companyK

AG2H

AProvided that in the case of a company ha!in a paid/"p share capital of not less than r"pees one crore, no s"ch contract shall #e entered into except with the pre!io"s appro!al of the *entral +o!ernment.B 4othin contained in cla"se GaH of s"#/section G1H shall affect/ GaH the p"rchase of oods and materials from the company, or the sale of oods and materials to the company, #y any director, relati!e, firm, partner or pri!ate company as aforesaid for cash at pre!ailin mar;et pricesL or any contract or contracts #etween the company on one side and any s"ch director, relati!e, firm, partner or pri!ate company on the other for sale, p"rchase or /s"pply of any oods, materials and ser!ices in which either the company or the director, relati!e, firm, partner or pri!ate company, as the case may #e, re "larly trades or does #"siness. Provided that s"ch contract or contracts do not relate to oods and materials the !al"e of which, or ser!ices the cost of which, exceeds fi!e tho"sand r"pees in the a re ate in any year comprised in the period of the contract or contractsL or in the case of a #an;in or ins"rance company any transaction in the ordinary co"rse of #"siness of s"ch company with any director, relati!e, firm, partner or pri!ate company as aforesaid.

G#H

GcH G3H

G$H

4otwithstandin anythin contained in s"#/sections G1H and G2H a director, relati!e, firm, partner or pri!ate company as aforesaid may, in circ"mstances of "r ent necessity, enter, witho"t o#tainin the consent of the 0oard, into any contract with the company for the sale, p"rchase or s"pply of any oods, materials or ser!ices e!en if the !al"e of s"ch oods or cost of s"ch ser!ices exceeds fi!e tho"sand r"pees in the a re ate in any year comprised in the period of the contractL #"t in s"ch a case, the consent of the 0oard shall #e o#tained at a meetin within three months of the date on which the contract was entered into. 1!ery consent of the 0oard reD"ired "nder this section shall #e accorded #y a resol"tion passed at a meetin of the 0oard and not otherwiseL and the consent of the 0oard reD"ired "nder s"#/section G1H shall not #e deemed to ha!e #een i!en within the meanin of that s"#/section "nless the consent is accorded #efore the contract is entered into or within three months of the date on which it was entered into. If consent is not accorded to any contract "nder this section, anythin done in p"rs"ance of the contract shall #e !oida#le at the option of the 0oard. 4othin in this section shall apply to any case where the consent has #een accorded to the contract #efore the commencement of the *ompanies GAmendmentH Act, 1,(0.

G'H G(H

2.,.
Omitted by t e !o@s (Ammendment#A$t% 2--- '(e() 13H12H2---

Procedure etc! where director interested 2...

G1H

isclosure o! interest &% director

1!ery director of a company who is in any way, whether directly or indirectly, concerned or interested in a contract or arran ement, or proposed contract or arran ement, entered into or to #e entered into, #y or on #ehalf of the company, shall disclose, the nat"re of his concern or interest at a meetin of the 0oard of directors. In the case of a proposed contract or arran ement the disclos"re reD"ired to #e made #y a director "nder s"#/section G1H shall #e made at the meetin of the 0oard at which the D"estion of enterin into

G2HGaH

the contract or arran ement is first ta;en into consideration, or if the director was not, at the date of that meetin , concerned or interested in the proposed contract or arran ement, at the first meetin of the 0oard held after he #ecomes so concerned or interested. G#H In the case of any other contract or arran ement, the reD"ired disclos"re shall #e made at the first meetin of the 0oard held after the director #ecomes concerned or interested in the contract or arran ement. 3or the p"rposes of s"#/sections G1H and G2H, a eneral notice i!en to the 0oard #y a director to the effect that he is a director or a mem#er of a specified #ody corporate or is a mem#er of a specified firm and is to #e re arded as concerned or interested in any contract or arran ement which may, after the date of the notice, #e entered into with that #ody corporate or firm, shall #e deemed to #e a s"fficient disclos"re of concern or interest in relation to any contract or arran ement so made. Any s"ch eneral notice shall expire at the end of the financial year in which it is i!en, #"t may #e renewed for f"rther periods of one financial year at a time, #y a fresh notice i!en in the last month of the financial year in which it wo"ld otherwise expire. 4o s"ch eneral notice, and no renewal thereof, shall #e of effect "nless either it is i!en at a meetin of the 0oard, or the director concerned ta;es reasona#le steps to sec"re that it is #ro" ht "p and read at the first meetin of the 0oard after it is i!en. 1!ery director who fails to comply with s"#/section G1H or G2H shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB. 4othin in this section shall #e ta;en to preC"dice the operation of any r"le of law restrictin a director of a company from ha!in any concern or interest in any contracts or arran ements with the company. 4othin in this section shall apply to any contract or arran ement entered into or to #e entered into #etween two companies where any of the directors of the one company or two or more of them to ether holds or hold not more than two per cent of the paid/"p share capital in the other company.B

G3HGaH

G#H

GcH

G$H G'H AG(H

#00. "nterested director not to participate or vote in 2oardEs proceedings

G1H 4o director of a company shall, as a director, ta;e any part in the disc"ssion of, or !ote on, any contract or arran ement entered into, or to #e entered into, #y or on #ehalf of the company, if he is in any way, whether directly or indirectly, concerned or interested in the contract or arran ementL nor shall his presence co"nt for the p"rpose of formin a D"or"m at the time of any s"ch disc"ssion or !oteL and if he does !ote, his !ote shall #e !oid. S"#/section G1H shall not apply to/ GaH G#H a pri!ate company which is neither a s"#sidiary nor a holdin company of a p"#lic companyL a pri!ate company which is a s"#sidiary of a p"#lic company, in respect of any contract or arran ement entered into, or to #e entered into, #y the pri!ate company with the holdin company thereof, any contract of indemnity a ainst any loss which the directors, or any one or more of them, may s"ffer #y reason of #ecomin or #ein s"reties or a s"rety for the companyL any contract or arran ement entered into or to #e entered into with a p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, in which the interest of the director aforesaid Aconsists solely/ GiH in his #ein a director of s"ch company and the holder of not more than shares of s"ch n"m#er or !al"e therein as is reD"isite to D"alify him for appointment as a director thereof, he ha!in #een nominated as s"ch director #y the company referred to in s"#/ section G1H, or GiiH in his #ein a mem#er holdin not more than two per cent of its paid/"p share capitalLB a p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, in respect of which a notification is iss"ed "nder s"#/section G3H, to the extent specified in the notification.

G2H

GcH GdH

GeH G3H

In the case of a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, if the *entral +o!ernment is of opinion that ha!in re ard to the desira#ility of esta#lishin or promotin any ind"stry, #"siness or trade, it wo"ld not #e in the p"#lic interest to apply all or any of the prohi#itions contained in s"#/section G1H to the company, the *entral +o!ernment may, #y notification

G$H

in the :fficial +aFette, direct that that s"#/section shall not apply to s"ch company, or shall apply thereto s"#Cect to s"ch exceptions, modifications and conditions as may #e specified in the notification. 1!ery director who ;nowin ly contra!enes the pro!isions of this section shall #e p"nisha#le with fine which may extend to Afifty tho"sand r"peesB.

#01. :egister o! contracts, companies and !irms in which directors are interested
AG1H 1!ery company shall ;eep one or more re isters in which shall #e entered separately partic"lars of all contracts or arran ements to which section 2,7 or section 2,, applies, incl"din the followin partic"lars to the extent they are applica#le in each case, namely../ GaH the date of the contract or arran ementL G#H GcH GdH the names of the parties theretoL the principal terms and conditions thereof,

G2H

in the case of a contract to which section 2,7 applies or in the case of a contract or arran ement to which s"#/section G2H of section 2,, applies, the date on which it was placed #efore the 0oardL GeH the names of the directors !otin for and a ainst the contract or arran ement and the names of those remainin ne"tral. &artic"lars of e!ery s"ch contract or arran ement to which section 2,7 or, as the case may #e, s"#/ section G2H of section 2,, applies, shall #e entered in the rele!ant re ister aforesaid/ GaH in the case of a contract or arran ement reD"irin the 0oardEs appro!al, within se!en days Gexcl"si!e of p"#lic holidaysH of the meetin of the 0oard at which the contract or arran ement is appro!ed, G#H in the case of any other contract or arran ement, within se!en days of the receipt at the re istered office of the company of the partic"lars of s"ch other contract or arran ement or within thirty days of the date of s"ch other contract or arran ement whiche!er is later, and the re ister shall #e placed #efore the next meetin of the 0oard and shall then #e si ned #y all the directors present at the meetin . .he re ister aforesaid shall also specify, in relation to each director of the company, the names of the firms and #odies corporate of which notice has #een i!en #y him "nder s"#/section G3H of section 2,,. 4othin in s"#/sections G1H, G2H and G3H shall apply/ GaH to any contract or arran ement for the sale, p"rchase or s"pply of any oods, materials or ser!ices if the !al"e of s"ch oods and materials or the cost of s"ch ser!ices does not exceed one tho"sand r"pees in the a re ate in any yearL or to any contract or arran ement Gto which section 2,7 or, as the case may #e, section 2,, appliesH #y a #an;in company for the collection of #ills in the ordinary co"rse of its #"siness or to any transaction referred to in cla"se GcH or s"#/section G2H of section 2,7.B

G3H G3AH

G#H

G$H

G'H

If defa"lt is made in complyin with the pro!isions of s"#/section G1H, G2H or G3H, the company, and e!ery officer of the company who is in defa"lt, shall, in respect of each defa"lt, #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB. .he re ister aforesaid shall #e ;ept at the re istered office of the companyL and it shall #e open to inspection at s"ch office, and extracts may #e ta;en therefrom and copies thereof may #e reD"ired, #y any mem#er of the company to the same extent, in the same manner, and on payment of the same fee, as in the case of the re ister of mem#ers of the companyL and the pro!isions of section 1(3 shall apply accordin ly.

#02.

isclosure to mem&ers o! directors interest in contract appointing manager, managing director GKKKH
=here a company/ GaH enters into a contract for the appointment of a mana er of the company, in which contract any director of the company is m any way, whether directly or indirectly, concerned or interestedL or

G1H

G#H

G2H

G3H G$H

!aries any s"ch contract already in existence and in which a director is concerned or interested as aforesaidL the company shall, within twenty/one days from the date of enterin into the contract or of the !aryin of the contract, as the case may #e, send to e!ery mem#er of the company an a#stract of the terms of the contract or !ariation, to ether with a memorand"m clearly specifyin the nat"re of the concern or interest of the director in s"ch contract or !ariation. =here a company enters into a contract for the appointment of a mana in director of the company, or !anes any s"ch contract which is already in existence, the company shall send an a#stract of the terms of the contract or !ariation to e!ery mem#er of the company within the time specified in s"#/section G1HL and if any other director of the company is concerned or interested in the contract or !ariation, a memorand"m clearly specifyin the nat"re of the concern or interest of s"ch other director in the contract or !ariation shall also #e sent to e!ery mem#er of the company with the a#stract aforesaid. AJJJB =here a director #ecomes concerned or interested as aforesaid in any s"ch contract as is referred to in s"#/section G1H, G2H or G3H after it is made, the a#stract and the memorand"m, if any, referred to in the said s"#/section shall #e sent to e!ery mem#er of the company within twenty/one days from the date on which the director #ecomes so concerned or interested. If defa"lt is made in complyin with the fore oin pro!isions of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 200Aten tho"sand r"peesB. All contracts entered into #y a company for the appointment of a mana er or mana in director AJJJB shall #e ;ept at the re istered office of the companyL and shall #e open to the inspection of any mem#er of the company at s"ch officeL and extracts may #e ta;en therefrom and copies thereof may #e reD"ired #y any s"ch mem#er, to the same extent, in the same manner and on payment of the same fee, as in the case of the re ister of mem#ers of the companyL and the pro!isions of section 1(3 shall apply accordin ly. .he pro!isions of this section shall apply in relation to any resol"tion AJJJB of the 0oard of directors of a company appointin a mana er or a mana in or whole/time director, or !aryin any pre!io"s contract or resol"tion of the company relatin to the appointment of a mana er or a mana in or whole/time director, as they apply in relation to any contract AJJJB for the li;e p"rpose.

G'H

G(H

G7H

Register of directors etc! #0#. :egister o! directors, GKKKH etc.

G1H 1!ery company shall ;eep at its re istered office a re ister of its directors, mana in director, AJJJB mana er and secretary, containin with respect to each of them the followin partic"lars, that is to sayK/ GaH in the case of an indi!id"al, his present name, and s"rname in f"llL any former name or s"rname in f"llL Ahis fatherEs name and s"rname in f"llL or where the indi!id"al is a married woman, the h"s#andEs name and s"rname in f"llBL his "s"al residential addressL his nationality and, if that nationality is not the nationality of ori in, his nationality of ori in, his #"siness occ"pation, if any, if he holds the office of director, mana in director, AJJJB mana er or secretary in any other #ody corporate, the partic"lars of each s"ch office held #y himL and except in the case of a pri!ate company which is not a s"#sidiary of a p"#lic company, the date of his #irthL G#H in the case of a #ody corporate, its corporate name and re istered or principal officeL and the f"ll name, address, nationality, and nationality of ori in, if different from that nationality 21Athe fatherEs name or where a director is a married woman, the h"s#andEs nameB of each of its directorsL and if it holds the office of AJJJB mana er or secretary in any other #ody corporate, the partic"lars of each s"ch officeL in the case of a firm, the name of the firm, the f"ll name, address, nationality, and nationality of ori in, if different from that nationality Athe fatherIs name or where a partner is a married woman, the h"s#andEs nameB of each partnerL and the date on which each #ecame a partnerL and if the firm holds the office of AJJJB mana er or secretary in any other #ody corporate, the partic"lars of each s"ch officeL

GcH

GdH

if any director or directors ha!e #een nominated #y a #ody corporate, its corporate nameL all the partic"lars referred to in cla"se GaH in respect of each director so nominated, and also all the partic"lars referred to in cla"se G#H in respect of the #ody corporateL

GeH

if any director or directors ha!e #een nominated #y a firm, the name of the firm, all the partic"lars referred to in cla"se GaH in respect of each director so nominated, and also all the partic"lars referred to in cla"se GcH in respect of the firm. Explanation( /3or the p"rposes of this s"#/section/ G1H G2H G3H any person in accordance with Awhose directions or instr"ctionsB, the 0oard of directors of a company is acc"stomed to act shall #e deemed to #e a director of the companyL in the case of a person "s"ally ;nown #y a title different from his s"rname, the expression "s"rname" means that titleL and reference to a former name or s"rname do not incl"de/ GiH in the case of a person "s"ally ;nown #y an Indian title different from his s"rname, the name #y which he was ;nown pre!io"s to the adoption of, or s"ccession to, the titleL GiiH in the case of any person, a former name or s"rname, where that name or s"rname was chan ed or dis"sed #efore the person #earin the name attained the a e of ei hteen years, or has #een chan ed or dis"sed for a period of not less than twenty yearsL and GiiiH G2H in the case of a married woman, the name or s"rname #y which she was ;nown pre!io"s to the marria e.

.he company shall, within the periods respecti!ely mentioned in this s"#/section, send to the 8e istrar Aa ret"rn in d"plicate in the prescri#ed form 2$B containin the partic"lars specified in the said re ister and Aa notification in d"plicate in the prescri#ed formB of any chan e amon its directors, mana in directors, AJJJB mana ers or secretaries AJJJBspecifyin the date of the chan e. .he period within which the said ret"rn is to #e sent shall #e period of 27AthirtyB days from the appointment of the first directors of the company and the period within which the said notification of a chan e is to #e sent shall #e 2)AthirtyB days from the happenin thereof.

AJJJB G3H If defa"lt is made in complyin with s"#/section G1H or G2H, the company, and e!ery officer of the company who/is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

#0'. "nspection o! the register

G1H .he re ister ;ept "nder section 303 shall #e open to the inspection of any mem#er of the company witho"t char e and of any other person on payment of one r"pee for each inspection d"rin #"siness ho"rs s"#Cect to s"ch reasona#le restrictions as the company may #y its articles or in eneral meetin impose, so that not less than two ho"rs in each day are allowed for inspection. If any inspection reD"ired "nder s"#/section G1H is ref"sed,/ GaH the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesBL and G#H the A*entral +o!ernment or .ri#"nal, as the case may #eB may, #y order, compel an immediate inspection of the re ister.

G2H

#0).
G1H

ut% o! directors etc. to ma=e disclosure

1!ery director, mana in director, AJJJB mana er or secretary of any company, who is appointed to or relinD"ishes, the office of director, mana in director AJJJB mana er or secretary of any other #ody corporate, shall within twenty days of his appointment to, or as the case may #e, relinD"ishment of, s"ch office, disclose to the company aforesaid the partic"lars relatin to the office in the other #ody corporate which are reD"ired to #e specified "nder s"#/section G1H of section 303L and if he fails to do so, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

G2H

.he pro!isions of s"#/section G1H shall also apply to a person deemed to #e a director of the company #y !irt"e of the 1xplanation to s"#/section G1H of section 303 when s"ch person is appointed to, or relinD"ishes, any of the offices in the other #ody corporate referred to in s"#/section G1H.B

#0*. :egister to e =ept &% :egistrar and "nspection thereo!

G1H .he 8e istrar shall ;eep a separate re ister or re isters in which there shall #e entered the partic"lars recei!ed #y him "nder s"#section G2H of section 303 in respect of companies, so howe!er that all entries in respect of each s"ch company shall #e to ether. .he re ister or re isters aforesaid shall #e open to inspection #y any mem#er of the p"#lic at any time d"rin office ho"rs, on payment of the prescri#ed fee.

G2H

Register of directors. shareholdings #0+. :egister o! directorsE shareholdings, etc.

G1H 1!ery company shall ;eep a re ister showin , as respects each director of the company, the n"m#er, description and amo"nt of any shares in, or de#ent"res of, the company or any other #ody corporate, #ein the companyEs s"#sidiary or holdin company, or a s"#sidiary of the companyEs holdin company, which are held #y him or in tr"st for him, or of which he has any ri ht to #ecome the holder whether on payment or not. =here any shares or de#ent"res ha!e to #e recorded in the said re ister or to #e omitted therefrom, in relation to any director, #y reason of a transaction entered into after the commencement of this Act and while he is a director, the re ister shall also show the date of, and the price or other consideration for, the transactionK Provided that where there is an inter!al #etween the a reement for any s"ch transaction and the completion thereof, the date so shown shall #e that of the a reement. G3H G$H G'H .he nat"re and extent of any interest or ri ht in or o!er any shares or de#ent"res recorded in relation to a director in the said re ister shall, if he so reD"ires, #e indicated in the re ister. .he company shall not, #y !irt"e of anythin done for the p"rposes of this section, #e affected with notice of, or #e p"t "pon inD"iry as to, the ri hts of any person in relation to any shares or de#ent"res. .he said re ister shall, s"#Cect to the pro!isions of this section, #e ;ept at the re istered office of the company, and shall #e open to inspection d"rin #"siness ho"rs Gs"#Cect to s"ch reasona#le restrictions as the company may, #y its articles or in eneral meetin , impose, so that not less than two ho"rs in each day are allowed for inspectionH as followsK/ GaH d"rin the period #e innin fo"rteen days #efore the date of the companyEs ann"al eneral meetin and endin three days after the date of its concl"sion, it shall #e open to the inspection of any mem#er or holder of de#ent"res of the companyL and G#H d"rin that or any other period, it shall #e open to the inspection of any person actin on #ehalf of the *entral +o!ernment or of the 8e istrar. In comp"tin the fo"rteen days and the three days mentioned in this s"#section, any day which is a Sat"rday, a S"nday or a p"#lic holiday shall #e disre arded. =itho"t preC"dice to the ri hts conferred #y s"#/section G'H, the *entral +o!ernment or the 8e istrar may, at any time reD"ire a copy of the said re ister, or any part thereof. .he said re ister shall also #e prod"ced at the commencement of e!ery ann"al eneral meetin of the company and shall remain open and accessi#le d"rin the contin"ance of the meetin to any person ha!in the ri ht to attend the meetin . If defa"lt is made in complyin , with this s"#/section the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 20AAfi!e tho"sand r"peesB. G)H If defa"lt is made in complyin with s"#/section G1H or G2H, or if any inspection reD"ired "nder this section is ref"sed, or if any copy reD"ired there"nder is not sent within a reasona#le time, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to

G2H

G(H G7H

G,H G10H

Afifty tho"sand r"peesB and also with a f"rther fine which may extend to 2,AAtwo h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es. In the case of any s"ch ref"sal, the (aA*entral +o!ernment or .ri#"nal, as the case may #eB may also, #y order, compel an immediate inspection of the re ister. 3or the p"rposes of this section/
3A

GaH G#H

any person in accordance with whose directions or instr"ctions the 0oard of directors of a company is acc"stomed to act, shall #e deemed to #e a director of the companyL and

G11H 33

a director of a company, shall #e deemed to hold or to ha!e an interest or a ri ht in or o!er, any shares or de#ent"res, if a #ody corporate other than the company holds them or has that interest or ri ht in or o!er them, and either/ GiH that #ody corporate or its 0oard of directors is acc"stomed to act in accordance with his directions or instr"ctionsL or GiiH he is entitled to exercise or control the exercise of one/third or more of the total !otin power exercisa#le at any eneral meetin of that #ody corporate. AAJJJomitted #y the *oIs GAmmendmentHAct, 2000 w.e.f 13O12O2000B

#0,.

ut% o! directors and persons deemed to &e directors to ma=e disclosure o! shareholdings
1!ery director of a company, and e!ery person deemed to #e a director of the company #y !irt"e of s"#/ section G10H of section 307, shall i!e notice to the company of s"ch matters relatin to himself as may #e necessary for the p"rpose of ena#lin the company to comply with the pro!isions of that section. Any s"ch notice shall #e i!en in writin , and if it is not i!en at a meetin of the 0oard, the person i!in the notice shall ta;e all reasona#le steps to sec"re that it is #ro" ht "p and read at the meetin of the 0oard next after it is i!en. Any person who fails to comply with s"#/section G1H or G2H shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to 3AAfifty tho"sand r"peesB, or with #oth.

G1H

G2H

G3H

Remuneration of directors #0.. :emuneration o! directors

G1H .he rem"neration paya#le to the directors of a company, incl"din any mana in or whole/time director, shall #e determined, in accordance with and s"#Cect to the pro!isions of section 1,) and this section, either #y the articles of the company, or #y a resol"tion or, if the articles so reD"ire, #y a special resol"tion, passed #y the company in eneral meetin 3$Aand the rem"neration paya#le to any s"ch director determined as aforesaid shall #e incl"si!e of the rem"neration paya#le to s"ch director for ser!ices rendered #y him in any other capacity K Provided that any rem"neration for ser!ices rendered #y any s"ch director in any other capacity shall not #e so incl"ded if/ GaH G#H
3'

AG2H

the ser!ices rendered are of a professional nat"re, and in the opinion of the *entral +o!ernment, the director possesses the reD"isite D"alifications for the practice of the professionB. A director may recei!e rem"neration #y way of a fee for each meetin of the 0oard, or a committee thereof, attended #y himK Provided that where immediately #efore the commencement of the *ompanies GAmendmentH Act, 1,(0 fees for meetin s of the 0oard and any committee thereof, attended #y a director are paid on a monthly #asis, s"ch fees may contin"e to #e paid on that #asis for a period of two years after s"ch commencement or for the remainder of the term of office of s"ch director, whiche!er is less, #"t no lon er.

G3H

A director who is either in the whole/time employment of the company or A mana in director may #e paid rem"neration either #y way of a monthly payment or at a specified percenta e of the net profits of the company or partly #y one way and partly #y the otherK Provided that except with the appro!al 3( of the *entral +o!ernment s"ch rem"neration shall not exceed fi!e per cent of the net profits for one s"ch director, and if there is more than one s"ch director, ten per cent for all of them to ether.B A director who is neither in the whole/time employment of the company nor a mana in director may #e paid rem"neration either/ GaH #y way of a monthly, D"arterly or ann"al payment with the appro!al of the *entral +o!ernmentL or G#H #y way of commission if the company #y special resol"tion a"thorises s"ch paymentK Provided that the rem"neration paid to s"ch director, or where there is more than one s"ch director, to all of them to ether, shall not exceed/ GiH one per cent of the net profits of the company, if the company has a mana in or whole/time director, 7AAJJJB or a mana erL

37

AG$H

GiiH three per cent of the net profits of the company, in any other caseK Provided !urther that the company in eneral meetin may, with the appro!al of the *entral +o!ernment, a"thorise the payment of s"ch rem"neration at a rate exceedin one per cent or, as the case may #e, three per cent of its net profits.B G'H
3)

.he net profits referred to in s"#/sections G3H and G$H shall #e comp"ted in the manner referred to in section 1,), s"#/section G1H.

AG'AH If any director draws or recei!es, directly or indirectly, #y way of rem"neration any s"ch s"ms in excess of the limit prescri#ed #y this section or witho"t the prior sanction of the *entral +o!ernment, where it is reD"ired, he shall ref"nd s"ch s"ms to the company and "ntil s"ch s"m is ref"nded, hold it in tr"st for the, company. .he company shall not wai!e the reco!ery of any s"m ref"nda#le to it "nder s"#/section G'AH "nless permitted #y the *entral +o!ernment.B 4o director of a company who is in receipt of any commission from the company and who is either in the whole/time employment of the company or a mana in director shall #e entitled to recei!e any commission or other rem"neration from any s"#sidiary of s"ch company. .he special resol"tion referred to in s"#/section G$H, shall not remain in force for a period of more than fi!e yearsL #"t may #e renewed, from time to time, #y special resol"tion for f"rther periods of not more than fi!e years at a timeK Provided that no renewal shall #e effected earlier than one year from the date on which it is to come into force.

G'0H G(H

G7H

G)H

G,H

.he pro!isions of this section shall come into force immediately on the commencement of this Act or, where s"ch commencement does not coincide with the end of a financial year of the company, with effect from the expiry of the financial year immediately s"cceedin s"ch commencement. .he pro!isions of this section shall not apply to a pri!ate company "nless it is a s"#sidiary of a p"#lic company.

#10. Provisions !or increase in remuneration to reDuire -overnment sanction

AAIn the case of a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic company, any pro!ision relatin to the rem"neration of any director incl"din a mana in or whole/time director, or any amendment thereof, which p"rports to increaseB or has the effect of increasin , whether directly or indirectly, the amo"nt thereof, whether that pro!ision #e contained in the companyEs memorand"m or articles, or in an a reement entered into #y it, or in any resol"tion passed #y the company in eneral meetin or #y its 0oard of directors, $0Ashall not ha!e any effect/ GaH in cases where Sched"le >III is applica#le, "nless s"ch increase is in accordance with the conditions specified in that Sched"leL and G#H in any other case, "nless it is appro!ed$1 #y the *entral +o!ernmentB,
3,

and the amendment shall #ecome !oid if, and in so far as, it is disappro!ed #y that +o!ernmentK

AProvided that the appro!al of the *entral +o!ernment shall not #e reD"ired where any s"ch pro!ision or any amendment thereof p"rports to increase, or has the effect of increasin , the amo"nt of s"ch rem"neration only #y way of a fee for each meetin of the 0oard or a committee thereof attended #y any s"ch director and the amo"nt of s"ch fee after s"ch increase does not exceed $3As"ch s"m as may #e prescri#edBK $$ AProvided !urther that where in the case of any pri!ate company which con!erts itself into a p"#lic company or #ecomes a p"#lic company "nder the pro!isions of section $3A, any pro!ision relatin to the rem"neration of any director incl"din a mana in or whole/time director as contained in its memorand"m or articles or in any a reement entered into #y it or in any, resol"tion passed #y it in eneral meetin or #y its 0oard of directors incl"des a pro!ision for the payment of fee for each meetin of the 0oard or a *ommittee thereof attended #y any s"ch director which is in excess of the s"m specified "nder the first pro!iso, s"ch pro!ision shall #e deemed to #e an increase in the rem"neration of s"ch director and shall not, after it ceases to #e a pri!ate company, or, as the case may #e, #ecomes a p"#lic company, ha!e any effect "nless appro!ed #y the *entral +o!ernmentB.
$2

#11. "ncrease in remuneration o! managing director on reappointment or appointment a!ter Act to reDuire -overnment sanction
In the case of a p"#lic company, or a pri!ate company which is a s"#sidiary of a p"#lic company, if the terms of any re/appointment or appointment of a mana in or whole/time director, made after the commencement of this Act, p"rport to increase or ha!e the effect of increasin , whether directly or indirectly, the rem"neration which the mana in or whole/time director or the pre!io"s mana in or whole/time director, as the case may #e, was recei!in immediately #efore s"ch re/appointment or appointment, the re/appointment or appointment $0 Ashall not ha!e any effect/ GaH in cases where Sched"le >III is applica#le, "nless s"ch increase is in accordance with the conditions specified in that Sched"leL and G#H in any other case, "nless it is appro!ed$' #y the *entral +o!ernmentB and shall #ecome !oid if, and in so far as, it is disappro!ed #y that +o!ernment.

Miscellaneous provisions #12. Prohi&ition o! assignment o! o!!ice &% director

Any assi nment of his office made after the commencement of this Act #y any director of a company shall #e !oid.

#1#. Appointment and term o! o!!ice o! alternate directors

G1H .he 0oard of directors of a company may, if so a"thorised #y its articles or #y a resol"tion passed #y the company in eneral meetin , appoint an alternate director to act for a director Ghereinafter in this section called "the ori inal director"H d"rin his a#sence for a period of not less than three months from the State in which meetin s of the 0oard are ordinarily held. An alternate director appointed "nder s"#/section G1H shall not #old office as s"ch for a period lon er than that permissi#le to the ori inal director in whose place he has #een appointed and shall !acate office if and when the ori inal director ret"rns to the State in which meetin s of the 0oard are ordinarily held.B If the term of office of the ori inal director is determined #efore he so ret"rns to the State aforesaid, any pro!ision for the a"tomatic re/appointment of retirin directors in defa"lt of another appointment shall apply to the ori inal, and not to the alternate, director.

$(

AG2H

G3H

#1'.
$7

irector, etc., not to hold o!!ice or place o! pro!it

1xcept with the $)AconsentB of the company accorded #y a special resol"tion,/ GaH no director of a company shall hold any office or place of profit, and

AG1H

G#H

Ano partner or relati!e of s"ch director, no firm in which s"ch director, or a relati!e of s"ch director, is a partner, no pri!ate company of which s"ch director is a director or mem#er, and no director or mana er of s"ch a pri!ate company, shall hold any office or place of profit carryin a total monthly rem"neration of '0As"ch s"m as may #e prescri#edB, except that of mana in director or mana er,B #an;er or tr"stee for the holders of de#ent"res of the company,/
$,

GiH GiiH

"nder the companyL or "nder any s"#sidiary of the company, "nless the rem"neration recei!ed from s"ch s"#sidiary in respect of s"ch office or place of profit is paid o!er to the company or its holdin companyK

AAProvided that it shall #e s"fficient if the special resol"tion accordin the consent of the company is passed at eneral meetin of the company held for the first time after the holdin of s"ch office or place of profitK Provided !urther that where a relati!e of a director or a firm in which s"ch relati!e is a partner, is appointed to an office or place of profit "nder the company or a s"#sidiary thereof witho"t the ;nowled e of the director, the consent of the company may #e o#tained either in the eneral meetin aforesaid or within three months from the date of the appointment, whiche!er is later.B Explanation( /3or the p"rpose of this s"#/section, a special resol"tion accordin consent shall #e necessary for e!ery appointment in the first instance to an office or place of profit and to e!ery s"#seD"ent appointment to s"ch office or place of profit on a hi her rem"neration not co!ered #y the special resol"tion, except where an appointment on a time scale has already #een appro!ed #y the special resol"tion.
'1

G1AH

4othin in s"#/section G1H shall apply where a relati!e of a director or a firm in which s"ch relati!e is a partner holds any office or place of profit "nder the company or a s"#sidiary thereof ha!in #een appointed to s"ch office or place #efore s"ch director #ecomes a director of the company.B '2 AG10H 4otwithstandin anythin contained in s"#/section G1H,/ GaH G#H GcH no partner or relati!e of a director or mana er, no firm in which s"ch director or mana er, or relati!e of either, is a partner, no pri!ate company of which s"ch a director or mana er, or relati!e of either, is a director or mem#er,

shall hold any office or place of profit in the company which carries a total monthly rem"neration of not less than '3As"ch s"m as may #e prescri#edB, except with the prior consent of the company #y a special resol"tion and the appro!al '$ of the *entral +o!ernmentK '' AJJJomitted #y the *oIs GAmmendmentHAct, 2000 w.e.f 1'O0(O1,))B
'1

AG2H '(AGaHB If any office or place of profit is held in contra!ention of the pro!isions of s"#/section G1H, the director, partner, relati!e, firm, pri!ate company 7AAJJJB, or the mana er concerned, shall #e deemed to ha!e !acated his or its office as s"ch on and from the date next followin the date of the eneral meetin of the company referred to in the first pro!iso or, as the case may #e, the date of the expiry of the period of three months referred to in the second pro!iso to that s"#/section, and shall also #e lia#le to ref"nd to the company any rem"neration recei!ed or the monetary eD"i!alent of any perD"isite or ad!anta e enCoyed #y him or it for the period immediately precedin the date aforesaid in respect of s"ch office or place of profit.B
'2

G#H

.he company shall not wai!e the reco!ery of any s"m ref"nda#le to it "nder cla"se GaH "nless permitted to do so #y the *entral +o!ernment.B

'7

AG2AH 1!ery indi!id"al, firm, pri!ate company or other #ody corporate proposed to #e appointed to any office or place of profit to which this section applies shall, #efore or at the time of s"ch appointment, declare in writin whether he or it is or is not connected with a director of the company in any of the ways referred to in s"#/section G1H.B

AG20H If, after the commencement of the *ompanies GAmendmentH Act, 1,7$ any office or place of profit is held, witho"t the prior consent of the company #y a special resol"tion and the appro!al of the *entral +o!ernment, the partner, relati!e, firm or pri!ate company appointed to s"ch office or place of profit shall #e lia#le to ref"nd to the company any rem"neration recei!ed or the monetary eD"i!alent of any perD"isite or ad!anta e enCoyed #y him on and from the date on which the office was so held #y him. G2*H If any office or place of profit is held in contra!ention of the pro!isions of the pro!iso to s"#/section G10H, the director, partner, relati!e, firm, pri!ate company or mana er concerned shall #e deemed to ha!e !acated his or its office as s"ch on and from the expiry of six months from the commencement of the *ompanies GAmendmentH Act, 1,7$ or the date next followin the date of the eneral meetin of
'2

G2DH G3H

the company referred to in the said pro!iso, whiche!er is earlier, and shall #e lia#le to ref"nd to the company any rem"neration recei!ed or the monetary eD"i!alent of any perD"isite or ad!anta e enCoyed #y him or it for the period immediately precedin the date aforesaid in respect of s"ch office or place of profit. .he *ompany shall not wai!e the reco!ery of any s"m ref"nda#le to it "nder s"#/section G20H ')AJJJB "nless permitted to do so #y the *entral +o!ernment.B Any office or place ',AJJJB shall #e deemed to #e an office or place of profit "nder the company (0 Awithin the meanin of this sectionB,/ GaH in case the office or place is held #y a director, if the director holdin it (1Ao#tains from the company anythin B #y way of rem"neration o!er and a#o!e the rem"neration to which he is entitled as s"ch director, whether as salary, fees, commission, perD"isites, the ri ht to occ"py free of rent any premises as a place of residence, or otherwiseL G#H in case the office or place is held #y an indi!id"al other than a director or #y any firm, pri!ate company or other #ody corporate, if the indi!id"al, firm, pri!ate company or #ody corporate holdin it (1Ao#tains from the company anythin B #y way of rem"neration whether as salary, fees, commission, perD"isites, the ri ht to occ"py free of rent any premises as a place of residence, or otherwise. 4othin in this section shall apply to a person, who #ein the holder of any office of profit in the company, is appointed #y the *entral +o!ernment, "nder section $0), as a director of the company.B

'2

G$H

Restrictions on appointment of managing directors G#1). Application o! sections #1* and #1+1 :epealed &% the Companies (Amendment) Act, 1.*0H #1*. 6um&er o! companies o! which one person ma% &e appointed managing director
G1H A4o p"#lic company and no pri!ate company which is a s"#sidiary of a p"#lic companyB shall, after the commencement of this Act, appoint or employ any person as mana in director, if he is either the mana in director or the mana er of (3Aany other company Gincl"din a pri!ate company which is not a s"#sidiary of a p"#lic companyHB, except as pro!ided in s"#/section G2H.
(2

G2H

AA p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic companyB may appoint or employ a person as its mana in director, if he is the mana in director or mana er of one, and of not more than one, ('Aother company Gincl"din a pri!ate company which is not a s"#sidiary of a p"#lic companyHKB
($

Provided that s"ch appointment or employment is made or appro!ed #y a resol"tion passed at a meetin of the 0oard with the consent of all the directors present at the meetin and of which meetin , and of the resol"tion to #e mo!ed thereat, specific notice has #een i!en to all the directors then in India. G3H =here, at the commencement of this Act, any person is holdin the office either of mana in director or of mana er in more than. ((Atwo companies of which each one or at least one is a p"#lic company or a pri!ate company which is a s"#sidiary of a p"#lic companyB, he shall, within one year from the commencement of (7Athe *ompanies GAmendmentH Act, 1,(0B, choose not more than two of those companies as companies in which he wishes to contin"e to hold the director or mana er, as the case may #eL and the pro!isions of cla"se G#H and GcH of s"#/section G1H and of s"#/sections G2H and G3H of section 27( shall apply m"tatis m"tandis in relation to this case, as those pro!isions apply in relation to the case of a director. 4otwithstandin anythin contained in s"#/sections G1H to G3H, the *entral +o!ernment may, #y order, permit any person to #e appointed as a mana in director of more than two companies if the *entral +o!ernment is satisfied that it is necessary that the companies sho"ld, for their proper wor;in f"nction as a sin le "nit and ha!e a common mana in director.

G$H

#1+. (anaging director not to &e appointed !or more than !ive %ears at a time

G1H G2H

4o company shall, after the commencement of this Act, appoint or employ any indi!id"al as its mana in director for a term exceedin fi!e years at a time. Any indi!id"al holdin at the commencement of this Act the office of mana in director in a company shall "nless his term expires earlier, #e deemed to ha!e !acated his office immediately on the expiry of fi!e years from the commencement of this Act. 4othin contained in s"#/section G1H shall #e deemed to prohi#it the reappointment, re/employment, or the extension of the term of office, of any person #y f"rther periods not exceedin fi!e years on each occasionK Provided that any s"ch re/appointment, re/employment or extension shall not #e sanctioned earlier than two years from the date on which it is to come into force. .his section shall not apply to a pri!ate company "nless it is a s"#sidiary of a p"#lic company.B

G3H

()

AG$H

Compensation for loss of office #1,. Compensation !or loss o! o!!ice not permissi&le except to managing or whole1time directors or to directors who are managers
G1H &ayment may #e made #y a company, except in the cases specified in s"#/section G3H and s"#Cect to the limit specified in s"#/section G$H, to mana in director, or a director holdin the office of mana er or in the whole/time employment of the company, #y way of compensation for loss of office, or as consideration for retirement from office, or in connection with s"ch loss Lor retirement. 4o s"ch payment shall #e made #y the company to any other director. 4o payment shall #e made to a mana in or other director in p"rs"ance of s"#/section G1H, in the followin cases, namelyK/ GaH where the director resi ns his office in !iew of the reconstr"ction of the company, or of its amal amation with any other #ody corporate or #odies corporate, and is appointed as the mana in director, 2AAJJJB 70AJJJB mana er or other officer of the reconstr"cted company or of the #ody corporate res"ltin from the amal amationL G#H where the director resi ns his office otherwise than on the reconstr"ction of the company or its amal amation as aforesaidL GcH where the office of the director is !acated #y !irt"e of section 203, 71AJJJB or any of the cla"ses GaH to 72AGIHB, of s"#/section G1H of section 2)3L GdH where the company is #ein wo"nd "p, whether #y (aAorder of the .ri#"nalB or !ol"ntarily, pro!ided the windin "p was d"e to the ne li ence or defa"lt of the directorK GeH where the director has #een "ilty of fra"d or #reach of tr"st in relation to, or of ross ne li ence in or ross mismana ement of, the cond"ct of the affairs of the company or any s"#sidiary or holdin company thereof, GfH G$H where the director has insti ated, or has ta;en part directly or indirectly in #rin in a#o"t, the termination of his office.

G2H G3H

Any payment made to a mana in or other director in p"rs"ance of s"#/section G1H shall not exceed the rem"neration which he wo"ld ha!e earned if he had #een in office for the "nexpired resid"e of his term or for three years, whiche!er is shorter, calc"lated on the #asis of the a!era e rem"neration act"ally earned #y him d"rin a period of three years immediately precedin the date on which he ceased to hold the office, or where he held the office for a lesser period than three years, d"rin s"ch period. Provided that no s"ch payment shall #e made to the director in the e!ent of the commencement of the windin "p of the company, whether #efore, or at any time within twel!e months after, the date on which he ceased to hold office, if the assets of the company on the windin "p, after ded"ctin the expenses thereof, are not s"fficient to repay to the shareholders the share capital Gincl"din the premi"ms, if anyH, contri#"te #y themK 4othin in this section shall #e deemed to prohi#it the payment to a mana in director, or a director, holdin the office of mana er, of any rem"neration for ser!ices rendered #y him to the company in any other capacity.

G'H

#1.. Pa%ment to director, etc., !or loss o! o!!ice, etc., in connection with trans!er o! or propert%
G1H

underta=ing

4o director of a company shall, in connection with the transfer of the whole or any part of any "nderta;in or property of the company, recei!e any payment, #y way of compensation for loss of office, or as consideration for retirement from office, or in connection with s"ch loss or retirement/ GaH G#H from s"ch companyL or from the transferee of s"ch "nderta;in or property or from any other person Gnot #ein s"ch companyH, "nless partic"lars with respect to the payment proposed to #e made #y s"ch transferee or person Gincl"din the amo"nt thereofH ha!e #een disclosed to the mem#ers of the company and the proposal has #een appro!ed #y the company in eneral meetin . =here a director of a company recei!es payment of any amo"nt in contra!ention of s"#/section G1H, the amo"nt shall #e deemed to ha!e #een recei!ed #y him in tr"st for the company. S"#/sections G1H and G2H shall not affect in any manner the operation of section 31).

G2H G3H

#20. Pa%ment to director !or loss o! o!!ice, etc., in connection with trans!er o! shares
G1H 4o director of a company shall, in connection with the transfer to any persons of all or any of the shares in a company, #ein a transfer res"ltin from/ GiH an offer made to the eneral #ody of shareholdersL GiiH GiiiH an offer made #y or on #ehalf of some other #ody corporate with a !iew to the company #ecomin a s"#sidiary of s"ch #ody corporate or a s"#sidiary of its holdin companyL an offer made #y or on #ehalf of an indi!id"al with a !iew to his o#tainin the ri ht to exercise, or control the exercise of, not less than one/third of the total !otin power at any eneral meetin of the companyL or any other offer which is conditional on acceptance to a i!en extentL

Gi!H

recei!e any payment #y way of compensation for loss of office, or as consideration for retirement from office, or in connection with s"ch loss or retirement,/ GaH G#H G2H from s"ch companyL or except as otherwise pro!ided in this section, from the transferees of the shares or from any other person Gnot #ein s"ch companyH. In the case referred to in cla"se G#H of s"#/section G1H, it shall #e the d"ty of the director concerned to ta;e all reasona#le steps to sec"re that partic"lars with respect to the payment proposed to #e made #y the transferees or other person Gincl"din the amo"nt thereofH are incl"ded in, or sent with, any notice of the offer made for their shares which is i!en to any shareholders. If/ GaH G#H any s"ch director fails to ta;e reasona#le steps as aforesaidL or any person who has #een properly reD"ired #y any s"ch director to incl"de the said partic"lars in, or send them with, any s"ch notice as aforesaid fails so to doL he shall #e p"nisha#le with fine which may extend to (,Atwo tho"sand fi!e h"ndred r"peesB. G$H If/ GaH G#H the reD"irements of s"#/section G2H are not complied with in relation to any s"ch payment as is o!erned #y cla"se G#H of s"#/section G1HL or the ma;in of the proposed payment is not, #efore the transfer of any shares in p"rs"ance of the offer, appro!ed #y a meetin called for the p"rpose, of the holders of the shares to which the offer relates and other holders of shares of the same class Gother than shares already held at the date of the offer #y, or #y a nominee for, the offeror, or where the offeror is a company, #y, or #y a nominee for, any s"#sidiary thereofH as any of the said sharesL

G3H

any s"m recei!ed #y the director on acco"nt of the payment shall #e deemed to ha!e #een recei!ed #y him in tr"st for any persons who ha!e sold their shares as a res"lt of the offer made, and the expenses

G'H

inc"rred #y him in distri#"tin that s"m amon st those persons shall #e #orne #y him and not retained o"t of that s"m. If at a meetin called for the p"rpose of appro!in any payment as reD"ired #y cla"se G#H of s"#/section G$H, a D"or"m is not present and, after the meetin has #een adCo"rned to a later date, a D"or"m is a ain not present, the payment shall, for the p"rposes of that s"#/section, #e deemed to ha!e #een appro!ed.

#21. Provisions supplementar% to sections #1,, #1. and #20

G1H =here in proceedin s for the reco!ery of any payments as ha!in , #y !irt"e of s"#/section, G2H of section 31, or s"#/section G$H of section 320, #een recei!ed #y any person in tr"st,, it is shown that/ GaH the payment was made in p"rs"ance of any arran ement entered into as part of the a reement for the transfer in D"estion, or within one year #efore, or within two years after, that a reement or the offer leadin theretoL and the company or any person to whom the transfer was made was pri!y to that arran ementL

G#H

the payment shall #e deemed, except in so far as the contrary is shown, to #e one to which that s"#/ section applies. G2H If in connection with any s"ch transfer as is mentioned in section 31, or in section 320, GaH the price to #e paid, to a director of the company whose office is to #e a#olished or who is to retire from office, for any shares in the company held #y him is in excess of the price which co"ld at the time ha!e #een o#tained #y other holders of the li;e sharesL or G#H any !al"a#le consideration is i!en to any s"ch directorL the excess or the money !al"e of the consideration, as the case may #e, shall for the p"rposes of that section, #e deemed to ha!e #een a payment made to him #y way of compensation for loss of office, or as consideration for retirement from office, or in connection with s"ch loss or retirement. G3H 8eferences in sections 31), 31, and 320 to payments made to any director of a company #y way of compensation for loss of office, or as consideration for retirement from office, or in connection with s"ch loss or retirement, do not incl"de any #ona fide payment #y way of dama es for #reach of contract or #y way of pension in respect of past ser!icesL and for the p"rposes of this s"#/section the expression "pension" incl"des any s"perann"ation allowance, s"perann"ation rat"ity or similar payment. 4othin in sections 31, and 320 shall #e ta;en to preC"dice the operation of any r"le of law reD"irin disclos"re to #e made with respect to any s"ch payments as are therein mentioned or with respect to any other li;e payments made or to #e made to the directors of a company.

G$H

+irectors with unlimited liability #22.

G1H G2H

irectors, etc., with unlimited lia&ilit% in limited compan%

In a limited company, the lia#ility of the directors or of any director 2AAJJJB or mana er may, if so pro!ided #y the memorand"m, #e "nlimited. In a limited company in which the lia#ility of a director 7AAJJJB or mana er is "nlimited, the directors, 2A AJJJB and the mana er of the company, and the mem#er who proposes a person for appointment to the office of director, 7AAJJJB or mana er, shall add to that proposal a statement that the lia#ility of the person holdin that office will #e "nlimitedL and #efore the person accepts the office or acts therein, notice in writin that his lia#ility will #e "nlimited, shall #e i!en to him #y the followin or one of the followin persons, namely, the promoters of the company, its directors, 2AAJJJB or mana er, if any, and its officers. If any director, 7AAJJJB mana er or proposer ma;es defa"lt in addin s"ch a statement, or if any promoter, director, 7AAJJJB mana er or officer of the company ma;es defa"lt in i!in s"ch a notice, he shall #e which may extend to 200Aten tho"sand r"peesB and shall also #e which the person so appointed may s"stain from the defa"ltL person appointed shall not #e affected #y die defa"lt.

G3H

#2#. Special resolution o! limited compan% ma=ing lia&ilit% o! directors, etc., unlimited

G1H G2H

A limited company may, if so a"thorised #y its articles, #y special resol"tion, alter its memorand"m so as to render "nlimited the lia#ility of its directors or of any director 2AAJJJB or mana er. <pon the passin of any s"ch special resol"tion, the pro!isions thereof shall #e as !alid as if they had #een ori inally contained in the memorand"mK Provided that no alteration of the memorand"m ma;in the lia#ility of any of the officers referred to in s"#/section G1H "nlimited shall apply to s"ch officer, if he was holdin the office from #efore the date of the alteration, "ntil the expiry of his then term, "nless he has accorded his consent to his lia#ility #ecomin "nlimited.

5oot 6oteK (a. .he *ompanies GSecond AmendmentH Act, 2002 dated t e 1$t *anuary% 2003

Chapter """J

(anaging Agents Prohibition of appointment of managing agent in certain cases

ASections 32$, 32$A, 32', 32'A, and sections 32( to 3$) omitted #y the *ompanies GAmendmentH Act, 2000, w.e.f. 1$th. Decem#er, 2000B

#'..
G1H

etermination o! net pro!its

In comp"tin GaH G#H
73

AJJJB, the net profits of a company in any financial year/

credit shall #e i!en for the s"ms specified in s"#/section G2H, and credit shall not #e i!en for those specified in s"#/section G3H, and the s"ms specified in s"#/section G$H shall #e ded"cted, and those specified in s"#/section G'H shall not #e ded"cted.

G2H

In ma;in the comp"tation aforesaid, credit shall #e i!en for the followin s"msK/ #o"nties and s"#sidies recei!ed from any +o!ernment, or any p"#lic a"thority constit"ted or a"thorised in this #ehalf, #y any +o!ernment, "nless and except in so far as the *entral +o!ernment otherwise directs. In ma;in the comp"tation aforesaid, credit shall not #e i!en for the followin s"msK/ GaH profits, #y way of premi"m, on shares or de#ent"res of the company, which are iss"ed or sold #y the companyL G#H profits on sales #y the company of forfeited sharesL GcH GdH Aprofits of a capital nat"re incl"din profits from the saleB of the "nderta;in or any of the "nderta;in s of the company or of any part thereof,
7$

G3H

profits from the sale of any immo!a#le property or fixed assets of a capital nat"re comprised in the "nderta;in or any of the "nderta;in s of the company, "nless the #"siness of the company consists, whether wholly or partly, of #"yin and sellin any s"ch property or assetsK 7' AProvided that where the amo"nt for which any fixed asset is sold exceeds the written/down !al"e thereof referred to in section 3'0, credit shall #e i!en for so m"ch of the excess as is not hi her than the difference #etween the ori inal cost of that fixed asset and its written/down !al"e.B G$H In ma;in the comp"tation aforesaid, the followin s"ms shall #e ded"ctedK/ GaH all the "s"al wor;in char esL G#H GcH directorsE rem"nerationL #on"s or commission paid or paya#le to any mem#er of the companyEs staff, or to any en ineer, technician or person employed or en a ed #y the company, whether on a whole/time or on a part/time #asisL any tax notified #y the *entral +o!ernment as #ein in the nat"re of a tax on excess or a#normal profitsL

GdH

GeH GfH G H GhH GiH

any tax on #"siness profits imposed for special reasons or in special circ"mstances and notified #y the *entral +o!ernment in this #ehalfL interest on de#ent"res iss"ed #y the companyL interest on mort a es exec"ted #y the company and on loans and ad!ances sec"red #y a char e on its fixed or floatin assetsL

interest on "nsec"red loans and ad!ancesL expenses on repairs, whether to immo!a#le or to mo!a#le property, pro!ided the repairs are not of a capital nat"reL 7( AGCH o"t oin s incl"si!e of contri#"tions made "nder cla"se GeH of s"#/section G1H of section 2,3LB G;H depreciation to the extent specified in section 3'0L 7( AGlH the excess of expendit"re o!er income, which had arisen in comp"tin the net profits in accordance with this section in any year which #e ins at or, after the commencement of this Act, in so far as s"ch excess has not #een ded"cted in any s"#seD"ent year precedin the year in respect of which the net profits ha!e to #e ascertainedLB GmH any compensation or dama es to #e paid in !irt"e of any le al lia#ility incl"din a lia#ility arisin from a #reach of contractL GnH any s"m paid #y way of ins"rance a ainst the ris; of meetin any lia#ility s"ch as is referred to in cla"se GmHL
77

AGoH de#ts considered #ad and written off or adC"sted d"rin the year of acco"nt.B

G'H

AGpH amo"nt paid as cess "nder section $$1A.B In ma;in the comp"tation aforesaid, the followin s"ms shall not #e ded"ctedK/
(a

GaH G#H

AJJJB income/tax and s"per/tax paya#le #y the company "nder the Indian Income/tax Act, 1,22 7,, or any other tax on the income of the company not fallin "nder cla"ses GdH and GeH of s"#/section G$HL
7)

GcH
77

any compensation, dama es or payments made !ol"ntarily, that is to say, otherwise than in !irt"e of a lia#ility s"ch as is referred to in cla"se GmH of s"#/section G$HL

AGdH loss of a capital nat"re incl"din loss on sale of the "nderta;in or any of the "nderta;in s of the company or of any part thereof not incl"din any excess referred to in the pro!iso to section 3'0 of the written/down !al"e of any asset which is sold, discarded, demolished or destroyed o!er its sale proceeds or its scrap !al"e.B

G#)0#)0.

Ascertainment o! depreciation

.he amo"nt of depreciation to #e ded"cted in p"rs"ance of cla"se G;H of s"#/section G$H of section 3$, shall #e )0A Athe amo"nt of depreciation on assetsB as shown #y the #oo;s of the company at the end of the financial year expirin at the commencement of this Act or immediately thereafter and at the end of each s"#seD"ent financial year )1Aat the rate specified in Sched"le >I7BK Provided that if any asset is sold, discarded, demolished or destroyed for any reason #efore depreciation of s"ch asset has #een pro!ided for in f"ll, the excess, if any, of the written/down !al"e of s"ch asset o!er its sale proceeds or, as the case may #e, its scrap !al"e, shall #e written off in the financial year in which the asset is sold, discarded, demolished or destroyed.B ASections 3'1 to 3'$ omitted #y the *ompanies GAmendmentH Act, 2000, w.e.f. 1$th. Decem#er, 2000B

#)). Saving
Sections )1AA3$, and 3'0B shall not apply to a pri!ate company "nless it is a s"#sidiary of a p"#lic company.

ASections 3'( to 3(, omitted #y the *ompanies GAmendmentH Act, 2000, w.e.f. 1$th. Decem#er, 2000B

#+0. 4oans, etc., to companies under the same management

G1H 4o company Ghereinafter in this section referred to as "the lendin company"H shall/ GaH G#H ma;e any loan to, or i!e any "arantee, or pro!ide any sec"rity, in connection with a loan made #y any other person to, or to any other person #y, any #ody corporate )2AJJJB "nless the ma;in of s"ch loan, the i!in of s"ch "arantee or the pro!ision of s"ch sec"rity has #een pre!io"sly a"thorised #y a special resol"tion of the lendin companyK AProvided that no special resol"tion shall #e necessary in the case of loans made to other #odies corporate not "nder the same mana ement as the lendin company where the a re ate of s"ch loans does not exceed )$As"ch percenta e of the a re ate of the s"#scri#ed capital of the lendin company and its free reser!es as may #e prescri#edBK
)3

Provided !urther that the a re ate of the loans made to all #odies corporate shall not exceed witho"t the prior appro!al )' of the *entral +o!ernment/ GaH )(As"ch percenta e of the a re ate of the s"#scri#ed capital of the lendin company and its free reser!es as may #e prescri#edB where all s"ch other #odies corporate are not "nder the same mana ement as the lendin companyL )7As"ch percenta e of the a re ate of the s"#scri#ed capital of the lendin company and its free reser!es as may #e prescri#edB where all s"ch other #odies corporate are "nder the same mana ement as the lendin company.

G#H

AExplanation B I./If a special resol"tion has #een passed #y the lendin company a"thorisin the ma;in of loans "p to the limit of ),Athe percenta e of the a re ate specified in cla"se GaH, or as the case may #e, the percenta e of the a re ate specified in cla"se G#H of the second pro!isoB, then, no f"rther special resol"tion or resol"tions shall #e deemed to #e necessary for the ma;in of any loan or loans within s"ch limit.B ,0 AExplanation II./If a special resol"tion has #een passed #y the lendin company a"thorisin the 0oard of directors to i!e any "arantee or pro!ide any sec"rity "p to a limit specified in the resol"tion, then, no f"rther special resol"tion or resol"tions shall #e deemed to #e necessary for i!in any "arantee or pro!idin any sec"rity within s"ch limit.B ,1 AG1AH =here the lendin company/
))

GaH G#H

ma;es any loan to, or i!es any "arantee, or pro!ides any sec"rity, in connection with a loan made #y any other person to, or to any other person #y, a firm in which a partner is a #ody corporate, "nder the same mana ement as the lendin company/ GiH GiiH the loan shall #e deemed to ha!e #een made to, or the "arantee or the sec"rity shall #e deemed to ha!e #een i!en or pro!ided in connection with the loan made #y s"ch other person to, or to s"ch other person #y, a #ody corporate "nder the same mana ement.B

,2

AG10HB

A3or the p"rposes of s"#/sections G1H and G1AHB two #odies corporate shall #e deemed to #e "nder the same mana ement/
,3

GiH

if the 7AJJJB mana in director or mana er of the one #ody, ,AJJJB is/ 7 GaH AJJJB mana in director or mana er of the other #odyL or G#H GcH
1) ,

AJJJB AJJJB

GiiH
,

if a maCority of the directors of the one #ody constit"te, or at any time within the six months immediately precedin *onstit"ted, a maCority of the directors of the other #odyL ,1AorB

AGiiiH if not less than one/third of the total !otin power with respect to any matter relatin to each of the two #odies corporate is exercised or controlled #y the same indi!id"al or #ody corporateL or

Gi!H G!H

if the holdin company of the one #ody corporate is "nder the same mana ement as the other #ody corporate within the meanin of cla"se GiH, cla"se GiiH or cla"se GiiiHL or if one or more directors of the one #ody corporate while holdin , whether #y themsel!es or to ether with their relati!es, the maCority of shares in that #ody corporate also hold, whether #y themsel!es or to ether with their relati!es, the maCority of shares in the other #ody corporate.B

AG1*H

1!ery lendin company shall ;eep a re ister showin / GaH the names of all #odies corporate "nder the same mana ement as the lendin company and the name of e!ery firm in which a partner is a #ody corporate "nder the same mana ement as the lendin company, and G#H the followin partic"lars in respect of e!ery loan made, "arantee i!en or sec"rity pro!ided #y the lendin company ,$Ain relation to any s"ch #ody corporateB "nder this section,/ GiH the name of the #ody corporate to which the loan has #een made whether s"ch loan has #een made #efore or after that #ody corporate came "nder the same mana ement as the lendin company, the amo"nt of the loan,

GiiH GiiiH Gi!H

G1DH

G11H

G13H

the date on which the loan has #een made, the date on which the "arantee has #een i!en or sec"rity has #een pro!ided in connection with a loan made #y any other person to, or to any other person #y, any #ody corporate or firm referred to in s"#section G1H or G1AH to ether with the name of the person, #ody corporate or firm. &artic"lars of 137Ae!ery loan, "arantee or sec"rity referred to in s"#/section G1*HB shall #e entered in the re ister aforesaid within three days of the ma;in of s"ch loan, or the i!in of s"ch "arantee or the pro!ision of s"ch sec"rity or in the case of any loan made, "arantee i!en or sec"rity pro!ided #efore the commencement of the *ompanies GAmendmentH Act, 1,(0, within three months from s"ch commencement or s"ch f"rther time not exceedin six months as the company may #y special resol"tion allow. If defa"lt is made in complyin with the pro!isions of s"#/section G1*H or GIDH, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to fi!e h"ndred r"pees and also with a f"rther fine which may extend to fifty r"pees for e!ery day after the first d"rin which the defa"lt contin"es. .he re ister aforesaid shall #e ;ept at the re istered office of the lendin company and/ GaH G#H shall #e open to inspection at s"ch office, and extracts may #e ta;en therefrom or copies thereof may #e reD"ired,

#y any mem#er of the company to the same extent and in the same manner and on the payment of the same fees as in the case of the re ister of mem#ers of the companyL and the pro!isions of section 1(3 shall apply accordin ly.B ,( AG1+H A company, which has defa"lted in the repayment of any deposit referred to in section ')A or part thereof or interest there"pon in accordance with the terms and conditions of s"ch deposit, shall not ma;e any loan or i!e "arantee "nder this section till the defa"lt is made ood.B
,7

AG2H

4othin contained in the fore oin pro!isions of this section shall apply to/ GaH any loan made/ GiH GiiH
,)

#y a holdin company to its s"#sidiaryL or 1) AJJJB #y a #an;in company, or an ins"rance company, in the ordinary co"rse of itEs #"sinessL ,0AorB #y a pri!ate company, "nless it is a s"#sidiary of a p"#lic companyL ,AorB #y a company esta#lished with the o#Cect of financin ind"strial enterprisesLB

AGiiiH

Gi!H G!H G#H

any "arantee i!en or any sec"rity pro!ided/ GiH #y a holdin company in respect of any loan made to its s"#sidiaryL or GiiH 1)AJJJB ,,AGiiiH #y a #an;in company, or an ins"rance company, in the ordinary co"rse of its #"sinessL or

Gi!H G3H G$H

100

#y a pri!ate company, "nless it is a s"#sidiary of a p"#lic companyL or

AG'H

102

AG(H

G!H #y a company esta#lished with the o#Cect of financin ind"strial enterprises.B 4othin in this section shall apply to a #oo; de#t "nless the transaction represented #y the #oo; de#t was from its inception in the nat"re of a loan or an ad!ance. 3or the p"rposes of this section, any person in accordance with whose directions or instr"ctions the 0oard of directors of a company is acc"stomed to act shall #e deemed to #e a director of the company.B =here #efore the commencement of the *ompanies GAmendmentH Act, 1,(', any loan, "arantee or sec"rity has #een made, i!en or pro!ided #y a company which co"ld not ha!e #een made, i!en or pro!ided "nder this section as amended #y that Act, and s"ch loan, "arantee or sec"rity is o"tstandin at s"ch commencement, the company shall, within six months from s"ch commencement, enforce the repayment of the loan made or, as the case may #e, re!o;e the "arantee i!en or the sec"rity pro!ided, notwithstandin any a reement to the co"ntryK Provided that the aforesaid period of six months may #e extended #y the *entral +o!ernment on an application made to it in that #ehalf #y the company.B 101 AExplanation( /3or the p"rposes of this section, "loan" incl"des any deposit of money made #y one company with another company, not #ein a #an;in company.B 4othin contained in this section shall apply to a company on and after the commencement of the *ompanies GAmendmentH Act, 1,,,.B

G#+0A. #+0

Provisions as to certain loans which could not have &een made i! sections #*. and were in !orce

=here any loan made, "arantee i!en or sec"rity pro!ided #y a company and o"tstandin at the commencement of the *ompanies GAmendmentH Act, 1,(0 wo"ld not ha!e #een made, i!en or pro!ided if 103A AJJJB section 370 had #een in force at the time when s"ch loan was made, "arantee i!en or sec"rity pro!ided, the company shall, within six months from the commencement of that Act, enforce the repayment of the loan made or, as the case may #e, re!o;e the "arantee i!en or the sec"rity pro!ided, notwithstandin any a reement to the contraryK Provided that the period of six months within which the company is reD"ired #y this section to enforce the repayment of the loan or to re!o;e the "arantee or sec"rity, may #e extended/ 2A GaH AJJJB G#H in the case of a loan, "arantee or sec"rity "nder section 370, #y a special resol"tion of the company.B

#+1. Penalt% !or contravention o! section #*., #+0 or #+0A

G1H 1!ery person who is a party to any contra!ention of 10$A 103AAJJJB section 370 Aexcl"din s"#/section G1*H or G1DHB, or section 370AB incl"din in partic"lar any person to whom the loan is made, or in whose interest the "arantee is i!en or the sec"rity is pro!ided, shall #e p"nisha#le with fine which may extend to 3AAfifty tho"sand r"peesB or with simple imprisonment for a term which may extend to six monthsK Provided that where any s"ch loan, or any loan in connection with which any s"ch "arantee or sec"rity has #een i!en or pro!ided #y the lendin company, has #een repaid in f"ll, no p"nishment #y way of imprisonment shall #e imposed "nder this s"#/sectionL and where rite loan has #een repaid in part, the maxim"m p"nishment which may #e imposed "nder this s"#/section #y way of imprisonment shall #e proportionately red"ced. All persons who are ;nowin ly parties to any s"ch contra!ention shall #e lia#le, Cointly and se!erally, to the lendin company for the repayment of the loan, or for ma;in ood the s"m which the lendin company may ha!e #een called

G2H

"pon to pay in !irt"e of the "arantee i!en or the sec"rity pro!ided #y s"ch company.

G#+2. Purchase &% compan% o! shares, etc., o! other companies

10(

AG1H

G2H

A company, whether #y itself or to ether with its s"#sidiaries Ghereafter in this section and section 373 referred to as the in!estin companyH, shall not #e entitled to acD"ire, #y way of s"#scription, p"rchase or otherwise Gwhether #y itself, or #y any indi!id"al or association of indi!id"als in tr"st for it or for its #enefit or on its acco"ntH the shares of any other #ody corporate except to the extent, and except in accordance with the restrictions and conditions, specified in this section.B 107 A.he 0oard of directors of the in!estin company shall #e entitled to in!est in any shares of any other #ody corporate "p to s"ch percenta e of the s"#scri#ed eD"ity share capital, or the a re ate of the paid/"p eD"ity and preference share capital, of s"ch other #ody corporate, whiche!er is less, as may #e prescri#edKB Provided that the a re ate of the in!estments so made #y the 0oard in all other #odies corporate shall not exceed 10)As"ch percenta e of the a re ate of the s"#scri#ed capital and free reser!es of the in!estin company, as may #e prescri#edKB

Provided !urther that the a re ate of the in!estments made in all other #odies corporate in the same ro"p shall not exceed 10,As"ch percenta e of the a re ate of the s"#scri#ed capital and free reser!es of the in!estin company, as may #e prescri#edB. G3H In comp"tin at any time the percenta es specified in s"#/section G2H and the pro!isos thereto, the a re ate of the in!estments made #y the in!estin company in other #ody or #odies corporate Awhether #efore or after the commencement of the *ompanies GAmendmentH Act, 1,(0B "p to that time shall #e ta;en into acco"nt. ,( AG3AH A company, which has defa"lted in the repayment of any deposit referred to in section ')A or part thereof or interest d"e there"pon in accordance with the terms and conditions of s"ch deposit, shall riot ma;e any in!estment "nder this section till the defa"lt is made ood.B G$H .he in!estin company shall not ma;e any in!estment in the shares of any other #ody corporate in excess of the percenta es specified in s"#/section G2H and the pro!iso thereto, "nless the in!estment is sanctioned #y a resol"tion of the in!estin company in eneral meetin and 110A"nless pre!io"sly appro!ed111B #y the *entral +o!ernmentK Provided that the in!estin company may at any time in!est "p to any amo"nt in shares offered to it "nder cla"se GaH of s"#/section G1H of section )1 Ghereafter in this section referred to as ri hts sharesH irrespecti!e of the aforesaid percenta esK Provided !urther that when at any time the in!estin company intends to ma;e any in!estments in shares other than ri hts shares, then, in comp"tin at that time any of the aforesaid percenta es, all existin in!estments, if any, made in ri hts shares "p to that time shall #e incl"ded in the a re ate of the in!estments of the company. 4o in!estment shall #e made #y the 0oard of directors of an in!estin company in p"rs"ance of s"#/ section G2H, "nless it is sanctioned #y a resol"tion passed at a meetin of the 0oard with the consent of all the directors present at the meetin , except those not entitled to !ote thereon, and "nless f"rther notice of the resol"tion to #e mo!ed at the meetin has #een i!en to e!ery director in the manner specified in section 2)(. 1!ery in!estin company shall ;eep a re ister of all in!estments made #y it in shares of any other #ody or #odies corporate Gwhether in the same ro"p or not and whether in the case of a #ody corporate in the same ro"p, s"ch in!estments were made #efore or after that #ody came within the same ro"p as the in!estin companyH, showin in respect of each in!estment the followin partic"larsK/ GaH G#H GcH the name of the #ody corporate in which the in!estment has #een madeL the date on which the in!estment has #een madeL where the #ody corporate is in the same ro"p as the in!estin company, the date on which the #ody corporate came in the same ro"pL

G'H

G(H

G7H

GdH the names of all #odies corporate in the same ro"p as the in!estin company. &artic"lars of e!ery in!estment to which s"#/section G(H applies shall #e entered in the re ister aforesaid within se!en days of the ma;in thereof or in the case of in!estments made #efore the commencement of the *ompanies GAmendmentH Act, 1,(0, within six months from s"ch commencement, or s"ch f"rther time as the *entral +o!ernment may rant on an application #y the company in that #ehalf. If defa"lt is made in complyin with the pro!isions of s"#/section G(H or G7H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to fi!e

G)H

G,H

h"ndred r"pees and also with a f"rther fine which may extend to fifty r"pees for e!ery day after the first d"rin which the defa"lt contin"es. .he re ister aforesaid shall #e ;ept at the re istered office of the in!estin company and/ GaH G#H shall #e open to inspection at s"ch office, and extracts may #e ta;en therefrom and copies thereof may #e reD"ired,

G10H

G11H

#y any mem#er of the in!estin company to the same extent, in the same manner, and on the payment of the same fees as in the case of the re ister of mem#ers of the in!estin companyL and the pro!isions of section 1(3 shall apply accordin ly. 1!ery in!estin company shall annex in each #alance sheet prepared #y it after the commencement of the *ompanies GAmendmentH Act, 1,(0, a statement showin the #odies corporate Gindicatin separately the #odies corporate in the same ro"pH in the shares of which in!estments ha!e #een made #y it Gincl"din all in!estments, whether existin or not, made s"#seD"ent to the date as at which the pre!io"s #alance sheet was made o"tH and the nat"re and extent of the in!estments so made in each #ody corporateK Provided that in the case of a company whose principal #"siness is the acD"isition of shares, stoc;, de#ent"res or other sec"rities Ghereafter in this section referred to as an in!estment companyH, it shall #e s"fficient if the statement shows only the in!estments existin on the date as at which the #alance sheet to which the statement is annexed has #een made o"t. 3or the p"rposes of this section, a #ody corporate shall #e deemed to #e in the same ro"p as the in!estin company/ 1) GaH AJJJB G#H if the #ody corporate and the in!estin company sho"ld, in !irt"e of s"#section G10H of section 370, #e deemed to #e "nder the same mana ement.

G12H

G13H G1$H

8eferences in the fore oin pro!isions of this section to shares shall in the case of in!estments made #y the in!estin company in other #odies corporate in the same ro"p, #e deemed to incl"de references to de#ent"res also. .he pro!isions of this section except the first pro!iso to s"#/section G2H 112Aand s"#/section G'HB shall also apply to an in!estment company. .his section shall not apply/ GaH G#H GcH to any #an;in or ins"rance companyL to a pri!ate company, "nless it is a s"#sidiary of a p"#lic companyL

to any company esta#lished with the o#Cect of financin , whether #y way of ma;in loans or ad!ances to, or s"#scri#in to the capital of, pri!ate ind"strial enterprises in India, in any case where the *entral +o!ernment has made or a reed to ma;e to the company a special ad!ance for the p"rpose or has "aranteed or a reed to "arantee the payment of moneys #orrowed #y the company from any instit"tion o"tside IndiaL 113 AGdH to in!estments #y a holdin company in its s"#sidiary, other than a s"#sidiary within the meanin of cla"se GaH of s"#/section G1H of section $.B 1) GeH AJJJB
102

AG1'H 4othin contained in this section shall apply to a company on and after the commencement of the companies GAmendmentH Act, 1,,,.B

#+2A. "nter1corporate loans and investments

G1H 4o company shall, directly or indirectly/ GaH G#H GcH ma;e any loan to any other #ody corporateL i!e any "arantee or pro!ide sec"rity, in connection with a loan made #y any other person to, or to any other person, #y any #ody corporateL and acD"ire, #y way of s"#scription, p"rchase or otherwise the sec"rities of any other #ody corporate,

exceedin sixty per cent of its paid/"p share capital and free reser!es, or h"ndred per cent of its free reser!es, whiche!er is moreK

Provided that where the a re ate of the loans and in!estments so far made, the amo"nts for which "arantee or sec"rity so far pro!ided to or in all other #odies corporate, alon with the in!estment, loan, "arantee or sec"rity proposed to #e made or i!en #y the 0oard, exceeds the aforesaid limits, no in!estment or loan shall #e made or "arantee shall #e i!en or sec"rity shall #e pro!ided "nless pre!io"sly a"thorised #y a special resol"tion passed in a eneral meetin K Provided !urther that the 0oard may i!e "arantee, witho"t #ein pre!io"sly a"thorised #y a special resol"tion, if,/ GaH G#H GcH a resol"tion is passed in the meetin of the 0oard a"thorisin to i!e "arantee in accordance with the pro!isions of this sectionL there exists exceptional circ"mstances which pre!ent the company from o#tainin pre!io"s a"thorisation #y a special resol"tion passed in a eneral meetin for i!in a "aranteeL and

the resol"tion of the 0oard "nder cla"se GaH is confirmed within twel!e months, in a eneral meetin of the company or the ann"al eneral meetin held immediately after passin of the 0oardIs resol"tion, whiche!er is earlierK Provided also that the notice of s"ch resol"tion shall indicate clearly the specific limits, the partic"lars of the #ody corporate in which the in!estment is proposed to #e made or loan or sec"rity or "arantee to #e i!en, the p"rpose of the in!estment, loan or sec"rity or "arantee, specific so"rces of f"ndin and s"ch other details. G2H 4o loan or in!estment shall #e made or "arantee or sec"rity i!en #y the company "nless the resol"tion sanctionin it is passed at a meetin of the 0oard with the consent of all the directors &resent at the meetin and the prior appro!al of the p"#lic financial instit"tion referred to in section $A, where any term loan is s"#sistin , is o#tained.. Provided that prior appro!al of a p"#lic financial instit"tion shall not #e reD"ired where the a re ate of the loans and in!estments so far made, the amo"nts for which "arantee or sec"rity so far pro!ided to or in all other #odies corporate, alon with the in!estments, loans, "arantee or sec"rity proposed to #e made or i!en does not exceed the limit of sixty per cent specified in s"#/section G1H, if there is no defa"lt in repayment of loan instalments or payment of interest thereon as per the terms and *onditions of s"ch loan to the p"#lic financial instit"tion. G3H 4o loan to any #ody corporate shall #e made at a rate of interest lower than the pre!ailin #an; rate, #ein the standard rate made p"#lic "nder section $, of the 8eser!e 0an; of India Act, 1,3$. G$H 4o company, which has defa"lted in complyin with the pro!ision of section ')A, shall, directly or indirectly/ GaH ma;e any loan to any #ody corporateL G#H i!e any "arantee or pro!ide sec"rity in connection with a loan made #y any other person to, or to any other person #y, any #ody corporateL and GcH acD"ire, #y way of s"#scription, p"rchase or otherwise the sec"rities of any other #ody corporate, till s"ch defa"lt is s"#sistin . G'HGaH 1!ery company shall ;eep a re ister showin the followin partic"lars in respect of e!ery in!estment or loan made, "arantee i!en or sec"rity pro!ided #y it in relation to any #ody corporate "nder s"#/ section G1H, namelyK/ GiH the name of the #ody corporateL GiiH GiiiH Gi!H G#H the amo"nt, terms and p"rpose of the in!estment or loan or sec"rity or "aranteeL the date on which the in!estment or loan has #een madeL and the date on which the "arantee has #een i!en or sec"rity has #een pro!ided in connection with a loan.

G(H

.he partic"lars of in!estment, loan, "arantee or sec"rity referred to in cla"se GaH shall #e entered chronolo ically in the re ister aforesaid within se!en days of the ma;in of s"ch in!estment or loan, or the i!in of s"ch "arantee or the pro!ision of s"ch sec"rity. .he re ister referred to in s"#/section G'H shall #e ;ept at the re istered a office of the company concerned and/ GaH shall #e open to inspection at s"ch officeL and G#H extracts may #e ta;en therefrom and copies thereof may #e reD"ired,

#y any mem#er of the company to the same extent, in the same manner, and on payment of the same fees as in the case of the re ister of mem#ers of the company, and the pro!isions of section 1(3 shall apply accordin ly. G7H G)H .he *entral +o!ernment may, prescri#e "idelines for the p"rposes of this section. 4othin contained in this section shall apply,/ GaH to any loan made, any "arantee i!en or any sec"rity pro!ided or any in!estment made #y/ GiH a #an;in company, or an ins"rance company, or a ho"sin finance company in the ordinary co"rse of its #"siness, or a company esta#lished with the o#Cect of financin ind"strial enterprises or of pro!idin infrastr"ct"ral facilitiesL GiiH a company whose principal #"siness is the acD"isition of shares, stoc;, de#ent"res or other sec"ritiesL

G#H GcH GdH GeH G,H

GiiiH a pri!ate company, "nless it is a s"#sidiary of a p"#lic companyL to in!estment made in shares allotted in p"rs"ance of cla"se GaH of s"#section G1H of section )1L to any loan made #y a holdin company to its wholly owned s"#sidiaryL to any "arantee i!en or any sec"rity pro!ided #y a holdin company in respect of loan made to its wholly owned s"#sidiaryL or to acD"isition #y a holdin company, #y way of s"#scription, p"rchases or otherwise, the sec"rities of its wholly owned s"#sidiary.

If defa"lt is made in complyin with the pro!isions of this section, other than s"#/section G'H, the company and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with imprisonment which may extend to two years or with fine which may extend to fifty tho"sand r"peesK Provided that where any s"ch loan or any loan in connection with which any s"ch "arantee or sec"rity has #een i!en, or pro!ided #y the company, has #een repaid in f"ll, no p"nishment #y way of imprisonment shall #e imposed "nder this s"#/section, and where s"ch loan has #een repaid in part, the maxim"m p"nishment which may #e imposed "nder this s"#/section #y way of imprisonment shall #e appropriately red"ced Provided !urther that all persons who are ;nowin ly parties to an ! s"ch contra!ention shall #e lia#le, Cointly and se!erally, to the company or the repayment of the loan or for ma;in ood the same which the company may ha!e #een called "pon to pay #y !irt"e of the "arantee i!en or the sec"rities pro!ided #y s"ch company. If defa"lt is made in complyin with the pro!isions of s"#/section G'H, the company and e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to fi!e tho"sand r"pees and also with a f"rther fine which may extend to fi!e h"ndred r"pees for e!ery day after the first d"rin which the defa"lt contin"es. Explanation( /3or the p"rposes of this section,/ GaH G#H "loan" incl"des de#ent"res or any deposit of money made #y one company, with another company, not #ein a #an;in companyL "free reser!es" means those reser!es which, as per the latest a"dited #alance sheet of the company, are free for distri#"tion as di!idend and shall incl"de #alance to the credit of the sec"rities premi"m acco"nt #at shall not incl"de share application money.B

G10H

#+#. "nvestments made &e!ore commencement o! Act

=here any in!estments ha!e #een made #y a company 11$Ain any other #ody corporate in the same ro"pB at any time after the first day of April, 1,'2, which, if section 372 had #een then in force, co"ld not ha!e #een made except on the a"thority of a resol"tion passed #y the in!estin company and the appro!al of the *entral +o!ernment, the a"thority of the company #y means of a resol"tion and the appro!al of the *entral +o!ernment shall #e o#tained to s"ch in!estments, within six months from the commencement of this ActL and if s"ch a"thority and appro!al are not so o#tained, the 0oard of directors of the company shall dispose of the in!estments, in so far as they may #e in excess of the limits specified in s"#section G2H of section 372 and 11'Athe second pro!iso to that s"#/sectionB, within two years from the commencement of this Act.

#+'. Penalt% !or contravention o! section #+2 or #+#

If defa"lt is made in complyin with the pro!isions of 11(Asection 372 Aexcl"din s"#/sections G(H and G7HB or section 373B, e!ery officer of the company who is in defa"lt shall #e p"nisha#le with fine which may extend to 3A Afifty tho"sand r"peesB.

G#+*. Conditions prohi&iting reconstruction or amalgamation o! compan%

=here any pro!ision in the memorand"m or articles of a company, or in any resol"tion passed in eneral meetin #y, or #y the 0oard of Directors of the company, or in an a reement #etween the company and any other person, whether made #efore or after the commencement of this Act, prohi#its the reconstr"ction of the company or its amal amation with any #ody corporate or #odies corporate, either a#sol"tely or except on the condition that the mana in director or mana er of the company is appointed or reappointed as mana in director or mana er of the reconstr"cted company or of the #ody res"ltin from amal amation, as the case may #e, shall #ecome !oid with effect from the commencement of this Act, or #e !oid, as the case may #e.B ASection 377 omitted #y the *ompanies GAmendmentH Act, 2000, w.e.f. 1$th. Decem#er, 2000B

5oot 6oteJ *a. 0he Companies (Second Amendment) Act, 2002 dated the 1'th /anuar%, 200# Chapter "9J A. Secretaries L +GKKKH0reasurers

ASections 37) to 3)3 omitted #y the *ompanies GAmendmentH Act, 2000, w.e.f. 1$th. Decem#er, 2000B

G#,#A.
G1H

Certain companies to have secretaries

1!ery company 11,Aha!in s"ch paid/"p share capital as may #e prescri#edB shall ha!e a whole/time secretary, and where the 0oard of directors of any s"ch company comprises only two directors, neither of them shall #e the secretary of the company.
11,A

AProvided that e!ery company not reD"ired to employ a whole/time secretary "nder s"#/section G1H and ha!in a paid/"p share capital of ten la;h r"pees or more shall file with the 8e istrar a certificate from a secretary in whole/time practice in s"ch form and within s"ch time and s"#Cect to s"ch conditions as may #e prescri#ed, as to whether the company has complied with all pro!isions of this Act and a copy of s"ch certificate shall #e attached with 0oardEs report referred to in section 217.B 120 AG1AH If a company fails to comply with the pro!isions of s"#/section G1H, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 30Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"esK Provided that in any proceedin s a ainst a person in respect of an offence "nder this s"#/section, it shall #e a defence to pro!e that all reasona#le efforts to comply with the pro!isions of s"#/section G1H were ta;en or that the financial position of the company was s"ch that it was #eyond its capacity to en a e a whole/time secretary.B G2H =here, at the commencement of the *ompanies GAmendmentH Act, 1,7$,/ GaH any firm or #ody corporate is holdin office, as the secretary of company, s"ch firm or #ody corporate shall, within six months from s"ch commencement, !acate office as secretary of s"ch companyL G#H any indi!id"al is holdin office as the secretary of more than one company ha!in a paid/"p share capital of r"pees twenty/fi!e la;hs or more, he shall, within a period of six months from s"ch commencement, exercise his option as to the company of which he intends to contin"e as the secretary and shall, on and from s"ch date, !acate office as secretary in relation to all other companiesB.

2. (anagers
0. %A4A+18S

#,'. 5irm or &od% corporate not to &e appointed manager

A4o companyB shall, after the commencement of this Act, appoint or employ, or after the expiry of six months from s"ch commencement, contin"e the appointment or employment of, any firm, #ody corporate or association as its mana er.
121

#,). Certain persons not to &e appointed managers

G1H 4o company shall, after the commencement of this Act, appoint or employ, or contin"e the appointment or employment of, any person as its mana er who/ GaH is an "ndischar ed insol!ent, or has at any time within the precedin fi!e years #een adC"d ed an insol!entL or G#H s"spends, or has at any time within the precedin fi!e years s"spended, payment to his creditorsL or ma;es, or has at any time within the precedin fi!e years made, a composition with themL or GcH is, or has at any time within the precedin fi!e years #een, con!icted #y a *o"rt in India of an offence in!ol!in moral t"rpit"de. .he *entral +o!ernment may, #y notification in the :fficial +aFette, remo!e the disD"alification inc"rred #y any person in !irt"e of cla"se GaH, G#H or GcH of s"#/section G1H, either enerally or in relation to any company or companies specified in the notification.

G2H

#,*. 6um&er o! companies o! which a person ma% &e appointed manager

G1H 4o company shall, after the commencement of this Act, appoint or employ any person as mana er, if he is either the mana er or the mana in director of any other company, except as pro!ided in s"#/ section G2H. A company may appoint or employ a person as its mana er, if he is the mana er or mana in director of one, and not more than one, other companyK Provided that s"ch appointment or employment is made or appro!ed #y a resol"tion passed at a meetin of the 0oard with the consent of all the directors present at the meetin , and of which meetin and of the resol"tion to #e mo!ed thereat, specific notice has #een i!en to all the directors then in India. G3H =here, at the commencement of this Act, any person is holdin the office either of mana er or of mana in director in more than two companies, he shall, within one year from the commencement of this Act, choose not more than two of those companies as companies in which he wishes to contin"e to hold the office of mana er or mana in director, as the case may #eL and the pro!isions of cla"ses G#H and GcH of s"#/section G1H and of s"#/sections G2H and G3H of section 27( shall apply m"tatis m"tandis in relation to this case, as those pro!isions apply in relation to the case of a director. 4otwithstandin anythin contained in s"#/sections G1H to G3H, the *entral +o!ernment may, #y order, permit any person to #e appointed as a mana er of more than two companies, if the *entral +o!ernment is satisfied that it is necessary that the companies sho"ld, for their proper wor;in , f"nction as a sin le "nit and ha!e a common mana er.

G2H

G$H

122

AJJJB

#,+. :emuneration o! manager

.he mana er of a company may, s"#Cect to the pro!isions of section 1,), recei!e rem"neration either #y way of a monthly payment, or #y way of a specified percenta e 123AJJJB of the "net profits" of the company calc"lated in the manner laid down in sections 3$, 123AAand 3'0B or partly #y the one way and partly #y the otherK AProvided that except with the appro!al 3( of the *entral +o!ernment s"ch rem"neration shall not exceed in the a re ate fi!e per cent of the net profits.B
12$

#,,. Application o! sections 2*., #10, #11, #12 and #1+ to managers12)
.he pro!isions of sections 12(A2(,, 3101, 311 and 317 shall apply in relation to the mana er of a company as they apply in relation to a mana in director thereof, and those of section 312 shall apply in relation to the mana er of a company, as they apply to a director thereof. A

#,,A. Sections #,* to #,, not to appl% to certain private companies.1

Sections 3)(, 3)7 and 3)) shall not apply to a pri!ate company "nless it is a s"#sidiary of a p"#lic company.B

GChapter "9AJ Powers o! cCentral g-overnment to remove managerial personnel !rom o!!ice on the recommendation o! the *aG0ri&unalH H #,,2. :e!erence to *aG0ri&unalH o! cases against managerial personnel.1
G1H =here in the opinion of the *entral +o!ernment there are circ"mstances s" estin / GaH that any person concerned in the cond"ct and mana ement of the affairs of a company is or has #een in connection therewith "ilty of fra"d, misfeasance, persistent ne li ence or defa"lt in carryin o"t his o#li ations and f"nctions "nder the law, or #reach of tr"stL or that the #"siness of a company is not or has not #een cond"cted and mana ed #y s"ch person in accordance with so"nd #"siness principles or pr"dent commercial practicesL or that a company is or has #een cond"cted and mana ed #y s"ch person in a manner which is li;ely to ca"se, or has ca"sed, serio"s inC"ry or dama e to the interest of the trade, ind"stry or #"siness to which s"ch company pertainsL or

G#H GcH

GdH

G2H G3H G$H

that the #"siness of a company is or has #een cond"cted and mana ed #y s"ch person with intent to defra"d its creditors, mem#ers or any other persons or otherwise for a fra"d"lent or "nlawf"l p"rpose or in a manner preC"dicial to p"#lic interest, the *entral +o!ernment may state a case a ainst the person aforesaid and refer the same to the (a A.ri#"nalB with a reD"est that the (aA.ri#"nalB may inD"ire into the case and 130Arecord a decisionB as to whether or not s"ch person is a fit and proper person to hold the office of director or any other office connected with the cond"ct and mana ement of any company. 1!ery case "nder s"#/section G1H shall #e stated in the form of an application which shall #e presented to the (aA.ri#"nalB or s"ch officer thereof as it may appoint in this #ehalf. .he person a ainst whom a case is referred to the (aA.ri#"nalB "nder this section shall #e Coined as a respondent to the application. 1!ery s"ch application/ GaH G#H shall contain a concise statement of s"ch circ"mstances and materials as the *entral +o!ernment may consider necessary for the p"rpose of the inD"iry, and shall #e si ned and !erified in the manner laid down in the *ode of *i!il &roced"re, 1,0), for the si nat"re and !erification of a plaint in a s"it #y the *entral +o!ernment.

G'H

.he (aA.ri#"nalB may at any sta e of the proceedin s allow the *entral +o!ernment to alter or amend the application in s"ch manner and on s"ch terms as may #e C"st, and all s"ch alterations or amendments shall #e made as may #e necessary for the p"rpose of determinin the real D"estions in the inD"iry.

#,,C. "nterim order &% *aG0ri&unalH

G1H =here d"rin the pendency of a case #efore the (aA.ri#"nalB it appears necessary to the (aA.ri#"nalB so to do in the interest of the mem#ers or creditors of the company or in the p"#lic interest, the (a A.ri#"nalB may on the application of the *entral +o!ernment or on its own motion, #y an order/ GaH direct that the respondent shall not dischar e any of the d"ties of his office "ntil f"rther orders of the (aA.ri#"nalB, and G#H appoint a s"ita#le person in place of the respondent to dischar e the d"ties of the office held #y the respondent s"#Cect to s"ch terms and conditions as the (aA.ri#"nalB may specify in the order. 1!ery person appointed "nder cla"se G#H of s"#/section G1H shall #e deemed to #e a p"#lic ser!ant within the meanin of section 21 of the Indian &enal *ode, 1)(0.

G2H

#,, .

ecision o! the *aG0ri&unalH

At the concl"sion of the hearin of the case, the 131A (aA.ri#"nalB B shall record its decisionB statin therein specifically as to whether or not the respondent is a fit and proper person to hold the office of director or any other office connected with the cond"ct and mana ement of any company.B

#,,3. Power o! Central -overnment to remove managerial personnel on the &asis o! *aG0ri&unalH decision
G1H 4otwithstandin any other pro!ision contained in this Act, the 132A*entral +o!ernment shallB #y order, remo!e from office any director, or any other person concerned in the cond"ct and mana ement of the affairs, of company, a ainst whom there is a 133Adecision of the (aA.ri#"nalB "nder this *hapterBK
2A

AJJJB G2H
13$

AJJJB

G3H

G$H

.he person a ainst whom an order of remo!al from office is made "nder this section shall not hold the office of a director or any other office connected with the cond"ct and mana ement of the affairs of any company d"rin a period of fi!e years from the date of the order of remo!alK Provided that the *entral +o!ernment may, with the pre!io"s conc"rrence of the (aA.ri#"nalB, permit s"ch person to hold any s"ch office #efore the expiry of fi!e years. 4otwithstandin anythin contained in any other pro!ision of this Act or any other law or any contract, memorand"m or articles, on the remo!al of a person from the office of a director or, as the case may #e, any other office connected with the cond"ct and mana ement of the affairs of the company, that person shall not #e entitled to, or #e paid, any compensation for the loss or termination of the office. :n the remo!al of a person from the office of a director or, as the case may #e, any other office connected with the cond"ct and mana ement of the affairs of the company, the company may with the pre!io"s appro!al of the *entral +o!ernment, appoint another person to that office in accordance with the pro!isions of this Act.B

G'H

3oot 4oteK (a. .he *ompanies GSecond AmendmentH Act, 2002 dated the 1$th -an"ary, 2003

Chapter 9J
A

Ar&itration, Compromises, Arrangements and :econstructions

#,.. Power !or companies to re!er matters to ar&itration1

Gepealed by t e !ompanies (Amendment# A$t% 196-+

#.0. "nterpretation o! sections #.1 and #.#

In sections 3,1 and 3,3,/ GaH the expression "company" means any company lia#le to #e wo"nd "p "nder this ActL G#H the 1xpression "arran ement" incl"des a reor anisation of the share capital of the company #y the consolidation of shares of different classes, or #y the di!ision of shares into shares of different classes or, #y #oth those methodsL and "nsec"red creditors who may ha!e filed s"its or o#tained decrees shall #e deemed to #e of the same class as other "nsec"red creditors.

GcH

#.1. Power to compromise or ma=e arrangements with creditors and mem&ers

G1H =here a compromise or arran ement is proposed/ GaH #etween a company and its creditors or any class of themL or G#H #etween a company and its mem#ers or any class of themL (a the A.ri#"nalB may, on the application of the company or of any creditor or mem#er of the company, or, in the case of a company which is #ein wo"nd "p, of the liD"idator, order a meetin of the creditors or class of creditors, or of the mem#ers or class of mem#ers, as the case may #e, to #e called, held and cond"cted in s"ch manner as the (aA.ri#"nalB directs. If a maCority in n"m#er representin three/fo"rths in !al"e of the creditors, or class of creditors, or mem#ers, or class of mem#ers, as the case may #e, present and !otin either in person or, where proxies are allowed 13'A"nder the r"les made "nder section ($3B, #y proxy, at the meetin , a ree to any compromise or arran ement, the compromise or arran ement shall, if sanctioned #y the co"rt, #e #indin on all the creditors, all the creditors of the class, all the mem#ers, or all the mem#ers of the class as the case may #e, and also on the company, or in the case of a company which is #ein wo"nd "p, on the liD"idator and contri#"tories of the companyK AProvided that no order sanctionin any compromise or arran ement shall #e made #y the A.ri#"nalB "nless the (aA.ri#"nalB is satisfied that the company or any other person #y whom an application has #een made "nder s"#/section G1H has disclosed to the (aA.ri#"nalB, #y affida!it or otherwise, all material facts relatin to the company, s"ch as the latest financial position of the company, the latest a"ditorEs report on the acco"nts of the company, the pendency of any in!esti ation proceedin s in relation to the company "nder sections 23' to 2'1, and the li;e.B
13( (a

G2H

G3H G$H

An order made #y the (aA.ri#"nalB "nder s"#/section G2H shall ha!e no effect "ntil a certified copy of the order has #een filed with the 8e istrar. A copy of e!ery s"ch order shall #e annexed to e!ery copy of the memorand"m of the company iss"ed after the certified copy of the order has #een filed as aforesaid, or in the case of a company not ha!in a memorand"m, to e!ery cc y so iss"ed of the instr"ment constit"tin or definin the constit"tion of the companyK If defa"lt is made in complyin with s"#/section G$H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 13(AAone h"ndred r"peesB for each copy in respect of which defa"lt is made. .he (aA.ri#"nalB may, at any time after an application has #een made to it "nder this section, stay the commencement or contin"ation of any s"it or proceedin a ainst the company on s"ch terms as the (a A.ri#"nalB thin;s fit, "ntil the application is finally disposed of. :mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 13th -an"ary, 2003 A para B :mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 13th -an"ary, 2003 B

G'H

G(H

(a

A G7H

*aG#.2.
G1H

Power o! 0ri&unal to en!orce compromise and arrangement

=here the .ri#"nal ma;es an order "nder section 3,1 sanctionin a compromise or an arran ement in respect of a company, itM GaH shall ha!e power to s"per!ise the carryin o"t of the compromise or an arran ementL and

G#H

may, at the time of ma;in s"ch order or at any time thereafter, i!e s"ch directions in re ard to any matter or ma;e s"ch modifications in the compromise or arran ement as it may consider necessary for the proper wor;in of the compromise or arran ement.

G2H

If the .ri#"nal aforesaid is satisfied that a compromise or an arran ement sanctioned "nder section 3,1 cannot #e wor;ed satisfactorily with or witho"t modifications, it may, either on its own motion or on the application of any person interested in the affairs of the company, ma;e an order windin "p the company, and s"ch an order shall #e deemed to #e an order made "nder section $33 of this Act. .he pro!isions of this section shall, so far as may #e, also apply to a company in respect of which an order has #een made #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002 sanctionin a compromise or an arran ement.B

G3H

#.#. "n!ormation as to compromises or arrangements with creditors and mem&ers

G1H =here a meetin of creditors or any class of creditors, or of mem#ers or any class of mem#ers, is called "nder section 3,1 GaH with e!ery notice callin the meetin which is sent to a creditor or mem#er, there shall #e sent also a statement settin forth the terms of the compromise or arran ement and explainin its effect, and in partic"lar, statin any material interests of the, directors, mana in director, AJJJB or mana er of the company, whether in their capacity as s"ch or as mem#ers or creditors of the company or otherwise, and the effect on those interests, of the compromise or arran ement, if, and in so far as, it is different from the effect on the li;e interests of other personsL and in e!ery notice callin the meetin which is i!en #y the ad!ertisement, there shall #e incl"ded either s"ch a statement as aforesaid or a notification of the place at which and the manner in which creditors or mem#ers entitled to attend the meetin may o#tain copies of s"ch a statement as aforesaid.

G#H

G2H

G3H

=here the compromise or arran ement affects the ri hts of de#ent"re holders of the company, the said statement shall i!e the li;e information and 1xplanation as respects the tr"stees of any deed for sec"rin the iss"e of the de#ent"res as it is reD"ired to i!e as respects the companyEs directors. =here a notice i!en #y ad!ertisement incl"des a notification that copies of a statement settin forth the terms of the compromise or arran ement proposed and explainin its effect can #e o#tained #y creditors or mem#ers entitled to attend the meetin , e!ery creditor or mem#er so entitled shall, on ma;in an application in the manner indicated #y the notice, #e f"rnished #y the company, free of char e, with a copy of the statement. =here defa"lt is made in complyin with any of the reD"irements of this section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 3A Afifty tho"sand r"peesBL and for the p"rpose of this s"#/section any liD"idator of the company and any tr"stee of a deed for sec"rin the iss"e of de#ent"res of the company shall #e deemed to #e an officer of the companyK Provided that a person shall not #e p"nisha#le "nder this s"#/section if he shows that the defa"lt was d"e to the ref"sal of any other person, #ein a director, mana in director, AJJJB mana er or tr"stee for de#ent"re holders, to s"pply the necessary partic"lars as to his material interests. 1!ery director, mana in director, 7AAJJJB or mana er of the company, and e!ery tr"stee for de#ent"re holders of the company, shall i!e notice to the company of s"ch matter relatin to himself as may #e necessary for the p"rposes of this sectionL and if he fails to do so, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

G$H

G'H

#.'. Provisions !or !acilitating reconstruction and amalgamation o! companies

G1H =here an application is made to the (aA.ri#"nalB "nder section 3,1 for the sanctionin of a compromise or arran ement proposed #etween a company and any s"ch persons as are mentioned in that section, and it is shown to the (aA.ri#"nalB, GaH that the compromise or arran ement has #een proposed for the p"rposes of, or in connection with, a scheme for the reconstr"ction of any company or companies, or the amal amation of any two or more companiesL and

G#H

that "nder the scheme the whole or any part of the "nderta;in , property or lia#ilities of any company concerned in the scheme Gin this section referred to as a "transferor company"H is to #e transferred to another company Gin this section referred to as the "transferee company"HL

the (aA.ri#"nalB may, either #y the order sanctionin the compromise or arran ement or #y a s"#seD"ent order, ma;e pro!ision for all or any of the followin mattersK/ GiH GiiH the transfer to the transferee company of the whole or any part of the "nderta;in , property or lia#ilities of any transferor companyL the allotment or appropriation #y the transferee company of any shares, de#ent"res, policies, or other li;e interests in that company which, "nder the compromise or arran ement, are to #e allotted or appropriated #y that company to or any personL the contin"ation #y or a ainst the transferee company of any le al proceedin s pendin #y or a ainst any transferor companyL the dissol"tion, witho"t windin "p, of any transferor companyL the pro!ision to #e made for any person who, within s"ch time and in s"ch manner as the (a A.ri#"nalB directs, dissent from the compromise or arran ementL and s"ch incidental, conseD"ential and s"pplemental matters as are necessary to sec"re that the reconstr"ction or amal amation shall #e f"lly and effecti!ely carried o"tK

GiiiH Gi!H G!H G!iH

G2H

AProvided that no compromise or arran ement proposed for the p"rposes of, or in connection with, a scheme for the amal amation of a company, which is #ein wo"nd "p, with any other company or companies, shall #e sanctioned #y the (aA.ri#"nalB "nless the (aA.ri#"nalB has recei!ed a report from (a AomittedB the 8e istrar that the affairs of the company ha!e not #een cond"cted in a manner preC"dicial to the interests of its mem#ers or to p"#lic interestK Provided !urther that no order for the dissol"tion of any transferor company "nder cla"se Gi!H shall #e made #y the (aA.ri#"nalB "nless the :fficial 2iD"idator has, on scr"tiny of the #oo;s and papers of the company, made a report to the (aA.ri#"nalB that the affairs of the company ha!e not #een cond"cted in a manner preC"dicial to the interests of its mem#ers or to p"#lic interest.B =here an order "nder this section pro!ides for the transfer of any property or lia#ilities, then, #y !irt"e of the order, that property shall #e transferred to and !est in, and those lia#ilities shall #e transferred to and #ecome the lia#ilities of, the transferee companyL and in the case of any property, if the order so directs, freed from any char e which is, #y !irt"e of the compromise or arran ement, to cease to ha!e effect. =ithin AthirtyB days after the ma;in of an order "nder this section, e!ery company in relation to which the order is made shall ca"se a certified copy thereof to #e filed with the 8e istrar for re istration. If defa"lt is made in complyin with this s"#/section, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 30Afi!e h"ndred r"peesB. In this section/ GaH G#H "property" incl"des property, ri hts and powers of e!ery descriptionL and "lia#ilities" incl"des d"ties of e!ery descriptionL and "transferee company" does not incl"de any company other than a company within the meanin of this ActL #"t "transferor company" incl"des any #ody corporate, whether a company within the meanin of this Act or not.

G3H

G$H

#.'A. 6otice to &e given to Central -overnment !or applications under sections #.1 and #.'
.he (aA.ri#"nalB shall i!e notice of e!ery application made to it "nder section 3,1 or 3,$ to the *entral +o!ernment, and shall ta;e into consideration the representations, if any, made to it #y that +o!ernment #efore passin any order "nder any of these sections.B

#.). Power and dut% to acDuire shares o! shareholders dissenting !rom scheme or contract approved &% maCorit%

G1H

=here a scheme or contract in!ol!in the transfer of shares or any class of shares in a company Gin this section referred to as "the transferor company"H to another company Gin this section referred to as "the transferee company"H, has, within fo"r months after the ma;in of the offer in that #ehalf #y the transferee company, #een appro!ed #y the holders of not less than nine/tenths in !al"e of the shares whose transfer is in!ol!ed Gother than shares already held at the date of the offer #y, or #y a nominee for, the transferee company or its s"#sidiaryH the transferee company may, at any time within two months after the expiry of the said fo"r months, i!e notice in the prescri#ed manner to any dissentin shareholder, that it desires to acD"ire his sharesL and when s"ch a notice is i!en, the transferee company shall, "nless, on an application made #y the dissentin shareholder within one month from the date on which the notice was i!en, the (aA.ri#"nalB thin;s fit to order otherwise, #e entitled and #o"nd to acD"ire those shares on the terms on which, "nder the scheme or contract, the shares of the appro!in shareholders are to #e transferred to the transferee companyK Provided that where shares in the transferor company of the same class as the shares whose transfer is in!ol!ed are already held as aforesaid to a !al"e reater than one/tenth of the a re ate of the !al"es of all the shares in the company of s"ch class, the fore oin pro!isions of this s"#/section shall not apply, "nless/ GaH the transferee company offers the same terms to all holders of the shares of that class Gother than those already held as aforesaidH whose transfer is in!ol!edL and G#H the holders who appro!e the scheme or contract, #esides holdin not less than nine/tenths in !al"e of the shares Gother than those already held as aforesaidH whose transfer is in!ol!ed, are not less than three/fo"rths in n"m#er of the holders of those shares. =here, in p"rs"ance of any s"ch scheme or contract as aforesaid, shares, or shares of any class, in a company are transferred to another company or its nominee, and those shares to ether with any other shares or any other shares of the same class, as the case may #e, in the first/mentioned company held at the date of the transfer #y, or #y a nominee for, the transferee company or its s"#sidiary comprise nine/tenths in !al"e of the shares, or the shares of that class, as the case may #e, in the first/mentioned company, then,/ GaH the transferee company shall, within one month from the date of the transfer G"nless on a pre!io"s transfer in p"rs"ance of the scheme or contract it has already complied with this reD"irementH, i!e notice of that fact in the prescri#ed manner to the holders of the remainin shares or of the remainin shares of that class, as the case may #e, who ha!e not assented to the scheme or contract, and G#H any s"ch holder may, within three months from the i!in of the notice to him, reD"ire the transferee company to acD"ire the shares in D"estionL and where a shareholder i!es notice "nder cla"se G#H with respect to any shares, the transferee company shall #e entitled and #o"nd to acD"ire those shares on the terms on which, "nder the scheme or contract, the shares of the appro!in shareholders were transferred to it, or on s"ch other terms as may #e a reed, or as the (aA.ri#"nalB on the application of either the transferee company or the shareholder thin;s fit to order.

G2H

G3H

=here a notice has #een i!en #y the transferee company "nder s"#section G1H and the (aA.ri#"nalB has not, on application made #y the dissentin shareholder, made an order to the contrary, the transferee company shall, on the expiry of one month from the date on which the notice has #een i!en, or, if an application to the (aA.ri#"nalB #y the dissentin shareholder is then pendin , after that application has #een disposed of, transmit a copy of the notice to the transferor company to ether with an instr"ment of transfer exec"ted on #ehalf of the shareholder #y any person appointed #y the transferee company and on its own #ehalf #y the transferee company, and pay or transfer to the transferor company the amo"nt or other consideration representin the price paya#le #y the transferee company for the shares which, #y !irt"e of this section, that company is entitled to acD"ireL and 1$1Athe transferor company shall/ GaH G#H there"pon re ister the transferee company as the holder of those shares, and within one month of the date of s"ch re istration, inform the dissentin shareholders of the fact of s"ch re istration and of the receipt of the amo"nt or other consideration representin the price paya#le to them #y the transferee companyKB

Provided that an instr"ment of transfer shall not #e reD"ired for any share for which a share warrant is for the time #ein o"tstandin . G$H Any s"ms recei!ed #y the transferor company "nder this section shall #e paid into a separate #an; acco"nt, and any s"ch s"ms and any other consideration so recei!ed shall #e held #y that company in

tr"st for the se!eral persons entitled to the shares in respect of which the said s"ms or other considerations were respecti!ely recei!ed. AG$AHGaH .he followin pro!isions shall apply in relation to e!ery offer of a scheme or contract in!ol!in the transfer of shares or any class of shares in the transferor company to the transferee company, namelyK/ GiH e!ery s"ch offer or e!ery circ"lar containin s"ch offer or e!ery recommendation to the mem#ers of the transferor company #y its directors to accept s"ch offer shall #e accompanied #y s"ch information as may #e prescri#edL GiiH GiiiH Gi!H e!ery s"ch offer shall contain a statement #y or on #ehalf of the transferee company, disclosin the steps it has ta;en to ens"re that necessary cash will #e a!aila#leL e!ery circ"lar containin or recommendin acceptance of, s"ch offer shall #e presented to the 8e istrar for re istration and no s"ch circ"lar shall #e iss"ed "ntil it is so re isteredL

G'H

the 8e istrar may ref"se to re ister any s"ch circ"lar which does not contain the information reD"ired to #e i!en "nder s"#/cla"se GiH or which sets o"t s"ch information in a manner li;ely to i!e a false impressionL and G!H an appeal shall lie to the (aA.ri#"nalB a ainst an order of the 8e istrar ref"sin to re ister any s"ch circ"lar. G#H =hoe!er iss"es a circ"lar referred to in s"#/cla"se GiiiH of cla"se GaH which has not #een re istered, shall #e p"nisha#le with fine which may extend to 20AAfi!e tho"sand r"peesB.B In this section GaH "dissentin shareholder" incl"des a shareholder who has not assented to the scheme or contract and any shareholder who has failed or ref"sed to transfer his shares to the transferee company in accordance with the scheme or contractL "transferor company" and "transferee company" shall ha!e the same meanin as in section 3,$.

G#H G(H

In relation to an offer made #y the transferee company to shareholders of the transferor company #efore the commencement of this Act, this section shall ha!e effect./ GaH with the s"#stit"tion, in s"#/section G1H, for the words "the shares whose transfer is in!ol!ed Gother than shares already held at the date of the offer #y, or #y a nominee for, the transferee company or its s"#sidiaryH," of the words "the shares affected" and with the omission of the pro!iso to that s"#/sectionL with the omission of s"#/section G2HL with the omission in s"#/section G3H of the words "to ether with an instr"ment of transfer exec"ted on #ehalf of the shareholder #y any person appointed #y the transferee company and on its own #ehalf #y the transferee company" and of the pro!iso to that s"#/sectionL and with the omission of cla"se G#H of s"#/section G'H.

G#H GcH

GdH

#.*. Power o! Central -overnment to provide !or amalgamation o! companies in national interest
G1H =here the *entral +o!ernment is satisfied that it is essential in the Ap"#lic interestB that two or more companies sho"ld amal amate, then, notwithstandin anythin contained in section 3,$ and 3,' #"t s"#Cect to the pro!isions of this section, the *entral +o!ernment may, #y order notified in the :fficial +aFette, pro!ide for the amal amation of those companies into a sin le company with s"ch constit"tionL with s"ch property, powers, ri hts, interest, a"thorities and pri!ile esL and s"ch lia#ilities, d"ties, and o#li ationsL as may #e specified in the order. A.he order aforesaid may pro!ide for the contin"ation #y or a ainst the transferee company of any le al proceedin s pendin #y or a ainst may transferor company and may alsoB contain s"ch conseD"ential, incidental and s"pplemental pro!isions as may, in the opinion of the *entral +o!ernment, #e necessary to i!e effect to the amal amation. 1!ery mem#er or creditor Gincl"din a de#ent"re holderH of each of the companies #efore the amal amation shall ha!e, as nearly as may #e, the same interest in or ri hts a ainst the company res"ltin from the amal amation as he had in the company of which he was ori inally a mem#er or creditorL and to the extent to which the interest or ri hts of s"ch mem#er or creditor in or a ainst the company res"ltin from the amal amation are less than his interest in or ri hts a ainst the ori inal

G2H

G3H

AG3AH

G$H

company, he shall #e entitled to compensation which shall #e assessed #y s"ch a"thority Aas may #e prescri#ed and e!ery s"ch assessment shall #e p"#lished in the :fficial +aFetteB. .he compensation so assessed shall #e paid to the mem#er or creditor concerned #y the company res"ltin from the amal amation. Any person a rie!ed #y any assessment of compensation made #y the prescri#ed a"thority "nder s"#/ section G3H may, within thirty days from the date of p"#lication of s"ch assessment in the :fficial +aFette, prefer an appeal to the (aA.ri#"nalB and there"pon the assessment of the compensation shall #e made #y the (aA.ri#"nalB.B 4o order shall #e made "nder this section, "nless/ GaH a copy of the proposed order has #een sent in draft to each of the companies concernedL AJJJB AGaaH the time for preferrin an appeal "nder s"#/section G3AH has expired, or where any s"ch appeal has #een preferred, the appeal has #een finally disposed ofL andB G#H the central +o!ernment has considered, and made s"ch modifications, if any, in the draft order as may seem to it desira#le in the li ht of any s" estions and o#Cections which may #e recei!ed #y it from any s"ch company within s"ch period as the *entral +o!ernment may fix in that #ehalf, not #ein less than two months from the date on which the copy aforesaid is recei!ed #y that company, or from any class of shareholders therein, or from any creditors or any class of creditors thereof. *opies of e!ery order made "nder this section shall, as soon as may he after it has #een made, #e laid #efore #oth 6o"ses of &arliament.

G'H

#.*A. Preservation o! &oo=s and papers o! amalgamated compan%

.he #oo;s and papers of a company which has #een amal amated with, or whose shares ha!e #een acD"ired #y, another company "nder this *hapter shall not #e disposed of witho"t the prior permission, of the *entral +o!ernment and #efore rantin s"ch permission, that +o!ernment may appoint a person to examine the #oo;s and papers or any of them for the p"rpose of ascertainin whether they contain any e!idence of the commission of an offence in connection with the promotion or formation, or the mana ement of the affairs, of the first/ mentioned company or its amal amation or the acD"isition of its shares.B

Chapter 9"J

Prevention o! oppression and mismanagement A! Powers of /a$Tribunal%

#.+. Application to *aG0ri&unalH !or relie! in cases o! oppression

G1H Any mem#er of a company who complain that the affairs of the company 1'2Aare #ein cond"cted in a manner preC"dicial to p"#lic interest orB in a manner oppressi!e to any mem#er or mem#ers Gincl"din any one or more of themsel!esH may apply to the (aA.ri#"nalB for an order "nder this section, pro!ided s"ch mem#ers ha!e a ri ht so to apply in !irt"e of section 3,,. If, on any application "nder s"#/section G1H the (aA.ri#"nalB is of opinion/ GaH G#H that the companyEs affairs Aare #ein cond"cted in a manner preC"dicial to p"#lic interest orB in a manner oppressi!e to any mem#er or mem#ersL and

G2H

that to wind "p the company wo"ld "nfairly preC"dice s"ch mem#er or mem#ers, #"t that otherwise the facts wo"ld C"stify the ma;in of a windin "p order on the ro"nd that it was C"st and eD"ita#le that the company sho"ld #e wo"nd "pL (a the A.ri#"nalB may, with a !iew to #rin in to an end the matters complained of, ma;e s"ch order as it thin;s fit.

#.,. Application to *aG0ri&unalH !or relie! in cases o! mismanagement

G1H

Any mem#ers of a company who complainK GaH G#H that the affairs of the company Aare #ein cond"cted in a manner preC"dicial to p"#lic interest orB in a manner preC"dicial to the interests of the companyL or

G2H

that a material chan e Gnot #ein a chan e #ro" ht a#o"t #y, or in the interests of, any creditors Gincl"din de#ent"re holders, or any class of shareholders, of the company has ta;en place in the mana ement or control of the company, whether #y an alteration in its 0oard of directors, AJJJB Aor mana erB, AJJJB or in the ownership of the companyEs shares, or if it has no share capital, in its mem#ership, or in any other manner whatsoe!er, and that #y reason of s"ch chan e, it is li;ely that the affairs of the company 1''Awill #e cond"cted in a manner preC"dicial to p"#lic interest orB in a manner preC"dicial to the interests of the companyL may apply to the (aA.ri#"nalB for an order "nder this section, pro!ided s"ch mem#ers ha!e a ri ht so to apply in !irt"e of section 3,,. If, on any application "nder s"#/section G1H, the (aA.ri#"nalB is of opinion that the affairs of the company are #ein cond"cted as aforesaid or that #y reason of any material chan e as aforesaid in the mana ement or control of the company, it is li;ely that the affairs of the company will #e cond"cted as aforesaid, the (aA.ri#"nalB may, with a !iew to #rin in to an end or pre!entin the matters complained of or apprehended, ma;e s"ch order as it thin;s fit.

#... :ight to appl% under sections #.+ and #.,

G1H .he followin mem#ers of a company shall ha!e the ri ht to apply "nder section 3,7 or 3,)K/ GaH in the case of a company ha!in a share capital, not less than one h"ndred mem#ers of the company or not less than one/tenth of the total n"m#er of its mem#ers, whiche!er is less, or any mem#er or mem#ers holdin not less than one/tenth of the iss"ed share capital of the company, pro!ided that the applicant or applicants ha!e paid all calls and other s"ms d"e on their sharesL in the case of a company not ha!in a share capital, not less than one/fifth of the total n"m#er of its mem#ers.

G#H G2H G3H

3or the p"rposes of s"#/section G1H, where any share or shares are held #y two or more persons Cointly, they shall #e co"nted only as one mem#er. =here any mem#ers of a company are entitled to ma;e an application in !irt"e of s"#/section G1H, any one or more of them ha!in o#tained the consent in writin of the rest, may ma;e the application on #ehalf and for the #enefit of all of them. .he *entral +o!ernment may, if in its opinion circ"mstances exist which ma;e it C"st and eD"ita#le so to do, a"thorise any mem#er or mem#ers of the company to apply to the (aA.ri#"nalB "nder section 3,7 or 3,), notwithstandin that the reD"irements of cla"se GaH or cla"se G#H, as the case may #e, of s"#/ section G1H are not f"lfilled. .he *entral +o!ernment may, #efore a"thorisin any mem#er or mem#ers as aforesaid, reD"ire s"ch mem#er or mem#ers to i!e sec"rity for s"ch amo"nt as the *entral +o!ernment may deem reasona#le, for the payment of any costs which the (aA.ri#"nalB dealin with the application may order s"ch mem#er or mem#ers to pay to any other person or persons who are parties to the application.

G$H

G'H

'00. 6otice to &e given to Central -overnment o! applications under sections #.+ and #.,
.he (aA.ri#"nalB shall i!e notice of e!ery application made to it "nder section 3,7 or 3,) to the *entral +o!ernment, and shall ta;e into consideration the representations, if any, made to it #y that +o!ernment #efore passin final a order "nder that section.

'01. :ight o! Central -overnment to appl% under sections #.+ and #.,
.he *entral +o!ernment may itself apply to the (aA.ri#"nalB for an order "nder section 3,7 or 3,), or ca"se an application to #e made to the (aA.ri#"nalB for s"ch an order #y any person a"thorised #y it in this #ehalf.

'02. Powers o! *aG0ri&unalH on application under section #.+ or #.,

=itho"t preC"dice to the enerality of the powers of the either section may pro!ide for/ GaH G#H GcH GdH

(a

A.ri#"nalB "nder section 3,7 or 3,), any order "nder/

the re "lation of the cond"ct of the companyEs affairs in f"t"reL the p"rchase of the shares or interests of any mem#ers of the company #y other mem#ers thereof or #y the companyL in the case of a p"rchase of its shares #y the company as aforesaid, the conseD"ent red"ction of its share capital. the termination, settin aside or modification of any a reement, howsoe!er arri!ed at, #etween the company on the one hand, and any of the followin persons, on the other, namelyK/ GiH the mana in director, GiiH GiiiH Gi!H G!H any other director, AJJJB, AJJJB and the mana er,
(a

"pon s"ch terms and conditions as may, in the opinion of the the circ"mstances of the caseL GeH

A.ri#"nalB #e C"st and eD"ita#le in all

the termination settin aside or modification of any a reement #etween the company and any person not referred to in cla"se GdH, pro!ided that no s"ch a reement shall #e terminated, set aside or modified except after d"e notice to the party concerned and pro!ided f"rther that no s"ch a reement shall #e modified except after o#tainin the consent of the party concernedL the settin aside of any transfer, deli!ery of oods, payment, exec"tion or other act relatin to property made or done #y or a ainst the company within three months #efore the date of the application "nder section 3,7 or 3,), which wo"ld, if made or done #y or a ainst an indi!id"al, #e deemed in his insol!ency to #e a fra"d"lent preferenceL any other matter for which in the opinion of the (aA.ri#"nalB it, is C"st and eD"ita#le that pro!ision sho"ld #e made.

GfH

G H

'0#. "nterim order &% *aG0ri&unalH

&endin the ma;in #y it of a final order "nder section 3,7 or 3,), as the case may #e, the (aA.ri#"nalB may, on the application of any party to the proceedin , ma;e any interim order which it thin;s fit for re "latin the cond"ct of the companyEs affairs, "pon s"ch terms and conditions as appear to it to #e C"st and eD"ita#le.

'0'. 3!!ect o! alteration o! memorandum or articles o! compan% &% order under section #.+ or #.,
G1H =here an order "nder section 3,7 or 3,) ma;es any alteration in the memorand"m or articles of a company, then, notwithstandin any other pro!ision of this Act, the company shall not ha!e power, except to the extent, if any, permitted in the order, to ma;e witho"t the lea!e of the (aA.ri#"nalB any alteration whatsoe!er which is inconsistent with the order, either in the memorand"m or in the articles. S"#Cect to the pro!isions of s"#/section G1H, the alterations made #y the order shall, in all respects, ha!e the same effect as if they had #een d"ly made #y the company in accordance with the pro!isions of this ActL and the said pro!isions shall apply accordin ly to the memorand"m or articles as so altered. A certified copy of e!ery order alterin or i!in lea!e to alter a companyEs memorand"m or articles, shall within AthirtyB days after the ma;in thereof, #e filed #y the company with the 8e istrar who shall re ister the same. If defa"lt is made in complyin with the pro!isions of s"#/section G3H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 3AAfifty tho"sand r"peesB.

G2H

G3H

G$H

'0). Addition o! respondents to application under section #.+ or #.,

If the mana in director or any other director AJJJB or the mana er, of a company, or any other person, who has not #een impleaded as a respondent to any application "nder section 3,7 or 3,) applies to #e added as a respondent thereto, the (aA.ri#"nalB shall, if it is satisfied that there is s"fficient ca"se for doin so, direct that he may #e added as a respondent accordin ly.

'0*. Application o! sections )#. to )'' to proceedings under sections #.+ and #.,
In relation to an application "nder section 3,7 or 3,), sections '3, to '$$, #oth incl"si!e, shall apply in the form set forth in Sched"le >I.

'0+. ConseDuences o! termination or modi!ication o! certain agreements

G1H =here an order AJJJB made "nder section 3,7 or 3,) terminates, sets aside, or modifies an a reement s"ch as is referred to in cla"se GdH or GeH of section $02,/ GaH the order shall not i!e rise to any claims whate!er a ainst the company #y any person for dama es or for compensation for loss of office or in any other respect, either in p"rs"ance of the a reement or otherwiseL G#H no mana in or other director, AJJJB or mana er whose a reement is so terminated or set aside AJJJB shall, for a period of fi!e years from the date of Athe order terminatin or settin aside the a reement, witho"t the lea!e of the (aA.ri#"nalB #e appointed or act, as the mana in or other director, AJJJB or mana er of the company.

G2HGaH G#H GcH

Any person who ;nowin ly acts as a mana in or other director, AJJJB or mana er of a company in contra!ention of cla"se G#H of s"#/section G1HL AJJJBL and e!ery other director or e!ery director, as the case may #e, of the company, who is ;nowin ly a party to s"ch contra!entionL shall #e p"nisha#le with imprisonment for a term which may extend to one year, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. A4o lea!e shall #e rantedB "nder cla"se G#H of s"#/section G1H "nless notice of the intention to apply for lea!e has #een ser!ed on the *entral +o!ernment and that +o!ernment has #een i!en an opport"nity of #ein heard in the matter.

G3H

-! Powers of Central *overnment '0,. Powers o! -overnment to prevent oppression or mismanagement

AG1H 4otwithstandin anythin contained in this Act, the *entral +o!ernment may appoint s"ch n"m#er of persons as the (aA.ri#"nalB may, #y order in writin , specify as #ein necessary to effecti!ely safe "ard the interests of the company, or its shareholders or the p"#lic interests to hold office as directors thereof for s"ch period, not exceedin three years on any one occasion, as it may thin; fit, if the (a A.ri#"nalB on a reference made to it #y the *entral +o!ernment or on an application of not less than one h"ndred mem#ers of the company or of the mem#ers of the company holdin not less than one/ tenth of the total !otin power therein, is satisfied, after s"ch inD"iry as it deems fit to ma;e, that it is necessary to ma;e the appointment or appointments in order to pre!ent the affairs of the company #ein cond"cted either in a manner which is oppressi!e to any mem#ers of the company or in a manner which is preC"dicial to the interests of the company or to p"#lic interestK Provided that in lie" of passin an order as aforesaid, the (aA.ri#"nalB may, if the company has not a!ailed itself of the option i!en to it "nder section 2(', direct the company to amend its articles in the manner pro!ided in that section and ma;e fresh appointments of directors in p"rs"ance of the articles as so amended, within s"ch time as nay #e specified in that #ehalf #y the (aA.ri#"nalB.

G2H

G3H

In case the (aA.ri#"nalB passes an order "nder the pro!iso to s"#section G1H, it may, if it thin;s fit, direct that "ntil new directors are appointed in p"rs"ance of the order aforesaid, s"ch n"m#er of persons as the (aA.ri#"nalB may, #y orders specify as #ein necessary to effecti!ely safe "ard the interests, of the company, or its shareholders or the p"#lic interest, shall hold office as additional directors of the company and on s"ch directions, the *entral +o!ernment shall appoint s"ch additional directorsB. 3or the p"rposes of rec;onin two/thirds or any other proportion of the total n"m#er of directors of the company, any director or directors appointed #y the *entral +o!ernment "nder s"#/section G1H or G2H shall not #e ta;en into acco"nt. A person appointed "nder s"#/section G1H to hold office as a director or a person directed "nder s"#/ section G2H to hold office as an additional director, shall not #e reD"ired to hold any D"alification shares nor his period of office shall #e lia#le to determination #y retirement of directors #y rotationL #"t any s"ch director or additional director may #e remo!ed #y the *entral +o!ernment from his office at any time and another person may #e appointed #y that +o!ernment in his place to hold office as a director or, as the case may #e, an additional director. 4o chan e in the 0oard of directors made after a person is appointed or directed to hold office as a director or additional director "nder this section shall, so lon as s"ch director or additional director holds office, ha!e effect "nless confirmed #y the (aA.ri#"nalB. 4otwithstandin anythin contained in this Act or in any other law for the time #ein in force, where any person is appointed #y the *entral +o!ernment to hold office as director or additional director of a company in p"rs"ance of s"#/section G1H or s"#/section G2H, the *entral +o!ernment may iss"e s"ch directions to the company as it may consider necessary or appropriate in re ard to its affairs 1('Aand s"ch directions may incl"de directions to remo!e an a"ditor already appointed and to appoint another a"ditor in his place or to alter the articles of the company, and "pon s"ch directions #ein i!en, the appointment, remo!al or alteration, as the case may #e, shall #e deemed to ha!e come into effect as if the pro!isions of this Act in this #ehalf ha!e #een complied with witho"t reD"irin any f"rther act or thin to #e done.B .he *entral +o!ernment may reD"ire the persons appointed as directors or additional directors in p"rs"ance of s"#/section G1H or s"#/section G2H to report to the *entral +o!ernment from time to time with re ard to the affairs of the company.B

AG$H

G'H

AG(H

G7H

'0.. Power o! *aG0ri&unalH to prevent change in 2oard o! directors li=el% to a!!ect compan% preCudiciall%
G1H =here a complaint is made to the (aA.ri#"nalB #y the mana in director or any other director, AJJJB Aor the mana erB, of a company that as a res"lt of a chan e which has ta;en place or is li;ely to ta;e place in the ownership of any shares held in the company, a chan e in the 0oard of directors is li;ely to ta;e place which Gif allowedH wo"ld affect preC"dicially the affairs of the company, the (aA.ri#"nalB may, if satisfied, after s"ch inD"iry as it thin;s fit to ma;e that it is C"st and proper so to do, #y order, direct that Ano resol"tion passed or that may #e passed or no action ta;en or that may #e ta;enB to effect a chan e in the 0oard of directors after the date of the complaint shall ha!e effect "nless confirmed #y the (aA.ri#"nalBL and any s"ch order shall ha!e effect notwithstandin anythin to the contrary contained in any other pro!ision of this Act or in the memorand"m or articles of the company, or m any a reement with, or any resol"tion passed in eneral meetin #y, or #y the 0oard of directors of, the company. .he (aA.ri#"nalB shall ha!e power when any s"ch complaint is recei!ed #y it, to ma;e an interim order to the effect set o"t in s"#/section G1H, #efore ma;in or completin the inD"iry aforesaid. 4othin contained in s"#/sections G1H and G2H shall apply to a pri!ate company, "nless it is a s"#sidiary of a p"#lic company.

G2H G3H

Chapter 9""J

Constitution and powers o! GAdvisor% CommitteeH

'10. Appointment o! Advisor% Committee

3or the p"rpose of ad!isin the *entral +o!ernment and the (aA.ri#"nalB on s"ch matters arisin o"t of the administration of this Act as may #e referred to it #y that +o!ernment (aAor the .ri#"nalB, the *entral +o!ernment may constit"te an Ad!isory *ommittee consistin of not more than fi!e persons with s"ita#le D"alifications.B ASections $11 to $1' omitted #y Act 4o. 31 of 1,(', w.e.f. 1'th. :cto#er, 1,('.B

Chapter 9"""J (iscellaneous Provisions Contracts where company is undisclosed principal '1*. Contracts &% agents o! compan% in which compan% is undisclosed principal
G1H 1!ery person, #ein the AJJJB mana er or other a ent of a p"#lic company or of a pri!ate company which is a s"#sidiary of a p"#lic company, who enters into a contract for or on #ehalf of the company in which contract the company is an "ndisclosed principal shall, at the time of enterin into the contract, ma;e a memorand"m in writin of the terms of the contract, and specify therein the person with whom it is entered into. 1!ery s"ch person who enters into a contract as aforesaid shall forthwith deli!er the memorand"m to the company and send copies thereof to each of the directorsL and s"ch memorand"m shall #e filed in the office of the company and laid #efore the 0oard of directors at its next meetin . If defa"lt is made in complyin with the reD"irements of this section,/ GaH the contract shall, at the option of the company, #e !oida#le as a ainst the companyL and G#H the person who enters into the contract, or e!ery officer of the company who is in defa"lt, as the case may #e, shall #e p"nisha#le with fine which may extend to 2)'0Atwo tho"sand r"peesB.

G2H

G3H

0mployees. securities and provident funds '1+. 3mplo%eesE securities to &e deposited in post o!!ice savings &an= or Scheduled 2an=
AG1H Any money or sec"rity deposited with a company #y any of its employee in p"rs"ance of his contract of ser!ice with the company shall #e ;ept or deposited #y the company within fifteen days from the date of deposit/ GaH G#H in a post office sa!in s #an; acco"nt, or in a special acco"nt to #e opened #y the company for the p"rpose in the State 0an; of India or in a Sched"led 0an;, or GcH where the company itself is a Sched"led 0an;, in a special acco"nt to #e opened #y the company for the p"rpose either in itself or in the State 0an; of India or in any other Sched"led 0an;.B 4o portion of s"ch moneys or sec"rities shall #e "tilised #y the company except for the p"rposes a reed to in the contracts of ser!ice. A receipt for moneys deposited with a company #y its employee shall not #e deemed to #e a sec"rity within the meanin of this sectionL and the moneys themsel!es shall accordin ly #e deposited 2))AJJJB as pro!ided in s"#/section G1H.

G2H G3H

'1,. Provisions applica&le to provident !unds o! emplo%ees

AG1H =here a pro!ident f"nd has #een constit"ted #y a company for its employees or any class of its employees, all moneys contri#"ted to s"ch f"nd Gwhether #y the company or #y the employeesH or recei!ed or accr"in #y way of interest or otherwise to s"ch f"nd shall, within fifteen days from the date of contri#"tion, receipt or accr"al, as the case may #e, either/

GaH

#e deposited/ GiH GiiH GiiiH in a post office sa!in s #an; acco"nt, or in a special acco"nt to #e opened #y the company for the p"rpose in the State 0an; of India or in a Sched"led 0an;, or where the company itself is a Sched"led 0an;, in a special acco"nt to #e opened #y the company for the p"rpose either in itself or in the State 0an; of India or in any other Sched"led 0an;L or

G#H G2H

#e in!ested in the sec"rities mentioned or referred to in cla"ses GaH to GeH of section 20 of the Indian .r"sts Act, 1))2.B

G3H

4otwithstandin anythin to the contrary in the r"les of any pro!ident f"nd to which s"#/section G1H applies or in any contract #etween a company and its employees, no employee shall #e entitled to recei!e, in respect of s"ch portion of the amo"nt to his credit in s"ch f"nd as is in!ested in accordance with the pro!isions of s"#/section G1H, interest at a rate exceedin the rate of interest yielded #y s"ch in!estment. 4othin in s"#/section G1H shall affect any ri hts of an employee "nder the r"les of a pro!ident f"nd to o#tain ad!ances from or to withdraw money standin to his credit in the f"nd, where the f"nd is a reco nised pro!ident f"nd within the meanin of cla"se GaH of section ')A of the Indian Income/tax Act, 1,22, or where the r"les of the f"nd contain pro!isions correspondin to r"les $, ', (, 7, ) and ,, of the Indian Income/tax G&ro!ident 3"nds 8eliefH 8"les. =here a AJJJB tr"st has #een created #y a company with respect to any pro!ident f"nd referred to in s"#/section G1H, the company shall #e #o"nd to collect the contri#"tion of the employees concerned and pay s"ch contri#"tion as well as its own contri#"tions, if any, to the tr"stees Awithin fifteen days from the date of collectionBL #"t in other respects, the o#li ations laid on the company #y this section shall de!ol!e on the tr"stees and shall #e dischar ed #y them instead of #y the company.

G$H

'1.. :ight o! emplo%ee to see &an=Es receipt !or mone%s or securities re!erred to in section or '1,

'1+

An employee shall #e entitled, on reD"est made in this #ehalf to the company, or to the tr"stees referred to in s"#/section G$H of section $1), as the case may #e, to see the #ar;Es receipt for any money or sec"rity s"ch as is referred to in section, $17 or $1).

'20. Penalt% !or contravention o! sections '1+, '1, and '1.

Any officer of a company, or any s"ch tr"stee of a pro!ident f"nd as is referred to in s"#/section G$H of section $1) who, ;nowin ly, contra!enes, or a"thorises or permits the contra!ention of, the pro!isions of section $17, $1) or $1,, shall #e p"nisha#le with Aimprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesBB.

Receivers and Managers '21. 5iling o! accounts o! receivers

1!ery recei!er of the property of a company who has #een appointed "nder a power conferred #y any instr"ment and who has ta;en possession, shall once in e!ery half year while he remains in possession, and also on ceasin to act as recei!er, file with the 8e istrar an a#stract in the prescri#ed form 2,$ of his receipts and payments d"rin the period to which the a#stract relates.

'22. "nvoices, etc., to re!er to receiver where there is one

=here a recei!er of the property of a company has #een appointed, e!ery in!oice, order for oods, or #"siness letter iss"ed #y or on #ehalf of the company, or the recei!er of the company, #ein a doc"ment on or in which the name of the company appears, shall contain a statement that a recei!er has #een appointed.

'2#. Penalt% !or non1compliance with sections '21 and '22

If defa"lt is made in complyin with the reD"irements of section $21 or $22, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Atwo tho"sand r"peesB. 3or the p"rposes of this section, the recei!er shall #e deemed to #e an officer of the company.

*a'2'. Application o! sections '21 to '2# to, receivers and managers appointed &% 0ri&unal, and, managers appointed in pursuance o! an instrument
.he pro!isions of sections $21 to $23 shall apply to the recei!er of, or any person appointed to mana e, the property of a company, appointed #y the .ri#"nal or to any person appointed to mana e, the property of a company "nder any powers contained in an instr"ment, in li;e manner as they apply to a recei!er appointed "nder any powers contained in an instr"ment.B

6aPART VIA:

REVIVAL AND REHABILITATION OF SICK INDUSTRIAL COMPANIES

'2'A. :e!erence to 0ri&unal

G1H =here an ind"strial company, has #ecome a sic; ind"strial company, the 0oard of directors of s"ch company shall ma;e a reference to the .ri#"nal, and prepare a scheme of its re!i!al and reha#ilitation and s"#mit the same to the .ri#"nal alon with an application containin s"ch partic"lars as may #e prescri#ed, for determination of the meas"res which may #e adopted with respect to s"ch companyK Provided that nothin contained in this s"#/section shall apply to a +o!ernment companyK Provided !urther that a +o!ernment company may, with the prior appro!al of the *entral +o!ernment or a State +o!ernment, as the case may #e, ma;e a reference to the .ri#"nal in accordance with the pro!isions of this s"#/section and thereafter all the pro!isions of this Act shall apply to s"ch +o!ernment company. G2H .he application "nder s"#/section G1H shall #e accompanied #y a certificate from an a"ditor from a panel of a"ditors prepared #y the .ri#"nal indicatin M GaH G#H G3H the reasons of the net worth of s"ch company #ein fifty per cent. or less than fifty per cent.L or the defa"lt in repayment of its de#t ma;in s"ch company a sic; ind"strial company, as the case may #e. =itho"t preC"dice to the pro!isions of s"#/section G 1H, the *entral +o!ernment or the 8eser!e 0an; of India or a State +o!ernment or a p"#lic financial instit"tion or a State le!el instit"tion or a sched"led #an; may, if it has s"fficient reasons to #elie!e that any ind"strial company has #ecome, for the p"rposes of this Act, a sic; ind"strial company, ma;e a reference in respect of s"ch company to the .ri#"nal for determination of the meas"res which may #e adopted with respect to s"ch companyK Provided that a reference shall not #e made "nder this s"#/section in respect of any ind"strial company #yM GaH G#H the +o!ernment of any State "nless all or any of the ind"strial "nderta;in s #elon in to s"ch company are sit"ated in s"ch StateL a p"#lic financial instit"tion or a State le!el instit"tion or a sched"led #an; "nless it has, #y reason of any financial assistance or o#li ation rendered #y it, or "nderta;en #y it, with respect to s"ch company, an interest in s"ch company.

G$H

G'H

A reference "nder s"#/section (1# or s"#/section (3# shall #e made to the .ri#"nal within a period of one h"ndred and ei hty days from the date on which the 0oard of directors of the company or the *entral +o!ernment or the 8eser!e 0an; of India or a State +o!ernment or a p"#lic financial instit"tion or a State le!el instit"tion or a sched"led #an;, as the case may #e, come to ;now, of the rele!ant facts i!in rise to ca"ses of s"ch reference or within sixty days of final adoption of acco"nts, whiche!er is earlier. .he .ri#"nal may, on receipt of a reference "nder s"#/section (1#% pass an order as to whether a company in respect of which a reference has #een made has #ecome a sic; ind"strial company and s"ch order shall #e final.

'2'2. "nDuir% into wor=ing o! sic= industrial companies

G1H .he .ri#"nal may ma;e s"ch inD"iry as it may deem fit for determinin whether any ind"strial company has #ecome a sic; ind"strial companyM GaH "pon receipt of a reference with respect to s"ch company "nder section $2$AL or G#H G2H "pon information recei!ed with respect to s"ch company or "pon its own ;nowled e as to the financial condition of the company.

G3H

G$H

.he .ri#"nal may, if it deems necessary or expedient so to do for the expeditio"s disposal of an inD"iry "nder s"#/section G1H, reD"ire #y order any operatin a ency to enD"ire into the scheme for re!i!al and ma;e a report with respect to s"ch matters as may #e specified in the order. .he operatin a ency shall complete its inD"iry as expeditio"sly as possi#le and s"#mit its report to the .ri#"nal within twenty/one days from the date of s"ch orderK Provided that the .ri#"nal may extend the said period to forty days for reasons to #e recorded in writin for s"ch extension. .he .ri#"nal shall concl"de its inD"iry as expeditio"sly as possi#le and pass final orders in the proceedin s within sixty days from the commencement of the inD"iryK Provided that the .ri#"nal may extend the said period to ninety days for reasons to #e recorded in writin for s"ch extension. Explanation( M 3or the p"rposes of this s"#/section, an inD"iry shall #e deemed to ha!e commenced "pon the receipt #y the .ri#"nal of any reference or information or "pon its own ;nowled e red"ced to writin #y the .ri#"nal. =here the .ri#"nal deems it fit to ma;e an inD"iry or to ca"se an inD"iry to #e made into any ind"strial company "nder s"#/section G1H or, as the case may #e, "nder s"#/section G2H, it may appoint one or more persons who possess ;nowled e, experience and expertise in mana ement and control of the affairs of any other company to #e a special director or special directors on the #oard of s"ch ind"strial company on s"ch terms and conditions as may #e prescri#ed for safe "ardin its financial and other interests or in the p"#lic interest. .he special director or special directors appointed "nder s"#/section G'H shall s"#mit a report to the .ri#"nal within sixty days from the date of appointment of s"ch director or directors, a#o"t the state of affairs of the company in respect of which reference has #een made "nder s"#/section G1H and s"ch special director or directors shall ha!e all the powers of a director of a company "nder this Act, necessary for dischar e of his or their d"ties. .he .ri#"nal may iss"e s"ch directions to a special director appointed "nder s"#section G'H as it may deem necessary or expedient for proper dischar e of his d"ties. .he appointment of a special director referred to in s"#/section G'H shall #e !alid and effecti!e notwithstandin anythin to the contrary contained in any other pro!isions of this Act or in any other law for the time #ein in force or in the memorand"m and articles of association or any other instr"ment relatin to the ind"strial company, and any pro!ision re ardin share D"alification, a e limit, n"m#er of directorships, remo!al from office of directors and s"ch li;e conditions contained in any s"ch law or instr"ment aforesaid, shall not apply to any special director or directors appointed #y the .ri#"nal. Any special director appointed "nder s"#/section G'H, shallM GaH hold office d"rin the pleas"re of the .ri#"nal and may #e remo!ed or s"#stit"ted #y any person #y order of the .ri#"nalL

G'H

G(H

G7H G)H

G,H

G#H

not inc"r any o#li ation or lia#ility #y reason only of his #ein a director or for anythin done or omitted to #e done in ood faith in the dischar e of his d"ties as a director or anythin in relation theretoL not #e lia#le to retirement #y rotation and shall not #e ta;en into acco"nt for comp"tin the n"m#er of directors lia#le to s"ch retirementL not #e lia#le to #e prosec"ted "nder any law for anythin done or omitted to #e done in ood faith in the dischar e of his d"ties in relation to the sic; ind"strial company.

GcH GdH

'2'C. Powers o! 0ri&unal to ma=e suita&le order on completion o! inDuir%

G1H If after ma;in an inD"iry "nder section $2$0, the .ri#"nal is satisfied that a company has #ecome a sic; ind"strial company, the .ri#"nal shall, after considerin all the rele!ant facts and circ"mstances of the case, decide, as soon as may #e, #y an order in writin , whether it is practica#le for the company to ma;e its net worth exceed the acc"m"lated losses or ma;e the repayment of its de#ts referred to in cla"se G#H of s"#/section G2H of section $2$A within a reasona#le time. If the .ri#"nal decides "nder s"#/section G1H that it is practica#le for a sic; ind"strial company to ma;e its net worth exceed the acc"m"lated losses or pay its de#t referred to in that s"#/section within a reasona#le time, the .ri#"nal shall, #y order in writin and s"#Cect to s"ch restrictions or conditions as may #e specified in the order, i!e s"ch time to the company as it may deem fit to ma;e its net worth exceed the acc"m"lated losses or ma;e repayment of the de#ts. If the .ri#"nal decides "nder s"#/section G1H that it is not practica#le for a sic; ind"strial company to ma;e its net worth exceed the acc"m"lated losses or ma;e the repayment of its de#ts referred to in cla"se G#H of s"#/section G2H of section $2$A, within a reasona#le time and that it is necessary or expedient in the p"#lic interest to adopt all or any of the meas"res specified in section $2$D in relation to the said company it may, as soon as may #e, #y order in writin , direct any operatin a ency specified in the order to prepare, ha!in re ard to s"ch "idelines as may #e specified in the order, a scheme pro!idin for s"ch meas"res in relation to s"ch company. .he .ri#"nal may,M GaH if any of the restrictions or conditions specified in an order made "nder s"#section G2H are not complied with #y the company concerned, or if the company fails to re!i!e in p"rs"ance of the said order, re!iew s"ch order on a reference in that #ehalf from any a ency referred to in s"#/ section G3H of section $2$A or on its own motion and pass a fresh order in respect of s"ch company "nder s"#/section G3HL G#H if the operatin a ency specified in an order made "nder s"#/section G3H ma;es a s"#mission in that #ehalf, re!iew s"ch order and modify the order in s"ch manner as it may deem appropriate.

G2H

G3H

G$H

'2' . Preparation and sanction o! schemes

G1H =here an order is made "nder s"#/section G3H of section $2$* in relation to any sic; ind"strial company, the operatin a ency specified in the order shall prepare as expeditio"sly as possi#le and ordinarily within a period of sixty days from the date of s"ch order, ha!in re ard to the "idelines framed #y the 8eser!e 0an; of India in this #ehalf, a scheme with respect to s"ch company pro!idin for any one or more of the followin meas"res, namelyKM GaH G#H GcH the financial reconstr"ction of s"ch ind"strial companyL the proper mana ement of s"ch ind"strial company #y chan e in, or ta;e o!er of, the mana ement of s"ch ind"strial companyL the amal amation ofM GiH GiiH s"ch ind"strial company with any other companyL or any other company with s"ch ind"strial company Ghereafter in this section, in the case of s"#/cla"se GiH, the other company, and in the case of s"#/cla"se GiiH, s"ch ind"strial company, referred to as "transferee/company"HL

GdH GeH

the sale or lease of a part or whole of any ind"strial "nderta;in of s"ch ind"strial companyL the rationalisation of mana erial personnel, s"per!isory staff and wor;men in accordance with lawL

GfH G H GhH

s"ch other pre!enti!e ameliorati!e and remedial meas"res as may #e appropriateL

G2H

repayment of de#tL s"ch incidental, conseD"ential or s"pplemental meas"res as may #e necessary or expedient in connection with or for the p"rposes of the meas"res specified in cla"ses GaH to G HK Provided that the .ri#"nal may extend the said period of sixty days to ninety days for reasons to #e recorded in writin for s"ch extension. .he scheme referred to in s"#/section G1H may pro!ide for any one or more of the followin , namelyKM GaH the constit"tion, name and re istered office, the capital, assets, powers, ri hts, interests, a"thorities and pri!ile es, d"ties and o#li ations of the sic; ind"strial company or, as the case may #e, of the transferee companyL the transfer to the transferee company of the #"siness, properties, assets and lia#ilities of the sic; ind"strial company on s"ch terms and conditions as may #e specified in the schemeL any chan e in the 0oard of directors, or the appointment of a new 0oard of directors, of the sic; ind"strial company and the a"thority #y whom, the manner in which and the other terms and conditions on which, s"ch chan e or appointment shall #e made and in the case of appointment of a new 0oard of directors or of any director, the period for which s"ch appointment shall #e madeL the alteration of the memorand"m or articles of association of the sic; ind"strial company or, as the case may #e, of the transferee company for the p"rpose of alterin the capital str"ct"re thereof, or for s"ch other p"rposes as may #e necessary to i!e effect to the reconstr"ction or amal amationL the contin"ation #y or a ainst the sic; ind"strial company or, as the case may #e, the transferee company of any action or other le al proceedin pendin a ainst the sic; ind"strial company immediately #efore the date of the order made "nder s"#/section G3H of section $2$*L the red"ction of the interest or ri hts which the shareholders ha!e in the sic; ind"strial company to s"ch extent as the .ri#"nal considers necessary in the interests of the reconstr"ction, re!i!al or reha#ilitation or repayment of de#ts of s"ch sic; ind"strial company or for the maintenance of the #"siness of s"ch ind"strial companyL the allotment to the shareholders of the sic; ind"strial company, of shares in s"ch company or, as the case may #e, in the transferee company and where any shareholder claims payment in cash and not allotment of shares, or where it is not possi#le to allot shares to any shareholder, the payment of cash to those shareholders in f"ll satisfaction of their claimsM GiH in respect of their interest in shares in the sic; ind"strial company #efore its reconstr"ction or amal amationL or GiiH where s"ch interest has #een red"ced "nder cla"se GfH in respect of their interest in shares as so red"cedL any other terms and conditions for the reconstr"ction or amal amation of the sic; ind"strial companyL sale of the ind"strial "nderta;in of the sic; ind"strial company free from all enc"m#rances and all lia#ilities of the company or other s"ch enc"m#rances and lia#ilities as may #e specified, to any person, incl"din a co/operati!e society formed #y the employees of s"ch "nderta;in and fixin of reser!e price for s"ch saleL lease of the ind"strial "nderta;in of the sic; ind"strial company to any person, incl"din a co/ operati!e society formed #y the employees of s"ch "nderta;in L method of sale of assets of the ind"strial "nderta;in of the sic; ind"strial company s"ch as #y p"#lic a"ction or #y in!itin tenders or in any other manner as may #e specified and for the manner of p"#licity thereforL iss"e of the shares in the sic; ind"strial company at the face !al"e or at the intrinsic !al"e which may #e at disco"nt !al"e or s"ch other !al"e as may #e specified to any ind"strial company or any person incl"din the exec"ti!es and employees of s"ch sic; ind"strial companyL s"ch incidental, conseD"ential and s"pplemental matters as may #e necessary to sec"re that the reconstr"ction or amal amation or other meas"res mentioned in the scheme are f"lly and effecti!ely carried o"t.

G#H GcH

GdH

GeH

GfH

G H

GhH GiH

GCH G;H

GlH

GmH

G3HGaH

G#H GcH

G$H

.he scheme prepared #y the operatin a ency shall #e examined #y the .ri#"nal and a copy of the scheme with modification, if any, made #y the .ri#"nal shall #e sent, in draft, to the sic; ind"strial company and the operatin a ency and in the case of amal amation, also to any other company concerned, and the .ri#"nal may p"#lish or ca"se to #e p"#lished the draft scheme in #rief in s"ch daily newspapers as the .ri#"nal may consider necessary, for s" estions and o#Cections, if any, within s"ch period as the .ri#"nal may specify. .he complete draft scheme shall #e ;ept at the place where re istered office of the company is sit"ated or at s"ch places as mentioned in the ad!ertisement. .he .ri#"nal may ma;e s"ch modifications, if any, in the draft scheme as it may consider necessary in the li ht of the s" estions and o#Cections recei!ed from the sic; ind"strial company and the operatin a ency and also from the transferee company and any other company concerned in the amal amation and from any shareholder or any creditors or employees of s"ch companiesK Provided that where the scheme relates to amal amation, the said scheme shall #e laid #efore the company other than the sic; ind"strial company in the eneral meetin for the appro!al of the scheme #y its shareholders and no s"ch scheme shall #e proceeded with "nless it has #een appro!ed, with or witho"t modification, #y a special resol"tion passed #y the shareholders of the transferee company. .he scheme may thereafter #e sanctioned, within sixty days #y the .ri#"nal Ghereinafter referred to as the sanctioned schemeH and shall come into force on s"ch date as the .ri#"nal may specify in this #ehalfK Provided that the .ri#"nal may extend the said period of sixty days to ninety days for reasons to #e recorded in writin for s"ch extensionK

G'H

Provided !urther that different dates may #e specified for different pro!isions of the scheme. .he .ri#"nal may, on the recommendations of the operatin a ency or otherwise, re!iew any sanctioned scheme and ma;e s"ch modifications as it may deem fit or may #y order in writin direct any operatin a ency specified in the order, ha!in re ard to s"ch "idelines incl"din the "idelines framed #y the 8eser!e 0an; of India in this #ehalf in order to prepare a fresh scheme pro!idin for s"ch meas"res as the operatin a ency may consider necessary. =hen a fresh scheme is prepared "nder s"#/section G'H, the pro!isions of s"#/sectionsG3H and G$H shall apply in relation thereto as they apply to in relation to a scheme prepared "nder s"#/section G1H. =here a sanctioned scheme pro!ides for the transfer of any property or lia#ility of the sic; ind"strial company in fa!o"r of any other company or person or where s"ch scheme pro!ides for the transfer of any property or lia#ility of any other company or person in fa!o"r of the sic; ind"strial company, then, #y !irt"e of, and to the extent pro!ided in, the scheme, on and from the date of comin into operation of the sanctioned scheme or any pro!ision thereof, the property shall #e transferred to, and !est in, and the lia#ility shall #ecome the lia#ility of, s"ch other company or person or, as the case may #e, the sic; ind"strial company. .he sanction accorded #y the .ri#"nal "nder s"#/section G$H shall #e concl"si!e e!idence that all the reD"irements of this scheme relatin to the reconstr"ction or amal amation, or any other meas"re specified therein ha!e #een complied with and a copy of the sanctioned scheme certified in writin #y an officer of the .ri#"nal to #e a tr"e copy thereof, shall, in all le al proceedin s Gwhether in appeal or otherwiseH, #e admitted as e!idence. A copy of the sanctioned scheme referred to in s"#/section G)H shall #e filed with the 8e istrar within the prescri#ed time #y the company in respect of which s"ch scheme relates. :n and from the date of the comin into operation of the sanctioned scheme or any pro!ision thereof, the scheme or s"ch pro!ision shall #e #indin on the sic; ind"strial company and the transferee company or, as the case may #e, the other company and also on the shareholders, creditors and "arantors and employees of the said companies. .he creditors of a sic; ind"strial company may also prepare a scheme for re!i!al or reha#ilitation of s"ch sic; ind"strial company and s"#mit the same to the .ri#"nal for its sanctionK Provided that no scheme shall #e s"#mitted #y the creditors to the .ri#"nal "nless s"ch scheme has #een appro!ed #y at least three/fo"rth in !al"e of creditors of the sic; ind"strial company.

G(H G7H

G)H

G,H G10H

G11H

G12H G13H

All the pro!isions relatin to the preparation of scheme #y the operatin a ency and sanction of s"ch scheme #y the .ri#"nal shall, as far as may #e, apply to the scheme referred to in s"#/section G11H. .he scheme referred to in s"#/section G11H if sanctioned #y the .ri#"nal shall #e #indin on all the creditors and on other concerned.

G1$H

G1'H

If any diffic"lty arises in i!in effect to the pro!isions of the sanctioned scheme, the .ri#"nal may, on the recommendation of the operatin a ency or otherwise, #y order, do anythin , not inconsistent with s"ch pro!isions, which appears to it to #e necessary or expedient for the p"rpose of remo!in the diffic"lty. .he .ri#"nal may, if it deems necessary or expedient so to do, #y order in writin , direct any operatin a ency specified in the order to implement a sanctioned scheme with s"ch terms and conditions and in relation to the sic; ind"strial company as may #e specified in the order. =here the whole of the "nderta;in of the sic; ind"strial company is sold "nder a sanctioned scheme, the .ri#"nal may distri#"te the sale proceeds to the parties entitled thereto in accordance with the pro!isions of section '2,A and other pro!isions of this Act. .he .ri#"nal may monitor periodically the implementation of the sanctioned scheme.

G1(H

G17H

'2'3. :eha&ilitation &% giving !inancial assistance

G1H =here the scheme relates to pre!enti!e, ameliorati!e, remedial and other meas"res with respect to the sic; ind"strial company, the scheme may pro!ide for financial assistance #y way of loans, ad!ances or "arantees or reliefs or concessions or sacrifices from the *entral +o!ernment, a State +o!ernment, any sched"led #an; or other #an;, a p"#lic financial instit"tion or State le!el instit"tion or any instit"tion or other a"thority Gany +o!ernment, #an;, instit"tion or other a"thority reD"ired #y a scheme to pro!ide for s"ch financial assistance #ein hereafter in this section referred to as the person reD"ired #y the scheme to pro!ide financial assistanceH to the sic; ind"strial company. 1!ery scheme referred to in s"#/section G1H shall #e circ"lated to e!ery person reD"ired #y the scheme to pro!ide financial assistance for his consent within a period of sixty days from the date of s"ch circ"lation or within s"ch f"rther period, not exceedin sixty days, as may #e allowed #y the .ri#"nal, and if no consent is recei!ed within s"ch period or f"rther period, it shall #e deemed that consent has #een i!en. =here in respect of any scheme the consent referred to in s"#/section G2H is i!en #y e!ery person reD"ired #y the scheme to pro!ide financial assistance, the .ri#"nal may, as soon as may #e, sanction the scheme and on and from the date of s"ch sanction the scheme shall #e #indin on all concerned. :n the sanction of the scheme "nder s"#/section G3H, the financial instit"tions and the #an;s reD"ired to pro!ide financial assistance, shall desi nate #y m"t"al a reement a financial instit"tion and a #an; from amon st themsel!es which shall #e responsi#le to dis#"rse financial assistance #y way of loans or ad!ances or "arantees or reliefs or concessions or sacrifices a reed to #e pro!ided or ranted "nder the scheme on #ehalf of all financial instit"tions and #an;s concerned. .he financial instit"tion and the #an; desi nated "nder s"#/section G$H shall forthwith proceed to release the financial assistance to the sic; ind"strial company in f"lfilment of the reD"irement in this re ard. =here in respect of any scheme consent "nder s"#/section G2H is not i!en #y any person reD"ired #y the scheme to pro!ide financial assistance, the .ri#"nal may adopt s"ch other meas"res, incl"din the windin "p of the sic; ind"strial company, as it may deem fit.

G2H

G3H

G$H

G'H

G(H

'2'5. Arrangement !or continuing operations, etc., during inDuir%

G1H At any time #efore completion of the inD"iry "nder section $2$0, the sic; ind"strial company or the *entral +o!ernment or the 8eser!e 0an; of India or a State +o!ernment or a p"#lic financial instit"tion or a State le!el instit"tion or a sched"led #an; or any other instit"tion, #an; or a"thority pro!idin or intendin to pro!ide any financial assistance #y way of loans or ad!ances or "arantees or reliefs, or concessions to s"ch ind"strial company may ma;e an application to the .ri#"nalM GaH a reein to an arran ement for contin"in the operations of the sic; ind"strial companyL or G#H s" estin a scheme for the financial reconstr"ction of the sic; ind"strial company. .he .ri#"nal may, within sixty days of the receipt of the application "nder s"#/section G1H, pass s"ch orders thereon as it may deem fit.

G2H

'2'-. ?inding up o! sic= industrial compan%

G1H

=here the .ri#"nal, after ma;in inD"iry "nder section $2$0 and after consideration of all the rele!ant facts and circ"mstances and after i!in an opport"nity of #ein heard to all concerned parties, is of the opinion that the sic; ind"strial company is not li;ely to ma;e its net worth exceed the acc"m"lated losses within a reasona#le time while meetin all its financial o#li ations and that the company as a res"lt thereof is not li;ely to #ecome !ia#le in f"t"re and that it is C"st and eD"ita#le that the company sho"ld #e wo"nd "p, it may record its findin s and order windin "p of the company. 3or the p"rpose of windin "p of the sic; ind"strial company, the .ri#"nal may appoint any officer of the operatin a ency, if the operatin a ency i!es its consent, as the liD"idator of s"ch ind"strial company and the officer so appointed shall for the p"rpose of the windin "p of s"ch sic; ind"strial company, #e deemed to #e, and ha!e all the powers of, the official liD"idator "nder this Act. 4otwithstandin anythin contained in s"#/section G2H, the .ri#"nal may ca"se to #e sold the assets of the sic; ind"strial company in s"ch manner as it may deem fit and pass orders for distri#"tion in accordance with the pro!isions of section '2,A, and other pro!isions of this Act. =itho"t preC"dice to the other pro!isions contained in this Act, the windin "p of a company shall, as far as may #e, concl"ded within one year from the date of the order made "nder s"#/section G1H.

G2H

G3H

G$H

'2'8. <perating agenc% to prepare complete inventor%, etc.

=here for the proper dischar e of the f"nctions of the .ri#"nal "nder this &art, the circ"mstances so reD"ire, the .ri#"nal may, thro" h any operatin a ency, ca"se to #e preparedM GaH with respect to a company a complete in!entory ofM GiH all assets and lia#ilities of whate!er nat"reL GiiH G#H GcH all #oo;s of acco"nt, re isters, maps, plans, records, doc"ments of title or ownership of property and all other doc"ments of whate!er nat"re relatin theretoL

a list of shareholders and a list of creditors showin separately in the list of creditors, the sec"red creditors and "nsec"red creditorsL a !al"ation report in respect of the shares and assets in order to arri!e at the reser!e price for the sale of a part or whole of the ind"strial "nderta;in of the company or for fixation of the lease rent or share exchan e ratioL an estimate of reser!e price, lease rent or share exchan e ratioL proforma acco"nts, where no "p/to/date a"dited acco"nts are a!aila#le.

GdH GeH

'2'".

irection not to dispose o! assets

.he .ri#"nal may, if it is of the opinion, that any direction is necessary in the interest of the sic; ind"strial company or creditors or shareholders or in the p"#lic interest, #y order, direct s"ch company not to dispose of, except with the prior appro!al of the .ri#"nal, any of its assets d"rin the period of inD"iry "nder section $2$0 or d"rin the period of preparation or consideration of the scheme "nder section $2$*.

'2'/. Power o! 0ri&unal to call !or periodic in!ormation

:n receipt of reference "nder section $2$A, the .ri#"nal may call for any periodic information from the company as to the steps ta;en #y the company to ma;e its net worth exceed the acc"m"lated losses or to ma;e repayment of its de#ts referred to in that section, as the case may #e, and the company shall f"rnish s"ch information.

'2';. (is!easance proceedings

G1H

If, in the co"rse of scr"tiny or implementation of any scheme or proposal, it appears to the .ri#"nal that any person who has ta;en part in the promotion, formation or mana ement of the sic; ind"strial company or its "nderta;in , incl"din any past or present director, mana er or officer or employee of the sic; ind"strial companyM GaH has misapplied or retained, or #ecome lia#le or acco"nta#le for, any money or property of the sic; ind"strial companyL or G#H has #een "ilty of any misfeasance, malfeasance or non/feasance of #reach of tr"st in relation to the sic; ind"strial company, the .ri#"nal may, #y order, direct him to repay or restore the money or property or any part thereof, with or witho"t interest, as it thin;s C"st, or to contri#"te s"ch s"m to the assets of the sic; ind"strial company or the other person, entitled thereto #y way of compensation in respect of the misapplication, retainer, misfeasance or #reach of tr"st as the .ri#"nal thin;s C"st, and also report the matter to the *entral +o!ernment for any other action which that +o!ernment may deem fit. If the .ri#"nal is satisfied on the #asis of the information and e!idence in its possession with respect to any person who is or was a director or an officer or other employee of the sic; ind"strial company, that s"ch person #y himself or alon with others had di!erted the f"nds or other property of s"ch company for any p"rpose other than a #ona fide p"rpose of the company or had mana ed the affairs of the company in a manner hi hly detrimental to the interests of the company, the .ri#"nal shall #y order, direct the p"#lic financial instit"tions, sched"led #an;s and State le!el instit"tions not to pro!ide, d"rin a period of ten years from the date of the order, any financial assistance to s"ch person or any firm of which s"ch person is a partner or any company or other #ody corporate of which s"ch person is a director G#y whate!er name calledH. 4o order shall #e made #y the .ri#"nal "nder this section a ainst any person "nless s"ch person has #een i!en an opport"nity for ma;in his s"#missions. .his section shall apply notwithstandin that the matter is one for which the person may #e criminally lia#le.

G2H

G3H G$H

'2'4. Penalt% !or certain o!!ences

G1H =hoe!er !iolates the pro!isions of this &art or any scheme, or any order, of the .ri#"nal or the Appellate .ri#"nal or ma;es a false statement or i!es false e!idence to the .ri#"nal or the Appellate .ri#"nal, and attempts to tamper the records of reference or appeal filed "nder this Act, he shall #e p"nisha#le with simple imprisonment for a term which may extend to three years or shall #e lia#le to fine not exceedin ten la;h r"pees. 4o co"rt shall ta;e co niFance of any offence "nder s"#/section G1H except on a complaint in writin of an officer of the .ri#"nal or the Appellate .ri#"nal or any officer of the *entral +o!ernment a"thorised #y it or any officer of an operatin a ency as may #e a"thorised in this #ehalf #y the .ri#"nal or the Appellate .ri#"nal, as the case may #e.B

G2H

PART VII:
Chapter "J

WINDING UP
Preliminar% Modes of 1inding 2p

'2). (odes o! winding up

G1H .he windin "p of a company may #e either/ GaH #y the (aA.ri#"nalBL or G#H GcH !ol"ntaryL (aAomittedB (a AomittedB

G2H

.he pro!isions of this Act with respect to windin "p apply, "nless the contrary appears, to the windin "p of a company in any of those modes.

Contributories '2*. 4ia&ilit% as contri&utories o! present and past mem&ers

G1H In the e!ent of a company #ein wo"nd "p, e!ery present and past mem#er shall #e lia#le to contri#"te to the assets of the company to an amo"nt s"fficient for payment of its de#ts and lia#ilities and the costs, char es and expenses of the windin "p, and for the adC"stment of the ri hts of the contri#"tories amon themsel!es, s"#Cect to the pro!isions of section $27 and s"#Cect also to the followin D"alifications, namelyK/ GaH a past mem#er shall not #e lia#le to contri#"te if he has ceased to #e a mem#er for one year or "pwards #efore the commencement of the windin "pL G#H a past mem#er shall not #e lia#le to contri#"te in respect of any de#t or lia#ility of the company contracted after he ceased to #e a mem#erL GcH no past mem#er shall #e lia#le to contri#"te "nless it appears to the (aA.ri#"nalB that the present mem#ers are "na#le to satisfy the contri#"tions reD"ired to #e made #y them in p"rs"ance of this ActL GdH in the case of a company limited #y shares, no contri#"tion shall #e reD"ired from any past or present mem#er exceedin the amo"nt, if any, "npaid on the shares in respect of which he is lia#le as s"ch mem#erL in the case of a company limited #y "arantee, no contri#"tion shall, s"#Cect to the pro!isions of s"#/section G2H, #e reD"ired from any past or present mem#er exceedin the amo"nt "nderta;en to #e contri#"ted #y him to the assets of the company in the e!ent of its #ein wo"nd "pL

GeH

GfH

G2H

nothin in this Act shall in!alidate any pro!ision contained in any policy of ins"rance or other contract where#y the lia#ility of indi!id"al mem#ers on the policy or contract is restricted, or where#y the f"nds of the company are alone made lia#le in respect of the policy or contractL G H a s"m d"e to any past or present mem#er of the company in his character as s"ch, #y way of di!idends, profits or otherwise, shall not #e deemed to #e a de#t of the company paya#le to that mem#er, in a case of competition #etween himself and 2,'Aany creditor claimin otherwise than in the character of a past or present mem#er of the companyBL #"t any s"ch s"m shall #e ta;en into acco"nt for the p"rpose of the final adC"stment of the ri hts of the contri#"tors amon themsel!es. In the windin "p of a company limited #y "arantee which has a share capital, e!ery mem#er of the company shall #e lia#le, in addition to the amo"nt "nderta;en to #e contri#"ted #y him to the assets of the company in the e!ent of its #ein wo"nd "p, to contri#"te to the extent of any s"ms "npaid on any shares held #y him as if the company were a company limited #y shares.

'2+. <&ligations o! directors GKKKH and managers whose lia&ilit% is unlimited

In the windin "p of a limited company, any director AJJJB or mana er, whether past or present, whose lia#ility is, "nder the pro!isions of this Act, "nlimited, shall in addition to his lia#ility, if any, to contri#"te as an ordinary mem#er, #e lia#le to ma;e a f"rther contri#"tion as if he were, at the commencement of the windin "p, a mem#er of an "nlimited companyK Provided that1 GaH a past director AJJJBor mana er shall not #e lia#le to ma;e s"ch f"rther contri#"tion, if he has ceased to hold office for a year or "pwards #efore the commencement of the windin "pL G#H a past director AJJJB or mana er shall not #e lia#le to ma;e s"ch f"rther contri#"tion in respect of any de#t or lia#ility of the company contracted after he ceased to hold officeL GcH s"#Cect to the articles of the company, a director, AJJJB or mana er shall not #e lia#le to ma;e s"ch f"rther contri#"tion, "nless the (aA.ri#"nalB deems it necessary to reD"ire the contri#"tion in order to satisfy the de#ts and lia#ilities of the company, and the costs, char es and expenses of the windin "p.

'2,.

e!inition o! $contri&utor%$

.he term "contri#"tory" means, e!ery person lia#le to contri#"te to the assets of a company in the e!ent of its #ein wo"nd "p, and incl"des the holder of any shares which are f"lly paid "pL and for the p"rposes of all proceedin s for determinin , and all proceedin s prior to the final determination of, the persons who are to #e deemed contri#"tories, incl"des any person alle ed to #e a contri#"tory.

'2.. 6ature o! lia&ilit% o! contri&utor%

G1H G2H .he lia#ility of a contri#"tory shall create a de#t accr"in d"e from him at the time when his lia#ility commenced, #"t paya#le at the times specified in calls made on him for enforcin the lia#ility. 4o claim fo"nded on the lia#ility of a contri#"tory shall #e co niFa#le #y any *o"rt of Small *a"ses sittin o"tside the presidency towns.

'#0. Contri&utories in case o! death o! mem&er

G1H If a contri#"tory dies either #efore or after he has #een placed on the list of contri#"tories, his le al representati!es shall #e lia#le in d"e co"rse of administration, to contri#"te to the asset of the company in dischar e of his lia#ility, and shall #e contri#"tories accordin ly. If the le al representati!es ma;e defa"lt in payin any money ordered to #e paid #y them, proceedin s may #e ta;en for administerin the estate of the deceased contri#"tory and compellin payment thereo"t of the money d"e. 3or the p"rposes of this section, where the deceased contri#"tory was a mem#er of a 6ind" Coint family o!erned #y the %ita;shara School of 6ind" 2aw, his le al representati!es shall #e deemed to incl"de the s"r!i!in coparceners.

G2H

G3H

'#1. Contri&utories in case o! insolvenc% o! mem&er

If a contri#"tory is adC"d ed insol!ent, either #efore or after he has #een placed on the list of contri#"tories,/ GaH his assi nees in insol!ency shall represent him for all the p"rposes of the windin "p, and shall #e contri#"tories accordin ly, and may #e called on to admit to proof a ainst the estate of the insol!ent, or otherwise to allow to #e paid o"t of his assets in d"e co"rse of law, any money d"e from the insol!ent in respect of his lia#ility to contri#"te to the assets of the companyL and G#H there may #e pro!ed a ainst the estate of the insol!ent the estimated !al"e of his lia#ility to f"t"re calls as well as calls already made.

'#2. Contri&utories in case o! winding up o! a &od% corporate which is a mem&er

If a #ody corporate which is a contri#"tory is ordered to #e wo"nd "p, either #efore or after it has #een placed on the list of contri#"tories,/ GaH the liD"idator of the #ody corporate shall represent it for all the p"rposes of the windin "p of the company and shall #e a contri#"tory accordin ly, and may #e called on to admit to proof a ainst the assets of the #ody corporate, or otherwise to allow to #e paid o"t of its assets in d"e co"rse of law, any money d"e from the #ody corporate in respect of its lia#ility of contri#"te to the assets of the companyL and there may #e pro!ed a ainst the assets of the #ody corporate the estimated !al"e of its lia#ility to f"t"re calls as well as calls already made.

G#H

Chapter ""J

?inding up &% the *aG0ri&unalH

Cases in which company may be wound up by the /a$Tribunal% *a'##. Circumstances in which compan% ma% &e wound up &% 0ri&unal
A company may #e wo"nd "p #y the .ri#"nal, M GaH if the company has, #y special resol"tion, resol!ed that the company #e wo"nd "p #y the .ri#"nalL G#H GcH GdH GeH GfH G H if defa"lt is made in deli!erin the stat"tory report to the 8e istrar or in holdin the stat"tory meetin L if the company does not commence its #"siness within a year from its incorporation, or s"spends its #"siness for a whole yearL if the n"m#er of mem#ers is red"ced, in the case of a p"#lic company, #elow se!en, and in the case of a pri!ate company, #elow twoL if the company is "na#le to pay its de#tsL

if the .ri#"nal is of the opinion that it is C"st and eD"ita#le that the company sho"ld #e wo"nd "pL if the company has made a defa"lt in filin with the 8e istrar its #alance sheet and profit and loss acco"nt or ann"al ret"rn for any fi!e consec"ti!e financial yearsL GhH if the company has acted a ainst the interests of the so!erei nty and inte rity of India, the sec"rity of the State, friendly relations with forei n States, p"#lic order, decency or moralityL GiH if the .ri#"nal is of the opinion that the company sho"ld #e wo"nd "p "nder the circ"mstances specified in section $2$+K Provided that the .ri#"nal shall ma;e an order for windin "p of a company "nder cla"se GhH on application made #y the *entral +o!ernment or a State +o!ernmentB

'#'. Compan% when deemed una&le to pa% its de&ts

G1H A company shall #e deemed to #e "na#le to pay its de#ts/ GaH if a creditor, #y assi nment or otherwise, to whom the company is inde#ted in a s"m exceedin (a Aone la;h r"peesB then d"e, has ser!ed on the company, #y ca"sin it to #e deli!ered at its re istered office, #y re istered post or otherwise, a demand "nder his hand reD"irin the company to pay the s"m so d"e and the company has for three wee;s thereafter ne lected to pay the s"m, or to sec"re or compo"nd for it to the reasona#le satisfaction of the creditorL G#H GcH if exec"tion or other process iss"ed on a decree or order of (aAany *o"rt or .ri#"nalB in fa!o"r of a creditor of the company is ret"rned "nsatisfied in whole or in partL or

G2H

if it is pro!ed to the satisfaction of the (aA.ri#"nalB that the company is "na#le to pay its de#ts, and, in determinin whether a company is "na#le to pay its de#ts, the (aA.ri#"nalB shall ta;e into acco"nt the contin ent and prospecti!e lia#ilities of the company. .he demand referred to in cla"se GaH of s"#/section G1H shall #e deemed to ha!e #een d"ly i!en "nder the hand of the creditor if it is si ned #y any a ent or le al ad!iser d"ly a"thorised on his #ehalf, or in the case of a firm, if it is si ned #y any s"ch a ent or le al ad!iser or #y any mem#er of the firm.
(a (a

$3'.

A:mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 1$th -an"ary. 2003B

$3(. A:mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 1$th -an"ary. 2003B $37. (aA:mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 1$th -an"ary. 2003B $3).
(a

A:mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 1$th -an"ary. 2003B

'#.. Provisions as to applications !or winding up

G1H An application to the (aA.ri#"nalB for the windin "p of a company shall #e #y petition presented, s"#Cect to the pro!isions of this section,/

GaH G#H GcH GdH GeH GfH

(a

#y the companyL or #y any creditor or creditors, incl"din any contin ent or prospecti!e creditor or creditorsL or #y any contri#"tory or contri#"toriesL or #y all or any of the parties specified in cla"ses GaH, G#H and GcH, whether to ether or separatelyL or #y the 8e istrarL or in a case fallin "nder section 2$3, #y any person a"thorised #y the *entral +o!ernment in that #ehalf.

AG2H in a case fallin "nder cla"se ( H of section $33, #y the *entral +o!ernment or a State +o!ernmentLB

G2H

A sec"red creditor, the holder of any de#ent"res Gincl"din de#ent"re stoc;H, whether or not any tr"stee or tr"stees ha!e #een appointed in respect of s"ch and other li;e de#ent"res, and the tr"stee for the holders of de#ent"res, shall #e deemed to #e creditors within the meanin of cla"se G#H of s"#/ section G1H. A contri#"tory shall #e entitled to present a petition for windin "p a company, notwithstandin that he may #e the holder of f"lly paid/"p shares, or that the company may ha!e no assets at all, or may ha!e no s"rpl"s assets left for distri#"tion amon the shareholders after the satisfaction of its lia#ilities. A contri#"tory shall not #e entitled to present a petition for windin "p a company "nless/ GaH G#H either the n"m#er of mem#ers is red"ced, in the case of a p"#lic company, #elow se!en, and, in the case of a pri!ate company, #elow twoL or the shares in respect of which he is a contri#"tory, or some of them, either were ori inally allotted to him or ha!e #een held #y him, and re istered in his name, for at least six months d"rin the ei hteen months immediately #efore the commencement of the windin "p, or ha!e de!ol!ed on him thro" h the death of a former holder.

G3H

G$H

G'H

G(H G7H

1xcept, in the case where he is a"thorised in p"rs"ance of cla"se GfH of s"#/section G1H, the 8e istrar shall #e entitled to present a petition for windin "p a company only on the ro"nds specified in 2,7 Acla"ses G#H, GcH, GdH, GeH, (aAGfH and G HB of section $33K Provided that the 8e istrar shall not present a petition on the ro"nd specified in cla"se GeH aforesaid, "nless it appears to him either from the financial condition of the company as disclosed in its #alance sheet or from the report of Aa special a"ditor appointed "nder section 233A or an inspectorB appointed "nder section 23' or 237, that the company is "na#le to pay its de#tsK Provided !urther that the 8e istrar shall o#tain the pre!io"s sanction of the *entral +o!ernment to the presentation of the petition on any of the ro"nds aforesaid. .he *entral +o!ernment shall not accord its sanction in p"rs"ance of the fore oin pro!iso, "nless the company has first #een afforded an opport"nity of ma;in its representations, if any. A petition for windin "p a company on the ro"nd specified in cla"se G#H of section $33 shall not #e presented/ GaH except #y the 8e istrar or #y a contri#"toryL or G#H #efore the expiration of fo"rteen days after the last day on which the stat"tory meetin referred to in cla"se G#H aforesaid o" ht to ha!e #een held.

G)H

0efore a petition for windin "p a company presented #y a contin ent or prospecti!e creditor is admitted, the lea!e of the (aA.ri#"nalB shall #e o#tained for the admission of the petition and s"ch lea!e shall not #e ranted/ GaH "nless, in the opinion of the (aA.ri#"nalB, there is a prima facie case for windin "p the companyL and G#H "ntil s"ch sec"rity for costs has #een i!en as the (aA.ri#"nalB, thin;s reasona#le.

*a'#.A.
G1H G2H

Statement o! a!!airs to &e !iled on winding up o! a compan%

1!ery company shall file with the .ri#"nal a statement of its affairs alon with the petition for windin "p. =here a company opposes a petition for its windin "p, it shall file with the .ri#"nal a statement of its affairs.

G3H

.he statement of affairs referred to in s"#/section G1H or s"#/section G2H shall #e accompanied #yM GaH G#H GcH GdH GeH the last ;nown addresses of all directors and company secretary of s"ch companyL the details of location of assets of the company and their !al"eL the details of all de#tors and creditors with their complete addressesL the details of wor;men and other employees and any amo"nt o"tstandin to themL s"ch other details as the .ri#"nal may direct.B

''0. *a:ight to present winding up petition where compan% is &eing wound up voluntaril%
G1H =here a company is #ein wo"nd "p !ol"ntarily, a petition for its windin "p #y the .ri#"nal may #e presented #yM GaH G#H G2H any person a"thorised to do so "nder section $3,L or the :fficial 2iD"idator.

.he .ri#"nal shall not ma;e a windin "p order on a petition presented to it "nder s"#section G1H, "nless it is satisfied that the !ol"ntary windin "p cannot #e contin"ed with d"e re ard to the interests of the creditors or contri#"tories or #oth.B

(a

''1. Commencement o! winding up &% 0ri&unal

G1H =here, #efore the presentation of a petition for the windin "p of a company #y the .ri#"nal, a resol"tion has #een passed #y the company for !ol"ntary windin "p, the windin "p of the company shall #e deemed to ha!e commenced at the time of the passin of the resol"tion, and "nless the .ri#"nal, on proof of fra"d or mista;e, thin;s fit to direct otherwise, all proceedin s ta;en in the !ol"ntary windin "p shall #e deemed to ha!e #een !alidly ta;en. In any other case, the windin "p of a company #y the .ri#"nal shall #e deemed to commence at the time of the presentation of the petition for the windin "p.B

G2H

''1A. *a4ev% and collection o! cess on turnover or gross receipts o! companies

G1H .here shall #e le!ied and collected, for the p"rposes of reha#ilitation or re!i!al or protection of assets of the sic; ind"strial company, a le!y #y way of cess at s"ch rate not less than 0.00' per cent. and not more than 0.1 per cent. on the !al"e of ann"al t"rno!er of e!ery company or its ann"al ross receipt, whiche!er is more as the *entral +o!ernment may, from time to time, specify #y notification in the :fficial +aFette. 1!ery company shall pay to the *entral +o!ernment the cess referred to in s"#/section G1H within three months from the close of e!ery financial year. 1!ery company shall f"rnish, in s"ch form as may #e prescri#ed, to the *entral +o!ernment and the .ri#"nal the details of its t"rno!er and ross receipts with payment of cess "nder s"#/section G1H. .he *entral +o!ernment may, #y r"les made in this #ehalf, specify the manner in which the cess shall #e paid "nder s"#/section G2H.B

G2H G3H G$H

''12. *aCrediting proceeds o! cess to Consolidated 5und o! "ndia

.he proceeds of the cess le!ied and collected "nder section $$1A shall first #e credited to the *onsolidated 3"nd of India and the *entral +o!ernment may, if &arliament #y appropriation made #y law in this #ehalf so pro!ides, pay to the .ri#"nal, from time to time, o"t of s"ch proceeds Gafter ded"ctin the cost of collectionH, s"ch s"ms of money as it may thin; fit for #ein "tilised for the p"rposes of the 3"nd.B

''1C. *a:eha&ilitation and revival 5und

G1H G2H

.here shall #e formed for the p"rposes of reha#ilitation or re!i!al or protection of assets of a sic; ind"strial company, a 3"nd to #e called the 8eha#ilitation and 8e!i!al 3"nd. .here shall #e credited to the 3"nd M GaH G#H GcH GdH GeH all amo"nts paid "nder section $$10L any amo"nt i!en as rants #y the *entral +o!ernment for the p"rposes of this 3"ndL any amo"nt i!en to the 3"nd from any other so"rceL any income from in!estment of the amo"nt in the 3"ndL amo"nt ref"nded #y the company "nder section $$1+.B

(a

''1 . Application o! 5und

.he 3"nd shall #e applied #y the .ri#"nal for the p"rpose ofM GaH G#H GcH GdH ma;in interim payment of wor;menIs d"es pendin the re!i!al or reha#ilitation of the sic; ind"strial companyL or payment of wor;menIs d"es d"e to the wor;men, referred to in s"#/section G3H of section '2,, of the sic; ind"strial companyL or protection of assets of sic; ind"strial companyL or re!i!al or reha#ilitation of sic; ind"strial companyL

which in the opinion of the .ri#"nal are necessary or expedient for the said p"rposes.B

''13. *aPower to call !or in!ormation

.he *entral +o!ernment or .ri#"nal may reD"ire any company to f"rnish for the p"rposes of reha#ilitation or re!i!al or protection of assets of sic; ind"strial companies, s"ch statistical and other information in s"ch form and within s"ch period as may #e prescri#ed.

''15. *aPenalt% !or non1pa%ment o! cess

G1H If any cess paya#le #y a company "nder section $$1A is not paid in accordance with the pro!isions of that section, it shall #e deemed to #e in arrears and the same shall #e reco!ered #y the .ri#"nal in s"ch manner as may #e prescri#ed. .he .ri#"nal may, after s"ch inD"iry as it deems fit, impose on the company, which is in arrears "nder s"#/section G1H, a penalty not exceedin ten times the amo"nt in arrearsK Provided that #efore imposin s"ch penalty, s"ch company shall #e i!en a reasona#le opport"nity of #ein heard, and if, after s"ch hearin , the .ri#"nal is satisfied that the defa"lt was for any ood and s"fficient reason, no penalty shall #e imposed "nder this s"#/section.B

G2H

*a''1-.
G1H

:e!und o! !und in certain cases

G2H

=here the f"nd has #een applied #y the .ri#"nal for any of the p"rposes specified in cla"ses GaH to GdH of section $$1D, s"ch amo"nt of f"nd shall #e reco!ered from the company after its re!i!al or reha#ilitation or o"t of sale proceeds of its assets after dischar in the stat"tory lia#ilities and payment of d"es to creditors. .he amo"nt referred to in s"#/section G1H shall #e reco!ered in the manner as the .ri#"nal may direct.B

''2. Powers o! *aG0ri&unalH

6a

Omitted by " e !ompanies (,e$ond Amendment# A$t% 2--2 dated 14t *anuary( 2--3(

*a''#. Power o! 0ri&unal on hearing petition

G1H :n hearin a windin "p petition, the .ri#"nal mayM GaH dismiss it, with or witho"t costsL or G#H GcH GdH adCo"rn the hearin conditionally or "nconditionallyL or ma;e any interim order that it thin;s fitL or ma;e an order for windin "p the company with or witho"t costs, or any other order that it thin;s fitK

G2H

G3H

Provided that the .ri#"nal shall not ref"se to ma;e a windin "p order on the ro"nd only that the assets of the company ha!e #een mort a ed to an amo"nt eD"al to or in excess of those assets, or that the company has no assets. =here the petition is presented on the ro"nd that it is C"st and eD"ita#le that the company sho"ld #e wo"nd "p, the .ri#"nal may ref"se to ma;e an order of windin "p, if it is of the opinion that some other remedy is a!aila#le to the petitioners and that they are actin "nreasona#ly in see;in to ha!e the company wo"nd "p instead of p"rs"in that other remedy. =here the petition is presented on the ro"nd of defa"lt in deli!erin the stat"tory report to the 8e istrar, or in holdin the stat"tory meetin , the .ri#"nal mayM GaH instead of ma;in a windin "p order, direct that the stat"tory report shall #e deli!ered or that a meetin shall #e heldL and G#H order the costs to #e paid #y any persons who, in the opinion of the .ri#"nal, are responsi#le for the defa"lt.B

'''. *a<rder !or winding up to &e communicated to <!!icial 4iDuidator and :egistrar
=here the .ri#"nal ma;es an order for the windin "p of the company, the .ri#"nal, shall within a period not exceedin two wee;s from the date of passin of the order, ca"se intimation thereof to #e sent to the :fficial 2iD"idator and the 8e istrar.

''). Cop% o! winding up order to &e !iled with :egistrar

G1H :n the ma;in of a windin "p order, it shall #e the d"ty of the petitioner in the windin "p proceedin s and of the company to file with the 8e istrar a certified copy of the order, within Athirty daysB from the date of the ma;in of the order. If defa"lt is made in complyin with the fore oin pro!ision, the petitioner, or as the case may reD"ire, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aone tho"sand r"peesB for each day d"rin which the defa"lt contin"es. In comp"tin the period of Athirty daysB from the date of the ma;in of a windin "p order "nder s"#/ section G1H, the time reD"isite for o#tainin a certified copy of the order shall #e excl"ded.B :n the filin of a certified copy of the windin "p order, the 8e istrar shall ma;e a min"te thereof in his #oo;s relatin to the company, and shall notify in the :fficial +aFette that s"ch an order has #een made. S"ch order shall #e deemed to #e notice of dischar e to the officers and employees of the company, except when the #"siness of the company is contin"ed.

AG1AH G2H

G3H

''*. Suits sta%ed on winding up order

G1H =hen a windin "p order has #een made or the :fficial 2iD"idator has #een appointed as pro!isional liD"idator, no s"it or other le al proceedin shall #e commenced, or if pendin at the date of the windin "p order, shall #e proceeded with, a ainst the company, except #y lea!e of the (aA.ri#"nalB and s"#Cect to s"ch terms as the (aA.ri#"nalB may impose.

AG2H

.he (aA.ri#"nalB shall, notwithstandin anythin contained in any other law for the time #ein in force, ha!e C"risdiction to entertain, or dispose of/ GaH any s"it or proceedin #y or a ainst the companyL G#H GcH GdH any claim made #y or a ainst the company Gincl"din claims #y or a ainst any of its #ranches in IndiaHL

any application made "nder section 3,1 #y or in respect of the companyL any D"estion of priorities or any other D"estion whatsoe!er, whether of law or fact, which may relate to or arise in co"rse of the windin "p of the companyL whether s"ch s"it or proceedin has #een instit"ted, or is instit"ted, or s"ch claim or D"estion has arisen or arises or s"ch application has #een made or is made #efore or after the order for the windin "p of the company, or #efore or after the commencement of the *ompanies GAmendmentH Act, 1,(0. G3H AG$H A:mitted #y .he *ompanies GSecond AmendmentH Act, 2002 dated 1$th -an"ary. 2003B. 4othin in s"#/section G1H or s"#/section G3H shall apply to any proceedin pendin in appeal #efore the S"preme *o"rt or a 6i h *o"rt.B
(a

*a''*A. :esponsi&ilit% o! directors and o!!icers to su&mit to 0ri&unal audited &oo=s o! account
.he directors and other officers of e!ery company shall ens"re that #oo;s of acco"nt of the company are completed and a"dited "p to date of windin "p order made #y the .ri#"nal and s"#mitted to it at the cost of the company, failin which s"ch directors and officers shall #e lia#le for p"nishment for a term not exceedin one year and a fine for an amo"nt not exceedin one la;h r"pees.B

''+. 3!!ect o! winding up order

An order for windin "p a company shall operate in fa!o"r of all the creditors and of all the contri#"tories of the company as if it had #een made o"t on the Coint petition of a creditor and of a contri#"tory.

'',. *aAppointment o! <!!icial 4iDuidator

G1H 3or the p"rposes of this Act, so far as it relates to the windin "p of a company #y the .ri#"nal, there shall #e an :fficial 2iD"idator whoM GaH may #e appointed from a panel of professional firms of chartered acco"ntants, ad!ocates, company secretaries, costs and wor;s acco"ntants or firms ha!in a com#ination of these professions, which the *entral +o!ernment shall constit"te for the .ri#"nalL or G#H may #e a #ody corporate consistin of s"ch professionals as may #e appro!ed #y the *entral +o!ernment from time to timeL or GcH may #e a whole/time or a part/time officer appointed #y the *entral +o!ernmentK Provided that, #efore appointin the :fficial 2iD"idator, the .ri#"nal may i!e d"e re ard to the !iews or opinion of the sec"red creditors and wor;men. .he terms and conditions for the appointment of the :fficial 2iD"idator and the rem"neration paya#le to him shall #eM GaH appro!ed #y the .ri#"nal for those appointed "nder cla"ses GaH and G#H of s"#/section G1H, s"#Cect to a maxim"m rem"neration of fi!e per cent. of the !al"e of de#t reco!ered and realisation of sale of assetsL G#H G3H appro!ed #y the *entral +o!ernment for those appointed "nder cla"se GcH of s"#/section G1H in accordance with the r"les made #y it in this #ehalf.

G2H

=here the :fficial 2iD"idator is an officer appointed #y the *entral +o!ernment "nder cla"se GcH of s"#/section G1H, the *entral +o!ernment may also appoint, if considered necessary, one or more Dep"ty :fficial 2iD"idators or Assistant :fficial 2iD"idators to assist the :fficial 2iD"idator in the dischar e of his f"nctions, and the terms and conditions for the appointment of s"ch :fficial

G$H

2iD"idators and the rem"neration paya#le to them shall also #e in accordance with the r"les made #y the *entral +o!ernment. All references to the ":fficial 2iD"idator" in this Act shall #e constr"ed as reference to the :fficial 2iD"idator specified in s"#/section G1H, or to the Dep"ty :fficial 2iD"idator or Assistant :fficial 2iD"idator referred to in s"#/section G3H, as the case may #e. .he amo"nt of the rem"neration paya#le shallM GaH form part of the windin "p order made #y the .ri#"nalL G#H #e treated as first char e on the realisation of the assets and #e paid to the :fficial 2iD"idator or to the *entral +o!ernment, as the case may #e.

G'H

G(H

.he :fficial 2iD"idator shall cond"ct proceedin s in the windin "p of a company and perform s"ch d"ties in reference thereto as the .ri#"nal may specify in this #ehalfK Provided that the .ri#"nal mayM GaH transfer the wor; assi ned from one :fficial 2iD"idator to another :fficial 2iD"idator for the reasons to #e recorded in writin L G#H remo!e the :fficial 2iD"idator on s"fficient ca"se #ein shownL GcH proceed a ainst the :fficial 2iD"idator for professional miscond"ct.B

''.. <!!icial 4iDuidator to &e liDuidator

:n a windin "p order #ein made in respect of a company, the :fficial 2iD"idator shall, #y !irt"e of his office, #ecome the liD"idator of the company.

')0. Appointment and powers o! provisional liDuidator

G1H G2H At any time after the presentation of a windin "p petition and #efore the ma;in of a windin "p order, the (aA.ri#"nalB may appoint the :fficial 2iD"idator to #e liD"idator pro!isionally. 0efore appointin a pro!isional liD"idator, the (aA.ri#"nalB shall i!e notice to the company and i!e a reasona#le opport"nity to it to ma;e its representations, if any, "nless, for special reasons to #e recorded in writin , the (aA.ri#"nalB thin;s fit to dispense with s"ch notice. =here a pro!isional liD"idator is appointed #y the (aA.ri#"nalB, the (aA.ri#"nalB may limit and restrict his powers #y the order appointin him or #y a s"#seD"ent orderL #"t otherwise he shall ha!e the same powers as a liD"idator. .he :fficial 2iD"idator shall cease to hold office as pro!isional liD"idator, and shall #ecome the liD"idator, of the company, on a windin "p order #ein made.

G3H

G$H

')1. -eneral provisions as to liDuidators

G1H G2H .he liD"idator shall cond"ct the proceedin s in windin "p the company and perform s"ch d"ties in reference thereto as the (aA.ri#"nalB may impose. =here (aAthe :fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B #ecomes or acts as liD"idator, there shall #e paid to the *entral +o!ernment o"t of the assets of the company s"ch fees as may #e prescri#ed. .he acts of a liD"idator shall #e !alid, notwithstandin any defect that may afterwards #e disco!ered in his appointment or D"alificationK Provided that nothin in this s"#/section shall #e deemed to i!e !alidity to acts done #y a liD"idator after his appointment has #een shown to #e in!alid.

G3H

')2. St%le, etc., o! liDuidator

A liD"idator shall #e descri#ed #y the style of ".he :fficial 2iD"idator" of the partic"lar company in respect of which he acts, and not #y his indi!id"al name.

')#. :eceiver not to &e appointed o! assets with liDuidator

A recei!er shall not #e appointed of assets in the hands of a liD"idator except #y, or with the lea!e of, the (a A.ri#"nalB.

')'. Statement o! a!!airs to &e made to <!!icial 4iDuidator

G1H =here the (aA.ri#"nalB has made a windin "p order or appointed the :fficial 2iD"idator as pro!isional liD"idator, "nless the (aA.ri#"nalB in its discretion otherwise orders, there shall #e made o"t and s"#mitted to the :fficial 2iD"idator a statement as to the affairs of the company in the prescri#ed form, !erified #y an affida!it, and containin the followin partic"lars, namelyK/ GaH the assets of the company, statin separately the cash #alance in hand and at the #an;, if any, and the ne otia#le sec"rities, if any, held #y the companyL G#H its de#ts and lia#ilitiesL GcH the names, residences and occ"pations of its creditors, statin separately the amo"nt of sec"red and "nsec"red de#tsL and in the case of sec"red de#ts, partic"lars of the sec"rities i!en, whether #y the company or an officer thereof, their !al"e and the dates on which they were i!enL the de#ts d"e to the company and the names, residences and occ"pations of the persons from whom they are d"e and the amo"nt li;ely to #e realised on acco"nt thereofL s"ch f"rther or other information as may #e prescri#ed, or as the :fficial 2iD"idator may reD"ire.

GdH GeH G2H

.he statement shall s"#mitted and !erified #y one or more of the persons who are at the rele!ant date the directors and #y the person who is at that date the mana er, secretary or other chief officer of the company, or #y s"ch of the persons hereinafter in this s"#/section mentioned, as the :fficial 2iD"idator, s"#Cect to the direction of the (aA.ri#"nalB, may reD"ire to s"#mit and !erify the statement, that is to say, persons/ GaH who are or ha!e #een officers of the companyL G#H GcH who ha!e ta;en part in the formation of the company at any time within one year #efore the rele!ant dateL

G3H

who are in the employment of the company, or ha!e #een in the employment of the company within the said year, and are, in the opinion of the :fficial 2iD"idator, capa#le of i!in the information reD"iredL GdH who are or ha!e #een within the said year officers of, or in the employment of, a company which is, or within the said year was, an officer of the company to which the statement relates. .he statement shall #e s"#mitted within twenty/one days from the rele!ant date, or within s"ch extended time not exceedin three months from that date as the :fficial 2iD"idator or the (aA.ri#"nalB may, for special reasons, appoint. Any person ma;in , or conc"rrin in ma;in , the statement and affida!it reD"ired #y this section shall #e allowed, and shall #e paid #y the :fficial 2iD"idator or pro!isional liD"idator, as the case may #e, o"t of the assets of the company, s"ch costs and expenses inc"rred in and a#o"t the preparation and ma;in of the statement and affida!it as the :fficial 2iD"idator may consider reasona#le, s"#Cect to an appeal to the (aA.ri#"nalB. If any person, witho"t reasona#le exc"se, ma;es defa"lt in complyin with any of the reD"irements of this section, he shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to 300AAone tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es, or with #oth. .he (aA.ri#"nalB #y which the windin "p order is made or the pro!isional liD"idator is appointed, may ta;e co niFance of an offence "nder s"#/section G'H "pon recei!in a complaint of facts constit"tin s"ch an offence and tryin the offence itself in accordance with the proced"re laid down in the *ode of *riminal &roced"re 1),)30(, for the trial of s"mmons cases #y ma istrates.B

G$H

AG'H

G'AH

G(H

Any person statin himself in writin to #e a creditor or contri#"tory of the company shall #e entitled, #y himself or #y his a ent, at all reasona#le times, on payment of the prescri#ed fee, to inspect the statement s"#mitted in p"rs"ance of this section, and to a copy thereof or extract therefrom. Any person "ntr"thf"lly so statin himself to #e a creditor or contri#"tory shall #e "ilty of an offence "nder section 1)2 of the Indian &enal *ode, 1)(0L and shall, on the application of the :fficial 2iD"idator, #e p"nisha#le accordin ly. In this section, the expression "the rele!ant date" means, in a case where a pro!isional liD"idator is appointed, the date of his appointment, and in a case where no s"ch appointment is made, the date of the windin "p order.

G7H

G)H

')). :eport &% <!!icial 4iDuidator

G1H In a case where a windin "p order is made, the :fficial 2iD"idator shall, as soon as practica#le after receipt of the statement to #e s"#mitted "nder section $'$ and not later than six months from the date of the order 307Aor s"ch extended period as may #e allowed #y the (aA.ri#"nalBB, or in a case where the (a A.ri#"nalB orders that no statement need #e s"#mitted, as soon as practica#le after the date of the order, s"#mit a preliminary report to the (aA.ri#"nalB / GaH as to the amo"nt of capital iss"ed, s"#scri#ed, and paid "p, and the estimated amo"nt of assets and lia#ilities, i!in separately, "nder the headin of assets, partic"lars of GiH cash and ne otia#le sec"ritiesL GiiH de#ts d"e from contri#"toriesL GiiiH de#ts d"e to the company and sec"rities, if any a!aila#le in respect thereofL Gi!H mo!a#le and immo!a#le properties #elon in to the companyL and G!H "npaid callsL if the company has failed, as to the ca"ses of the fail"reL and whether, in his opinion, f"rther inD"iry is desira#le as to any matter relatin to the promotion, formation, or fail"re of the company, or the cond"ct of the #"siness thereof.

G#H GcH G2H

G3H

.he official 2iD"idator may also, if he thin;s fit, ma;e a f"rther report, or f"rther reports, statin the manner in which the company was promoted or formed and whether in his opinion any fra"d has #een committed #y any person in its promotion or formation, or #y any officer of the company in relation to the company since the formation thereof, and any other matters which, in his opinion, it is desira#le to #rin to the notice of the (aA.ri#"nalB. If the :fficial 2iD"idator states in any s"ch f"rther report that in his opinion a fra"d has #een committed as aforesaid, the (aA.ri#"nalB shall ha!e the f"rther powers pro!ided in section $7).

')*. Custod% o! compan%Es propert%

G1H =here a windin "p order has #een made or where a pro!isional liD"idator has #een appointed, the liD"idator Aor the pro!isional liD"idator, as the case may #e,B shall ta;e into his c"stody or "nder his control, all the property, effects and actiona#le claims to which the company is or appears to #e entitled. 3or the p"rpose of ena#lin the liD"idator or the pro!isional liD"idator, as the case may #e, to ta;e into his c"stody or "nder his control, any property, effects or actiona#le claims to which the company is or appears to #e entitled, the liD"idator or the pro!isional liD"idator, as the case may #e, may #y writin reD"est the *hief &residency %a istrate or the District %a istrate within whose C"risdiction s"ch property, effects or actiona#le claims or any #oo;s of acco"nt or other doc"ments of the company may #e fo"nd, to ta;e possession thereof, and the *hief &residency %a istrate or the District %a istrate may there"pon, after s"ch notice as he may thin; fit to i!e to any party, ta;e possession of s"ch property, effects, actiona#le claims, #oo;s of acco"nt or other doc"ments and deli!er possession thereof to the liD"idator or the pro!isional liD"idator. 3or the p"rpose of sec"rin compliance with the pro!isions of s"#/section G1AH, the *hief &residency %a istrate or the District %a istrate may ta;e or ca"se to #e ta;en s"ch steps and "se or ca"se to #e "sed s"ch force as may in his opinion #e necessary.B All the property and effects of the company shall #e deemed to #e in the c"stody of the (aA.ri#"nalB as from the date of the order for the windin "p of the company.

AG1AH

G10H

G2H

')+. Powers o! liDuidator

G1H .he liD"idator in a windin "p #y the (aA.ri#"nalB shall ha!e power, with the sanction of the (a A.ri#"nalB,/ GaH to instit"te or defend any s"it, prosec"tion, or other le al proceedin , ci!il or criminal, in the name and on #ehalf of the companyL G#H to carry on the #"siness of the company so far as may #e necessary for the #eneficial windin "p of the companyL GcH to sell the immo!a#le and mo!a#le property and actiona#le claims of the company #y p"#lic a"ction or pri!ate contract, with power to transfer the whole thereof to any person or #ody corporate, or to sell the same in parcelsL AGcaH to sell whole of the "nderta;in of the company as a oin concernLB GdH to raise on the sec"rity of the assets of the company any money reD"isiteL
(a

GeH G2H

to do all s"ch other thin s as may #e necessary for windin "p the affairs of the company and distri#"tin its assets.

.he liD"idator in a windin "p #y the (aA.ri#"nalB shall ha!e power/ GiH to do all acts and to exec"te, in the name and on #ehalf of the company, all deeds, receipts, and other doc"ments, and for that p"rpose to "se, when necessary, the companyEs sealL AGiaH to inspect the records and ret"rns of the company on the files of the 8e istrar witho"t payment of any feeLB GiiH to pro!e, ran; and claim in the insol!ency of any contri#"tory, for any #alance a ainst his estate, and to recei!e di!idends in the insol!ency, in respect of that #alance, as a separate de#t d"e from the insol!ent, and ratea#ly with the other separate creditorsL GiiiH to draw, accept, ma;e and endorse any #ill of exchan e, h"ndi or promissory note in the name and on #ehalf of the company, with the same effect with respect to the lia#ility of the company as if the #ill, h"ndi or note had #een drawn, accepted, made or endorsed #y or on #ehalf of the company in the co"rse of its #"sinessL

Gi!H

to ta;e o"t, in his official name, letters of administration to any deceased contri#"tory, and to do in his official name any other act necessary for o#tainin payment of any money d"e from a contri#"tory or his estate which cannot #e con!eniently done in the name of the company, and in all s"ch cases, the money d"e shall, for the p"rpose of ena#lin the liD"idator to ta;e o"t the letters of administration or reco!er the money, #e deemed to #e d"e to the liD"idator himselfK Provided that nothin herein empowered shall #e deemed to affect the ri hts, d"ties and pri!ile es of any Administrator/+eneral. G!H to appoint an a ent to do any #"siness which the liD"idator is "na#le to do himself.
(a

AG2AH .he liD"idator shall M GaH appoint sec"rity "ards to protect the property of the company ta;en into his c"stody and to ma;e o"t an in!entory of the assets in cons"ltation with sec"red creditors after i!in them noticeL G#H appoint, as the case may #e, !al"er, chartered s"r!eyors or chartered acco"ntant to assess the !al"e of the companyIs assets within fifteen days after ta;in into c"stody of property, assets referred to in s"#/cla"se GaH and effects or actiona#le claims s"#Cect to s"ch terms and conditions as may #e specified #y the .ri#"nalL

GcH

G20H

G2*H

i!e an ad!ertisement, in!itin #ids for sale of the assets of the company, within fifteen days from the date of recei!in !al"ation report from the !al"er, chartered s"r!eyors or chartered acco"ntants referred to in cla"se G#H, as the case may #e. .he liD"idator shall, immediately after the order for windin "p or appointin the liD"idator as pro!isional liD"idator is made, iss"e a notice reD"irin any of the persons mentioned in s"#/section G2H of section $'$, to s"#mit and !erify a statement of the affairs of the company and s"ch notice shall #e ser!ed #y the liD"idator. .he liD"idator may apply to the .ri#"nal for an order directin any person who, in his opinion, is competent to f"rnish a statement of the affairs "nder sections $3,A and $'$ and s"ch person shall for the said p"rpose #e ser!ed a notice #y the liD"idator in the manner as may #e prescri#ed.

G2DH

.he liD"idator may, from time to time, call any person for recordin any statement for the p"rpose of in!esti atin the affairs of the company which is #ein wo"nd "p and it shall #e the d"ty of e!ery s"ch person to attend to the liD"idator at s"ch time and place as the liD"idator may appoint and i!e the liD"idator all information which he may reD"ire and answer all s"ch D"estions relatin to windin "p of company as may #e p"t to him #y the liD"idator. 1!ery #idder shall, in response to the ad!ertisement referred to in cla"se GcH of s"#/section G2AH, deposit, his offer in the manner as may #e prescri#ed, with liD"idator or pro!isional liD"idator, as the case may #e, within forty/fi!e days from the date of the ad!ertisement and the liD"idator or pro!isional liD"idator shall permit inspection of property and assets in respect of which #ids were in!itedK Provided that s"ch #id may #e withdrawn within three days #efore the last day of closin of the #idK Provided !urther that the inspection of property shall #e open for not more than fi!e days #efore closin of the #id. .he ad!ertisement in!itin #ids shall contain the followin details, namelyKM GaH G#H GcH GdH GeH GfH G H GhH GiH name, address of re istered office of the company and its #ranch offices, factories and plants and the place where assets of the company are ;ept and a!aila#le for saleL last date for s"#mittin #ids which shall not exceed ninety days from the date of ad!ertisementL time d"rin which the premises of the company shall remain open for inspectionL the last date for withdrawin the #idL financial "arantee which shall not #e less than one/half of the !al"e of the #idL !alidity period of the #idsL place and date of openin of the #ids in p"#licL reser!e price and earnest money to #e deposited alon with the #idL any other terms and conditions of sale which may #e prescri#ed.

G21H

G23H

G2+H

G3H

.he liD"idator appointed shallM GaH maintain a separate #an; acco"nt for each company "nder his char e for depositin the sale proceeds of the assets and reco!ery of de#ts of each companyL G#H maintain proper #oo;s of acco"nt in respect of all receipts and payments made #y him in respect of each company and s"#mit half yearly ret"rn of receipts and payments to the .ri#"nal.B .he exercise #y the liD"idator in a windin "p #y the (aA.ri#"nalB of the powers conferred #y this section shall #e s"#Cect to the control of the (aA.ri#"nalBL and any creditor or contri#"tory may apply to the (aA.ri#"nalB with respect to the exercise or proposed exercise of any of the powers conferred #y this section.

'),.

iscretion o! liDuidator

.he (aA.ri#"nalB may, #y order, pro!ide that the liD"idator may exercise any of the powers referred to in s"#/ section G1H of section $'7 witho"t the sanction or inter!ention of the (aA.ri#"nalBK Provided always that the exercise #y the liD"idator of s"ch powers shall #e s"#Cect to the control of the (a A.ri#"nalB.

'),A. 3xclusion o! certain time in computing periods o! limitation

4otwithstandin anythin in the Indian 2imitation Act, 1,0) or in any other law for the time #ein in force, in comp"tin the period of limitation prescri#ed for any s"it or application in the name and on #ehalf of a company which is #ein wo"nd "p #y the (aA.ri#"nalB, the period from the date of commencement of the windin "p of the company to the date on which the windin "p order is made G#oth incl"si!eH and a period of one year immediately followin the date of the windin "p order shall #e/excl"ded.B

*a').. Provision !or legal assistance to liDuidator

.he liD"idator may, with the sanction of the .ri#"nal, appoint one or more chartered acco"ntants or company secretaries or cost acco"ntants or le al practitioners entitled to appear #efore the .ri#"nal "nder section 10+D to assist him in the performance of his d"ties.B

'*0. 3xercise and control o! liDuidatorIs powers

G1H S"#Cect to the pro!isions of this Act, the liD"idator shall, in the administration of the assets of the company and the distri#"tion thereof amon its creditors, ha!e re ard to any directions which may #e i!en #y resol"tion of the creditors or contri#"tories at any eneral meetin or #y the committee of inspection. Any directions i!en #y the creditors or contri#"tories at any eneral meetin shall, in case of conflict, #e deemed to o!erride any directions i!en #y the committee of inspection. .he liD"idator/ GaH G#H may s"mmon eneral meetin s of the creditors or contri#"tories, whene!er he thin;s fit, for the p"rpose of ascertainin their wishesL

G2H G3H

G$H G'H G(H

shall s"mmon s"ch meetin s at s"ch times, as the creditors or contri#"tories, as the case may #e, may, #y resol"tion, direct, or whene!er reD"ested in writin to do so #y not less than one/tenth in !al"e of the creditors contri#"tories, as the case may #e. .he liD"idator may apply to the (aA.ri#"nalB in the manner prescri#ed, if any, for directions in relation to any partic"lar matter arisin in the windin "p. S"#Cect to the pro!isions of this Act, liD"idator shall "se his own discretion in the administration of the assets of the company and in the distri#"tion thereof amon the creditors. Any person a rie!ed #y any act or decision of the liD"idator may apply to the (aA.ri#"nalBL and the (a A.ri#"nalB may confirm, re!erse or modify the act or decision complained of, and ma;e s"ch f"rther order as it thin;s C"st in the circ"mstances.

'*1. 2oo=s to &e =ept &% liDuidator

G1H G2H .he liD"idator shall ;eep, in the manner prescri#ed, proper #oo;s in which he shall ca"se entries or min"tes to #e made of proceedin s at meetin and of s"ch other matters as may #e prescri#ed. Any creditor or contri#"tory may, s"#Cect to the control of the (aA.ri#"nalB, inspect any s"ch #oo;s, personally or #y his a ent.

'*2. Audit o! liDuidatorEs accounts

G1H G2H G3H .he liD"idator shall, at s"ch times as may #e prescri#ed #"t not less than twice in each year d"rin his ten"re of office, present to the (aA.ri#"nalB an acco"nt of his receipts and payments as liD"idator. .he acco"nt shall #e in the prescri#ed form, shall #e made in d"plicate, and shall #e !erified #y a declaration in the prescri#ed form. .he (aA.ri#"nalB shall ca"se the acco"nt to #e a"dited in s"ch manner as it thin;s fitL and for the p"rpose of the a"dit, the liD"idator shall f"rnish the (aA.ri#"nalB with s"ch !o"chers and information as the (aA.ri#"nalB may reD"ire, and the (aA.ri#"nalB may, at any time, reD"ire the prod"ction of, and inspect, any #oo;s or acco"nts ;ept #y the liD"idator. =hen the acco"nt has #een a"dited, one copy thereof shall #e filed and ;ept #y the (aA.ri#"nalB, and the other copy shall #e deli!ered to the 8e istrar for filin L and each copy shall #e open to the inspection of any creditor, contri#"tory or person interested. =here an acco"nt referred to in s"#/section G$H relates to a +o!ernment company in liD"idation, the liD"idator shall forward a copy thereof,/ GaH to the *entral +o!ernment, if that +o!ernment is a mem#er of the +o!ernment companyL or G#H GcH to any State +o!ernment, if that +o!ernment is a mem#er of the +o!ernment companyL or to the *entral +o!ernment and any State +o!ernment, if #oth the +o!ernments are mem#ers of the +o!ernment company.B

G$H

AG$AH

G'H

.he liD"idator shall ca"se the acco"nt when a"dited or a s"mmary thereof to #e printed, and shall send a printed copy of the acco"nt or s"mmary #y post to e!ery creditor and to e!ery contri#"toryK Provided that the (aA.ri#"nalB may in any case dispense with compliance with this s"#/section.

'*#. Control o! Central -overnment over liDuidators

G1H .he *entral +o!ernment shall ta;e co niFance of the cond"ct of liD"idators of companies which are #ein wo"nd/"p #y the (aA.ri#"nalB, and, if a liD"idator does not faithf"lly perform his d"ties and d"ly o#ser!e all the reD"irements imposed on him #y this Act 312Aor #y the Indian *ompanies Act, 1,13B, the r"les there"nder, or otherwise, with respect to the performance of his d"ties, or if any complaint is made to the *entral +o!ernment #y any creditor, or contri#"tory in re ard thereto, the *entral +o!ernment shall inD"ire into the matter, and ta;e s"ch action thereon as it may thin; expedientK AProvided that where the windin "p of a company has commenced #efore the commencement of this Act, the (aA.ri#"nalB may, on the application of the *entral +o!ernment, appoint in place of s"ch liD"idator the :fficial 2iD"idator as the liD"idator in s"ch windin "p.B .he *entral +o!ernment may at any time reD"ire any liD"idator of a company which is #ein wo"nd/ "p #y the (aA.ri#"nalB to answer any inD"iry in relation to any windin "p in which he is en a ed, and may, if the *entral +o!ernment thin;s fit, apply to the (aA.ri#"nalB to examine him or any other person on oath concernin the windin "p. .he *entral +o!ernment may also direct a local in!esti ation to #e made of the #oo;s and !o"chers of the liD"idators.

G2H

G3H

Committee of inspection '*'. Appointment and composition o! committee o! inspection

AG1HGaH .he (aA.ri#"nalB may, at the time of ma;in an order for the windin "p of a company or at any time thereafter, direct that there shall #e appointed a committee of inspection to act with the liD"idator. G#H =here a direction is i!en #y the (aA.ri#"nalB as aforesaid, the liD"idator shall, within two months from the date of s"ch direction, con!ene a meetin of the creditors of company Gas ascertained from its #oo;s and doc"mentsH for the p"rpose of determinin who are to #e mem#ers of the committeeL AG2H .he liD"idator shall, within fo"rteen days from the date of the creditorsE meetin or s"ch f"rther time as the (aA.ri#"nalB in its discretion may rant for the p"rpose, con!ene a meetin of the contri#"tories to consider the decision of the creditorsE meetin with respect to the mem#ership of the committeeL and it shall #e open to #e meetin of the contri#"tories to accept the decision of the creditorsE meetin with or witho"t modifications or to reCect it.B 1xcept in the case where the meetin of the contri#"tories accepts the decision of the creditorsE meetin in its entirety, it shall #e the d"ty of the liD"idator to apply to the (aA.ri#"nalB for directions as to AJJJB what the composition of the committee shall #e, and who shall #e mem#ers thereof.

G3H

'*). Constitution and proceedings o! committee o! inspection

G1H A committee of inspection appointed in p"rs"ance of section $($ shall consist of not more than twel!e mem#ers, #ein creditors and contri#"tories of the company or persons holdin eneral or special powers of attorney from creditors or contri#"tories, in s"ch proportions as may #e a reed on #y the meetin s of creditors and contri#"tories, or in case of difference of opinion #etween the meetin s, as may #e determined #y the (aA.ri#"nalB. .he committee of inspection shall ha!e the ri ht to inspect the acco"nts of the liD"idator at all reasona#le times. .he committee shall meet at s"ch times as it may from time to time appoint 31(AJJJB and the liD"idator or any mem#er of the committee may also call a meetin of the committee as and when he thin;s necessary. .he D"or"m for a meetin of the committee shall #e one/third of the total n"m#er of the mem#ers, or two, whiche!er is hi her.

G2H G3H

G$H

G'H G(H G7H

G)H

.he committee may act #y a maCority of its mem#ers present at a meetin , #"t shall not act "nless a D"or"m is present. A mem#er of the committee may resi n #y notice in writin si ned #y him and deli!ered to the liD"idator. If a mem#er of the committee is adC"d ed an insol!ent, or compo"nds or arran es with his creditors, or is a#sent from fi!e consec"ti!e meetin s of the committee witho"t the lea!e of those mem#ers who, to ether with himself, represent the creditors or contri#"tories, as the case may #e, his office shall #ecome !acant. A mem#er of the committee may #e remo!ed at a meetin of creditors if he represents creditors, or at a meetin of contri#"tories if he represents contri#"tories, #y an ordinary resol"tion of which se!en daysE notice has #een i!en, statin the o#Cect of the meetin . :n a !acancy occ"rrin in the committee, the liD"idator shall forthwith s"mmon a meetin of creditors or of contri#"tories, as the case may reD"ire, to fill the !acancyL and the meetin may, #y resol"tion, re/appoint the same, or appoint another, creditor or contri#"tory to fill the !acancyK Provided that if the liD"idator, ha!in re ard to the position in the windin "p, is of the opinion that it is "nnecessary for the !acancy to #e filled, he may apply to the (aA.ri#"nalB and the (aA.ri#"nalB may ma;e an order that the !acancy shall not #e filled, or shall not #e filled except in s"ch circ"mstances as may #e specified in the order. .he contin"in mem#ers of the committee, if not less than two, may act notwithstandin any !acancy in the committee.

G,H

G10H

*eneral Powers of /a$Tribunal% in case of winding up by /a$Tribunal%

(a

'**. Power o! 0ri&unal to sta% winding up

G1H .he .ri#"nal may at any time after ma;in a windin "p order, on the application either of the :fficial 2iD"idator or of any creditor or contri#"tory, and on proof to the satisfaction of the .ri#"nal that all proceedin s in relation to the windin "p o" ht to #e stayed, ma;e an order stayin the proceedin s, either alto ether or for a limited time, on s"ch terms and conditions as the .ri#"nal thin;s fit. :n any application "nder this section, the .ri#"nal may, #efore ma;in an order, reD"ire the :fficial 2iD"idator to f"rnish to the .ri#"nal a report with respect to any facts or matters which are in his opinion rele!ant to the application. A copy of e!ery order made "nder this section shall forthwith #e forwarded #y the company, or otherwise as may #e prescri#ed, to the 8e istrar, who shall ma;e a min"te of the order in his #oo;s relatin to the company.B

G2H

G3H

'*+. Settlement o! list o! contri&utories and application o! assets

G1H As soon as may #e after ma;in a windin "p order, the (aA.ri#"nalB shall settle a list of contri#"tories, with power to rectify the re ister of mem#ers in all cases where rectification is reD"ired in p"rs"ance of this Act, and shall ca"se the assets of the company to #e collected and applied in dischar e of its lia#ilitiesK Provided that, where it appears to the (aA.ri#"nalB that it will not #e necessary to ma;e calls on, or adC"st the ri hts of, contri#"tories, the (aA.ri#"nalB may dispense with the settlement of list of contri#"tories. In settlin the list of contri#"tories, the (aA.ri#"nalB shall distin "ish #etween those who are contri#"tories in their own ri ht and those who are contri#"tories as #ein representati!es of, or lia#le for the de#ts of, others.

G2H

'*,.

eliver% o! propert% to liDuidator

.he (aA.ri#"nalB may, at any time after ma;in a windin "p order, reD"ire any contri#"tory for the time #ein on the list of contri#"tories, and any tr"stee, recei!er, #an;er, a ent, 317Aofficer or other employeeB of the

company, to pay, deli!er, s"rrender or transfer forthwith, or within s"ch time as the (aA.ri#"nalB directs, to the liD"idator, any money, property or #oo;s and papers 31)Ain his c"stody or "nder his controlB to which the company is prima )a$ie entitled.

'*.. Pa%ment o! de&ts due &% contri&utor% and extent o! set1o!!

G1H .he (aA.ri#"nalB may, at any time after ma;in a windin "p order, ma;e an order on any contri#"tory for the time #ein on the list of contri#"tories to pay, in the manner directed #y the orderL any money d"e to the company, from him or from the estate of the person whom he represents, excl"si!e of any money paya#le #y him or the estate #y !irt"e of any call in p"rs"ance of this Act. .he (aA.ri#"nalB, in ma;in s"ch an order, may/ GaH in the case of an "nlimited company, allow to the contri#"tory, #y way of set/off, any money d"e to him or to the estate which he represents, from the company, on any independent dealin or contract with the company, #"t not any money d"e to him as a mem#er of the company in respect of any di!idend or profitL and in the case of a limited company, ma;e to any director "nlimited, or to his estate, the li;e allowance.
2)'A

G2H

G#H G3H

AJJJB or mana er whose lia#ility is

In the case of any company, whether limited, or "nlimited when all the creditors ha!e #een paid in f"ll, any money d"e on any acco"nt whate!er to a contri#"tory from the company may #e allowed to him #y way of set/off a ainst any s"#seD"ent call.

(a

'+0. Power o! 0ri&unal to ma=e calls

G1H .he .ri#"nal may, at any time after ma;in windin "p order, and either #efore or after it has ascertained the s"fficiency of the assets of the company,M GaH ma;e calls on all or any of the contri#"tories for the time #ein on the list of the contri#"tories, to the extent of their lia#ility, for payment of any money which the .ri#"nal considers necessary to satisfy the de#ts and lia#ilities of the company, and the costs, char es and expenses of windin "p, and for the adC"stment of the ri hts of the contri#"tories amon themsel!esL and

G2H

G#H ma;e an order for payment of any calls so made. In ma;in a call, the .ri#"nal may ta;e into consideration the pro#a#ility that some of the contri#"tories may, partly or wholly, fail to pay the call.B

'+1. Pa%ment into &an= o! mone%s due to compan%

G1H .he (aA.ri#"nalB may order any contri#"tory, p"rchaser or other persons from whom any money is d"e to the company to pay the money into the p"#lic acco"nt of India in the 8eser!e 0an; of India instead of to the liD"idator. Any s"ch order may #e enforced in the same manner as if the (aA.ri#"nalB had directed payment to the liD"idator.

G2H

*a'+2. (one%s and securities paid into &an= to &e su&Cect to order o! 0ri&unal
All moneys, #ills, h"ndis, notes and other sec"rities paid or deli!ered into the 8eser!e 0an; of India in the co"rse of the windin "p of a company #y the .ri#"nal, shall #e s"#Cect in all respects to the orders of the .ri#"nal.B

'+#. <rder on contri&utor% to &e conclusive evidenced

G1H An order made #y the (aA.ri#"nalB on a contri#"tory shall, s"#Cect to any ri ht of appeal, #e concl"si!e e!idence that the money, if any, there#y appearin to #e d"e or ordered to #e paid is d"e.

G2H

All other pertinent matters stated in the order shall #e ta;en to #e tr"ly stated as a ainst all persons and in all proceedin s whatsoe!er.

'+'. Power to exclude creditors not proving in time

.he (aA.ri#"nalB may fix a time or times within which creditors are to pro!e their de#ts or claims, or to #e excl"ded from the #enefit of any distri#"tion made #efore those de#ts or claims are pro!ed.

'+). AdCustment o! rights o! contri&utories

.he (aA.ri#"nalB shall adC"st the ri hts of the contri#"tories amon themsel!es and distri#"te any s"rpl"s amon the persons entitled thereto.

'+*. Power to order costs

.he (aA.ri#"nalB may, in the e!ent of the assets #ein ins"fficient to satisfy the lia#ilities, ma;e an order for the payment o"t of the assets, of the costs, char es and expenses inc"rred in the windin "p, in s"ch order of priority inter se as the (aA.ri#"nalB thin;s C"st.

'++. Power to summon persons suspected o! having propert% o! compan%, etc.

G1H .he (aA.ri#"nalB may, at any time after the appointment of a pro!isional liD"idator or the ma;in of a windin "p order, s"mmon #efore it any officer of the company or person ;nown or s"spected to ha!e in his possession any property or #oo;s or papers, of the company, or ;nown or s"spected to #e inde#ted to the company, or any person whom the (aA.ri#"nalB deems capa#le of i!in information concernin the promotion, formation, trade, dealin s, property, #oo;s or papers, or affairs of the company. .he (aA.ri#"nalB may examine any officer or person so s"mmoned on oath concernin the matters aforesaid, either #y word of mo"th or on written interro atoriesL and may, in the former case, red"ce his answers to writin and reD"ire him to si n them. .he (aA.ri#"nalB may reD"ire any officer or person so s"mmoned to prod"ce any #oo;s and papers in his c"stody or power relatin to the companyL #"t, where he claims any lien on #oo;s or papers prod"ced #y him, the prod"ction shall #e witho"t preC"dice to that lien, and the (aA.ri#"nalB shall ha!e C"risdiction in the windin "p to determine all D"estions relatin to that lien. If any officer or person so s"mmoned, after #ein paid or tendered a reasona#le s"m for his expenses, fails to appear #efore the (aA.ri#"nalB at the time appointed, not ha!in a lawf"l impediment Gmade ;nown to the (aA.ri#"nalB at the time of its sittin and allowed #y itH, the (aA.ri#"nalB may ca"se him to #e apprehended and #ro" ht #efore the (aA.ri#"nalB for examination. If, on his examination, any officer or person so s"mmoned admits that he is inde#ted to the company, the (aA.ri#"nalB may order him to pay to the pro!isional liD"idator or, as the case may #e, the liD"idator at s"ch time and in s"ch manner as to the (aA.ri#"nalB may seem C"st, the amo"nt in which he is inde#ted, or any part thereof, either in f"ll dischar e of the whole amo"nt or not, as the (aA.ri#"nalB thin;s fit, with or witho"t costs of the examination. If, on his examination, any s"ch officer or person admits that he has in his possession any property #elon in to the company, the (aA.ri#"nalB may order him to deli!er to the pro!isional liD"idator or, as the case may #e, the liD"idator, that property or any part thereof, at s"ch time, in s"ch manner and on s"ch terms as to the (aA.ri#"nalB may seem C"st. :rders made "nder s"#/sections G'H and G(H shall #e exec"ted in the same manner as decrees for the payment of money or for the deli!ery of property "nder the *ode of *i!il &roced"re, 1,0), respecti!ely. Any person ma;in any payment or deli!ery in p"rs"ance of an order made "nder s"#/section G'H or s"#/section G(H shall #y s"ch payment or deli!ery #e, "nless otherwise directed #y s"ch order, dischar ed from all lia#ility whatsoe!er in respect of s"ch de#t or property.B

G2H

G3H

G$H

AG'H

G(H

G7H

G)H

'+,. Power to order pu&lic examination o! promoters, directors, etc.

G1H =hen an order has #een made for windin "p a company #y the (aA.ri#"nalB, and the :fficial 2iD"idator has made a report to the (aA.ri#"nalB "nder this Act, statin that in his opinion a fra"d has #een committed #y any person in the promotion or formation of the company, or #y any officer of the company in relation to the company since its formation, the (aA.ri#"nalB may, after considerin the report, direct that that person or officer shall attend #efore the (aA.ri#"nalB on a day appointed #y it for that p"rpose, and #e p"#licly examined as to the promotion or formation or the cond"ct of the #"siness of the company, or as to his cond"ct and dealin s as an officer thereof. .he :fficial 2iD"idator shall ta;e part in the examination, and for that p"rpose may, if specially a"thoriFed #y the (aA.ri#"nalB in that #ehalf, employ s"ch le al assistance as may #e sanctioned #y the (a A.ri#"nalB. Any creditor or contri#"tory may also ta;e part in the examination either personally or #y any 6a [$ artered a$$ountants or $ompany se$retaries or $ost a$$ountants or le2al pra$titioners entitled to appear be)ore t e "ribunal under se$tion 1-65 B. .he (aA.ri#"nalB may p"t s"ch D"estions to the person examined as it thin;s fit. .he person examined shall #e examined on oath, and shall answer all s"ch D"estions as the (a A.ri#"nalB may p"t, or allow to #e p"t, to him. A person ordered to #e examined "nder this section/ GaH shall, #efore his examination, #e f"rnished at his own cost with a copy of the :fficial 2iD"idatorEs reportL and G#H may at his own cost employ, an 6a[$ artered a$$ountants or $ompany se$retaries or $ost a$$ountants or le2al pra$titioners entitled to appear be)ore t e "ribunal under se$tion 1-65+ the (aA.ri#"nalB, who shall #e at li#erty to p"t to him s"ch D"estions as the (aA.ri#"nalB may deem C"st for the p"rpose of ena#lin him to explain or D"alify any answers i!en #y him. If any s"ch person applies to the (aA.ri#"nalB to #e exc"lpated from any char es made or s" ested a ainst him, it shall #e the d"ty of the :fficial 2iD"idator to appear on the hearin of the application and call the attention of the (aA.ri#"nalB to any matters which appear to the :fficial 2iD"idator to #e rele!ant. If the (aA.ri#"nalB, after hearin any e!idence i!en or witnesses called #y the :fficial 2iD"idator, rants the application, the (aA.ri#"nalB may allow the applicant s"ch costs as it may thin; fit. 4otes of the examination shall #e ta;en down in writin , and shall #e read o!er to or #y, and si ned #y, the person examinedL and may thereafter #e "sed in e!idence a ainst him, and shall #e open to the inspection of any creditor or contri#"tory at all reasona#le times. .he (aA.ri#"nalB may, if it thin;s fit, adCo"rn the examination from time to time. An examination "nder this section may, if the .ri#"nal so directs, #e held #efore any person or a"thority a"thorised #y the .ri#"nal.B .he powers of the (aA.ri#"nalB "nder this section as to the cond"ct of the examination, #"t not as to costs, may #e (aAexercised #y the person or a"thorityB #efore whom the examination is held in p"rs"ance of s"#/section G10H.

G2H

G3H

G$H G'H G(H

G7HGaH

G#H G)H

G,H (a AG10H G11H

'+.. Power to arrest a&sconding contri&utor%

At any time either #efore or after ma;in a windin "p order, the (aA.ri#"nalB may, on proof of pro#a#le ca"se for #elie!in that a contri#"tory is a#o"t to D"it India or otherwise to a#scond, or is a#o"t to remo!e or conceal any of his property, for the p"rpose of e!adin payment of calls or of a!oidin examination respectin the affairs of the company, ca"se/ GaH the contri#"tory to #e arrested and safely ;ept "ntil s"ch time as the (aA.ri#"nalB may orderL and G#H his #oo;s and papers and mo!a#le property to #e seiFed and safely ;ept "ntil s"ch time as the (a A.ri#"nalB may order.

*a',0. Saving o! existing powers o! 0ri&unal.

Any powers conferred on the .ri#"nal #y this Act shall #e in addition to, and not in dero ation of, any existin powers of instit"tin proceedin s a ainst any contri#"tory or de#tor of the company, or the estate of any contri#"tory or de#tor, for the reco!ery of any call or other s"ms.

',1.
G1H

issolution o! compan%
=hen the affairs of a company ha!e #een completely wo"nd/"p 320Aor when the (aA.ri#"nalB is of the opinion that the liD"idator cannot proceed with the windin "p of a company for want of f"nds and assets or for any other reason whatsoe!er and it is C"st and reasona#le in the circ"mstances of the case that an order of dissol"tion of the company sho"ld #e madeB, the (aA.ri#"nalB shall ma;e an order that the company #e dissol!ed from the date of the order, and the company shall #e dissol!ed accordin ly. A copy of the order shallL within AthirtyB days from the date thereof, #e forwarded #y the liD"idator to the 8e istrar who shall ma;e in his #oo;s a min"te of the dissol"tion of the company. If the liD"idator ma;es defa"lt in forwardin a copy as aforesaid, he shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G2H G3H

0nforcement of and appeal from orders ',2. <rder made in an% Court to &e en!orced &% other Courts
Any order made #y a *o"rt for, or in the co"rse of, windin "p a company shall #e enforcea#le at any place in India, other than that o!er which s"ch *o"rt has C"risdiction, #y the *o"rt which wo"ld ha!e had C"risdiction in respect of the company if its re istered office had #een sit"ate at s"ch other place, and in the same manner in all respects as if the order had #een made #y that *o"rt.

',#. Appeals !rom orders

Appeals from (aAany order made or decision i!en #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002B, in the matter of the windin "p of a company #y the *o"rt shall lie to the same *o"rt to which, in the same manner in which, and s"#Cect to the same conditions "nder which, appeals lie from any order or decision of the *o"rt in cases within its ordinary C"risdiction.

Chapter """J

9oluntar% winding up Resolutions for and commencement of voluntary winding up

','. Circumstances in which compan% ma% &e wound1up voluntaril%

G1H A company may #e wo"nd/"p !ol"ntarily/ GaH when the period, if any, fixed for the d"ration of the company #y the articles has expired, or the e!ent, if any, has occ"rred, on the occ"rrence of which the articles pro!ide that the company is to #e dissol!ed, and the company in eneral meetin passes a resol"tion reD"irin the company to #e wo"nd/"p !ol"ntarilyL G#H if the company passes a special resol"tion that the company #e wo"nd/"p !ol"ntarily. In this Act, the expression "a resol"tion for !ol"ntary windin "p" means a resol"tion passed "nder cla"se GaH or G#H of s"#/section G1H.

G2H

',). Pu&lication o! resolution to wind1up voluntaril%

G1H

G2H

=hen a company has passed a resol"tion for !ol"ntary windin "p, it shall, within fo"rteen days of the passin of the resol"tion, i!e notice of the resol"tion #y ad!ertisement in the :fficial +aFette, and also in some newspaper circ"latin in the district where the re istered office of the company is sit"ate. If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to 321AAfi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

3or the p"rposes of this s"#/section, a liD"idator of the company shall #e deemed to #e an officer of the company.

',*. Commencement o! voluntar% winding up

A !ol"ntary windin "p shall #e deemed to commence at the time when the resol"tion for !ol"ntary windin "p is passed.

Conse,uences of voluntary winding up ',+. 3!!ect o! voluntar% winding up on status o! compan%

In the case of a !ol"ntary windin "p, the company shall, from the commencement of the windin "p, cease to carry on its #"siness, except so far as may #e reD"ired for the #eneficial windin "p of s"ch #"sinessK Provided that the corporate state and corporate powers of the company shall contin"e "ntil it is dissol!ed.

+eclaration of solvency ',,.

G1H

eclaration o! solvenc% in case o! proposal to wind1up voluntaril%

=here it is proposed to wind/"p a company !ol"ntarily, its directors, or in case the company has more than two directors, the maCority of the directors, may, at a meetin of the 0oard, ma;e a declaration !erified #y an affida!it, to the effect that they ha!e made a f"ll inD"iry into the affairs of the company, and that, ha!in done so, they ha!e formed the opinion that the company has no de#ts, or that it will #e a#le to pay its de#ts in f"ll within s"ch period not exceedin three years from the commencement of the windin "p as may #e specified in the declaration. A declaration made as aforesaid shall ha!e no effect for the p"rposes of this Act, "nless/ GaH it is made within the fi!e wee;s immediately precedin the date of the passin of the resol"tion for windin "p the company and is deli!ered to the 8e istrar for re istration #efore that dateL and AG#H it is accompanied #y a copy of the report of the a"ditors of the company Gprepared, as far as circ"mstances admit, in accordance with the pro!isions of this ActH on the profit and loss acco"nt of the company for the period commencin from the date "p to which the last s"ch acco"nt was prepared and endin with the latest practica#le date immediately #efore the ma;in of the declaration and the #alance sheet of the company made o"t as on the last/mentioned date and also em#odies a statement of the companyEs assets and lia#ilities as at that date.B

G2H

G3H

Any director of a company ma;in a declaration "nder this section witho"t ha!in reasona#le ro"nds for the opinion that the company will #e a#le to pay its de#ts in f"ll within the period specified in the declaration, shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. If the company is wo"nd/"p in p"rs"ance of a resol"tion passed within the period of fi!e wee;s after the ma;in of the declaration, #"t its de#ts are not paid or pro!ided for in f"ll within the period specified in the declaration, it shall #e pres"med, "ntil the contrary is shown, that the director did not ha!e reasona#le ro"nds for his opinion.

G$H

G'H

A windin "p in the case of which a declaration has #een made and deli!ered in accordance with this section is in this Act referred to as "a mem#ersE !ol"ntary windin "p"L and a windin "p in the case of which a declaration has not #een so made and deli!ered is in this Act referred to as "a creditorsE !ol"ntary windin "p".

Provisions applicable to a members. voluntary winding up ',.. Provisions applica&le to a mem&ersE voluntar% winding up
.he pro!isions contained in sections $,0 and $,), #oth incl"si!e, shall s"#Cect to the pro!isions of section $,), apply in relation to a mem#ersE !ol"ntary windin "p.

'.0. Power o! compan% to appoint and !ix remuneration o! liDuidators

G1H .he company in eneral meetin shall/ GaH appoint one or more liD"idators for the p"rpose of windin "p the affairs and distri#"tin the assets of the companyL and

G2H G3H

G#H fix the rem"neration, if any, to #e paid to the liD"idator or liD"idators. Any rem"neration so fixed shall not #e increased in any circ"mstances whate!er, whether with or witho"t the sanction of the (aA.ri#"nalB. 0efore the rem"neration of the liD"idator or liD"idators is fixed as aforesaid, the liD"idator, or any of the liD"idators, as the case may #e, shall not ta;e char e of his office.

'.1. 2oardEs powers to cease on appointment o! a liDuidator

:n the appointment of a liD"idator, all the powers of the 0oard of directors and of the mana in or whole/time directors AJJJB and mana er, if there #e any of these, shall cease, except for the p"rpose of i!in notice of s"ch appointment to the 8e istrar in p"rs"ance of section $,3 or in so far as the company in eneral meetin or the liD"idator may sanction the contin"ance thereof.

'.2. Power to !ill vacanc% in o!!ice o! liDuidator

G1H If a !acancy occ"rs #y death, resi nation or otherwise in the office of any liD"idator appointed #y the company, the company in eneral meetin may, s"#Cect to any arran ement with its creditors, fill the !acancy. 3or that p"rpose, a eneral meetin may #e con!ened #y any contri#"tory, or #y the contin"in liD"idator or liD"idators, if any. .he meetin shall #e held in the manner pro!ided #y this Act or #y the articles, or in s"ch other manner as the (aA.ri#"nalB may, on application #y any contri#"tory or #y the contin"in liD"idator or liD"idators, determine.

G2H G3H

'.#. 6otice o! appointment o! liDuidator to &e given to :egistrar

G1H .he company shall i!e notice to the 8e istrar of the appointment of a liD"idate or liD"idators made #y it, "nder section $,0, of e!ery !acancy occ"rrin in the office of liD"idator, and of the name of the liD"idator or liD"idators, appointed to fill e!ery s"ch !acancy "nder section $,2. .he notice aforesaid shall #e i!en #y the company within ten days of the e!ent to which it relates. If defa"lt is made in complyin with s"#/section G1H or G2H, the company, and e!ery officer of the company Gincl"din e!ery liD"idator or contin"in liD"idatorH who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aone tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es.

G2H G3H

'.'. Power o! liDuidator to accept shares, etc., as consideration !or sale o! propert% o! compan%
G1H =here/ GaH G#H a company Gin this section called "the transferor company"H is proposed to #e, or is in co"rse of #ein , wo"nd/"p alto ether !ol"ntarilyL and

the whole or any part of its #"siness or property is proposed to #e transferred or sold to another company, whether a company within the meanin of this Act or not Gin this section called "the transferee company"HL the liD"idator of the transferor company may, with the sanction of a special resol"tion of that company conferrin (n the liD"idator either a eneral a"thority or an a"thority in respect of any partic"lar arran ement,/ GiH recei!e, #y way of compensation or part compensation for the transfer or sale, shares, policies, or other li;e interest in the transferee company, for distri#"tion amon the mem#ers of the transferor companyL or enter into any other arran ement where#y the mem#ers of the transferor company may, in lie" of recei!in cash, shares, policies or other li;e interests or in addition thereto, participate in the profits of, or recei!e any other #enefit from, the transferee company.

GiiH

G2H G3H

Any sale or arran ement in p"rs"ance of this section shall #e #indin on the mem#ers of the transferor company. If any mem#er of the transferor company who did not !ote in fa!o"r of the special resol"tion expresses his dissent therefrom in writin addressed to the liD"idator, and left at the re istered office of the company within se!en days after the passin of the resol"tion, he may reD"ire the liD"idator either/ GaH to a#stain from carryin the resol"tion into effectL or G#H to p"rchase his interest at a price to #e determined #y a reement, or #y ar#itration in the manner pro!ided #y this section.

G$H

G'H

G(H

If the liD"idator elects to p"rchase the mem#erEs interest, the p"rchase money shall #e paid #efore the company is dissol!ed, and #e raised #y the liD"idator in s"ch manner as may #e determined #y special resol"tion. A special resol"tion shall not #e in!alid for the p"rposes of this section #y reason only that it is passed #efore or conc"rrently with a resol"tion for !ol"ntary windin "p or for appointin liD"idators, #"t if an order is made within a year for windin "p the company #y (aAthe .ri#"nalB, the special resol"tion shall not #e !alid "nless it is (aAsanctioned #y the .ri#"nalB. .he pro!isions of the Ar#itration Act, 1,$0, other than those restrictin the application of that Act in respect of the s"#Cect/matter of the ar#itration, shall apply to all ar#itrations in p"rs"ance of this section.

'.).
G1H

ut% o! liDuidator to call creditorsE meeting in case o! insolvenc%

If, in the case of a windin "p commenced after the commencement of this Act, the liD"idator is at any time of opinion that the company will not #e a#le to pay its de#ts in f"ll within the period stated in the declaration "nder section $)), or that period has expired witho"t the de#ts ha!in #een paid in f"ll, he shall forthwith s"mmon a meetin of the creditors, and shall lay #efore the meetin a statement of the assets and lia#ilities of the company. If the liD"idator fails to comply with s"#/section G1H, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

G2H

'.*.
G1H

ut% o! liDuidator to call general meeting at the end o! each %ear

S"#Cect to the pro!isions of section $,), in the e!ent of the windin "p contin"in for more than one year, the liD"idator shall/

GaH

G#H

call a eneral meetin of the company at the end of the first year from the commencement of the windin "p, and at the end of each s"cceedin year, or as soon thereafter as may #e con!enient within three months from the end of the year or s"ch lon er period as the *entral +o!ernment may allowL and lay #efore the meetin an acco"nt of his acts and dealin s and of the cond"ct of the windin "p d"rin the precedin year, to ether with a statement in the prescri#ed form and containin the prescri#ed partic"lars with respect to the proceedin s in, and position of, the liD"idation.

G2H

If the liD"idator fails to comply with s"#/section G1H, he shall #e p"nisha#le, in respect of each fail"re, wish fine which may extend to Aone tho"sand r"peesB.

'.+. 5inal meeting and dissolution

G1H S"#Cect to the pro!isions of section $,), as soon as the affairs of the company are f"lly wo"nd/"p, the liD"idator shall/ GaH ma;e "p an acco"nt of the windin "p, showin how the windin "p has #een cond"cted and the property of the company has #een disposed ofL and G#H call a eneral meetin of the company for the p"rpose of layin the acco"nt #efore it, and i!in any explanation thereof .he meetin shall #e called #y ad!ertisement/ GaH G#H G3H specifyin the time, place and o#Cect of the meetin L and p"#lished not less than one month #efore the meetin in the :fficial +aFette, and also in some newspapers circ"latin in the district where the re istered office of the company is sit"ate. =ithin one wee; after the meetin , the liD"idator shall send to the 323A8e istrar and the (aA:fficial 2iD"idator referred to in cla"se G$H of s"#/section G1H of section $$)B a copy each of the acco"nt and shall ma;e a ret"rn to each of themB of the holdin of the meetin and of the date thereof. If the copy is not so sent or the ret"rn is not so made, the liD"idator shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es. G$H If a D"or"m is not present at the meetin aforesaid, the liD"idator shall, in lie" of the ret"rn referred to in s"#/section G3H, ma;e a ret"rn that the meetin was d"ly called and that no D"or"m was present thereat. <pon s"ch a ret"rn #ein made within one wee; after the date fixed for the meetin the pro!ision of s"#/section G3H as to the ma;in of the ret"rn shall #e deemed to ha!e #een complied with. .he 8e istrar, on recei!in the acco"nt and either the ret"rn mentioned in s"#/section G3H or the ret"rn mentioned in s"#/section G$H, shall forthwith re ister them. .he (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B, on recei!in the acco"nt and either the ret"rn mentioned in s"#/section G3H or the ret"rn in s"#/section G$H, shall as soon as may #e, ma;e, and the liD"idator and all officers, past or present, of the company shall i!e the (a A:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B all reasona#le facilities to ma;e, a scr"tiny of the #oo;s and papers of the company and if on s"ch scr"tiny the (aA:fficial 2iD"idator referred to in cla"se G$H of s"#/section G1H of section $$)B ma;es a report to the (aA.ri#"nalB that the affairs of the company ha!e not #een cond"cted in a manner preC"dicial to the interests of its mem#ers or to p"#lic interest, then, from the date of the s"#mission of the report to the (aA.ri#"nalB the company shall #e deemed to #e dissol!ed. If on s"ch scr"tiny the (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B ma;es a report to the (aA.ri#"nalB that the affairs of the company ha!e #een cond"cted in a manner preC"dicial as aforesaid, the (aA.ri#"nalB shall #y order direct the (aA:fficial 2iD"idator referred to in cla"se G$H of s"#/section G1H of section $$)B to ma;e a f"rther in!esti ation of the affairs of the company and for that p"rpose shall in!est him with all s"ch powers as the (aA.ri#"nalB may deem fit. :n the receipt of the report of the (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B on s"ch f"rther in!esti ation the (aA.ri#"nalB may either ma;e an order that the company shall stand dissol!ed with effect from the date to #e specified #y the (aA.ri#"nalB therein or ma;e s"ch other order as the circ"mstances of the case #ro" ht o"t in the report permit.B If the liD"idator fails to call a eneral meetin of the company as reD"ired #y this section, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

G2H

AG'H G(H

G(AH

G(0H

G7H

'.,. Alternative provisions as to annual and !inal meetings in case o! insolvenc%

=here section $,' has effect, sections '0) and '0, shall apply to the windin "p, to the excl"sion of sections $,( and $,7, as if the windin "p were a creditorsE !ol"ntary windin "p and not a mem#ersE !ol"ntary windin "pK Provided that the liD"idator shall not #e reD"ired to call a meetin of creditors "nder section '0) at the end of the first year from the commencement of the windin "p, "nless the meetin held "nder section $,' has #een held more than months #efore the end of that year.

Provisions applicable to a creditors. voluntary winding up '... Provisions applica&le to a creditorEs voluntar% winding up
.he pro!isions contained in sections '00 to '0,, #oth incl"si!e, shall apply in relation to a creditorEs !ol"ntary windin "p.

)00. (eeting o! creditors

G1H .he company shall ca"se a meetin of the creditors of the company to #e called for the day, or the day next followin the day, on which there is to #e held the eneral meetin of the company at which the resol"tion for !ol"ntary windin "p is to #e proposed, and shall ca"se notices of the meetin of creditors to #e sent #y post to the creditors sim"ltaneo"sly with the sendin of the notices of the meetin of the company. .he company shall ca"se notice of the meetin of the creditors to #e ad!ertised once at least in the :fficial +aFette and once at least in two newspapers circ"latin in the district where the re istered office or principal place of #"siness of the company is sit"ate. .he 0oard of directors of the company shall/ GaH ca"se a f"ll statement of the position of the companyEs affairs to ether with a list of the creditors of the company and the estimated amo"nt of their claims to #e laid #efore the meetin of the creditors to #e held as aforesaidL and G#H appoint one of their n"m#er to preside at the said meetin . It shall #e the d"ty of the director appointed to preside at the meetin of creditors to attend the meetin and preside thereat. If the meetin of the company at which the resol"tion for !ol"ntary windin "p is to #e proposed is adCo"rned and the resol"tion is passed at an adCo"rned meetin , any resol"tion passed at the meetin of the creditors held in p"rs"ance of s"#/section G1H shall ha!e effect as if it had #een passed immediately after the passin of the resol"tion for windin "p the company. If defa"lt is made/ GaH G#H #y the company, in complyin with s"#/sections G1H and G2HL #y its 0oard of directors, in complyin with s"#/section G3HL

G2H

G3H

G$H G'H

G(H

GcH #y any director of the company, in complyin with s"#/section G$HL the company, each of the directors, or the director, as the case may #e, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB and, in the case of defa"lt #y the company, e!ery officer of the company who is in defa"lt, shall #e lia#le to the li;e p"nishment.

)01. 6otice o! resolutions passed &% creditorsE meeting to &e given to :egistrar
G1H 4otice of any resol"tion passed at a creditorsE meetin in p"rs"ance of section '00 shall #e i!en #y the company to the 8e istrar within ten days of the passin thereof.

G2H

If defa"lt is made in complyin with s"#/section G1H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

3or the p"rposes of this section, a liD"idator of the company shall #e deemed to #e an officer of the company.

)02. Appointment o! liDuidator

G1H .he creditors and the company at their respecti!e meetin s mentioned in section '00 may nominate a person to #e liD"idator for the p"rpose of windin "p the affairs and distri#"tin the assets of the company. If the creditors and the company nominate different persons the person nominated #y the creditors shall #e liD"idatorK Provided that any director, mem#er or creditor of the company may, within se!en days after the date on which the nomination was made #y the creditors, apply to the (aA.ri#"nalB for an order either directin that the person nominated as liD"idator #y the company shall #e liD"idator instead of or Cointly with the person nominated #y the creditors, or appointin the :fficial 2iD"idator or some other person to #e liD"idator instead of the person appointed #y the creditors. If no person is nominated #y the creditors, the person, if any, nominated #y the company shall #e liD"idator. If no person is nominated #y the company, the person, if any, nominated #y the creditors shall #e liD"idator.

G2H

G3H G$H

)0#. Appointment o! committee o! inspection

G1H G2H .he creditors at the meetin to #e held in p"rs"ance of section '00 or at any s"#seD"ent meetin may, if they thin; fit, appoint a committee of inspection consistin of not more than fi!e persons. If s"ch a committee is appointed, the company may, either at the meetin at which the resol"tion for !ol"ntary windin "p is passed or at any s"#seD"ent eneral meetin , appoint s"ch n"m#er of persons Gnot exceedin fi!eH as they thin; fit to act as mem#ers of the committeeK Provided that the creditors may, if they thin; fit, resol!e that all or any of the persons so appointed #y the company o" ht not to #e mem#ers of the committee of inspection. G3H G$H If the creditors so resol!e, the persons mentioned in the resol"tion shall not, "nless the otherwise directs, #e D"alified to act as mem#ers of the committee.
(a

A.ri#"nalB

G'H

:n any application to the (aA.ri#"nalB for a direction "nder s"#/section G3H, the (aA.ri#"nalB may, if it thin;s fit, appoint other persons to act as mem#ers of the committee of inspection in the place of the persons mentioned in the creditorsE resol"tion. S"#Cect to the pro!isions of s"#/sections G1H to G$H and to s"ch r"les as may #e made #y the *entral +o!ernment, the pro!isions of section $(' Aexcept s"#/section G1H thereofB shall apply with respect to a committee of inspection appointed "nder this section as they apply with respect to a committee of inspection appointed in a windin "p #y the (aA.ri#"nalB.

)0'. 5ixing o! liDuidatorsE remuneration

G1H G2H G3H .he committee of inspection, or if there is no s"ch committee, the creditors, may fix the rem"neration to #e paid to the liD"idator or liD"idators. =here the rem"neration is not so fixed, it shall #e determined #y the (aA.ri#"nalB. Any rem"neration fixed "nder s"#/section G1H or G2H shall not #e increased in any circ"mstances whate!er, whether with or witho"t the sanction of the (aA.ri#"nalB.

)0). 2oardEs powers to cease on appointment o! liDuidator

:n the appointment of a liD"idator, all the powers of the 0oard of directors shall cease, except in so far as the committee of inspection, or if there is no s"ch committee, the creditors in eneral meetin , may sanction the contin"ance thereof.

)0*. Power to !ill vacanc% in o!!ice o! liDuidator

If a !acancy occ"rs #y death, resi nation or otherwise, in the office of a liD"idator Gother than a liD"idator appointed #y, or #y the direction of the (aA.ri#"nalBH, the creditors in eneral meetin , may fill the !acancy.

)0+. Application o! section '.' to a creditors voluntar% winding up

.he pro!isions of section $,$ shall apply in the case of a creditorsE !ol"ntary windin "p as in the case of a mem#ersE !ol"ntary windin "p, with the modification that the powers of the liD"idator "nder that section shall not #e exercised except with the sanction either of the (aA.ri#"nalB or of the committee of inspection.

)0,.
G1H

ut% o! liDuidator to call meetings o! compan% and o! creditors at end o! each %ear
In the e!ent of the windin "p contin"in for more than one year, the liD"idator shall/ GaH call a eneral meetin of the company and a meetin of the creditors at the end of the first year from the commencement of the windin "p and at the end of each s"cceedin year, or as soon thereafter as may #e con!enient within three months from the end of the year or s"ch lon er period as the *entral +o!ernment may allowL and

G#H

G2H

lay #efore the meetin s an acco"nt of his acts and dealin s and of the cond"ct of the windin "p d"rin the precedin year, to ether with a statement in the prescri#ed form and containin the prescri#ed partic"lars with respect to the proceedin s in, and position of, the windin "p. If the liD"idator fails to comply with s"#/section G1H, he shall #e p"nisha#le, in respect of each fail"re, with fine which may extend to Aone tho"sand r"peesB.

)0.. 5inal meeting and dissolution

G1H As soon as the affairs of the company are f"lly wo"nd/"p, the liD"idator shall/ GaH ma;e "p an acco"nt of the windin "p, showin how the windin "p has #een cond"cted and the property of the company has #een disposed ofL and G#H call a eneral meetin of the company and a meetin of the creditors for the p"rpose of layin the acco"nt #efore the meetin s and i!in any explanation thereof. 1ach s"ch meetin shall #e called #y ad!ertisement/ GaH G#H G3H specifyin the time, place and o#Cect thereofL and p"#lished not less than one month #efore the meetin in the :fficial +aFette and also in some newspaper circ"latin in the district where the re istered office of the company is sit"ate. =ithin one wee; after the date of the meetin , or if the meetin s are not held on the same date, after the date of the later meetin , the liD"idator shall send to the A8e istrar and the (aA:fficial 2iD"idator referred to in cla"se G$H of s"#/section G1H of section $$)B a copy each of the acco"nt and shall ma;e a ret"rn to each of themB of the holdin of the meetin s and of the date or dates on which they were held. If the copy is not so sent or the ret"rn is not so made, the liD"idator shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es. If a D"or"m Gwhich for the p"rposes of this section shall #e two personsH is not present at either of s"ch meetin s, the liD"idator shall, in lie" of the ret"rn referred to in s"#/section G3H, ma;e a ret"rn that the meetin was d"ly called and that no D"or"m was present thereat. <pon s"ch a ret"rn #ein made within one wee; after the date fixed for the meetin , the pro!isions of s"#/section G3H as to the ma;in of the ret"rn shall, in respect of that meetin , #e deemed to ha!e #een complied with.

G2H

G$H

AG'H G(H

.he 8e istrar, on recei!in the acco"nt and also, in respect of each s"ch meetin , either the ret"rn mentioned in s"#/section G3H or the ret"rn mentioned in s"#/section G$H, shall forthwith re ister them. .he (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B, on recei!in the acco"nt and either the ret"rn mentioned in s"#/section G3H or the ret"rn mentioned in s"#/section G$H, shall, as soon as may #e, ma;e, and the liD"idator and all officers, past or present of the company shall i!e the (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B all reasona#le facilities to ma;e, a scr"tiny of the #oo;s and papers of the company and if on s"ch scr"tiny the (a A:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B ma;es a report to the (a A.ri#"nalB that the affairs of the company ha!e not #een cond"cted in a manner preC"dicial to the interests of its mem#ers or to p"#lic interest, then, from the date of the s"#mission of the report to the (a A.ri#"nalB the company shall #e deemed to #e dissol!ed. If on s"ch scr"tiny the (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B ma;es a report to the (aA.ri#"nalB that the affairs of the company ha!e #een cond"cted in a manner preC"dicial as aforesaid, the (aA.ri#"nalB shall #y order direct the (aA:fficial 2iD"idator referred to in cla"se G$H of s"#/section G1H of section $$)B to ma;e a f"rther in!esti ation of the affairs of the company and for that p"rpose shall in!est him with all s"ch powers as the (aA.ri#"nalB may deem fit. :n the receipt of the report of the (aA:fficial 2iD"idator referred to in cla"se G $H of s"#/section G1H of section $$)B on s"ch f"rther in!esti ation the (aA.ri#"nalB may either ma;e an order that the company shall stand dissol!ed with effect from the date to #e specified #y the (aA.ri#"nalB therein or ma;e s"ch other order as the circ"mstances of the case #ro" ht o"t in the report permit.B If the liD"idator fails to call a eneral meetin of the company or a meetin of the creditors as reD"ired #y this section, he shall #e p"nisha#le, in respect of each s"ch fail"re, with fine which may extend to Afi!e tho"sand r"peesB.

G(AH

G(0H

G7H

Provisions applicable to every voluntary winding up )10. Provisions applica&le to ever% voluntar% winding up
.he pro!isions contained in sections '11 to '21, #oth incl"si!e, shall apply to e!ery !ol"ntary windin "p, whether a mem#ersE or a creditorsE windin "p.

)11.

istri&ution o! propert% o! compan%

S"#Cect to the pro!isions of this Act as to preferential payments, the assets of a company, shall, on its windin "p, #e applied in satisfaction of its lia#ilities pari pass" and, s"#Cect to s"ch application, shall, "nless the articles otherwise pro!ide, #e distri#"ted amon the mem#ers accordin to their ri hts and interests in the company.

)11A. Application o! section ')' to voluntar% winding up

.he pro!isions of section $'$ shall, so far as may #e, apply to e!ery !ol"ntary windin "p as they apply to the windin "p #y the (aA.ri#"nalB except that references to/ GaH the (aA.ri#"nalB shall #e omittedL G#H GcH the :fficial 2iD"idator or the pro!isional liD"idator shall #e constr"ed as references to the liD"idatorL and the "rele!ant date" shall #e constr"ed as references to the date of commencement of the windin "p.B

)12. Powers and duties o! liDuidator in voluntar% winding up

G1H .he liD"idator may,/ GaH in the case of a mem#ersE !ol"ntary windin "p, with the sanction of a special resol"tion of the company, and in the case of a creditorEs !ol"ntary windin "p, with the sanction of the

A.ri#"nalB or, the committee of inspection or, if there is no s"ch committee, of a meetin of the creditors, exercise any of the powers i!en #y Acla"ses GaH to GdH of s"#/section G1HB of section $'7 to a liD"idator in a windin "p #y the (aA.ri#"nalBL
(a

G#H GcH GdH GeH

witho"t the sanction referred to in cla"se GaH, exercise any of the other powers i!en #y this Act to the liD"idator in a windin "p #y the (aA.ri#"nalBL exercise the power of the (aA.ri#"nalB "nder this Act of settlin a list of contri#"tories Gwhich shall #e prima facie e!idence of the lia#ility of the persons named therein to #e contri#"toriesHL exercise the power of the (aA.ri#"nalB of ma;in callsL call eneral meetin s of the company for the p"rpose of o#tainin the sanction of the company #y ordinary or special resol"tion, as the case may reD"ire, or for any other p"rpose he may thin; fit.

G2H

G3H G$H

.he exercise #y the liD"idator of the powers i!en #y cla"se GaH of s"#/section G1H shall #e s"#Cect to the control of the (aA.ri#"nalBL and any creditor or contri#"tory may apply to the (aA.ri#"nalB with respect to any exercise or proposed exercise of any of the powers conferred #y this section. .he liD"idator shall pay the de#ts of the company and shall adC"st the ri hts of the contri#"tories amon themsel!es. =hen se!eral liD"idators are appointed, any power i!en #y this Act may #e exercised #y s"ch one or more of them as may #e determined at the time of their appointment, or, in defa"lt of s"ch determination, #y any n"m#er of them not #ein less than two.

)1#. 2od% corporate not to &e appointed as liDuidator

G1H G2H G3H
(a

A #ody corporate shall not #e D"alified for appointment as liD"idator of a company in a !ol"ntary windin "p. Any appointment made in contra!ention of s"#/section G1H shall #e !oid. Any #ody corporate which acts as liD"idator of a company, and e!ery director AJJJB or a mana er thereof, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB.

AProvided that, notwithstandin anythin contained in any other law for the time #ein in force, a #ody corporate consistin of s"ch professionals as may #e appro!ed #y the *entral +o!ernment from time to time, shall #e D"alified for appointment as :fficial 2iD"idator "nder section $$).B

)1'. Corrupt inducement a!!ecting appointment as liDuidator

Any person who i!es, or a rees or offers to i!e, to any mem#er or creditor of a company any ratification whate!er with a !iew to/ GaH G#H sec"rin his own appointment or nomination as the companyEs liD"idatorL or sec"rin or pre!entin the appointment or nomination of some person other than himself, as the companyEs liD"idatorL shall #e p"nisha#le with fine which may extend to 2,3AAten tho"sand r"peesB.

)1). *aPower o! 0ri&unal to appoint and remove liDuidator in voluntar% winding up

G1H G2H G3H G$H If from any ca"se whate!er, there is no liD"idator actin , the .ri#"nal may appoint the :fficial 2iD"idator or any other person as a liD"idator. .he .ri#"nal may, on ca"se shown, remo!e a liD"idator and appoint the :fficial 2iD"idator or any other person as a liD"idator in place of the remo!ed liD"idator. .he .ri#"nal may also appoint or remo!e a liD"idator on the application made #y the 8e istrar in this #ehalf. If the :fficial 2iD"idator is appointed as liD"idator "nder the pro!iso to s"#/section G2H of section '02 or "nder this section, the rem"neration to #e paid to him shall #e fixed #y the .ri#"nal and shall #e credited to the *entral +o!ernment.B

)1*. 6otice &% liDuidator o! his appointment

G1H G2H .he liD"idator shall, within AthirtyB days after his appointment p"#lish in the :fficial +aFette and deli!er to the 8e istrar for re istration a notice of his appointment in the form prescri#ed. If the liD"idator fails to comply with s"#/section G1H, he shall #e p"nisha#le with fine which may extend to Afi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

)1+. Arrangement when &inding on compan% and creditors

G1H Any arran ement entered into #etween a company a#o"t to #e, or in the co"rse of #ein , wo"nd/"p and its creditors shall, s"#Cect to the ri ht of appeal "nder this section, #e #indin on the company and on the creditors if it is sanctioned #y a special resol"tion of the company and acceded to #y three/fo"rths in n"m#er and !al"e of the creditors. Any creditor or contri#"tory may, within three wee;s from the completion of the arran ement, appeal to the (aA.ri#"nalB a ainst it and the (aA.ri#"nalB may there"pon, as it thin;s C"st, amend, !ary, confirm or set aside the arran ement.

G2H

)1,. *aPower to appl% to 0ri&unal to have Duestions determined or powers exercised

G1H .he liD"idator or any contri#"tory or creditor may apply to the .ri#"nal,M GaH to determine any D"estion arisin in the windin "p of a companyL or G#H to exercise, as respects the enforcin of calls, the stayin of proceedin s or any other matter, all or any of the powers which the .ri#"nal mi ht exercise if the company were #ein wo"nd "p #y the .ri#"nal. .he liD"idator or any creditor or contri#"tory may apply to the .ri#"nal for an order settin aside any attachment, distress or exec"tion p"t into force a ainst the estate or effects of the company after the commencement of the windin "p. .he .ri#"nal, if satisfied on an application "nder s"#/section G1H or s"#/section G2H that the determination of the D"estion or the reD"ired exercise of power or the order applied for will #e C"st and #eneficial, may accede wholly or partially to the application on s"ch terms and conditions as it thin;s fit, or may ma;e s"ch other order on the application as it thin;s C"st. A copy of an order stayin the proceedin s in the windin "p, made #y !irt"e of this section, shall forthwith #e forwarded #y the company, or otherwise as may #e prescri#ed, to the 8e istrar, who shall ma;e a min"te of the order in his #oo;s relatin to the company.

G2H

G3H

G$H

)1.. *aApplication o! liDuidator to 0ri&unal !or pu&lic examination o! promoters, directors, etc.
G1H .he liD"idator may ma;e a report to the .ri#"nal statin that in his opinion a fra"d has #een committed #y any person in the promotion or formation of the company or #y any officer of the company in relation to the company since its formationL and the .ri#"nal may, after considerin the report, direct that that person or officer shall attend #efore the .ri#"nal on a day appointed #y it for that p"rpose, and #e p"#licly examined as to the promotion or formation or the cond"ct of the #"siness of the company, or as to his cond"ct and dealin s as officer thereof. .he pro!isions of s"#/sections G2H to G11H of section $7) shall apply in relation to any examination directed "nder s"#/section G1H as they apply in relation to an examination directed "nder s"#/section G1H of section $7) with references to the liD"idator #ein s"#stit"ted for references to the :fficial 2iD"idator in those pro!isions.B

G2H

)20. Costs o! voluntar% winding up

All costs, char es and expenses properly inc"rred in the windin "p, incl"din the rem"neration of the liD"idator, shall, s"#Cect to the ri hts of sec"red creditors, if any, #e paya#le o"t of the assets of the company in priority to all other claims.

)21. Saving o! right o! creditors and contri&utories to appl% !or winding up

Gepealed by t e !ompanies (Amendment# A$t% 196-+

Chapter "9J

?inding up su&Cect to supervision o! Court

)22. (aA:mitted #y the *ompanies GSecond AmendmentH Act, 2002 )2#. (aA:mitted #y the *ompanies GSecond AmendmentH Act, 2002 )2'. (aA:mitted #y the *ompanies GSecond AmendmentH Act, 2002 )2). (aA:mitted #y the *ompanies GSecond AmendmentH Act, 2002 )2*. (aA:mitted #y the *ompanies GSecond AmendmentH Act, 2002 )2+. (aA:mitted #y the *ompanies GSecond AmendmentH Act, 2002

Chapter 9J

Provisions applica&le to ever% mode o! winding up Proof and ran3ing of claims

)2,.

e&ts o! all descriptions to &e admitted to proo!

In e!ery windin "p Gs"#Cect, in the case of insol!ent companies, to the application in accordance with the pro!isions of this Act of the law of insol!encyH, all de#ts paya#le on a contin ency, and all claims a ainst the company, present or f"t"re, certain or contin ent, ascertained or so"ndin only in dama es, shall #e admissi#le to proof a ainst the company, a C"st estimate #ein made, so far as possi#le, of the !al"e of s"ch de#ts or claims as may #e s"#Cect to any contin ency, or may so"nd only in dama es, or for some other reason may not #ear a certain !al"e.

)2..
G1H

Application o! insolvenc% rules in winding up o! insolvent companies

In the windin "p of an insol!ent company, the same r"les shall pre!ail and #e o#ser!ed with re ard to/ GaH G#H GcH de#ts pro!a#leL the !al"ation of ann"ities and f"t"re and contin ent lia#ilitiesL and the respecti!e ri hts of sec"red and "nsec"red creditorsL as are in force for the time #ein "nder the law of insol!ency with respect to the estates of persons adC"d ed insol!entK

AProvided that the sec"rity of e!ery sec"red creditor shall #e deemed to #e s"#Cect to a pari pass" char e in fa!o"r of the wor;men to the extent of the wor;menEs portion therein, and, where a sec"red creditor, instead of relinD"ishin his sec"rity and pro!in his de#ts opts to realise his sec"rity,/ GaH the liD"idator shall #e entitled to represent the wor;men and enforce s"ch char eL G#H GcH any amo"nt realised #y the liD"idator #y way of enforcement of s"ch char e shall #e applied ratea#ly for the dischar e of wor;menEs d"esL and so m"ch of the de#ts d"e to s"ch sec"red creditor as co"ld not #e realised #y him #y !irt"e of the fore oin pro!isions of this pro!iso or the amo"nt of the wor;menEs portion in his sec"rity, whiche!er is less, shall ran; part pass" with the wor;menEs d"es for the p"rposes of section '2,A.B

G2H

All persons who in any s"ch case wo"ld #e entitled to pro!e for and recei!e di!idends o"t of the assets of the company, may come in "nder the windin "p, and ma;e s"ch claims a ainst the company as they respecti!ely are entitled to ma;e #y !irt"e of this sectionK AProvided that if a sec"red creditor instead of relinD"ishin his sec"rity and pro!in for his de#ts proceeds to realise his sec"rity, he shall #e lia#le to 33'Apay his portion of the expensesB inc"rred #y the liD"idator Gincl"din a pro!isional liD"idator, if anyH for the preser!ation of the sec"rity #efore its realiFation #y the sec"red creditor.B AExplanation( / 3or the p"rposes of this pro!iso, the portion of expenses inc"rred #y the liD"idator for the preser!ation of a sec"rity which the sec"red creditor shall #e lia#le to pay shall #e the whole of the expenses less an amo"nt which #ears to s"ch expenses the same proportion as the wor;menEs portion in relation to the sec"rity #ears to the !al"e of the sec"rityL

G3H

3or the p"rposes of this section, sections '2,A and section '30./ GaH "wor;men", in relation to a company, means the employees of the company, #ein wor;men within the meanin of the Ind"strial Disp"tes Act, 1,$7L G#H "wor;menEs d"es", in relation to a company, means the a re ate of the followin s"ms d"e from the company to its wor;men, namelyK/ GiH all wa es or salary incl"din wa es paya#le for time or piece wor; and salary earned wholly or in part #y way of commission of any wor;man, in respect of ser!ices rendered to the company and any compensation paya#le to any wor;man "nder any of the pro!isions of the Ind"strial Disp"tes Act, 1,$7L GiiH all accr"ed holiday rem"neration #ecomin paya#le to any wor;man, or in the case of his death to any other person in his ri ht, on the termination of his employment #efore, or #y the effect of, the windin "p order or resol"tionL GiiiH "nless the company is #ein wo"nd/"p !ol"ntarily merely for the p"rposes of reconstr"ction or of amal amation with another company, or "nless the company has, at the commencement of the windin "p, "nder s"ch a contract with ins"rers as is mentioned in section 1$ of the =or;menEs *ompensation Act, 1,23, ri hts capa#le of #ein transferred to and !ested in the wor;man, all amo"nts d"e in respect of any compensation or lia#ility for compensation "nder the said Act in respect of the death or disa#lement of any wor;man of the companyL Gi!H all s"ms d"e to any wor;man from a pro!ident f"nd, a pension f"nd, a rat"ity f"nd or any other f"nd for the welfare of the wor;men, maintained #y the companyL "wor;menEs portion", in relation to the sec"rity of any sec"red creditor of a company, means the amo"nt which #ears to the !al"e of the sec"rity the same proportion as the amo"nt of the wor;menEs d"es #ears to the a re ate of/ GiH GiiH the amo"nt of wor;menEs d"esL and the amo"nts of the de#ts d"e to the sec"red creditors.

GcH

Illustration
.he !al"e of the sec"rity of a sec"red creditor of a company is 8s. 1,00,000. .he total amo"nt of the wor;menEs d"es is 8s. 1,00,000. .he amo"nt of the de#ts d"e from the company to its sec"red creditors is 8s. 3,00,000. .he a re ate of the amo"nt of wor;menEs d"es and of the amo"nts of de#ts d"e to sec"red creditors is 8s. $,00,000. .he wor;menEs portion of the sec"rity is, therefore, one/fo"rth of the !al"e of the sec"rity, that is 8s. 2',000.B

)2.A. <verriding pre!erential pa%ments

G1H 4otwithstandin anythin contained in any other pro!ision of this Act or any other law for the time #ein in force, in the windin "p of a company,/ GaH wor;menEs d"esL and G#H de#ts d"e to sec"red creditors to the extent s"ch de#ts ran; "nder cla"se GcH of the pro!iso to s"#/section G1H of section '2, pari pass" with s"ch d"es,

shall #e paid in priority to all other de#ts. G2H .he de#ts paya#le "nder cla"se GaH and cla"se G#H of s"#/section G1H shall #e paid in f"ll, "nless the assets are ins"fficient to meet them, in which case they shall a#ate in eD"al proportions.B

)#0.
G1H

Pre!erential pa%ments
In a windin "p, As"#Cect to the pro!isions of section '2,A, there shall #e paidB in priority to all other de#ts/ GaH all re!en"es, taxes, cesses and rates d"e from the company to the *entral or a State +o!ernment or to a local a"thority at the rele!ant date as defined in cla"se GcH of s"#/section G)H, and ha!in #ecome d"e and paya#le within the twel!e months next #efore that dateL G#H all wa es or salary Gincl"din wa es paya#le for time or piece wor; and salary earned wholly or in part #y way of commissionH of any employee, in respect of ser!ices rendered to the company and d"e for a period not exceedin fo"r months within the twel!e months next #efore the rele!ant date AJJJB, s"#Cect to the limit specified in s"#/section G2HL all accr"ed holiday rem"neration #ecomin paya#le to any employee, or in the case of his death to any other person in his ri ht, on the termination of his employment #efore, or #y the effect of, the windin "p order or resol"tionL "nless the company is #ein wo"nd/"p !ol"ntarily merely for the p"rposes of reconstr"ction or of amal amation with another company, all amo"nts d"e, in respect of contri#"tions paya#le d"rin the twel!e months next #efore the rele!ant date, #y the company as the employer of any persons, "nder the 1mployeesE State Ins"rance Act, 1,$), or any other law for the time #ein in forceL "nless the company is #ein wo"nd/"p !ol"ntarily merely for the p"rposes of reconstr"ction or of amal amation with another company, or "nless the company has, at the commencement of the windin "p, "nder s"ch a contract with ins"rers as is mentioned in section 1$ of the =or;menEs *ompensation Act, 1,23, ri hts capa#le of #ein transferred to and !ested in the wor;man, all amo"nts d"e in respect of any compensation or lia#ility for compensation "nder the said Act in respect of the death or disa#lement of any employee of the companyL all s"ms d"e to any employee from a pro!ident f"nd, a pension f"nd, a rat"ity f"nd or any other f"nd for the welfare of the employees, maintained #y the companyL and the expenses of any in!esti ation held in p"rs"ance of section 23' or 237, in so far as they are paya#le #y the company.

GcH

GdH

GeH

GfH G H G2H

.he s"m to which priority is to #e i!en "nder cla"se G#H of s"#/section G1H, shall not, in the case of any one claimant, Aexceed s"ch s"m as may #e notified #y the *entral +o!ernment in the :fficial +aFetteB. =here any compensation "nder the =or;menEs *ompensation Act, 1,23 is a wee;ly payment, the amo"nt d"e in respect thereof shall, for the p"rposes of cla"se GeH of s"#/section G1H, #e ta;en to #e the amo"nt of the l"mp s"m for which the wee;ly payment co"ld, if redeema#le, #e redeemed if the employer made an application for that p"rpose "nder the said Act. =here any payment has #een made to any employee of a company,/ GiH on acco"nt of wa es or salaryL or GiiH to him, or in the case of his death, to any other person in his ri ht, on acco"nt of accr"ed holiday rem"neration,

AJJJB G3H

G$H

G'H

o"t of money ad!anced #y some person for that p"rpose, the person #y whom the money was ad!anced shall, in a windin "p, ha!e a ri ht of priority in respect of the money so ad!anced and paid, "p to the amo"nt #y which the s"m in respect of which the employee or other person in his ri ht, wo"ld ha!e #een entitled to priority in the windin "p has #een diminished #y reason of the payment ha!in #een made. .he fore oin de#ts shall/ GaH ran; eD"ally amon themsel!es and #e paid in f"ll, "nless the assets are ins"fficient to meet them, in which case they shall a#ate in eD"al proportionsL and

G#H

G(H

G7H

G)H

so far as the assets of the company a!aila#le for payment of eneral creditors are ins"fficient to meet them, ha!e priority o!er the claims of holders of de#ent"res "nder any floatin char e created #y the company, and #e paid accordin ly o"t of any property comprised in or s"#Cect to that char e. S"#Cect to the retention of s"ch s"ms as may #e necessary for the costs and expenses of the windin "p, the fore oin de#ts shall #e dischar ed forthwith so far as the assets are s"fficient to meet them, and in the case of the de#ts to which priority is i!en #y cla"se GdH of s"#/section G1H, formal proof thereof shall not #e reD"ired except in so far as may #e otherwise prescri#ed. In the e!ent of a landlord or other person distrainin or ha!in distrained on any oods or effects of the company within three months next #efore the date of a windin "p order, the de#ts to which priority is i!en #y this section shall #e a first char e on the oods or effects so distrained on, or the proceeds of the sale thereof. Provided that, in respect of any money paid "nder any s"ch char e, the landlord or other person shall ha!e the same ri hts of priority as the person to whom the payment is made. 3or the p"rposes of this section/ GaH any rem"neration in respect of a period of holiday or of a#sence from wor; thro" h sic;ness or other ood ca"se shall #e deemed to #e wa es in respect of ser!ices rendered to the company d"rin that periodL G#H the expression "accr"ed holiday rem"neration" incl"des, in relation to any person, all s"ms which, #y !irt"e either of his contract of employment or of any enactment Gincl"din any order made or direction i!en "nder any enactmentH, are paya#le on acco"nt of the rem"neration which wo"ld, in the ordinary co"rse, ha!e #ecome paya#le to him in respect of a period of holiday, had his employment with the company contin"ed "ntil he #ecame entitled to #e allowed the holidayL AJJJB AG##H the expression "employee" does not incl"de a wor;manL and GcH the expression "the rele!ant date" means/ GiH in the case of a company ordered to #e wo"nd/"p comp"lsorily, the date of the appointment Gor first appointmentH of a pro!isional liD"idator, or if no s"ch appointment was made, the date of the windin "p order, "nless in either case the company had commenced to #e wo"nd/"p !ol"ntarily #efore that dateL and GiiH in any case where s"#/cla"se GiH does not apply, the date of the passin of the resol"tion for the !ol"ntary windin "p of the company. .his section shall not apply in the case of a windin "p where the date referred to in s"#/section G'H of section 230 of the Indian *ompanies Act, 1,13, occ"rred #efore the commencement of this Act, and in s"ch a case, the pro!isions relatin to preferential payments which wo"ld ha!e applied if this Act had not #een passed, shall #e deemed to remain in f"ll force.

G,H

0ffect of winding up on antecedent and other transactions )#1.

G1H

5raudulent pre!erence
Any transfer of property, mo!a#le or immo!a#le, deli!ery of oods, payment, exec"tion or other act relatin to property made, ta;en or done #y or a ainst a company within six months #efore the commencement of its windin "p which, had it #een made, ta;en or done #y or a ainst an indi!id"al within three months #efore the presentation of an insol!ency petition on which he is adC"d ed insol!ent, wo"ld #e deemed in his insol!ency a fra"d"lent preference, shall in the e!ent of the company #ein wo"nd/"p, #e deemed a fra"d"lent preference of its creditors and #e in!alid accordin lyK &ro!ided that, in relation to thin s made, ta;en or done #efore the commencement of this Act, this s"#/ section shall ha!e effect with the s"#stit"tion, for the reference to six months, of a reference to three months. 3or the p"rposes of s"#/section G1H, the presentation of a petition for windin "p in the case of a windin "p #y (aAthe .ri#"nalB, and the passin of a resol"tion for windin "p in the case of a

G2H

!ol"ntary windin "p, shall #e deemed to correspond to the act of insol!ency in the case of an indi!id"al.

)#1A. Avoidance o! voluntar% trans!er

Any transfer of property, mo!a#le or immo!a#le, or any deli!ery of oods, made #y a company, not #ein a transfer or deli!ery made in the ordinary co"rse of its #"siness or in fa!o"r of a p"rchaser or enc"m#rancer in ood faith and for !al"a#le consideration, if made within a period of one year #efore the presentation of petition for windin "p #y (aAthe .ri#"nalB or the passin of a resol"tion for !ol"ntary windin "p of the company, shall #e !oid a ainst the liD"idator.B

)#2.

0rans!ers !or &ene!it o! all creditors to &e void

Any transfer or assi nment #y a company of all its property to tr"stees for the #enefit of all its creditors shall #e !oid.

)##.
G1H

4ia&ilities and rights o! certain !raudulentl% pre!erred persons

=here, in the case of a company which is #ein wo"nd/"p, any thin made, ta;en or done after the commencement of this Act is in!alid "nder section '31 as a fra"d"lent preference of a person interested in property mort a ed or char ed to sec"re the companyEs de#t, then Gwitho"t preC"dice to any ri hts or lia#ilities arisin apart from this pro!isionH, the person preferred shall #e s"#Cect to the same lia#ilities, and shall ha!e the same ri hts, as if he had "nderta;en to #e personally lia#le as s"rety for the de#t, to the extent of the mort a e or char e on the property or the !al"e of his interest, whiche!er is less. .he !al"e of the said personEs interest shall #e determined as at the date of the transaction constit"tin the fra"d"lent preference, and shall #e determined as if the interest were free of all enc"m#rances other than those to which the mort a e or char e for the companyEs de#t was then s"#Cect. :n any application made to the (aAthe .ri#"nalB with respect to any payment on the ro"nd that the payment was a fra"d"lent preference of a s"rety or "arantor, the (aAthe .ri#"nalB shall ha!e C"risdiction to determine any D"estions with respect to the payment arisin #etween the person to whom the payment was made and the s"rety or "arantor and to rant relief in respect thereof, notwithstandin that it is not necessary so to do for the p"rposes of the windin "p, and for that p"rpose may i!e lea!e to #rin in the s"rety or "arantor as a third party as in the case of a s"it for the reco!ery of the s"m paid.

G2H

G3H

.his s"#/section shall apply, with the necessary modifications, in relation to transactions other than the payment of money as it applies in relation to payments of money.

)#'.

3!!ect o! !loating charge

=here a company is #ein wo"nd/"p, a floatin char e on the "nderta;in or property of the company created within the twel!e immediately precedin the commencement of the windin "p, shall, "nless it is pro!ed that the company immediately after the creation of the char e was sol!ent, #e in!alid, except to the amo"nt of any cash paid to the company at the time of, or s"#seD"ently to the creation of, and consideration for, the char e, to ether with interest on that amo"nt at the rate of fi!e per cent ann"m or s"ch other rate as may for the time #ein #e notified the *entral +o!ernment in this #ehalf in the :fficial +aFetteK Provided that in relation to a char e created more than three months #efore the commencement of this Act, this section shall ha!e effect with the s"#stit"tion, for references to twel!e months of references to three months.

)#).
G1H

isclaimer o! onerous propert% in case o! a compan% which is &eing wound1up

=here any part of the property of a company which is #ein wo"nd/"p consists of/

GaH G#H GcH

land of any ten"re, #"rdened with onero"s co!enantsL shares or stoc; in companiesL any other property which is "nsalea#le or is not readily salea#le, #y reason of its #indin the possessor thereof either to the performance of any onero"s act or to the payment of any s"m of moneyL or

GdH "nprofita#le contractsL the liD"idator of the company, notwithstandin that he has endea!o"red to sell or has ta;en possession of the property, or exercised any act of ownership in relation thereto, or done anythin in p"rs"ance of the contract, may, with the lea!e of the (aA.ri#"nalB and s"#Cect to the pro!isions of this section, #y writin si ned #y him, at any time within twel!e months after the commencement of the windin "p or s"ch extended period as may #e allowed #y the (aA.ri#"nalB, disclaim the propertyK Provided that, where any s"ch property has not come to the ;nowled e of the liD"idator within one month after the commencement of the windin "p, the power of disclaimin the property may #e exercised at any time within twel!e months after he has #ecome aware thereof or s"ch extended period as may #e allowed #y the (aA.ri#"nalB. G2H .he disclaimer shall operate to determine, as from the date of disclaimer, the ri hts, interest, and lia#ilities of the company, and the property of the company, in or in respect of the property disclaimed, #"t shall not, except so far as is necessary for the p"rpose of releasin the company and the property of the company from lia#ility, affect the ri hts or lia#ilities of any other person. .he (aA.ri#"nalB, #efore or on rantin lea!e to disclaim, may reD"ire s"ch notices to #e i!en to persons interested, and impose s"ch terms as a condition of rantin lea!e, and ma;e s"ch other order in the matter as the (aA.ri#"nalB thin;s C"st. .he liD"idator shall not #e entitled to disclaim any property in any case where an application in writin has #een made to him #y any person interested in the property reD"irin him to decide whether he will or will not disclaim, and the liD"idator has not, within a period of twenty/ei ht days after the receipt of the application or s"ch extended period as may #e allowed #y the (aA.ri#"nalB, i!en notice to the applicant that he intends to apply to the (aA.ri#"nalB for lea!e to disclaimL and in case the property is a contract, if the liD"idator, after s"ch an application as aforesaid, does not within the said period or extended period disclaim the contract, Ahe shall #e deemed to ha!e adopted itB. .he (aA.ri#"nalB may, on the application of any person who is, as a ainst the liD"idator, entitled to the #enefit or s"#Cect to the #"rden of a contract made with the company, ma;e an order rescindin the contract on s"ch terms as to payment #y or to either party of dama es for the non/performance of the contract, or otherwise as the (aA.ri#"nalB thin;s C"stL and any dama es paya#le "nder the order of any s"ch person may #e pro!ed #y him as a de#t in the windin "p. .he (aA.ri#"nalB may, on an application #y any person who either claims any interest in any disclaimed property or is "nder any lia#ility not dischar ed #y this Act in respect of any disclaimed property, and after hearin any s"ch persons as it thin;s fit, ma;e an order for the !estin of the property in, or the deli!ery of the property to, any person entitled thereto or to whom it may seem C"st that the property sho"ld #e deli!ered #y way of compensation for s"ch lia#ility as aforesaid, or a tr"stee for him, and on s"ch terms as the (aA.ri#"nalB thin;s C"stL and on any s"ch !estin order #ein made, the property comprised therein shall !est accordin ly in the person therein named in that #ehalf witho"t any con!eyance or assi nment for the p"rposeK Provided that, where the property disclaimed is of a leasehold nat"re, the (aA.ri#"nalB shall not ma;e a !estin order in fa!o"r of any person claimin "nder the company, whether as "nder/lessee or as mort a ee or holder of a char e #y way of demise, except "pon the terms of ma;in that person/ GaH G#H s"#Cect to the same lia#ilities and o#li ations as those to which the company was s"#Cect "nder the lease in respect of the property at the commencement of the windin "pL or if the (aA.ri#"nalB thin;s fit, s"#Cect only to the same lia#ilities and o#li ations as if the lease had #een assi ned to that person at that dateL

G3H

G$H

G'H

G(H

and in either e!ent Gif the case so reD"iresH as if the lease had comprised only the property comprised in the !estin orderL and any mort a ee or "nder/lessee declinin to accept a !estin order "pon s"ch terms shall #e excl"ded from all interest in and sec"rity "pon the property, and, if there is no person claimin "nder the company who is willin to accept an order "pon s"ch terms, the (aA.ri#"nalB shall ha!e power to !est the estate and interest of the company in the property in any person lia#le, either personally or in a representati!e character, and either alone or Cointly with the company, to perform the lesseeEs co!enants in the lease, freed and dischar ed from all estates, enc"m#rances and interests created therein #y the company.

G7H

Any person inC"red #y the operation of a disclaimer "nder this section shall #e deemed to #e a creditor of the company to the amo"nt of the compensation or dama es paya#le in respect of the inC"ry, and may accordin ly pro!e the amo"nt as a de#t in the windin "p.

)#*.
G1H

Avoidance o! trans!ers, etc., a!ter commencement o! winding up

In the case of a !ol"ntary windin "p, any transfer of shares in the company, not #ein a transfer made to or with the sanction of the liD"idator, and any alteration in the stat"s of the mem#ers of the company, made after the commencement of the windin "p, shall #e !oid. In the case of a windin "p #y (aAthe .ri#"nalB, any disposition of the property Gincl"din actiona#le claimsH of the company, and any transfer of shares in the company or alteration in the stat"s of its mem#ers, made after the commencement of the windin "p, shall, "nless the (aA.ri#"nalB otherwise orders, #e !oid.

G2H

*a)#+. Avoidance o! certain attachments, executions, etc., in winding up &% 0ri&unal

G1H =here any company is #ein wo"nd "p #y the .ri#"nalM GaH G#H G2H any attachment, distress or exec"tion p"t in force, witho"t lea!e of the .ri#"nal a ainst the estate or effects of the company, after the commencement of the windin "pL or any sale held, witho"t lea!e of the .ri#"nal, of any of the properties or effects of the company after s"ch commencement, shall #e !oid.

4othin in this section applies to any proceedin s for the reco!ery of any tax or impost or any d"es paya#le to the +o!ernment.B

4ffences antecedent to or in course of winding up )#,.

G1H

<!!ences &% o!!icers o! companies in liDuidation

If any person, #ein a past or present officer of a company which, at the time of the commission of the alle ed offence, is #ein wo"nd/"p, whether #y (aAthe .ri#"nalB or !ol"ntarily, or which is s"#seD"ently ordered to #e wo"nd/"p #y the (aA.ri#"nalB or which s"#seD"ently passes a resol"tion for !ol"ntary windin "p,/ GaH does not, to the #est of his ;nowled e and #elief, f"lly and tr"ly disco!er to the liD"idator all the property, mo!a#le and immo!a#le, of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except s"ch part as has #een disposed of in the ordinary co"rse of the #"siness of the companyL G#H does not deli!er "p to the liD"idator, or as he directs, all s"ch part of the mo!a#le and immo!a#le property of the company as is in his c"stody or "nder his control, and which he is reD"ired #y law to deli!er "pL GcH GdH does not deli!er "p to the liD"idator, or as he directs, all s"ch #oo;s and papers of the company as are in his c"stody or "nder his control and which he is reD"ired #y law to deli!er "pL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, conceals any part of the property of the company to the !al"e of one h"ndred r"pees or "pwards, or conceals any de#t d"e to or from the companyL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, fra"d"lently remo!es any part of the property of the company to the !al"e of one h"ndred r"pees or "pwardsL ma;es any material omission in any statement relatin to the affairs of the companyL ;nowin or #elie!in that a false de#t has #een pro!ed #y any person "nder the windin "p, fails for a period of one month to inform the liD"idator thereofL after the commencement of the windin "p, pre!ents the prod"ction of any #oo; or paper affectin or relatin to the property or affairs of the companyL

GeH

GfH G H GhH

GiH

GCH

within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, conceals, destroys, m"tilates or falsities, or is pri!y to the concealment, destr"ction, m"tilation or falsification of, any #oo; or paper affectin or relatin to, the property or affairs of the companyL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter ma;es, or is pri!y to the ma;in of, any false entry in any #oo; or paper affectin or relatin to the property or affairs of the companyL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, fra"d"lently parts with, alters or ma;es any omission in, or is pri!y to the fra"d"lent partin with alterin , or ma;in of any omission in, any #oo; or paper affectin or relatin to the property or affairs of the companyL after the commencement of the windin "p or at any meetin of the creditors of the company within the twel!e months next #efore the commencement of the windin "p, attempts to acco"nt for any part of the property of the company #y fictitio"s losses or expensesL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, #y any false representation or other fra"d, o#tains on credit, for or on #ehalf of the company, any property which the company does not s"#seD"ently pay forL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, "nder the false pretence that the company is carryin on its #"siness o#tains on credit for or on #ehalf of the company, any property which the company does not s"#seD"ently pay forL within the twel!e months next #efore the commencement of the windin "p or at any time thereafter, pawns, pled es or disposes of any property of the company which has #een o#tained on credit and has not #een paid for, "nless s"ch pawnin , pled in or disposin is in the ordinary co"rse of the #"siness of the companyL or is "ilty of any false representation or other fra"d for the p"rpose of o#tainin the consent of the creditors of the company or any of them, to an a reement with reference to the affairs of the company or to the windin "pL

G;H

GlH

GmH

GnH

GoH

GpH

he shall #e p"nisha#le, in the case of any of the offences mentioned in cla"ses GmH, GnH and GoH, with imprisonment for a term which may extend to fi!e years, or with fine, or with #oth, and, in the case of any other offence, with imprisonment for a term which may extend to two years, or with fine, or with #othK Provided that it shall #e a ood defence/ GiH to a char e "nder any of the cla"ses G#H, GcH, GdH, GfH, GnH and GoH, if the acc"sed pro!es that he had no intent to defra"dL and GiiH to a char e "nder any of the cla"ses GaH, GhH, GiH, and GCH, if he pro!es that he had no intent to conceal the tr"e state of affairs of the company or to defeat the law. =here any person pawns, pled es or disposes of any property in circ"mstances which amo"nt to an offence "nder cla"se GoH of s"#/section G1H, e!ery person who ta;es in pawn or pled es or otherwise recei!es the property, ;nowin it to #e pawned, pled ed, or disposed of in s"ch circ"mstances as aforesaid, shall #e p"nisha#le with imprisonment for a term which may extend to three years, or with fine, or with #oth. 3or the p"rposes of this section, the expression "officer" shall incl"de any person in accordance with whose directions or instr"ctions the directors of the company ha!e #een acc"stomed to act.

G2H

G3H

)#..

Penalt% !or !alsi!ication o! &oo=s

If with intent to defra"d or decei!e any person, any officer or contri#"tory of a company which is #ein wo"nd/ "p/ GaH destroys, m"tilates, alters, falsifies or secretes, or is pri!y to the destr"ction, m"tilation, alteration, falsification or secretin of, any #oo;s, papers or sec"ritiesL or G#H ma;es, or is pri!y to the ma;in of, any false or fra"d"lent entry in any re ister, #oo; of acco"nt or doc"ment #elon in to the companyL he shall #e p"nisha#le with imprisonment for a term which may extend to se!en years, and shall also #e lia#le to fine.

)'0.

Penalt% !or !rauds &% o!!icers

If any person, #ein at the time of the commission of the alle ed offence an officer of a company which is s"#seD"ently ordered to #e wo"nd/"p #y the (aA.ri#"nalB or which s"#seD"ently passes a resol"tion for !ol"ntary windin "p,/ GaH has, #y false pretences or #y means of any other fra"d ind"ced any person to i!e credit to the companyL or, G#H with intent to defra"d creditors of the company, has made or ca"sed to #e made any ift or transfer of or char e on, or has ca"sed or conni!ed at the le!yin of any exec"tion a ainst, the property of the companyL or GcH with intent to defra"d creditors of the company, has concealed or remo!ed any part of the property of the company since the date of any "nsatisfied C"d ment or order for payment of money o#tained a ainst the company, or within two months #efore that dateL he shall #e p"nisha#le with imprisonment for a term which may extend to two years and shall also #e lia#le to fine.

)'1.
G1H

4ia&ilit% where proper accounts not =ept

=here a company is #ein wo"nd/"p, if it is shown that proper #oo;s of acco"nts were not ;ept #y the company thro" ho"t the period of two years immediately precedin the commencement of the windin "p, or the period #etween the incorporation of the company and the commencement of the windin "p, whiche!er is shorter, e!ery officer of the company who is in defa"lt shall, "nless he shows that he acted honestly and that in the circ"mstances in which the #"siness of the company was carried on, the defa"lt was exc"sa#le, #e p"nisha#le with imprisonment for a term which may extend to one year. 3or the p"rposes of s"#/section G1H, it shall #e deemed that proper #oo;s of acco"nt ha!e not #een ;ept in the case of any company, if there ha!e not #een ;ept/ GaH s"ch #oo;s or acco"nts as are necessary to exhi#it and explain the transactions and financial position of the #"siness of the company, incl"din #oo;s containin entries made from day to day in s"fficient detail of all cash recei!ed and all cash paidL and where the #"siness of the company has in!ol!ed dealin s in oods, statements of the ann"al stoc; ta;in s and Gexcept in the case of oods sold #y way of ordinary retail tradeH of all oods sold and p"rchased showin the oods and the #"yers and the sellers thereof in s"fficient detail to ena#le those oods and those #"yers and sellers to #e identified.

G2H

G#H

)'2.
G1H

4ia&ilit% !or !raudulent conduct o! &usiness

If in the co"rse of the windin "p of a company, it appears that any #"siness of the company has #een earned on, with intent to defra"d creditors of the company or any other persons, or for any fra"d"lent p"rpose, the (aA.ri#"nalB, on the application of the :fficial 2iD"idator, or the liD"idator or any creditor or contri#"tory of the company, may, if it thin;s proper so to do, declare that any persons who were ;nowin ly parties to the carryin on of the #"siness in the manner aforesaid shall #e personally responsi#le, witho"t any limitation of lia#ility, for all or any of the de#ts or other lia#ilities of the company as the (aA.ri#"nalB may direct. :n the #earin of an application "nder this s"#/section, the :fficial 2iD"idator or the as the case may #e, may himself i!e e!idence or call witnesses. =here the (aA.ri#"nalB ma;es any s"ch declaration, it may i!e s"ch f"rther directions as it thin;s proper for the p"rpose of i!in effect to that declaration. In partic"lar, the (aA.ri#"nalB may ma;e pro!ision for ma;in the lia#ility of any s"ch person "nder the declaration a char e on any de#t or o#li ation d"e from the company to him, or on any mort a e or char e or any interest in any mort a e or char e on any assets of the company held #y or !ested in him, or any person on his #ehalf, or any person claimin as assi nee from or thro" h the person lia#le or only person actin on his #ehalf.

G2HGaH G#H

GcH GdH

.he (aA.ri#"nalB may, from time to time, ma;e s"ch f"rther order as may #e necessary for the p"rpose of enforcin any char e imposed "nder this s"#/section. 3or the p"rpose of this s"#/section, the expression "assi nee" incl"des any person to whom or in whose fa!o"r, #y the directions of the person lia#le, the de#t, o#li ation, mort a e or char e was created, iss"ed or transferred or the interest was created, #"t does not incl"de an assi nee for !al"a#le consideration Gnot incl"din consideration #y way of marria eH i!en in ood faith and witho"t notice of any of the matters on the ro"nd of which the declaration is made. =here any #"siness of a company is carried on with s"ch intent or for s"ch p"rpose as is mentioned in s"#/section G1H, e!ery person who was ;nowin ly a party to the carryin on of the #"siness in the manner aforesaid, shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to Afifty tho"sand r"peesB, or with #oth. .his section shall apply, notwithstandin that the person concerned may #e criminally lia#le in respect of the matters on the ro"nd of which the declaration is to #e made.

G3H

G$H

*a)'#. Power o! 0ri&unal to assess damages against delinDuent directors, etc.

G1H If in the co"rse of windin "p of a company, it appears that any person who has ta;en part in the promotion or formation of the company, or any past or present director, mana er, liD"idator or officer of the companyM GaH G#H has misapplied, or retained, or #ecome lia#le or acco"nta#le for, any money or property of the companyL or has #een "ilty of any misfeasance or #reach of tr"st in relation to the company, the .ri#"nal may, on the application of the :fficial 2iD"idator, or the liD"idator, or of any creditor or contri#"tory, made within the time specified in that #ehalf in s"#/section G2H, examine into the cond"ct of the person, director, mana er, liD"idator or officer aforesaid, and compel him to repay or restore the money or property or any part thereof respecti!ely, with interest at s"ch rate as the .ri#"nal thin;s C"st, or to contri#"te s"ch s"m to the assets of the company #y way of compensation in respect of the misapplication, retainer, misfeasance or #reach of tr"st, as the .ri#"nal thin;s C"st.

G2H

G3H

An application "nder s"#/section G1H shall #e made within fi!e years from the date of the order for windin "p, or of the first appointment of the liD"idator in the windin "p, or of the misapplication, retainer, misfeasance or #reach of tr"st as the case may #e, whiche!er is lon er. .his section shall apply notwithstandin that the matter is one for which the person concerned may #e criminally lia#le.B

)''.

4ia&ilit% under sections )'2 and )'# to extend to partners or directors in !irm or compan%

=here a declaration "nder section '$2 or an order "nder section '$3 is or may #e made in respect of a firm or #ody corporate, the (aA.ri#"nalB shall also ha!e power to ma;e a declaration "nder section '$2, or pass an order "nder section '$3, as the case may #e, in respect of any person who was at the rele!ant time a partner in that firm or a director of that #ody corporate.

)').
G1H

Prosecution o! delinDuent o!!icers and mem&ers o! the compan%

If it appears to the (aA.ri#"nalB in the co"rse of a windin "p #y, (aAthe .ri#"nalB, that any past or present officer, or any mem#er, of the company has #een "ilty of any offence in relation to the company, the (aA.ri#"nalB may, either on the application of any person interested in the windin "p or of its own motion, direct the liD"idator either himself to prosec"te the offender or to refer the matter to the 8e istrar. If it appears to the liD"idator in the co"rse of a !ol"ntary windin "p that any past or present officer, or any mem#er of the company has #een "ilty of any offence in relation to the company, he shall forthwith report the matter to the 8e istrar and shall f"rnish to him s"ch information and i!e to him s"ch access to and facilities for inspectin and ta;in copies of any #oo;s and papers, #ein

G2H

G3H

G$H

G'H

G(H

information or #oo;s and papers in the possession or "nder the control of the liD"idator and relatin to the matter in D"estion, as the 8e istrar may reD"ire. =here any report is made "nder s"#/section G2H to the 8e istrar, he may, if he thin;s fit, refer the matter to the *entral +o!ernment for f"rther inD"iry. .he *entral +o!ernment shall there"pon in!esti ate the matter and may, if it thin;s it expedient, apply to the (aA.ri#"nalB for an order conferrin on any person desi nated #y the *entral +o!ernment for the p"rpose, with respect to the company concerned, all s"ch powers of in!esti atin the affairs of the company as are pro!ided #y this Act in the case of a windin "p #y the (aA.ri#"nalB. If on any report to the 8e istrar "nder s"#/section G2H, it appears to him that the case is not one in which proceedin s o" ht to #e ta;en #y him, he shall inform the liD"idator accordin ly, and there"pon, s"#Cect to the pre!io"s sanction of the (aA.ri#"nalB, the liD"idator may himself ta;e proceedin s a ainst the offender. If it appears to the (aA.ri#"nalB in the co"rse of a !ol"ntary windin "p that any past or present officer, or any mem#er, of the company has #een "ilty as aforesaid, and that no report with respect to the matter has #een made #y the liD"idator to the 8e istrar "nder s"#/section G2H, the (aA.ri#"nalB may, on the application of any person interested in the windin "p or of its own motion, direct the liD"idator to, ma;e s"ch a report, and on a report #ein made accordin ly, the pro!isions of this section shall ha!e effect as tho" h the report had #een made in p"rs"ance of the pro!isions of s"#/section G2H. If, where any matter is reported or referred to the 8e istrar "nder this section, he considers that the case is one in which a prosec"tion o" ht to #e instit"ted, he shall report the matter to the *entral +o!ernmentL and that +o!ernment may, after ta;in s"ch le al ad!ice as it thin;s fit, direct the 8e istrar to instit"te proceedin sK Provided that no report shall #e made #y the 8e istrar "nder this s"#/section witho"t first i!in the acc"sed person an opport"nity of ma;in a statement in writin to the 8e istrar and of #ein heard thereon. =hen any proceedin s are instit"ted "nder this section, it shall #e the d"ty of the liD"idator and of e!ery officer and a ent of the company past and present Gother than the defendant in the proceedin sH to i!e all assistance in connection with the prosec"tion which he is reasona#ly a#le to i!e. 3or the p"rposes of this s"#/section, the expression "a ent", in relation to a company, shall #e deemed to incl"de any #an;er or le al ad!iser of the company and any person employed #y the company as a"ditor. If any person fails or ne lects to i!e assistance in the manner reD"ired #y s"#/section G7H, the (a A.ri#"nalB may, on the application of the 8e istrar, direct that person to comply with the reD"irements of that s"#/section. =here any s"ch application is made with respect to a liD"idator, the (aA.ri#"nalB may, "nless it appears that the fail"re or ne lect was d"e to the liD"idator not ha!in in his hands s"fficient assets of the company to ena#le him so to do, direct that the costs of the application shall #e #orne #y the liD"idator personally.

G7H

G)H

G,H

Miscellaneous provisions )'*.

G1H

4iDuidator to exercise certain powers su&Cect to sanction

.he liD"idator may/ GaH G#H with (aAthe sanction of the .ri#"nalB, when the company is #ein wo"nd/"p #y (aAthe .ri#"nalBL and with the sanction of a special resol"tion of the company, in the case of a !ol"ntary windin "p,/ GiH pay any classes of creditors in f"llL GiiH ma;e any compromise or arran ement with creditors or persons claimin to #e creditors, or ha!in or alle in themsel!es to ha!e any claim, present or f"t"re, certain or contin ent, ascertained or so"ndin only in dama es, a ainst the company, or where#y the company may #e rendered lia#leL or

GiiiH

compromise any call or lia#ility to call, de#t, and lia#ility capa#le of res"ltin in a de#t, and any claim, present or f"t"re, certain or contin ent, ascertained or so"ndin only in dama es, s"#sistin or alle ed to s"#sist #etween the company and a contri#"tory or alle ed contri#"tory or other de#tor or person apprehendin lia#ility to the company, and all D"estions in any way relatin to or affectin the assets or lia#ilities or the windin "p of the company, on s"ch terms as may #e a reed, and ta;e any sec"rity for the dischar e of any s"ch call, de#t, lia#ility or claim, and i!e a complete dischar e in respect thereof.

AG1AH

G2H G3H

4otwithstandin anythin contained in s"#/section G1H, in the case of a (aAwindin "p #y the .ri#"nalB, the S"preme *o"rt may ma;e r"les "nder section ($3 pro!idin that the liD"idator may, "nder s"ch circ"mstances, if any, and s"#Cect to s"ch conditions, restrictions and limitations, if any, as may #e specified in the r"les, exercise any of the powers referred to in s"#/cla"se GiiH or s"#/cla"se GiiiH of s"#/ section G1H witho"t the (aAthe sanction of the .ri#"nalBB In the case of a !ol"ntary windin "p, the exercise #y the liD"idator of the powers conferred #y s"#/ section G1H shall #e s"#Cect to the control of the (aA.ri#"nalB. Any creditor or contri#"tory may apply to the (aA.ri#"nalB with respect to any exercise or proposed exercise of any s"ch power.

)'+.
G1H

6oti!ication that a compan% is in liDuidation

=here a company is #ein wo"nd/"p, whether #y (aAthe .ri#"nalB or !ol"ntarily, e!ery in!oice, order for oods or #"siness letter iss"ed #y or on #ehalf of the company or a liD"idator of the company, or a recei!er or mana er of the property of the company, #ein a doc"ment on or in which the name of the company appears, shall contain a statement that the company is #ein wo"nd/"p. If defa"lt is made in complyin with this section, the company, and e!ery one of the followin persons who wilf"lly a"thorises or permits the defa"lt, namely, any officer of the company, any liD"idator of the company and any recei!er or mana er, shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB.

G2H

)',.

2oo=s and papers o! compan% to &e evidence

=here a company is #ein wo"nd/"p, all #oo;s and papers of the company and of the liD"idators shall, as #etween the contri#"tories of the company, #e prima facie e!idence of the tr"th of all matters p"rportin to #e therein recorded.

)'..
G1H

"nspection o! &oo=s and papers &% creditors and contri&utories

At any time after the ma;in of an order for the windin "p of a company #y (aAthe .ri#"nalB, any creditor or contri#"tory of the company may, if $Athe S"preme *o"rtB, #y r"les prescri#ed so permit and in accordance with and s"#Cect to s"ch r"les #"t not f"rther or otherwise, inspect the #oo;s and papers of the company. 4othin in s"#/section G1H shall #e ta;en as excl"din or restrictin any ri hts conferred #y any law for the time #ein in force/ GaH on the *entral or a State +o!ernmentL or G#H on any a"thority or officer thereofL or GcH on any person actin "nder the a"thority of any s"ch +o!ernment or of any s"ch a"thority or officer.

G2H

))0.
G1H

isposal o! &oo=s and papers o! compan%

=hen the affairs of a company ha!e #een completely wo"nd/"p and it is a#o"t to #e dissol!ed, its #oo;s and papers and those of the liD"idator may #e disposed of as follows, that is to sayK/
(a

AGaH in the case of windin "p #y the .ri#"nal, in s"ch manner as the .ri#"nal directsLB

G#H

G2H

G3H

in the case of a mem#ersE !ol"ntary windin "p, in s"ch manner as the company #y special resol"tion directsL and GcH in the case of a creditorsE !ol"ntary windin "p, in s"ch manner as the committee of inspection or, if there is no s"ch committee, as the creditors of the company may direct. After the expiry of fi!e years from the dissol"tion of the company, no responsi#ility shall rest on the company, the liD"idator, or any person to whom the c"stody of the #oo;s and papers has #een committed, #y reason of any #oo; or paper not #ein forthcomin to any person claimin to #e interested therein. .he *entral +o!ernment may, #y r"les,/ GaH pre!ent for s"ch period Gnot exceedin fi!e years from the dissol"tion of the companyH as the *entral +o!ernment thin;s proper, the destr"ction of the #oo;s and papers of a company which has #een wo"nd/"p and of its liD"idatorL and ena#le any creditor or contri#"tory of the company to ma;e representations to the *entral +o!ernment in respect of the matters specified in cla"se GaH and to (aAappeal to the .ri#"nalB from any direction which may #e i!en #y the *entral +o!ernment in the matter.

G#H

G$H

If any person acts in contra!ention of any s"ch r"les or of any direction of the *entral +o!ernment there"nder, he shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to 1AAfifty tho"sand r"peesB, or with #oth.

))1.
AG1H

"n!ormation as to pending liDuidations

If the windin "p of a company is not concl"ded within one year after its commencement, the liD"idator shall, "nless he is exempted from so doin either wholly or in part #y the *entral +o!ernment, within two months of the expiry of s"ch year and thereafter "ntil the windin "p is concl"ded, at inter!als of not more than one year or at s"ch shorter inter!als, if any, as may #e prescri#ed, file a statement in the prescri#ed form and containin the prescri#ed partic"lars d"ly a"dited, #y a person D"alified to act as a"ditor of the company, with respect to the proceedin s in, and position of, the liD"idation,/ (a AGaH in the case of a windin "p #y the .ri#"nal, in .ri#"nalL andB G#H in the case of a !ol"ntary windin "p, with the 8e istrarK Provided that no s"ch a"dit as is referred to in this s"#/section shall #e necessary where the pro!isions of section $(2 apply.B =hen the statement is filed in (aA.ri#"nalB "nder cla"se GaH of s"#/section G1H, a copy shall sim"ltaneo"sly #e filed with the 8e istrar and shall #e ;ept #y him alon with the other records of the company. =here a statement referred to in s"#/section G2H relates to a +o!ernment company in liD"idation, the liD"idator shall forward a copy thereof,/ GaH G#H GcH to the *entral +o!ernment, if that +o!ernment is a mem#er of the +o!ernment companyL or to any State +o!ernment, if that +o!ernment is a mem#er of the +o!ernment companyL or to the *entral +o!ernment and any State +o!ernment, if #oth the +o!ernments are mem#ers of the +o!ernment company.H

G2H

AG2AH

G3H

G$H

Any person statin himself in writin to #e a creditor or contri#"tory of the company shall #e entitled, #y himself or #y his a ent, at all reasona#le times, on payment of the prescri#ed fee, to inspect the statement, and to recei!e a copy thereof or an extract therefrom. Any person "ntr"thf"lly statin himself to #e a creditor or contri#"tory for the a#o!e p"rpose shall #e deemed to /#e "ilty of an offence "nder section 1)2 of the Indian &enal *ode, and Lhall, on the application of the liD"idator, #e p"nisha#le accordin ly. If a liD"idator fails to comply with any of the reD"irements of this section, he shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB for e!ery day d"rin which the fail"re contin"esK AProvided that if the liD"idator ma;es wilf"l defa"lt in ca"sin the statement referred to in s"#/section G1H to #e a"dited #y a person D"alified to act as a"ditor of the company, the liD"idator shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to Aten tho"sand r"peesB, or with #oth.B

G'H

))2.

0!!icial 4iDuidator to ma=e pa%ments into the pu&lic account o! "ndia

1!ery :fficial 2iD"idator shall, in s"ch manner and at s"ch times as may #e prescri#ed pay the moneys recei!ed #y him as liD"idator of any company, into the p"#lic acco"nt of India in the 8eser!e 0an; of India.

))#.

9oluntar% liDuidator to ma=e pa%ments into Scheduled 2an=

G1H

1!ery liD"idator of a company, not #ein an :fficial 2iD"idator, shall, in s"ch manner and at s"ch times as may #e prescri#ed, pay the moneys recei!ed #y him in his capacity as s"ch into a Sched"led 0an; to the credit of a special #an;in acco"nt opened #y him in that #ehalf, and called
*ompany 2imited" PPPPPPPPPPPPPPPPPPPPPPPPP *ompany &ri!ate 2imited" PPPPPPPPPPPPPPPPPPPPPPPPP *ompany"K

"the 2iD"idation Acco"nt of...................

Provided that if the (aA.ri#"nalB is satisfied that for the p"rpose of carryin on the #"siness of the company or of o#tainin ad!ances or for any other reason, it is to the ad!anta e of the creditors or contri#"tories that the liD"idator sho"ld ha!e an acco"nt with any other #an;, the (aA.ri#"nalB may a"thorise the liD"idator, to ma;e his payments into or o"t of s"ch other #an; as the (aA.ri#"nalB may selectL and there"pon those payments shall #e made in the prescri#ed manner and at the prescri#ed time into or o"t of s"ch other #an;. G2H If any s"ch liD"idator at any time retains for more than ten days a s"m exceedin fi!e h"ndred r"pees or s"ch other amo"nt as the (aA.ri#"nalB may, on the application of the liD"idator, a"thorise him to retain, then, "nless he explains the retention to the satisfaction of the (aA.ri#"nalB, he shall/ GaH pay interest on the amo"nt so retained in excess, at the rate of twel!e per cent per ann"m and also pay s"ch penalty as may #e determined #y the 8e istrarL G#H #e lia#le to pay any expenses occasioned #y reason of his defa"ltL and GcH also #e lia#le to ha!e all or s"ch part of his rem"neration as the (aA.ri#"nalB may thin; C"st, disallowed, and to #e remo!ed from his office #y the (aA.ri#"nalB.

))'.

4iDuidator not to pa% mone%s into private &an=ing account

4either the :fficial 2iD"idator nor any other liD"idator of a company shall pay any moneys recei!ed #y him in his capacity as s"ch into any pri!ate #an;in acco"nt.

))).

>npaid dividends and undistri&uted assets to &e paid into the Companies 4iDuidation Account
=here any company is #ein wo"nd/"p, if the liD"idator has in his hands or "nder his control any money representin / GaH di!idends paya#le to any creditor which had remained "npaid for six months after the date on which they were declared, or G#H assets ref"nda#le to any contri#"tory which ha!e remained "ndistri#"ted for six months after the date on which they #ecome ref"nda#le, the liD"idator shall forthwith pay the said money into the p"#lic acco"nt of India in the 8eser!e 0an; of India in a separate acco"nt to #e ;nown as the *ompanies 2iD"idation Acco"nt.B .he liD"idator shall, on the dissol"tion of the company, similarly pay into the said acco"nt any money representin A"npaidB di!idends or "ndistri#"ted assets in his hands at the date of dissol"tion.

AG1H

G2H

G3H

.he liD"idator shall, when ma;in any payment referred to in s"#/sections G1H and G2H, f"rnish to s"ch officer as the *entral +o!ernment may appoint in this #ehalf, a statement in the prescri#ed form, settin forth, in respect of all s"ms incl"ded in s"ch payment, the nat"re of the s"ms, the names and last ;nown addresses of the persons entitled to participate therein, the amo"nt to which each is entitled and the nat"re of his claim thereto, and s"ch other partic"lars as may #e prescri#ed. .he liD"idator shall #e entitled to a receipt from the 8eser!e 0an; of India for any money paid to it "nder s"#/sections G1H and G2HL and s"ch receipt shall #e an effect"al dischar e of the liD"idator in respect thereof. =here the company is #ein wo"nd/"p #y the (aA.ri#"nalB, the liD"idator shall ma;e the payments referred to in s"#/sections G1H and G2H #y transfer from the acco"nt referred to in section ''2. =here the company is #ein wo"nd/"p !ol"ntarily (aAthe .ri#"nalB, the liD"idator shall, when filin a statement in p"rs"ance of s"#/section G1H of section ''1, indicate the s"m of money which is paya#le to the 8eser!e 0an; of India "nder s"#/sections G1H and G2H of this section which he has had in his hands or "nder his control d"rin the six months precedin the date to which the said statement is #ro" ht down, and shall, within fo"rteen days of the date of filin the said statement, pay that s"m into the *ompanies 2iD"idation Acco"nt. Any person claimin to #e entitled to any money paid into the *ompanies 2iD"idation Acco"nt Gwhether paid in p"rs"ance of this section or "nder the pro!isions of any pre!io"s companies lawH may apply to the (aA.ri#"nalB for an order for payment thereof, and the (aA.ri#"nalB, if satisfied that the person claimin is entitled, may ma;e an order for the payment to that person of the s"m d"eK Provided that #efore ma;in s"ch an order, the (aA.ri#"nalB shall ca"se a notice to #e ser!ed on s"ch officer as the *entral +o!ernment may appoint in this #ehalf, callin on the officer to show ca"se within one month from the date of the ser!ice of the notice why the order sho"ld not #e made. Any person claimin as aforesaid may, instead of applyin to the (aA.ri#"nalB, apply to the *entral +o!ernment for an order for payment of the money claimedL and the *entral +o!ernment may, if satisfied whether on a certificate #y the liD"idator or the :fficial 2iD"idator or otherwise, that s"ch person is entitled to the whole or any part of the money claimed and that no application made in p"rs"ance of cla"se GaH is pendin in the (aA.ri#"nalB, ma;e an order for the payment to that person of the s"m d"e to him after ta;in s"ch sec"rity from him as it may thin; fit. Any money paid into the *ompanies 2iD"idation Acco"nt in p"rs"ance of this section, which remains "nclaimed thereafter for a period of fifteen years, shall #e transferred to the eneral re!en"e acco"nt of the *entral +o!ernmentL #"t a claim to any money so transferred may #e preferred "nder s"#/section G7H and shall #e dealt with as if s"ch transfer had not #een made, the order, if any, for payment on the claim #ein treated as an order for ref"nd of re!en"e. Any liD"idator retainin any money which sho"ld ha!e #een paid #y him into the *ompanies 2iD"idation Acco"nt "nder this section shall/ GaH pay interest on the amo"nt retained at the rate of twel!e per cent per ann"m, and also pay s"ch penalty as may #e determined #y the 8e istrarK AProvided that the *entral +o!ernment may in any proper case remit either in part or in whole the amo"nt of interest which the liD"idator is reD"ired to pay "nder this cla"seLB G#H #e lia#le to pay any expenses occasioned #y reason of his defa"ltL and GcH where the windin "p is #y (aAthe .ri#"nalB, also #e lia#le to ha!e all or s"ch part of his rem"neration as the (aA.ri#"nalB may thin; C"st to #e disallowed, and to #e remo!ed from his office #y the (aA.ri#"nalB.

G$H

G'H G(H

G7HGaH

G#H

G)H

G,H

))*.
G1H

3n!orcement o! dut% o! liDuidator to ma=e returns, etc.

If any liD"idator who has made any defa"lt in filin , deli!erin or ma;in any ret"rn, acco"nt or other doc"ment, or in i!in any notice which he is #y law reD"ired to file, deli!er, ma;e or i!e, fails to ma;e ood the defa"lt within fo"rteen days after the ser!ice on him of a notice reD"irin him to do so, A.ri#"nalBthe may, on an application made to the (aA.ri#"nalB #y any contri#"tory or creditor of the company or #y the 8e istrar, ma;e an order directin the liD"idator to ma;e ood the defa"lt within s"ch time as may #e specified in the order. Any s"ch order may pro!ide that all costs of and incidental to the application shall #e #orne #y the liD"idator.

G2H

G3H

4othin in this section shall #e ta;en to preC"dice the operation of any enactment imposin penalties on a liD"idator in respect of any s"ch defa"lt as aforesaid.

"upplementary powers of *a$Tribunal% ))+.

G1H

(eetings to ascertain wishes o! creditors or contri&utories.

In all matters relatin to the windin "p of a company, the (aA.ri#"nalB may/ GaH ha!e re ard to the wishes of creditors or contri#"tories of the company, as pro!ed to it #y any s"fficient e!idenceL G#H if it thin;s fit for the p"rpose of ascertainin those wishes, direct meetin s of the creditors or contri#"tories to #e called, held and cond"cted in s"ch manner as the (aA.ri#"nalB directsL and GcH appoint a person to act as chairman of any s"ch meetin and to report the res"lt thereof to the (a A.ri#"nalB. =hen ascertainin the wishes of creditors, re ard shall #e had to the !al"e of each creditorEs de#t. =hen ascertainin the wishes of contri#"tories, re ard shall #e had to the n"m#er of !otes which may #e cast #y each contri#"tory.

G2H G3H

)),.
G1H

Court or person &e!ore whom a!!idavit ma% &e sworn

Any affida!it reD"ired to #e sworn "nder the pro!isions, or for the p"rposes, of this &art may #e sworn/ GaH G#H in India, #efore any (aA*o"rt or the .ri#"nalB, -"d e or person lawf"lly a"thorised to ta;e and recei!e affida!itsL and in any other co"ntry, either #efore any *o"rt, -"d e or person lawf"lly a"thorised to ta;e and recei!e affida!its in that co"ntry or #efore an Indian *ons"l or !ice/cons"l.

AJJJB G2H

AAll *o"rts, .ri#"nalsB, -"d es, -"stices, *ommissioners and persons actin C"dicially India shall ta;e C"dicial notice of the seal, stamp or si nat"re, as the case may #e, of any (aAs"ch *o"rt, .ri#"nalB, -"d e, person, *ons"l or !ice/cons"l, attached, appended or s"#scri#ed to any s"ch affida!it or to any other doc"ment to he "sed for the p"rposes of this part.
(a

Provisions as to dissolution ))..

G1H

Power o! *aG0ri&unalH to declare dissolution o! compan% void

=here a company has #een dissol!ed, whether in p"rs"ance of this &art or of section 3,$ or otherwise, the (aA.ri#"nalB may at any time within two years of the date of the dissol"tion, on application #y the liD"idator of the company or #y any other person who appears to the (aA.ri#"nalB to #e interested, ma;e an order, "pon s"ch terms as the (aA.ri#"nalB thin;s fit, declarin the dissol"tion to ha!e #een !oidL and there"pon s"ch proceedin s may #e ta;en as mi ht ha!e #een ta;en if the company had not #een dissol!ed. It shall #e the d"ty of the person on whose application the order was made, within AthirtyB days after the ma;in of the order or s"ch f"rther time as the (aA.ri#"nalB may allow, to file a certified copy of the order with the 8e istrar who shall re ister the sameL and if s"ch person fails so to do, he shall #e p"nisha#le with fine which may extend to 11AAfi!e h"ndred r"peesB for e!ery day d"rin which the defa"lt contin"es.

G2H

)*0.

Power o! :egistrar to stri=e de!unct compan% o!! register

G1H

=here the 8e istrar has reasona#le, ca"se to #elie!e that a company is not carryin on #"siness or in operation, he shall send to the company #y post a letter inD"irin whether the company is carryin on #"siness or in operation. If the 8e istrar does not within one month of sendin the letter recei!e any answer thereto, he shall, within fo"rteen days after the expiry of the month, send to the company #y post a re istered letter referrin to the first letter, and statin that no answer thereto has #een recei!ed and that, if an answer is not recei!ed to the second letter within one month from the date thereof, a notice will he p"#lished in the :fficial +aFette with a !iew to stri;in the name of the company off the re ister. If the 8e istrar either recei!es an answer from the company to the effect that it is not carryin on #"siness or in operation, or does not within one month after sendin the second letter recei!e any answer, he may p"#lish in the :fficial +aFette, and send to the company #y re istered post, a notice that, at the expiration of three months from the date of that notice, the name of the company mentioned therein will, "nless ca"se is shown to the contrary, #e str"c; off the re ister and the company will #e dissol!ed. If, in any case where a company is #ein wo"nd/"p, the 8e istrar has reasona#le ca"se to #elie!e either that no liD"idator is actin , or that the affairs of the company ha!e #een completely wo"nd/"p, and any ret"rns reD"ired to #e made #y the liD"idator ha!e not #een made for a period of six consec"ti!e months, the 8e istrar shall p"#lish in the :fficial +aFette and send to the company or the liD"idator, if any, a li;e notice as is pro!ided in s"#/section G3H. At the expiry of the time mentioned in the notice referred to in s"#/section G3H or G$H, the 8e istrar may, "nless ca"se to the/contrary is/pre!io"sly shown #y the company, stri;e its name off the re ister, and shall p"#lish notice thereof in the :fficial +aFetteL and on the p"#lication in the :fficial +aFette of this notice, the company shall stand dissol!edK Provided that/ GaH the lia#ility, if any, of e!ery director AJJJB mana er or other officer who was exercisin any power of mana ement, and of e!ery mem#er of the company shall contin"e and may he enforced as if the company had not #een dissol!edL and G#H nothin in this s"#/section shall affect the power of the (aA.ri#"nalB to wind/"p a company the name of which has #een str"c; off the re ister.

G2H

G3H

G$H

G'H

G(H

If a company, or any mem#er or creditor thereof, feels a rie!ed #y the company ha!in #een str"c; off the re ister, the (aA.ri#"nalB, on an application made #y the company, mem#er or creditor #efore the expiry of twenty years from the p"#lication in the :fficial +aFette of the notice aforesaid, may, if satisfied that the company was, at the time of the stri;in off, carryin on #"siness or in operation or otherwise that it is C"st that the company #e restored to the re ister, order the name of the company to #e restored to the re isterL and the (aA.ri#"nalB may, #y the order, i!e s"ch directions and ma;e s"ch pro!isions as seem C"st for placin the company and all other persons in the same position as nearly as may #e as if the name of the company had not #een str"c; off. <pon a certified copy of the order "nder s"#/section G(H #ein deli!ered to the 8e istrar for re istration, the company shall he deemed to ha!e contin"ed in existence as if its name had not #een str"c; off. A letter or notice to #e sent "nder this section to a company may #e addressed to the company at its re istered office, or if no office has #een re istered, to the care of some director, AJJJB mana er or other officer of the company, or if there is no director, AJJJB mana er or officer of the company whose name and address are ;nown to the 8e istrar, may #e sent to each of the persons who s"#scri#ed the memorand"m, addressed to him at the address mentioned in the memorand"m. A notice to #e sent "nder this section to a liD"idator may #e addressed to the liD"idator at his last ;nown place of #"siness.

G7H

G)H

G,H

PART VIII:

APPLICATION OF ACT TO COMPANIES FORMED OR REGISTERED UNDER PREVIOUS COMPANIES LAWS

)*1.

Application o! Act to companies !ormed and registered under previous companies laws

.his Act shall apply to existin companies as followsK/

GaH

in the case of a limited company other than a company limited #y "arantee, this Act shall apply in the same manner as if the company had #een formed and re istered "nder this Act as a company limited #y sharesL in the case of a company limited #y "arantee, this Act shall apply in the same manner as if the company had #een formed and re istered "nder this Act as a company limited #y "aranteeL and in the case of a company other than a limited company, this Act shall apply in the same manner as if the company had #een formed and re istered "nder this Act as an "nlimited companyK Provided that/ GiH nothin in .a#le A in Sched"le I shall apply to a company formed and re istered "nder Act 1, of 1)'7 and Act 7 of 1)(0 or either of them, or "nder the Indian *ompanies Act, 1)(( G10 of 1)((H or the Indian *ompanies Act, 1))2 G( of 1))2HL GiiH reference, express or implied, to the date of re istration shall #e constr"ed as a reference to the date at which the company was re istered "nder the pre!io"s companies law concerned.

G#H GcH

)*2.

Application o! Act to companies registered &ut not !ormed under previous companies laws.1

.his Act shall apply to e!ery company re istered #"t not formed "nder any pre!io"s companies law in the same manner as it is in &art I> of this Act declared to apply to companies re istered #"t not formed "nder this ActK Provided that reference, express or implied, to the date of re istration shall #e constr"ed as a reference to the date at which the company was re istered "nder the pre!io"s companies law concerned.

)*#.

Application o! Act to unlimited companies registered under previous companies laws

.his Act shall apply to e!ery "nlimited company re istered as a limited company in p"rs"ance of any pre!io"s companies law, in the same manner as it applies to an "nlimited company re istered in p"rs"ance of this Act as a limited companyK Provided that reference, express or implied, to the date of re istration shall #e constr"ed as a reference to the date at which the company was re istered as a limited company "nder the pre!io"s companies law concerned.

)*'.

(ode o! trans!erring shares in the case o! companies registered under Acts 1. o! 1,)+ and + o! 1,*0

A company re istered "nder Act 1, of 1)'7 and Act 7 of 1)(0 or either of them may ca"se its shares to #e transferred in the manner hitherto in "se, or in s"ch other manner as the company may direct.

PART IX:
)*).
G1H

COMPANIES AUTHORISED TO REGISTER UNDER THIS ACT

Companies capa&le o! &eing registered1

=ith the exceptions and s"#Cect to the pro!isions contained in this section/ GaH any company consistin of se!en or more mem#ers, which was in existence on the first day of %ay, 1))2, incl"din any company re istered "nder Act 4o. 1, of 1)'7 and Act 4o. 7 of 1)(0 or either of them or "nder any laws or law in force in a &art 0 State, correspondin to those Acts or either of themL and any company formed after the date aforesaid, whether #efore or after the commencement of this Act, in p"rs"ance of any Act of &arliament other than this Act or of any other Indian 2aw Gincl"din a law in force in a &art 0 StateH, or of any Act of &arliament of the <nited 9in dom or 2etters &atent in force in India, or #ein otherwise d"ly constit"ted accordin to law, and consistin of se!en or more mem#ersL

G#H

may at any time re ister "nder this Act as an "nlimited company, or as a company limited #y shares, or as a company limited #y "aranteeL and the re istration shall not #e in!alid #y reason only that it has ta;en place with a !iew to the companyEs #ein wo"nd/"pK Provided that/ GiH a company re istered "nder the Indian *ompanies Act, 1))2 or "nder the Indian *ompanies Act, 1,13 shall not re ister in p"rs"ance of this sectionL GiiH a company ha!in the lia#ility of its mem#ers limited #y any Act of &arliament other than this Act or #y any other Indian law Gincl"din a law in force in a &art 0 StateH, or #y any Act of &arliament of the <nited 9in dom or 2etters &atent in force in India, and not #ein a Coint stoc; company as defined in section '((, shall not re ister in p"rs"ance of this sectionL GiiiH a company ha!in the lia#ility of its mem#ers limited #y any Act of &arliament other than this Act or #y any other Indian 2aw Gincl"din a law in force in a &art 0 StateH, or any Act of &arliament of the <nited 9in dom or 2etters &atent in force in India, shall not re ister in p"rs"ance of this section as an "nlimited company or as a company limited #y "aranteeL Gi!H a company that is not a Coint stoc; company as defined in section '(( shall not re ister in p"rs"ance of this section as a company limited #y sharesL G!H a company shall not re ister in p"rs"ance of this section witho"t the assent of a maCority of s"ch of its mem#ers as are present in person, or where proxies are allowed, #y proxy, at a eneral meetin s"mmoned for the p"rposeL G!iH where a company not ha!in the lia#ility of its mem#ers limited #y any Act of &arliament or any other Indian law Gincl"din a law in force in a &art 0 StateH or #y any Act of &arliament of the <nited 9in dom or 2etters &atent in force in India, is a#o"t to re ister as a limited company, the maCority reD"ired to assent as aforesaid shall consist of not less than three/fo"rths of the mem#ers present in person, or where proxies are allowed, #y proxy, at the meetin L G!iiH where a company is a#o"t to re ister as a company limited #y "arantee, the assent to its #ein so re istered shall #e accompanied #y a resol"tion declarin that each mem#er "nderta;es to contri#"te to the assets of the company, in the e!ent of its #ein wo"nd/"p while he is a mem#er, or within one year after he ceases to #e a mem#er, for payment of the de#ts and lia#ilities of the company or of s"ch de#ts and lia#ilities as may ha!e #een contracted #efore he ceases to #e a mem#er, and of the costs, char es and expenses of windin "p, and for the adC"stment of the ri hts of the contri#"tories amon themsel!es, s"ch amo"nt as may #e reD"ired, not exceedin a specified amo"nt. In comp"tin any maCority reD"ired for the p"rposes of s"#/section G1H when a poll is demanded, re ard shall #e had to the n"m#er of !otes to which each mem#er is entitled accordin to the re "lations of the company. 4othin in this section shall #e deemed to apply to any company the re istered office whereof at the commencement of this Act is in 0"rma, Aden or &a;istan AJJJB.

G2H

G3H

)**.
G1H

e!inition o! $Coint1stoc= compan%$1)

3or the p"rposes of this &art, so far as it relates to the re istration of companies as companies limited #y shares, a Coint/stoc; company means a company ha!in a permanent paid/"p or nominal share capital of fixed amo"nt di!ided into shares, also of fixed amo"nt, or held and transfera#le as stoc;, or di!ided and held partly in the one way and partly in the other, and formed on the principle of ha!in for its mem#ers the holders of those shares or that stoc;, and no other persons. S"ch a company, when re istered with limited lia#ility "nder this Act, shall #e deemed to #e a company limited #y shares.

G2H

)*+.

:eDuirements !or registration o! Coint1stoc= companies1*

0efore the re istration in p"rs"ance of this &art of a Coint/stoc; company, there shall #e deli!ered to the 8e istrar the followin doc"mentsK/ GaH a list showin the names, addresses and occ"pations of all persons who on a day named in the list, not #ein more than six clear days #efore the day of re istration, were mem#ers of the company with the

G#H

addition of the shares or stoc; held #y them respecti!ely, distin "ishin , in cases where the shares are n"m#ered, each share #y its n"m#erL a copy of any Act of &arliament or other Indian law, Act of &arliament of the <nited 9in dom, 8oyal *harter, 2etters &atent, deed of settlement, deed of partnership or other instr"ment constit"tin or re "latin the companyL and if the company is intended to #e re istered as a limited company, a statement specifyin the followin partic"larsK/ GiH GiiH GiiiH Gi!H the nominal share capital of the company and the n"m#er of shares into which it is di!ided or the amo"nt of stoc; of which it consistsL the n"m#er of shares ta;en and the amo"nt paid on each shareL the name of the company, with the addition of the word "2imited" or "&ri!ate 2imited" as the case may reD"ire, as the last word or words thereofL and in the case of a company intended to #e re istered as a company limited #y "arantee, a copy of the resol"tion declarin the amo"nt of the "arantee.

GcH

)*,.

:eDuirements !or registration o! companies not &eing Coint stoc= companies1+

0efore the re istration in p"rs"ance of this &art of any company not #ein a Coint stoc; company, there shall #e deli!ered to the 8e istrar the followin doc"ments. GaH G#H a list showin the names, addresses and occ"pations of the directors, AJJJB and the mana er, if any, of the companyL a copy of any Act of &arliament or other Indian law, Act of &arliament of the <nited 9in dom, 2etters &atent, deed of settlement, deed of partnership or other instr"ment constit"tin or re "latin the companyL and in the case of a company intended to #e re istered as a company limited #y "arantee, a copy of the resol"tion declarin the amo"nt of the "arantee.

GcH

)*..

Authentication o! statements o! existing companies

.he lists of mem#ers and directors and any other partic"lars relatin to the company reD"ired to #e deli!ered to the 8e istrar shall #e d"ly !erified #y the declaration of any two or more directors or other principal officers of the company.

)+0.

Power o! :egistrar to reDuire evidence as to nature o! compan%

.he 8e istrar may reD"ire s"ch e!idence as he thin;s necessary for the p"rpose of satisfyin himself whether any company proposin to #e re istered is or is not a Coint stoc; company as defined in section '((.

)+1.
G1H

6otice to customers on registration o! &an=ing compan% with limited lia&ilit%

=here a #an;in company which was in existence on the first day of %ay, 1))2, proposes to re ister as a limited company "nder this &art, it shall, at least thirty days #efore so re isterin , i!in notice of its intention so to re ister, to e!ery person who has a #an;in acco"nt with the company, either #y deli!ery of the notice to him, or #y postin it to him at, or deli!erin it at, his last ;nown address. If the #an;in company omits to i!e the notice reD"ired #y s"#/section G1H, then, as #etween the company and the person for the time #ein interested in the acco"nt in respect of which the notice o" ht to ha!e #een i!en, and so far as respects the acco"nt down to the time at which notice is i!en, #"t not f"rther or otherwise, the certificate of re istration with limited lia#ility shall ha!e no operation.

G2H

)+2.

Change o! name !or purposes o! registration

=here the name of a company see;in re istration "nder this &art is one which in the opinion of the *entral +o!ernment is "ndesira#le, the company may, with the appro!al of the *entral +o!ernment si nified in writin , chan e its name with effect from the date of its re istration "nder this &artK Provided that the li;e assent of the mem#ers of the company shall #e reD"ired to the chan e of name as is reD"ired #y section '(' to the re istration of the company "nder this &art.

)+#.

Addition o! $4imited$ or $Private 4imited$ to name

=hen a company re isters in p"rs"ance of this &art with limited lia#ility, the word "2imited" or the words "&ri!ate 2imited", as the case may #e, shall form, and #e re istered as, the last word or words of its nameK Provided that this section shall not #e deemed to excl"de the operation of section 2'.

)+'.

Certi!icate o! registration o! existing companies

:n compliance with the reD"irements of this &art with respect to re istration, and on payment of s"ch fees, if any, as are paya#le "nder Sched"le >, the 8e istrar shall certify "nder his hand that the company applyin for re istration is incorporated as company "nder this Act, and in the case of a limited company that it is limited and there"pon the company shall #e so incorporated.

)+).

9esting o! propert% on registration

All property, mo!a#le and immo!a#le Gincl"din actiona#le claimsH, #elon in to or !ested in a company at the date of its re istration in p"rs"ance of this &art, shall, on s"ch re istration, pass to and !est in the company as incorporated "nder this Act for all the estate and interest of the company therein.

)+*.

Sa%ing !or existing lia&ilities

.he re istration of a company in p"rs"ance of this &art shall not affect its ri hts or lia#ilities in respect of any de#t or o#li ation inc"rred, or any contract entered into, #y, to, with, or on #ehalf of, the company #efore re istration.

)++.

Continuation o! pending legal proceedings

All s"its and other le al proceedin s ta;en #y or a ainst the company, or any p"#lic officer or mem#er thereof, which are pendin at the time of the re istration of a company in p"rs"ance of this &art, may #e contin"ed in the same manner as if the re istration had not ta;en placeK &ro!ided that exec"tion shall not iss"e a ainst the property or persons of any indi!id"al mem#er of the company on any decree or order o#tained in any s"ch s"it or proceedin L #"t, in the e!ent of the property of the company #ein ins"fficient to satisfy the decree or order, an order may #e o#tained for windin "p the company.

)+,.
G1H G2H

3!!ect o! registration under Part

=hen a company is re istered in p"rs"ance of this &art, s"#/sections G2H to G7H shall apply. All pro!isions contained in any Act of &arliament or other Indian law, or other instr"ment constit"tin or re "latin the company, incl"din , in the case of a company re istered as a company limited #y "arantee the resol"tion declarin the amo"nt of the "arantee, shall #e deemed to #e conditions and re "lations of the company, in the same manner and with the same incidents as if so m"ch thereof as wo"ld, if the company had #een formed "nder this Act, ha!e #een reD"ired to #e inserted in the memorand"m, were contained in a re istered memorand"m, and the resid"e thereof were contained in re istered articles.

G3H

All the pro!isions of this Act shall apply to the company and the mem#ers, contri#"tories and creditors thereof, in the same manner in all respects as if it had #een formed "nder this Act, s"#Cect as followsK/ GaH .a#le A in Sched"le I shall not apply "nless and except in so far as it is adopted #y special resol"tionL G#H the pro!isions of this Act relatin to the n"m#erin of shares shall not apply to any Coint stoc; company whose shares are not n"m#eredL GcH s"#Cect to the pro!isions of this section, the company shall not ha!e power to alter any pro!ision contained in any Act of &arliament or other Indian law relatin to the companyL GdH s"#Cect to the pro!isions of this section the company shall not ha!e power, witho"t the sanction of the *entral +o!ernment, to alter any pro!ision contained in any Act of &arliament of the <nited 9in dom, 8oyal *harter or 2etters &atent, relatin to the companyL GeH the company shall not ha!e power to alter any pro!ision contained in any Act of &arliament or other Indian law or in any Act of &arliament of the <nited 9in dom, 8oyal *harter or 2etters &atent, with respect to the o#Cects of the companyL in the e!ent of the company #ein wo"nd/"p, e!ery person shall #e a contri#"tory, in respect of the de#ts and lia#ilities of the company contracted #efore re istration, who is lia#le to pay or contri#"te to the payment of any de#t or lia#ility of the company contracted #efore re istration, or to pay or contri#"te to the payment of any s"m for the adC"stment of the ri hts of the mem#ers amon themsel!es in respect of any s"ch de#t or lia#ility, or to pay or contri#"te to the payment of the costs, char es and expenses of windin "p the company, so far as relates to s"ch de#ts or lia#ilities as aforesaidL

GfH

G H

G$H

in the e!ent of the company #ein wo"nd/"p, e!ery contri#"tory shall #e lia#le to contri#"te to the assets of the company, in the co"rse of the windin "p, all s"ms d"e from him in respect of any s"ch lia#ility as aforesaidL and in the e!ent of the death or insol!ency of any contri#"tory, the pro!isions of this Act with respect to the le al representati!es of deceased contri#"tories, or with respect to the assi nees of insol!ent contri#"tories, as the case may #e, shall apply. .he pro!isions of this Act with respect to/ GaH G#H the re istration of an "nlimited as a limited companyL the powers of an "nlimited company on re istration as a limited company, to increase the nominal amo"nt of its share capital and to pro!ide that a portion of its share capital shall not #e capa#le of #ein called/"p except in the e!ent of windin "p, the power of a limited company to determine that a portion of its share capital shall not #e capa#le of #ein called/"p except in the e!ent of windin "pL

GcH

shall apply, notwithstandin any pro!isions contained in any Act of &arliament or other Indian law, or otter instr"ment constit"tin or re "latin the company. G'H 4othin in this section shall a"thorise the company to alter any s"ch pro!isions contained in any instr"ment constit"tin or re "latin the company as wo"ld, if the company had ori inally #een formed "nder this Act, ha!e #een reD"ired to #e contained in the memorand"m and are not a"thorised to #e altered #y this Act. 4one of the pro!isions of this Act Gapart from those of section $0$H shall dero ate from any power of alterin its constit"tion or re "lations which may #e !ested in the company, #y !irt"e of any Act of &arliament or other Indian law, or other instr"ment constit"tin or re "latin the company. In this section, the expression "instr"ment" incl"des deed of settlement, deed of partnership, Act of &arliament of the <nited 9in dom, 8oyal *harter and 2etters &atent.

G(H

G7H

)+..
G1H

Power to su&stitute memorandum and articles !or deed o! settlement

S"#Cect to the pro!isions of this section, a company re istered in p"rs"ance of this &art may, #y special resol"tion, alter the form of its constit"tion #y s"#stit"tin a memorand"m and articles for a deed of settlement. .he pro!isions of sections 17 and 1, with respect to an alteration of the o#Cects of a company shall, so far as applica#le, apply to any alteration "nder this section with the followin modificationsK/ GaH there shall #e s"#stit"ted for the printed copy of the altered memorand"m reD"ired to #e filed with the 8e istrar a printed copy of the s"#stit"ted memorand"m and articlesL and

G2H

G#H

G3H G$H

on the re istration of the alteration #ein certified #y the 8e istrar, the s"#stit"ted memorand"m and articles shall apply to the company in the same manner as if it were a company re istered "nder this Act with that memorand"m and those articles, and the companyEs deed of settlement shall cease to apply to the company. An alteration "nder this section may #e made either with or witho"t any alteration of the o#Cects of the company "nder this Act. In this section, the expression "deed of settlement" incl"des any deed of partnership, Act of &arliament of the <nited 9in dom, 8oyal *harter or 2etters &atent, or other instr"ment constit"tin or re "latin the company, not #ein an Act of &arliament or other Indian law.

),0.

Power o! Court to sta% or restrain proceedings

.he pro!isions of this Act with respect to stayin and restrainin s"its and other le al proceedin s a ainst a company at any time after the presentation of a petition for windin "p and #efore the ma;in of a windin "p order, shall, in the case of a company re istered in p"rs"ance of this &art, where the application to stay or restrain is #y a creditor, extend to s"its and other le al proceedin s a ainst any contri#"tory of the company.

),1.

Suits sta%ed on winding up order

=here an order has #een made for windin "p, or a pro!isional liD"idator has #een appointed for, a company re istered in p"rs"ance of this &art, no s"it or other le al proceedin shall #e proceeded with or commenced a ainst the company or any contri#"tory of the company in respect of any de#t of the company, except #y lea!e of the (aA.ri#"nalB and except on s"ch terms as the (aA.ri#"nalB may impose.

PART IXA:
),1A.

CHAPTER I - PRODUCER COMPANIES

e!initions

In this &art, "nless the context otherwise reD"ires,M GaH G#H GcH GdH GeH "acti!e %em#er" means a mem#er who f"lfils the D"ant"m and period of patrona e of the &rod"cer *ompany as may #e reD"ired #y the articlesL "*hief 1xec"ti!e" means an indi!id"al appointed as s"ch "nder s"#/section G1H of section ')1=L "limited ret"rn" means the maxim"m di!idend as may #e specified #y the articlesL "%em#er" means a person or &rod"cer instit"tion Gwhether incorporated or notH admitted as a %em#er of a &rod"cer *ompany and who retains the D"alifications necessary for contin"ance as s"chL "inter/State co/operati!e society" means a m"lti/State co/operati!e society as defined in cla"se GpH of section 3 of the %"lti/State *o/operati!e Societies Act, 2002 G3, of 2002H and incl"des any co/ operati!e society re istered "nder any other law for the time #ein in force, which has, s"#seD"ent to its formation, extended any of its o#Cects to more than one State #y enlistin the participation of persons or #y extendin any of its acti!ities o"tside the State, whether directly or indirectly or thro" h an instit"tion of which it is a constit"entL "m"t"al assistance principles" means the principles set o"t in s"#/section G2H of section ')1+L "officer" incl"des any director or *hief 1xec"ti!e or Secretary or any person in accordance with whose directions or instr"ctions part or whole of the #"siness of the &rod"cer *ompany is carried onL "patrona e" means the "se of ser!ices offered #y the &rod"cer *ompany to its %em#ers #y participation in its #"siness acti!itiesL "patrona e #on"s" means payments made #y a &rod"cer *ompany o"t of its s"rpl"s income to the %em#ers in proportion to their respecti!e patrona eL "primary prod"ce" meansM GiH prod"ce of farmers, arisin from a ric"lt"re Gincl"din animal h"s#andry, hortic"lt"re, floric"lt"re, piscic"lt"re, !itic"lt"re, forestry, forest prod"cts, re/!e etation, #ee raisin and

GfH G H GhH GiH GCH

GiiH GiiiH Gi!H

farmin plantation prod"ctsH, or from any other primary acti!ity or ser!ice which promotes the interest of the farmers or cons"mersL or prod"ce of persons en a ed in handloom, handicraft and other cotta e ind"striesL

G;H GlH GmH

GnH

any prod"ct res"ltin from any of the a#o!e acti!ities, incl"din #y/prod"cts of s"ch prod"ctsL any prod"ct res"ltin from an ancillary acti!ity that wo"ld assist or promote any of the aforesaid acti!ities or anythin ancillary theretoL G!H any acti!ity which is intended to increase the prod"ction of anythin referred to in s"#/cla"ses GiH to Gi!H or impro!e the D"ality thereofL "prod"cer" means any person en a ed in any acti!ity connected with or relata#le to any primary prod"ceL "&rod"cer *ompany" means a #ody corporate ha!in o#Cects or acti!ities specified in section ')10 and re istered as &rod"cer *ompany "nder this ActL "&rod"cer instit"tion" means a &rod"cer *ompany or any other instit"tion ha!in only prod"cer or prod"cers or &rod"cer *ompany or &rod"cer *ompanies as its mem#er whether incorporated or not ha!in any of the o#Cects referred to in section ')10 and which a rees to ma;e "se of the ser!ices of the &rod"cer *ompany or &rod"cer *ompanies as pro!ided in its articles. "withheld price" means part of the price d"e and paya#le for oods s"pplied #y any %em#er to the &rod"cer *ompanyL and as withheld #y the &rod"cer *ompany for payment on a s"#seD"ent date.

PART IXA:

CHAPTER II - INCORPORATION OF PRODUCER COMPANIES AND OTHER MATTERS

),12. <&Cects o! Producer Compan%

G1H .he o#Cects of the &rod"cer *ompany shall relate to all or any of the followin matters, namelyKM GaH prod"ction, har!estin , proc"rement, radin , poolin , handlin , mar;etin , sellin , export of primary prod"ce of the %em#ers or import of oods or ser!ices for their #enefitK Provided that the &rod"cer *ompany may carry on any of the acti!ities specified in this cla"se either #y itself or thro" h other instit"tionL G#H GcH GdH GeH GfH G H GhH GiH GCH GaH G;H G2H processin incl"din preser!in , dryin , distillin , #rewin , !intin , cannin and pac;a in of prod"ce of its %em#ersL man"fact"re, sale or s"pply of machinery, eD"ipment or cons"ma#les mainly to its %em#ersL pro!idin ed"cation on the m"t"al assistance principles to its %em#ers and othersL renderin technical ser!ices, cons"ltancy ser!ices, trainin , research and de!elopment and all other acti!ities for the promotion of the interests of its %em#ersL eneration, transmission and distri#"tion of power, re!italisation of land and water reso"rces, their "se, conser!ation and comm"nication relata#le to primary prod"ceL ins"rance of prod"cers or their primary prod"ceL promotin techniD"es of m"t"ality and m"t"al assistanceL welfare meas"res or facilities for the #enefit of %em#ers as may #e decided #y the 0oardL any other acti!ity, ancillary or incidental to any of the acti!ities referred to in cla"ses to GiH or other acti!ities which may promote the principles of m"t"ality and m"t"al assistance amon st the %em#ers in any other mannerL financin of proc"rement, processin , mar;etin or other acti!ities specified in cla"ses GaH to GCH which incl"de extendin of credit facilities or any other financial ser!ices to its %em#ers.

1!ery &rod"cer *ompany shall deal primarily with the prod"ce of its acti!e %em#ers for carryin o"t any of its o#Cects specified in this section.

),1C. 5ormation o! Producer Compan% and its registration

G1H

G2H

G3H

Any ten or more indi!id"als, each of them #ein a prod"cer or any two or more &rod"cer instit"tions, or a com#ination of ten or more indi!id"als and &rod"cer instit"tions, desiro"s of formin a &rod"cer *ompany ha!in its o#Cects specified in section ')10 and otherwise complyin with the reD"irements of this &art and the pro!isions of this Act in respect of re istration, may form an incorporated *ompany as a &rod"cer *ompany "nder this Act. If the 8e istrar is satisfied that all the reD"irements of this Act ha!e #een complied with in respect of re istration and matters precedent and incidental thereto, he shall, within thirty days of the receipt of the doc"ments reD"ired for re istration, re ister the memorand"m, the articles and other doc"ments, if any, and iss"e a certificate of incorporation "nder this Act. A &rod"cer *ompany so formed shall ha!e the lia#ility of its %em#ers limited #y the memorand"m to the amo"nt, if any, "npaid on the shares respecti!ely held #y them and #e termed a company limited #y shares. .he &rod"cer *ompany may reim#"rse to its promoters all other direct costs associated with the promotion and re istration of the company incl"din re istration, le al fees, printin of a memorand"m and articles and the payment thereof shall #e s"#Cect to the appro!al at its first eneral meetin of the %em#ers. :n re istration "nder s"#/section G1H, the &rod"cer *ompany shall #ecome a #ody corporate as if it is a pri!ate limited company to which the pro!isions contained in this &art apply, witho"t, howe!er, any limit to the n"m#er of %em#ers thereof, and the &rod"cer *ompany shall not, "nder any circ"mstance, whatsoe!er, #ecome or #e deemed to #ecome a p"#lic limited company "nder this Act.

G$H

G'H

),1 . (em&ership and voting rights o! (em&ers o! Producer Compan%

G1HGaH In a case where the mem#ership consists solely of indi!id"al mem#ers, the !otin ri hts shall #e #ased on a sin le !ote for e!ery %em#er, irrespecti!e of his shareholdin or patrona e of the &rod"cer *ompany. In a case where the mem#ership consists of &rod"cer instit"tions only, the !otin ri hts of s"ch &rod"cer instit"tions shall #e determined on the #asis of their participation in the #"siness of the &rod"cer *ompany in the pre!io"s year, as may #e specified #y articlesK Provided that d"rin the first year of re istration of a &rod"cer *ompany, the !otin ri hts shall #e determined on the #asis of the shareholdin #y s"ch &rod"cer instit"tions. In a case where the mem#ership consists of indi!id"als and &rod"cer instit"tions, the !otin ri hts shall #e comp"ted on the #asis of a sin le !ote for e!ery%em#er. .he articles of any &rod"cer *ompany may pro!ide for the conditions, s"#Cect to which a %em#er may contin"e to retain his mem#ership, and the manner in which !otin ri hts shall #e exercised #y the %em#ers. 4otwithstandin anythin contained in s"#/section G1H or s"#/section G2H, any &rod"cer *ompany may, if so a"thorised #y its articles, restrict the !otin ri hts to acti!e %em#ers, in any special or eneral meetin . 4o person, who has any #"siness interest which is in conflict with #"siness of the &rod"cer *ompany, shall #ecome a %em#er of that *ompany. A %em#er, who acD"ires any #"siness interest which is in conflict with the #"siness of the &rod"cer *ompany, shall cease to #e a %em#er of that *ompany and #e remo!ed as a %em#er in accordance with articles.

G#H

GcH G2H

G3H

G$H G'H

),13. 2ene!its to (em&ers

G1H S"#Cect to the pro!isions made in articles, e!ery %em#er shall initially recei!e only s"ch !al"e for the prod"ce or prod"cts pooled and s"pplied as the 0oard of &rod"cer *ompany may determine, and the withheld price may #e dis#"rsed later in cash or in ;ind or #y allotment of eD"ity shares, in proportion to the prod"ce s"pplied to the &rod"cer *ompany d"rin the financial year to s"ch extent and in s"ch manner and s"#Cect to s"ch conditions as may #e decided #y the 0oard. 1!ery %em#er shall, on the share capital contri#"ted, recei!e only a limited ret"rnK

G2H

G3H

Provided that e!ery s"ch %em#er may #e allotted #on"s shares in accordance with the pro!isions contained in section ')1@-. .he s"rpl"s if any, remainin after ma;in pro!ision for payment of limited ret"rn and reser!es referred to in section ')1@I, may #e dis#"rsed as patrona e #on"s, amon st the %em#ers, in proportion to their participation in the #"siness of the &rod"cer *ompany, either in cash or #y way of allotment of eD"ity shares, or #oth, as may #e decided #y the %em#ers at the eneral meetin .

),15. (emorandum o! Producer Compan%

.he memorand"m of association of e!ery &rod"cer *ompany shall stateM GaH G#H GcH GdH GeH GfH G H GhH the name of the company with "&rod"cer *ompany 2imited" as the last words of the name of s"ch *ompanyL the State in which the re istered office of the &rod"cer *ompany is to sit"ateL the main o#Cects of the &rod"cer *ompany shall #e one or more of the o#Cects specified in section ')10L the names and addresses of the persons who ha!e s"#scri#ed to the memorand"mL the amo"nt of share capital with which the &rod"cer *ompany is to #e re istered and di!ision thereof into shares of a fixed amo"ntL the names, addresses and occ"pations of the s"#scri#ers #ein prod"cers, who shall act as the first directors in accordance with s"#/section G2H of section ')1-L that the lia#ility of its mem#ers is limitedL opposite to the s"#scri#erEs name the n"m#er of shares each s"#scri#er ta;esK

Provided that no s"#scri#er shall ta;e less than one shareL GiH in case the o#Cects of the &rod"cer *ompany are not confined to one State, the States to whose territories the o#Cects extend.

),1-. Articles o! association

G1H .here shall #e presented, for re istration to the 8e istrar of the State to which the re istered office of the &rod"cer *ompany is, stated #y the memorand"m of association, to #e sit"ateM GaH G#H G2H memorand"m of the &rod"cer *ompanyL its articles d"ly si ned #y the s"#scri#ers to the memorand"m.

.he articles shall contain the followin m"t"al assistance principles, namelyKM GaH the mem#ership shall #e !ol"ntary and a!aila#le, to all eli i#le persons who, can participate or a!ail of the facilities or ser!ices of the &rod"cer *ompany, and are willin to accept the d"ties of mem#ershipL G#H GcH each %em#er shall, sa!e as otherwise pro!ided in this &art, ha!e only a sin le !ote irrespecti!e of the share holdin L the &rod"cer *ompany shall #e administered #y a 0oard consistin of persons elected or appointed as directors in the manner consistent with the pro!isions of this &art and the 0oard shall #e acco"nta#le to the %em#ersL sa!e as pro!ided in this &art, there shall #e limited ret"rn on share capitalL the s"rpl"s arisin o"t of the operations of the &rod"cer *ompany shall #e distri#"ted in an eD"ita#le manner #yM GiH GiiH GiiiH pro!idin for the de!elopment of the #"siness of the &rod"cer *ompanyL pro!idin for common facilitiesL and distri#"tin amon st the %em#ers, as may #e admissi#le in proportion to their respecti!e participation in the #"sinessL

GdH GeH

GfH G H

pro!ision shall #e made for the ed"cation of %em#ers, employees and others, on the principles of m"t"ality and techniD"es of m"t"al assistanceL the &rod"cer *ompany shall acti!ely co/operate with other &rod"cer *ompanies Gand other or anisations followin similar principlesH at local, national or international le!el so as to #est ser!e the interest of their %em#ers and the comm"nities it p"rports to ser!e.

G3H

=itho"t preC"dice to the enerality of the fore oin pro!isions of s"#/sections G1H and G2H, the articles shall contain the followin pro!isions, namelyKM GaH G#H GcH the D"alifications for mem#ership, the conditions for contin"ance or cancellation of mem#ership and the terms, conditions and proced"re for transfer of sharesL the manner of ascertainin the patrona e and !otin ri ht #ased on patrona eL s"#Cect to the pro!isions contained in s"#/section G1H of section ')14, the manner of constit"tion of the 0oard, its powers and d"ties, the minim"m and maxim"m n"m#er of directors, manner of election and appointment of directors and retirement #y rotation, D"alifications for #ein elected or contin"ance as s"ch and the terms of office of the said directors, their powers and d"ties, conditions for election or co/option of directors, method of remo!al of directors and the fillin "p of !acancies on the 0oard, and the manner and the terms of appointment of the *hief 1xec"ti!eL the election of the *hairman, term of office of directors and the *hairman, manner of !otin at the eneral or special meetin s of %em#ers, proced"re for !otin , #y directors at meetin s of the 0oard, powers of the *hairman and the circ"mstances "nder which the *hairman may exercise a castin !ote. the circ"mstances "nder which, and the manner in which, the withheld price is to #e determined and distri#"tedL the manner of dis#"rsement of patrona e #on"s in cash or #y iss"e of eD"ity shares, or #othL the contri#"tion to #e shared and related matters referred to in s"#/section G2H of section ')1@IL the matters relatin to iss"e of #on"s shares o"t of eneral reser!es as set o"t in section ')1@-L the #asis and manner of allotment of eD"ity shares of the &rod"cer *ompany in lie" of the whole or part of the sale proceeds of prod"ce or prod"cts s"pplied #y the %em#ersL the amo"nt of reser!es, so"rces from which f"nds may #e raised, limitation on raisin of f"nds, restriction on the "se of s"ch f"nds and the extent of de#t that may #e contracted and the conditions thereofL the credit, loans or ad!ances which may #e ranted to a %em#er and the conditions for the rant of the sameL the ri ht of any %em#er to o#tain information relatin to eneral #"siness of the companyL the #asis and manner of distri#"tion and disposal of f"nds a!aila#le after meetin lia#ilities in the e!ent of dissol"tion or liD"idation of the &rod"cer *ompanyL the a"thorisation for di!ision, amal amation, mer er, creation of s"#sidiaries and the enterin into Coint !ent"res and other matters connected therewithL layin of the memorand"m and articles of the &rod"cer *ompany #efore a special eneral meetin to #e held within ninety days of its re istrationL any other pro!ision, which the %em#ers may, #y special resol"tion recommend to #e incl"ded in articles.

GdH

GeH GfH G H GhH GiH GCH

G;H GlH GmH GnH GoH GpH

),18. Amendment o! memorandum

G1H G2H G3H A &rod"cer *ompany shall not alter the conditions contained in its memorand"m except in the cases, #y the mode and to the extent for which express pro!ision is made in this Act. A &rod"cer *ompany may, #y special resol"tion, not inconsistent with section ')10, alter its o#Cects specified in its memorand"m. A copy of the amended memorand"m, to ether with a copy of the special resol"tion d"ly certified #y two directors, shall #e filed with the 8e istrar within thirty days from the date of adoption of any resol"tion referred to in s"#/section G2HK

Provided that in the case of transfer of the re istered office of a &rod"cer *ompany from the C"risdiction of one 8e istrar to another, certified copies of the special resol"tion certified #y two directors shall #e filed with #oth the 8e istrars within thirty days, and each 8e istrar shall record the same, and there"pon the 8e istrar from whose C"risdiction the office is transferred, shall forthwith forward to the other 8e istrar all doc"ments relatin to the &rod"cer *ompany. G$H .he alteration of the pro!isions of memorand"m relatin to the chan e of the place of its re istered office from one State to another shall not ta;e effect "nless it is confirmed #y the *ompany 2aw 0oard on petition.

),11". Amendment o! articles

G1H Any amendment of the articles shall #e proposed #y not less than two/third of the elected directors or #y not less than one/third of the %em#ers of the &rod"cer *ompany, and adopted #y the %em#ers #y a special resol"tion. A copy of the amended articles to ether with the copy of the special resol"tion, #oth d"ly certified #y two directors, shall #e filed with the 8e istrar within thirty days from the date of its adoption.

G2H

),1/.
G1H

<ption to inter1State co1operative societies to &ecome Producer Companies

4otwithstandin anythin contained in s"#/section G1H of section ')1*, any inter/State co/operati!e society with o#Cects not confined to one State may ma;e an application to the 8e istrar for re istration as &rod"cer *ompany "nder this &art. 1!ery application "nder s"#/section G1H shall #e accompanied #yM GaH G#H a copy of the special resol"tion, of not less than two/third of total mem#ers of inter/ State co/ operati!e society, for its incorporation as a &rod"cer *ompany "nder this ActL a statement showin M GiH names and addresses or the occ"pation of the directors and *hief 1xec"ti!e, if any, #y whate!er name called, of s"ch co/operati!eL and GiiH list of mem#ers of s"ch inter/State co/operati!e societyL a statement indicatin that the inter/State co/operati!e society is en a ed in any one or more of the o#Cects specified in section ')10L a declaration #y two or more directors of the inter/State co/operati!e society certifyin that partic"lars i!en in cla"ses GaH to GcH are correct.

G2H

GcH GdH G3H

G$H

=hen an inter/State co/operati!e society is re istered as a &rod"cer *ompany, the words "&rod"cer *ompany 2imited" shall form part of its name with any word or expression to show its identity precedin it. :n compliance with the reD"irements of s"#/sections G1H to G3H, the 8e istrar shall, within a period of thirty days of the receipt of application, certify "nder his hand that the inter/State cooperati!e society applyin for re istration is re istered and there#y incorporated as a &rod"cer *ompany "nder this &art. A co/operati!e society formed #y prod"cers, #y federation or "nion of co/operati!e societies of prod"cers or co/operati!es of prod"cers, re istered "nder any law for the time #ein in force which has extended its o#Cects o"tside the State, either directly or thro" h a "nion or federation of co/operati!es of which it is a constit"ent, as the case may #e, and any federation or "nion of s"ch co/operati!es, which has so extended any of its o#Cects or acti!ities o"tside the State, shall #e eli i#le to ma;e an application "nder s"#/section G1H and to o#tain re istration as a &rod"cer *ompany "nder this &art. .he inter/State co/operati!e society shall, "pon re istration "nder s"#/section G1H, stand transformed into a &rod"cer *ompany, and thereafter shall #e o!erned #y the pro!isions of this &art to the excl"sion of the law #y which it was earlier o!erned, sa!e in so far as anythin done or omitted to #e done #efore its re istration as a &rod"cer *ompany, and notwithstandin anythin contained in any other law for the time #ein in force, no person shall ha!e any claim a ainst the cooperati!e instit"tion or the company #y reason of s"ch con!ersion or transformation. <pon re istration as a &rod"cer *ompany, the 8e istrar of *ompanies who re isters the company shall forthwith intimate the 8e istrar with whom the erstwhile inter/State co/operati!e society was earlier re istered for appropriate deletion of the society from its re ister.

G'H

G(H

G7H

),1;. 3!!ect o! incorporation o! Producer Compan%

1!ery shareholder of the inter/State cooperati!e society immediately #efore the date of re istration of &rod"cer *ompany Ghereafter referred to as the transformation dateH shall #e deemed to #e re istered on and from that date as a shareholder of the &rod"cer *ompany to the extent of the face !al"e of the shares held #y s"ch shareholder.

),14. 9esting o! underta=ing in Producer Compan%

G1H G2H All properties and assets, mo!a#le and immo!a#le, of, or #elon in to, the inter/State co/operati!e society as on the transformation date, shall !est in the &rod"cer *ompany. All the ri hts, de#ts, lia#ilities, interests, pri!ile es and o#li ations of the inter/State cooperati!e society as on the transformation date shall stand transferred to, and #e the ri hts, de#ts, lia#ilities, interests, pri!ile es and o#li ations of, the &rod"cer *ompany. =itho"t preC"dice to the pro!isions contained in s"#/section G2H, all de#ts, lia#ilities and o#li ations inc"rred, all contracts entered into and all matters and thin s en a ed to #e done #y, with or for, the society as on the transformation date for or in connection with their p"rposes, shall #e deemed to ha!e #een inc"rred, entered into, or en a ed to #e done #y, with or for, the &rod"cer *ompany. All s"ms of money d"e to the inter/State co/operati!e society immediately #efore the transformation date, shall #e deemed to #e d"e to the &rod"cer *ompany. 1!ery or anisation, which was #ein mana ed immediately #efore the transformation date #y the inter/ State co/operati!e society shall #e mana ed #y the &rod"cer *ompany for s"ch period, to s"ch extent and in s"ch manner as the circ"mstances may reD"ire. 1!ery or anisation which was ettin financial, mana erial or technical assistance from the inter/State co/operati!e society, immediately #efore the transformation date, may contin"e to #e i!en financial, mana erial or technical assistance, as the case may #e, #y the &rod"cer *ompany, for s"ch period, to s"ch extent and in s"ch manner as that company may deem fit. .he amo"nt representin the capital of the erstwhile inter/State co/operati!e society shall form part of the capital of the &rod"cer *ompany. Any reference to the inter/State co/operati!e society in any law other than this Act or in any contract or other instr"ment, shall #e deemed to #e reference to the &rod"cer *ompany. If, on the transformation date, there is pendin any s"it, ar#itration, appeal or other le al proceedin of whate!er nat"re #y or a ainst the inter/State co/operati!e society, the same shall not a#ate, #e discontin"ed or #e in any way preC"dicially affected #y reason of the incorporation of the &rod"cer *ompany "nder section ')1* or transformation of the inter/State co/operati!e society as a &rod"cer *ompany "nder section ')1-, as the case may #e, #"t the s"it, ar#itration, appeal or other proceedin , may #e contin"ed, prosec"ted and enforced #y or a ainst the &rod"cer *ompany in the same manner and to the same extent as it wo"ld ha!e, or may ha!e #een contin"ed, prosec"ted and enforced #y or a ainst the inter/State co/operati!e society as if the pro!isions contained in this &art had not come into force.

G3H

G$H G'H

G(H

G7H G)H G,H

),1(. Concession, etc., to &e deemed to have &een granted to Producer Compan%
=ith effect from the transformation date, all fiscal and other concessions, licences, #enefits, pri!ile es and exemptions ranted to the inter/State co/operati!e society in connection with the affairs and #"siness of the inter/State co/operati!e society "nder any law for the time #ein in force shall #e deemed to ha!e #een ranted to the &rod"cer *ompany.

),16. Provisions in respect o! o!!icers and other emplo%ees o! inter1State co1operative societ%

G1H

4otwithstandin anythin contained in section ')1/:, all the directors in the inter/State cooperati!e society #efore the incorporation of the &rod"cer *ompany shall contin"e in office for a period of one year from the transformation date and in accordance with the pro!isions of this Act. 1!ery officer or other employee of the inter/State co/operati!e society Gexcept a director of the 0oard, *hairman or %ana in DirectorH ser!in in its employment immediately #efore the transformation date shall, in so far as s"ch officer or other employee is employed in connection with the inter/State co/ operati!e society which has !ested in the &rod"cer *ompany #y !irt"e of this Act, #ecome, as from the transformation date, an officer or, as the case may #e, other employee of the &rod"cer *ompany and shall hold his office or ser!ice therein #y the same ten"re, at the same rem"neration, "pon the same terms and conditions, with the same o#li ations and with the same ri hts and pri!ile es as to lea!e, lea!e tra!el concession, welfare scheme, medical #enefit scheme, ins"rance, pro!ident f"nd, other f"nds, retirement, !ol"ntary retirement, rat"ity and other #enefits as he wo"ld ha!e held "nder the erstwhile inter/State co/operati!e society if its "nderta;in had not !ested in the &rod"cer *ompany and shall contin"e to do so as an officer or, as the case may #e, other employee of the &rod"cer *ompany. =here an officer or other employee of the inter/State co/operati!e society opts "nder s"#section G2H not to #e in employment or ser!ice of the &rod"cer *ompany, s"ch officer or other employee shall #e deemed to ha!e resi ned. 4otwithstandin anythin contained in the Ind"strial Disp"tes Act, 1,$7 G1$ of 1,$7H or in any other law for the time #ein in force, the transfer of the ser!ices of any officer or other employee of the inter/ State co/operati!e society to the &rod"cer *ompany shall not entitle s"ch officer or other employee to any compensation "nder this Act or "nder any other law for the time #ein in force and no s"ch claim shall #e entertained #y any co"rt, tri#"nal or other a"thority. .he officers and other employees who ha!e retired #efore the transformation date from the ser!ice of the inter/State co/operati!e society and are entitled to any #enefits, ri hts or pri!ile es, shall #e entitled to recei!e the same #enefits, ri hts or pri!ile es from the &rod"cer *ompany. .he tr"sts of the pro!ident f"nd or the rat"ity f"nd of the inter/State co/operati!e society and any other #odies created for the welfare of officers or employees shall contin"e to dischar e f"nctions in the &rod"cer *ompany as was #ein done hitherto in the inter/State co/operati!e society and any tax exemption ranted to the pro!ident f"nd or the rat"ity f"nd wo"ld contin"e to #e applied to the &rod"cer *ompany. 4otwithstandin anythin contained in this Act or in any other law for the time #ein in force or in the re "lations of the inter/State co/operati!e society, no director of the 0oard, *hairman, %ana in Director or any other person entitled to mana e the whole or s"#stantial part of the #"siness and affairs of the inter/Stateco/operati!e society shall #e entitled to any compensation a ainst the inter/Stateco/ operati!e society or the &rod"cer *ompany for the loss of office or for the premat"re termination of any contract of mana ement entered into #y him with the inter/State cooperati!e society.

G2H

G3H

G$H

G'H

G(H

G7H

PART IXA:

CHAPTER III - MANAGEMENT OF PRODUCER COMPANY

),11<. 6um&er o! directors

1!ery &rod"cer *ompany shall ha!e at least fi!e and not more than fifteen directorsK Provided that in the case of an inter/State co/operati!e society incorporated as a &rod"cer *ompany, s"ch company may ha!e more than fifteen directors for a period of one year from the date of its incorporation as a &rod"cer *ompany.

),1P. Appointment o! directors

G1H Sa!e as pro!ided in section ')14, the %em#ers who si n the memorand"m and the articles may desi nate therein the 0oard of directors Gnot less than fi!eH who shall o!ern the affairs of the &rod"cer *ompany "ntil the directors are elected in accordance with the pro!isions of this section. .he election of directors shall #e cond"cted within a period of ninety days of the re istration of the &rod"cer *ompanyK

G2H

Provided that in the case of an inter/State co/operati!e society which has #een re istered as a &rod"cer *ompany "nder s"#/section G$H of section ')1- in which at least fi!e directors Aincl"din the directors contin"in in office "nder s"#/section G1H of section ')14B hold office as s"ch on the date of re istration of s"ch company, the pro!isions of this s"#/section shall ha!e effect as if for the words "ninety days", the words "three h"ndred and sixty/fi!e days" had #een s"#stit"ted. G3H G$H G'H G(H 1!ery person shall hold office of a director for a period not less than one year #"t not exceedin fi!e years as may #e specified in the articles. 1!ery director, who retires in accordance with the articles, shall #e eli i#le for reappointment as a director. Sa!e as pro!ided in s"#/section G2H, the directors of the 0oard shall #e elected or appointed #y the %em#ers in the ann"al eneral meetin . .he 0oard may co/opt one or more expert directors or an additional director not exceedin one/fifth of the total n"m#er of directors or appoint any other person as additional director for s"ch period as the 0oard may deem fitK Provided that the expert directors shall not ha!e the ri ht to !ote in the election of the *hairman #"t shall #e eli i#le to #e elected as *hairman, if so pro!ided #y its articlesK Provided !urther that the maxim"m period, for which the expert director or the additional director holds office, shall not exceed s"ch period as may #e specified in the articles.

),17. 9acation o! o!!ice &% directors

G1H .he office of the director of a &rod"cer *ompany shall #ecome !acant ifM GaH he is con!icted #y a co"rt of any offence in!ol!in moral t"rpit"de and sentenced in respect thereof to imprisonment for not less than six monthsL G#H the &rod"cer *ompany, in which he is a director, has made a defa"lt in repayment of any ad!ances or loans ta;en from any company or instit"tion or any other person and s"ch defa"lt contin"es for ninety daysL GcH GdH he has made a defa"lt in repayment of any ad!ances or loans ta;en from the &rod"cer *ompany in which he is a directorL the &rod"cer *ompany, in which he is a directorM GiH has not filed the ann"al acco"nts and ann"al ret"rn for any contin"o"s three financial years commencin on or after the 1st day of April, 2002L or GiiH has failed to, repay its deposit or withheld price or patrona e #on"s or interest thereon on d"e date, or pay di!idend and s"ch fail"re contin"es for one year or moreL defa"lt is made in holdin election for the office of director, in the &rod"cer *ompany in which he is a director, in accordance with the pro!isions of this Act and articlesL the ann"al eneral meetin or extraordinary eneral meetin of the &rod"cer *ompany, in which he is a director, is not called in accordance with the pro!isions of this Act except d"e to nat"ral calamity or s"ch other reason.

GeH GfH

G2H

.he pro!isions of s"#/section G1H shall, as far as may #e, apply to the director of a &rod"cer instit"tion which is a mem#er of a &rod"cer *ompany.

),1:. Powers and !unctions o! 2oard

G1H G2H S"#Cect to the pro!isions of this Act and articles, the 0oard of directors of a &rod"cer *ompany shall exercise all s"ch powers and to do all s"ch acts and thin s, as that company is a"thorised so to do. In partic"lar and witho"t preC"dice to the enerality of the fore oin powers, s"ch powers may incl"de all or any of the followin matters, namelyKM GaH determination of the di!idend paya#leL G#H GcH determination of the D"ant"m of withheld price and recommend patrona e to #e appro!ed at eneral meetin L admission of new %em#ersL

GdH GeH GfH G H

p"rs"e and form"late the or anisational policy, o#Cecti!es, esta#lish specific lon term and ann"al o#Cecti!es, and appro!e corporate strate ies and financial plansL appointment of a *hief 1xec"ti!e and s"ch other officers of the &rod"cer *ompany, as may #e specified in the articlesL exercise s"perintendence, direction and control o!er *hief 1xec"ti!e and other officers appointed #y itL ca"se proper #oo;s of acco"nt to #e maintainedL prepare ann"al acco"nts to #e placed #efore the ann"al eneral meetin with the a"ditorIs report and the replies on D"alifications, if any, made #y the a"ditorsL acD"isition or disposal of property of the &rod"cer *ompany in its ordinary co"rse of #"sinessL in!estment of the f"nds of the &rod"cer *ompany in the ordinary co"rse of its #"sinessL sanction any loan or ad!ance, in connection with the #"siness acti!ities of the &rod"cer *ompany to any %em#er, not #ein a director or his relati!eL ta;e s"ch other meas"res or do s"ch other acts as may #e reD"ired in the dischar e of its f"nctions or exercise of its powers.

GhH GiH GCH G;H G3H

All the powers specified in s"#/sections G1H and G2H shall #e exercised #y the 0oard, #y means of resol"tion passed at its meetin on #ehalf of the &rod"cer *ompany. Explanation. 3or the remo!al of do"#ts, it is here#y declared that a director or a ro"p of directors, who do not constit"te the 0oard, shall not exercise any of the powers exercisa#le #y it.

),1S. (atters to &e transacted at general meeting

.he 0oard of directors of a &rod"cer *ompany shall exercise the followin powers on #ehalf of that company, and it shall do so only #y means of resol"tions passed at the ann"al eneral meetin of its %em#ers, namelyKM GaH appro!al of #"d et and adoption of ann"al acco"nts of the &rod"cer *ompanyL G#H GcH GdH GeH GfH appro!al of patrona e #on"sL iss"e of #on"s sharesL declaration of limited ret"rn and decision on the distri#"tion of patrona eL specify the conditions and limits of loans that may #e i!en #y the 0oard to any directorL and appro!al of any transaction of the nat"re as is to #e reser!ed in the articles for appro!al #y the %em#ers.

),10. 4ia&ilit% o! directors

G1H =hen the directors !ote for a resol"tion, or appro!e #y any other means, anythin done in contra!ention of the pro!isions of this Act or any other law for the time #ein in force or articles, they shall #e Cointly and se!erally lia#le to ma;e ood any loss or dama e s"ffered #y the &rod"cer *ompany. =itho"t preC"dice to the pro!isions contained in s"#/section G1H, the &rod"cer *ompany shall ha!e the ri ht to reco!er from its directorM GaH where s"ch director has made any profit as a res"lt of the contra!ention specified in s"#/section G1H, an amo"nt eD"al to the profit so madeL G#H where the &rod"cer *ompany inc"rred a loss or dama e as a res"lt of the contra!ention specified in s"#/section G1H, an amo"nt eD"al to that loss or dama eL .he lia#ility imposed "nder this section shall #e in addition to and not in dero ation of a lia#ility imposed on a director "nder this Act or any other law for the time #ein in force.

G2H

G3H

),1>. Committee o! directors

G1H

G2H

G3H G$H G'H

.he 0oard may constit"te s"ch n"m#er of committees as it may deem fit for the p"rpose of assistin the 0oard in the efficient dischar e of its f"nctionsK Provided that the 0oard shall not dele ate any of its powers or assi n the powers of the *hief 1xec"ti!e, to any committee. A committee constit"ted "nder s"#/section G1H may, with the appro!al of the 0oard, co/opt s"ch n"m#er of persons as it deems fit as mem#ers of the committeeK Provided that the *hief 1xec"ti!e appointed "nder section ')1= or a director of the &rod"cer *ompany shall #e a mem#er of s"ch committee. 1!ery s"ch committee shall f"nction "nder the eneral s"perintendence, direction and control of the 0oard, for s"ch d"ration, and in s"ch manner as the 0oard may direct. .he fee and allowances to #e paid to the mem#ers of the committee shall #e s"ch as may #e determined #y the 0oard. .he min"tes of each meetin of the committee shall #e placed #efore the 0oard at its next meetin .

),19. (eetings o! 2oard and Duorum

G1H G2H G3H A meetin of the 0oard shall #e held not less than once in e!ery three months and at least fo"r s"ch meetin s shall #e held in e!ery year. 4otice of e!ery meetin of the 0oard of directors shall #e i!en in writin to e!ery director for the time #ein in India, and at his "s"al address in India to e!ery other director. .he *hief 1xec"ti!e shall i!e notice as aforesaid not less than se!en days prior to the date of the meetin of the 0oard and if he fails to do so, he shall #e p"nisha#le with fine which may extend to one tho"sand r"peesK Provided that a meetin of the 0oard may #e called at shorter notice and the reasons thereof shall #e recorded in writin #y the 0oard. G$H G'H .he D"or"m for a meetin of the 0oard shall #e one/third of the total stren th of directors, s"#Cect to a minim"m of three. Sa!e as pro!ided in the articles, directors incl"din the co/opted director, may #e paid s"ch fees and allowances for attendance at the meetin s of the 0oard, as may #e decided #y the %em#ers in the eneral meetin .

),1?. Chie! 3xecutive and his !unctions

G1H G2H G3H G$H G'H 1!ery &rod"cer *ompany shall ha!e a f"ll time *hief 1xec"ti!e, #y whate!er name called, to #e appointed #y the 0oard from amon st persons other than %em#ers. .he *hief 1xec"ti!e shall #e ex officio director of the 0oard and s"ch director shall not retire #y rotation. Sa!e as otherwise pro!ided in articles, the D"alifications, experience and the terms and conditions of ser!ice of the *hief 1xec"ti!e shall #e s"ch as may #e determined #y the 0oard. .he *hief 1xec"ti!e shall #e entr"sted with s"#stantial powers of mana ement as the 0oard may determine. =itho"t preC"dice to the enerality of s"#/section G$H, the *hief 1xec"ti!e may exercise the powers and dischar e the f"nctions, namelyKM GaH G#H GcH GdH GeH do administrati!e acts of a ro"tine nat"re incl"din mana in the day/to/day affairs of the &rod"cer *ompanyL operate #an; acco"nts or a"thorise any person, s"#Cect to the eneral or special appro!al of the 0oard in this #ehalf, to operate the #an; acco"ntL ma;e arran ements for safe c"stody of cash and other assets of the &rod"cer *ompanyL si n s"ch doc"ments as may #e a"thorised #y the 0oard, for and on #ehalf of the companyL maintain proper #oo;s of acco"ntL prepare ann"al acco"nts and a"dit thereofL place the a"dited acco"nts #efore the 0oard and in the ann"al eneral meetin of the %em#ersL

GfH G H GhH GiH GCH G;H G(H

f"rnish %em#ers with periodic information to appraise them of the operation and f"nctions of the &rod"cer *ompanyL ma;e appointments to posts in accordance with the powers dele ated to him #y the 0oardL assist the 0oard in the form"lation of oals, o#Cecti!es, strate ies, plans and policiesL ad!ise the 0oard with respect to le al and re "latory matters concernin the proposed and on oin acti!ities and ta;e necessary action in respect thereofL exercise the powers as may #e necessary in the ordinary co"rse of #"sinessL dischar e s"ch other f"nctions, and exercise s"ch other powers, as may #e dele ated #y the 0oard.

.he *hief 1xec"ti!e shall mana e the affairs of the &rod"cer *ompany "nder the eneral s"perintendence, direction and control of the 0oard and #e acco"nta#le for the performance of the &rod"cer *ompany.

),1@. Secretar% o! Producer Compan%

G1H G2H 1!ery &rod"cer *ompany ha!in an a!era e ann"al t"rno!er exceedin fi!e crore r"pees in each of three consec"ti!e financial years shall ha!e a whole/time secretary. 4o indi!id"al shall #e appointed as whole/time secretary "nless he possesses mem#ership of the Instit"te of *ompany Secretaries of India constit"ted "nder the *ompany Secretaries Act, 1,)0 G'( of 1,)0H. If a &rod"cer *ompany fails to comply with the pro!isions of s"#/section G1H, the company and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to fi!e h"ndred r"pees for e!ery day d"rin which the defa"lt contin"esK Provided that in any proceedin s a ainst a person in respect of an offence "nder this s"#section, it shall #e a defence to pro!e that all reasona#le efforts to comply with the pro!isions of s"#section G1H were ta;en or that the financial position of the company was s"ch that it was #eyond its capacity to en a e a whole/time secretary.

G3H

),1A. 7uorum
<nless the articles reD"ire a lar er n"m#er, one/fo"rth of the total mem#ership shall constit"te the D"or"m at a eneral meetin .

),1B. 9oting rights

Sa!e as otherwise pro!ided in s"#/sections G1H and G3H of section ')1D, e!ery %em#er shall ha!e one !ote and in the case of eD"ality of !otes, the *hairman or the person presidin shall ha!e a castin !ote except in the case of election of the *hairman.

PART IXA:

CHAPTER IV - GENERAL MEETINGS

),1BA. Annual general meetings

G1H 1!ery &rod"cer *ompany shall in each year, hold, in addition to any other meetin s, a eneral meetin , as its ann"al eneral meetin and shall specify the meetin as s"ch in the notices callin it, and not more than fifteen months shall elapse #etween the date of one ann"al eneral meetin of a &rod"cer *ompany and that of the nextK Provided that the 8e istrar may, for any special reason, permit extension of the time for holdin any ann"al eneral meetin Gnot #ein the first ann"al eneral meetin H #y a period not exceedin three months.

G2H G3H G$H

A &rod"cer *ompany shall hold its first ann"al eneral meetin within a period of ninety days from the date of its incorporation. .he %em#ers shall adopt the articles of the &rod"cer *ompany and appoint directors of its 0oard in the ann"al eneral meetin . .he notice callin the ann"al eneral meetin shall #e accompanied #y the followin doc"ments, namelyKM GaH the a enda of the ann"al eneral meetin L G#H GcH GdH the min"tes of the pre!io"s ann"al eneral meetin or the extra/ordinary eneral meetin L the names of candidates for election, if any, to the office of director incl"din a statement of D"alifications in respect of each candidateL the a"dited #alance/sheet and profit and loss acco"nts of the &rod"cer *ompany and its s"#sidiary, if any, to ether with a report of the 0oard of Directors of s"ch *ompany with respect toM GiH GiiH GiiiH Gi!H G!H the state of affairs of the &rod"cer *ompanyL the amo"nt proposed to #e carried to reser!eL the amo"nt to #e paid as limited ret"rn on share capitalL the amo"nt proposed to #e dis#"rsed as patrona e #on"sL the material chan es and commitments, if any, affectin the financial position of the &rod"cer *ompany and its s"#sidiary, which ha!e occ"rred in #etween the date of the ann"al acco"nts of the &rod"cer *ompany to which the #alance/sheet relates and the date of the report of the 0oardL any other matter of importance relatin to ener y conser!ation, en!ironmental protection, expendit"re or earnin s in forei n exchan esL

G!iH

GeH GfH G'H

G!iiH any other matter which is reD"ired to #e, or may #e, specified #y the 0oardL the text of the draft resol"tion for appointment of a"ditorsL the text of any draft resol"tion proposin amendment to the memorand"m or articles to #e considered at the eneral meetin , alon with the recommendations of the 0oard.

.he 0oard of Directors shall, on the reD"isition made in writin , d"ly si ned and settin o"t the matters for the consideration, made #y one/third of the %em#ers entitled to !ote in any eneral meetin , proceed to call an extraordinary eneral meetin in accordance with the pro!isions contained in sections 1(, to 1)( of this Act. 1!ery ann"al eneral meetin shall #e called, for a time d"rin #"siness ho"rs, on a day that is not a p"#lic holiday and shall #e held at the re istered office of the &rod"cer *ompany or at some other place within the city, town or !illa e in which the re istered office of the *ompany is sit"ate. A eneral meetin of the &rod"cer *ompany shall #e called #y i!in not less than fo"rteen days prior notice in writin . .he notice of the eneral meetin indicatin the date, time and place of the meetin shall #e sent to e!ery %em#er and a"ditor of the &rod"cer *ompany. <nless the articles of the &rod"cer *ompany pro!ide for a lar er n"m#er, one/fo"rth of the total n"m#er of mem#ers of the &rod"cer *ompany shall #e the D"or"m for its ann"al eneral meetin . .he proceedin s of e!ery ann"al eneral meetin alon with the DirectorsI 8eport, the a"dited #alance/sheet and the profit and loss acco"nt shall #e filed with the 8e istrar within sixty days of the date on which the ann"al eneral meetin is held, with an ann"al ret"rn alon with the filin fees as applica#le "nder the Act. In the case where a &rod"cer *ompany is formed #y &rod"cer instit"tions, s"ch instit"tions shall #e represented in the eneral #ody thro" h the *hairman or the *hief 1xec"ti!e thereof who shall #e competent to act on its #ehalfK Provided that a &rod"cer instit"tion shall not #e represented if s"ch instit"tion ma;es a defa"lt or fail"re referred to in cla"ses GdH to GfH of s"#/section G1H of section ')15.

G(H

G7H G)H G,H G10H

G11H

PART IXA: CHAPTER V - SHARE CAPITAL AND MEMBERS RIGHTS

),1B2. Share capital

G1H G2H .he share capital of a &rod"cer *ompany shall consist of eD"ity shares only. .he shares held #y a %em#er in a &rod"cer *ompany, shall as far as may #e, #e in proportion to the patrona e of that company.

),1BC.
G1H G2H

Special user rights

.he prod"cers, who are acti!e %em#ers may, if so pro!ided in the articles, ha!e special ri hts and the &rod"cer *ompany may iss"e appropriate instr"ments to them in respect of s"ch special ri hts. .he instr"ments of the &rod"cer *ompany iss"ed "nder s"#/section G1H shall, after o#tainin appro!al of the 0oard in that #ehalf, #e transfera#le to any other acti!e %em#er of that &rod"cer *ompany. Explanation( 3or the p"rposes of this section, the expression "special ri ht" means any ri ht relatin to s"pply of additional prod"ce #y the acti!e %em#er or any other ri ht relatin to his prod"ce which may #e conferred "pon him #y the 0oard.

),1B .
G1H G2H G3H

0rans!era&ilit% o! shares and attendant rights

Sa!e as otherwise pro!ided in s"#sections G2H to G$H, the shares of a %em#er of a &rod"cer *ompany shall not #e transfera#le. A %em#er of a &rod"cer *ompany may, after o#tainin the pre!io"s appro!al of the 0oard, transfer the whole or part of his shares alon with any special ri hts, to an acti!e %em#er at par !al"e. 1!ery %em#er shall, within three months of his #ecomin a %em#er in the &rod"cer *ompany, nominate, in the manner specified in articles, a person to whom his shares in the &rod"cer *ompany shall !est in the e!ent of his death. .he nominee shall, on the death of the %em#er, #ecome entitled to all the ri hts in the shares of the &rod"cer *ompany and the 0oard of that *ompany shall transfer the shares of the deceased %em#er to his nomineeK Provided that in a case where s"ch nominee is not a prod"cer, the 0oard shall direct the s"rrender of shares to ether with special ri hts, if any, to the &rod"cer *ompany at par !al"e or s"ch other !al"e as may #e determined #y the 0oard. =here the 0oard of a &rod"cer *ompany is satisfied thatM GaH any %em#er has ceased to #e a primary prod"cerL or G#H any %em#er has failed to retain his D"alifications to #e a %em#er as specified in articles, the 0oard shall direct the s"rrender of shares to ether with special ri hts, if any, to the &rod"cer *ompany at par !al"e or s"ch other !al"e as may #e determined #y the 0oardK Provided that the 0oard shall not direct s"ch s"rrender of shares "nless the %em#er has #een ser!ed with a written notice and i!en an opport"nity of #ein heard.

G$H

G'H

Chapter 9J

Provisions applica&le to ever% mode o! winding up

PART IXA:

CHAPTER VI - FINANCE, ACCOUNTS AND AUDIT

),1B3. 2oo=s o! account

G1H 1!ery &rod"cer *ompany shall ;eep at its re istered office proper #oo;s of acco"nt with respect to M GaH G#H GcH all s"ms of money recei!ed and expended #y the &rod"cer *ompany and the matters in respect of which the receipts and expendit"re ta;e placeL all sales and p"rchase of oods #y the &rod"cer *ompanyL the instr"ments of lia#ility exec"ted #y or on #ehalf of the &rod"cer *ompanyL

GdH GeH G2H

the assets and lia#ilities of the &rod"cer *ompanyL in case of a &rod"cer *ompany en a ed in prod"ction, processin and man"fact"rin , the partic"lars relatin to "tilisation of materials or la#o"r or other items of costs.

.he #alance/sheet and profit and loss acco"nt of the &rod"cer *ompany shall #e prepared, as far as may #e, in accordance with the pro!isions contained in section 211.

),1B5. "nternal audit

1!ery &rod"cer *ompany shall ha!e internal a"dit of its acco"nts carried o"t, at s"ch inter!al and in s"ch manner as may #e specified in articles, #y a chartered acco"ntant as defined in cla"se G#H of s"#/section G1H of section 2 of the Instit"te of *hartered Acco"ntants Act, 1,$, G3) of 1,$,H.

),1B-. uties o! auditor under this Part

=itho"t preC"dice to the pro!isions contained in section 227, the a"ditor shall report on the followin additional matters relatin to the &rod"cer *ompany, namelyKM GaH G#H GcH GdH GeH GfH G H the amo"nt of de#ts d"e alon with partic"lars of #ad de#ts if anyL the !erification of cash #alance and sec"ritiesL the details of assets and lia#ilitiesL all transactions which appear to #e contrary to the pro!isions of this &artL the loans i!en #y the &rod"cer *ompany to the directorsL the donations or s"#scriptions i!en #y the &rod"cer *ompanyL any other matter as may #e considered necessary #y the a"ditor.

),1B8. onations or su&scription &% Producer Compan%

A &rod"cer *ompany may, #y special resol"tion, ma;e donation or s"#scription to any instit"tion or indi!id"al for the p"rposes ofM GaH G#H promotin the social and economic welfare of &rod"cer %em#ers or prod"cers or eneral p"#licL or promotin the m"t"al assistance principlesK

Provided that the a re ate amo"nt of all s"ch donation and s"#scription in any financial year shall not exceed three per cent. of the net profit of the &rod"cer *ompany in the financial year immediately precedin the financial year in which the donation or s"#scription was madeK Provided !urther that no &rod"cer *ompany shall ma;e directly or indirectly to any political party or for any political p"rpose to any person any contri#"tion or s"#scription or ma;e a!aila#le any facilities incl"din personnel or material.

),1B". -eneral and other reserves

G1H G2H 1!ery &rod"cer *ompany shall maintain a eneral reser!e in e!ery financial year, in addition to any reser!e maintained #y it as may #e specified in articles. In a case where the &rod"cer *ompany does not ha!e s"fficient f"nds in any financial year for transfer to maintain the reser!es as may #e specified in articles, the contri#"tion to the reser!e shall #e shared amon st the %em#ers in proportion to their patrona e in the #"siness of that company in that year.

),1B/. "ssue o! &onus shares

Any &rod"cer *ompany may, "pon recommendation of the 0oard and passin of resol"tion in the eneral meetin , iss"e #on"s shares #y capitalisation of amo"nts from eneral reser!es referred to in section ')1@I in proportion to the shares held #y the %em#ers on the date of the iss"e of s"ch shares.

PART IXA:

CHAPTER VII - LOANS TO MEMBERS AND INVESTMENTS

),1B;. 4oan, etc., to (em&ers

.he 0oard may, s"#Cect to the pro!isions made in articles, pro!ide financial assistance to the %em#ers of the &rod"cer *ompany #y way ofM GaH credit facility, to any %em#er, in connection with the #"siness of the &rod"cer *ompany, for a period not exceedin six monthsL G#H loans and ad!ances, a ainst sec"rity specified in articles to any %em#er, repaya#le within a period exceedin three months #"t not exceedin se!en years from the date of dis#"rsement of s"ch loan or ad!ancesK Provided that any loan or ad!ance to any director or his relati!e shall #e ranted only after the appro!al #y the %em#ers in eneral meetin .

),1B4. "nvestment in other companies, !ormation o! su&sidiaries, etc.

G1H .he eneral reser!es of any &rod"cer *ompany shall #e in!ested to sec"re the hi hest ret"rns a!aila#le from appro!ed sec"rities, fixed deposits, "nits, #onds iss"ed #y the +o!ernment or co/operati!e or sched"led #an; or in s"ch other mode as may #e prescri#ed. Any &rod"cer *ompany may, for promotion of its o#Cecti!es acD"ire the shares of another &rod"cer *ompany. Any &rod"cer *ompany may s"#scri#e to the share capital of, or enter into any a reement or other arran ement, whether #y way of formation of its s"#sidiary company, Coint !ent"re or in any other manner with any #ody corporate, for the p"rpose of promotin the o#Cects of the &rod"cer *ompany #y special resol"tion in this #ehalf. Any &rod"cer *ompany, either #y itself or to ether with its s"#sidiaries, may in!est, #y way of s"#scription, p"rchase or otherwise, shares in any other company, other than a &rod"cer *ompany, specified "nder s"#/section G2H, or s"#scription of capital "nder s"#/section G3H, for an amo"nt not exceedin thirty per cent. of the a re ate of its paid/"p capital and free reser!esK Provided that a &rod"cer *ompany may, #y special resol"tion passed in its eneral meetin and with prior appro!al of the *entral +o!ernment, in!est in excess of the limits specified in this section. G'H G(H G7H All in!estments #y a &rod"cer *ompany may #e made if s"ch in!estments are consistent with the o#Cects of the &rod"cer *ompany. .he 0oard of a &rod"cer *ompany may, with the pre!io"s appro!al of %em#ers #y a special resol"tion, dispose of any of its in!estments referred to in s"#/sections G3H and G$H. 1!ery &rod"cer *ompany shall maintain a re ister containin partic"lars of all the in!estments, showin the names of the companies in which shares ha!e #een acD"ired, n"m#er and !al"e of sharesL the date of acD"isitionL and the manner and price at which any of the shares ha!e #een s"#seD"ently disposed of. .he re ister referred to in s"#/section G7H shall #e ;ept at the re istered office of the &rod"cer *ompany and the same shall #e open to inspection #y any %em#er who may ta;e extracts therefrom.

G2H G3H

G$H

G)H

PART IXA:

CHAPTER VIII - PENALTIES

),1B(. Penalt% !or contravention

G1H

If any person, other than a &rod"cer *ompany re istered "nder this &art, carries on #"siness "nder any name which contains the words "&rod"cer *ompany 2imited", he shall #e p"nisha#le with fine which may extend to ten tho"sand r"pees for e!ery day d"rin which s"ch name has #een "sed #y him. If a director or an officer of a &rod"cer *ompany, who wilf"lly fails to f"rnish any information relatin to the affairs of the &rod"cer *ompany reD"ired #y a %em#er or a person d"ly a"thorised in this #ehalf, he shall #e lia#le to imprisonment for a term which may extend to six months and with fine eD"i!alent to fi!e per cent. of the t"rno!er of that company d"rin precedin financial year. If a director or officer of a &rod"cer *ompanyM GaH ma;es a defa"lt in handin o!er the c"stody of #oo;s of acco"nt and other doc"ments or property in his c"stody to the &rod"cer *ompany of which he is a director or officerL or G#H fails to con!ene ann"al eneral meetin or other eneral meetin s, he shall #e p"nisha#le with fine which may extend to one la;h r"pees, and in the case of a contin"in defa"lt or fail"re, with an additional fine which may extend to ten tho"sand r"pees for e!ery day d"rin which s"ch defa"lt or fail"re contin"es

G2H

G3H

PART IXA:

CHAPTER IX - AMALGAMATION, MERGER OR DIVISION

),1B6. Amalgamation, merger or division, etc., to !orm new Producer Companies

G1H A &rod"cer *ompany may, #y a resol"tion passed at its eneral meetin ,M GaH decide to transfer its assets and lia#ilities, in whole or in part, to any other &rod"cer *ompany, which a rees to s"ch transfer #y a resol"tion passed at its eneral meetin , for any of the o#Cects specified in section ')10L G#H di!ide itself into two or more new &rod"cer *ompanies. Any two or more &rod"cer *ompanies may, #y a resol"tion passed at any eneral or special meetin s of its %em#ers, decide toM GaH amal amate and form a new &rod"cer *ompanyL or G#H G3H mer e one &rod"cer *ompany Ghereafter referred to as "mer in company"H with another &rod"cer *ompany Ghereafter referred to as "mer ed company"H.

G2H

1!ery resol"tion of a &rod"cer *ompany "nder this section shall #e passed at its eneral meetin #y a maCority of total %em#ers, with ri ht of !ote not less than two/thirds of its %em#ers present and !otin and s"ch resol"tion shall contain all partic"lars of the transfer of assets and lia#ilities, or di!ision, amal amation, or mer er, as the case may #e. 0efore passin a resol"tion "nder this section, the &rod"cer *ompany shall i!e notice thereof in writin to ether with a copy of the proposed resol"tion to all the %em#ers and creditors who may i!e their consent. 4otwithstandin anythin contained in articles or in any contract to the contrary, any %em#er, or any creditor not consentin to the resol"tion shall, d"rin the period of one month of the date of ser!ice of the notice on him, ha!e the option,M GaH in the case of any s"ch %em#er, to transfer his shares with the appro!al of the 0oard to any acti!e %em#er there#y ceasin to contin"e as a %em#er of that companyL or

G$H

G'H

G(H G7H

G#H in the case of a creditor, to withdraw his deposit or loan or ad!ance, as the case may #e. Any %em#er or creditor, who does not exercise his option within the period specified in s"#/section G'H, shall #e deemed to ha!e consented to the resol"tion. A resol"tion passed #y a &rod"cer *ompany "nder this section shall not ta;e effect "ntil the expiry of one month or "ntil the assent thereto of all the %em#ers and creditors has #een o#tained, whiche!er is earlier. .he resol"tion referred to in this section shall pro!ide forM GaH the re "lation of cond"ct of the &rod"cer *ompanyIs affairs in the f"t"reL G#H the p"rchase of shares or interest of any %em#ers of the &rod"cer *ompany #y other %em#ers or #y the &rod"cer *ompanyL

G)H

GcH GdH

GeH

GfH

G H GhH GiH GCH G;H GlH GmH G,H G10H

in the case of p"rchase of shares of one &rod"cer *ompany #y another &rod"cer *ompany, the conseD"ent red"ction of its share capitalL termination, settin aside or modification of any a reement, howsoe!er arri!ed #etween the company on the one hand and the directors, secretaries and mana ers on the other hand, apart from s"ch terms and conditions as may, in the opinion of the maCority of shareholders, #e C"st and eD"ita#le in the circ"mstances of the caseL termination, settin aside or modification of any a reement #etween the &rod"cer *ompany and any person not referred to in cla"se GdHK Provided that no s"ch a reement shall #e terminated, set aside or modified except after i!in d"e notice to the party concernedK Provided !urther that no s"ch a reement shall #e modified except after o#tainin the consent of the party concernedL the settin aside of any transfer, deli!ery of oods, payment, exec"tion or other act relatin to property, made or done #y or a ainst the &rod"cer *ompany within three months #efore the date of passin of the resol"tion, which wo"ld if made or done a ainst any indi!id"al, #e deemed in his insol!ency to #e a fra"d"lent preferenceL the transfer to the mer ed company of the whole or any part of the "nderta;in , property or lia#ility of the &rod"cer *ompanyL the allotment or appropriation #y the mer ed company of any shares, de#ent"res, policies, or other li;e interests in the mer ed companyL the contin"ation #y or a ainst the mer ed company of any le al proceedin s pendin #y or a ainst any &rod"cer *ompanyL the dissol"tion, witho"t windin /"p, of any &rod"cer *ompanyL the pro!ision to #e made for the %em#ers or creditors who ma;e dissentL the taxes if any, to #e paid #y the &rod"cer *ompanyL s"ch incidental, conseD"ential and s"pplemental matters as are necessary to sec"re that the di!ision, amal amation or mer er shall #e f"lly and effecti!ely carried o"t.

=hen a resol"tion passed #y a &rod"cer *ompany "nder this section ta;es effect, the resol"tion shall #e a s"fficient con!eyance to !est the assets and lia#ilities in the transferee. .he &rod"cer *ompany shall ma;e arran ements for meetin in f"ll or otherwise satisfyin all claims of the %em#ers and the creditors who exercise the option, within the period specified in s"#/section G'H, not to contin"e as the %em#er or creditor, as the case may #e. =here the whole of the assets and lia#ilities of a &rod"cer *ompany are transferred to another &rod"cer *ompany in accordance with the pro!isions of s"#/section G,H, or where there is mer er "nder s"#/section G2H, the re istration of the first mentioned *ompany or the mer in company, as the case may #e, shall stand cancelled and that *ompany shall #e deemed to ha!e #een dissol!ed and shall cease to exist forthwith as a corporate #ody. =here two or more &rod"cer *ompanies are amal amated into a new &rod"cer *ompany in accordance with the pro!isions of s"#/section G2H and the &rod"cer *ompany so formed is d"ly re istered #y the 8e istrar, the re istration of each of the amal amatin companies shall stand cancelled forthwith on s"ch re istration and each of the *ompanies shall there"pon cease to exist as a corporate #ody. =here a &rod"cer *ompany di!ides itself into two or more &rod"cer *ompanies in accordance with the pro!isions of cla"se G#H of s"#/section G1H and the new &rod"cer *ompanies are re istered in accordance with the pro!isions of s"#/section G)H, the re istration of the erstwhile &rod"cer *ompany shall stand cancelled forthwith and that *ompany shall #e deemed to ha!e #een dissol!ed and cease to exist as a corporate #ody. .he amal amation, mer er or di!ision of companies "nder the fore oin s"#/sections shall not in any manner whatsoe!er affect the pre/existin ri hts or o#li ations and any le al proceedin s that mi ht ha!e #een contin"ed or commenced #y or a ainst any erstwhile company #efore the amal amation, mer er or di!ision, may #e contin"ed or commenced #y, or a ainst, the concerned res"ltin company, or mer ed company, as the case may #e. .he 8e istrar shall stri;e off the names of e!ery &rod"cer *ompany deemed to ha!e #een dissol!ed "nder s"#/sections G11H to G1$H.

G11H

G12H

G13H

G1$H

G1'H

G1(H G17H G1)H

Any mem#er or creditor or employee a rie!ed #y the transfer of assets, di!ision, amal amation or mer er may, within thirty days of the passin of the resol"tion, prefer an appeal to the 6i h *o"rt. .he 6i h *o"rt shall, after i!in a reasona#le opport"nity to the person concerned, pass s"ch orders thereon as it may deem fit. =here an appeal has #een filed "nder s"#/section G1(H, the transfer of assets, di!ision, amal amation or mer er of the &rod"cer *ompany shall #e s"#Cect to the decision of the 6i h *o"rt.

PART IXA:

CHAPTER X - RESOLUTION OF DISPUTES

),1B<. isputes
G1H =here any disp"te relatin to the formation, mana ement or #"siness of a &rod"cer *ompany arisesM GaH amon st %em#ers, former %em#ers or persons claimin to #e %em#ers or nominees of deceased %em#ersL or G#H #etween a %em#er, former %em#er or a person claimin to #e a %em#er, or nominee of deceased %em#er and the &rod"cer *ompany, its 0oard of directors, office#earers, or liD"idator, past or presentL or GcH #etween the &rod"cer *ompany or its 0oard, and any director, office/#earer or any former director, or the nominee, heir or le al representati!e of any deceased director of the &rod"cer *ompany, s"ch disp"te shall #e settled #y conciliation or #y ar#itration as pro!ided "nder the Ar#itration and *onciliation Act, 1,,( G2( of 1,,(H as if the parties to the disp"te ha!e consented in writin for determination of s"ch disp"tes #y conciliation or #y ar#itration and the pro!isions of the said Act shall apply accordin ly. Explanation( 3or the p"rposes of this section, a disp"te shall incl"deM GaH a claim for any de#t or other amo"nt d"eL G#H a claim #y s"rety a ainst the principal de#tor, where the &rod"cer *ompany has reco!ered from the s"rety amo"nt in respect of any de#tor or other amo"nt d"e to it from the principal de#tor as a res"lt of the defa"lt of the principal de#tor whether s"ch de#t or amo"nt d"e #e admitted or notL a claim #y &rod"cer *ompany a ainst a %em#er for fail"re to s"pply prod"ce as reD"ired of himL a claim #y a %em#er a ainst the &rod"cer *ompany for not ta;in him. oods s"pplied #y

GcH GdH G2H

If any D"estion arises whether the disp"te relates to formation, mana ement or #"siness of the &rod"cer *ompany, the D"estion shall #e referred to the ar#itrator, whose decision thereon shall #e final.

PART IXA:

CHAPTER XI - MISCELLANEOUS PROVISIONS

),1BP. Stri=e o!! name o! Producer Compan%

G1H =here a &rod"cer *ompany fails to commence #"siness within one year of its re istration or ceases to transact #"siness with the %em#ers or if the 8e istrar is satisfied, after ma;in s"ch inD"iry as he thin;s fit, that the &rod"cer *ompany is no lon er carryin on any of its o#Cects specified in section ')10, he shall ma;e an order stri;in off the name of the &rod"cer *ompany, which shall there"pon cease to exist forthwithK Provided that no s"ch order cancellin the re istration as aforesaid shall #e passed "ntil a notice to show ca"se has #een i!en #y the 8e istrar to the &rod"cer *ompany with a copy to all its directors on the proposed action and reasona#le opport"nity to represent its case has #een i!en. =here the 8e istrar has reasona#le ca"se to #elie!e that a &rod"cer *ompany is not maintainin any of the m"t"al assistance principles specified, he shall stri;e its name off the re ister in accordance with the pro!isions contained in section '(0 of this Act.

G2H

G3H G$H

Any %em#er of a &rod"cer *ompany, who is a rie!ed #y an order made "nder s"#section G1H, may appeal to the *ompany 2aw 0oard within sixty days of the order. =here an appeal is filed "nder s"#/section G3H, the order stri;in off the name shall not ta;e effect "ntil the appeal is disposed of.

),1B7. Provisions o! this Part to override other laws

.he pro!isions of this &art shall ha!e effect notwithstandin anythin inconsistent therewith contained in this Act or any other law for the time #ein in force or any instr"ment ha!in effect #y !irt"e of any s"ch lawL #"t the pro!isions of any s"ch Act or law or instr"ment in so far as the same are not !aried #y, or are inconsistent with, the pro!isions of this &art shall apply to the &rod"cer *ompany.

),1B:. Application o! provisions relating to private companies

All the limitations, restrictions and pro!isions of this Act, other than those specified in this &art, applica#le to a pri!ate company, shall, as far as may #e, apply to a &rod"cer *ompany, as if it is a pri!ate limited company "nder this Act in so far as they are not in conflict with the pro!isions of this &art.

PART IXA:

CHAPTER XII - RECONVERSION OF PRODUCER COMPANY TO INTER-STATE CO-OPERATIVE SOCIETY

),1BS. :econversion o! Producer Compan% to inter1State co1operative societ%

G1H Any &rod"cer *ompany, #ein an erstwhile inter/State co/operati!e society, formed and re istered "nder this &art, may ma;e an applicationM GaH G#H G2H G3H after passin a resol"tion in the eneral meetin #y not less than two/third of its %em#ers present and !otin L or on reD"est #y its creditors representin three/fo"rth !al"e of its total creditors, to the 6i h *o"rt for its re/con!ersion to the inter/State co/operati!e society.

.he 6i h *o"rt shall, on the application made "nder s"#/section G1H, direct holdin meetin of its %em#ers or s"ch creditors, as the case may #e, to #e cond"cted in s"ch manner as it may direct. If a maCority in n"m#er representin three/fo"rths in !al"e of the creditors, or %em#ers, as the case may #e, present and !otin in person at the meetin cond"cted in p"rs"ance of the directions of the 6i h *o"rt "nder s"#/section G2H, a ree for re/con!ersion, if sanctioned #y the 6i h *o"rt, #e #indin on all the %em#ers and all the creditors, as the case may #e, and also on the company which is #ein con!ertedK Provided that no order sanctionin re/con!ersion shall #e made #y the *o"rt "nless the *o"rt is satisfied that the company or any other person #y whom an application has #een made "nder s"#section G1H has disclosed to the *o"rt, #y affida!it or otherwise, all material facts relatin to the company, s"ch as the latest financial position of the company, the latest a"ditorIs report on the acco"nts of the company, the pendency of any in!esti ation proceedin s in relation to the company "nder sections 23' to 2'1, and the li;e. An order made #y the *o"rt "nder s"#/section G3H shall ha!e no effect "ntil a certified copy of the order has #een filed with the 8e istrar. A copy of e!ery s"ch order shall #e annexed to e!ery copy of the memorand"m of the company iss"ed after the certified copy of the order has #een filed as aforesaid, or in the case of a company not ha!in a memorand"m, to e!ery copy so iss"ed of the instr"ment constit"tin or definin the constit"tion of the company. If defa"lt is made in complyin with s"#/section G$H, the company, and e!ery officer of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to one h"ndred r"pees, for each copy in respect of which defa"lt is made.

G$H G'H

G(H

G7H

.he *o"rt may, at any time after an application has #een made to it "nder this section, stay the commencement or contin"ation of any s"it or proceedin a ainst the company on s"ch terms as the *o"rt thin;s fit, "ntil the application is finally disposed of. 1!ery &rod"cer *ompany which has #een sanctioned re/con!ersion #y the 6i h *o"rt, shall ma;e an application, "nder the %"lti/State *o/operati!e Societies Act, 2002 G3, of 2002H or any other law for the time #ein in force for its re istration as m"lti/State co/operati!e society or cooperati!e society, as the case may #e, within six months of sanction #y the 6i h *o"rt and file a report thereof to the 6i h *o"rt and the 8e istrar of companies and to the 8e istrar of the cooperati!e societies "nder which it has #een re istered as a m"lti/State co/operati!e society or cooperati!e society, as the case may #e.

G)H

),1B0. Power to modi!% Act in its application to Producer Companies

G1H .he *entral +o!ernment may, #y notification in the :fficial +aFette, direct that any of the pro!isions of this Act Gother than those contained in this &artH specified in the said notificationM GaH shall not apply to the &rod"cer *ompanies or any class or cate ory thereofL or G#H G2H shall apply to the &rod"cer *ompanies or any class or cate ory thereof with s"ch exception or adaptation as may #e specified in the notification.

A copy of e!ery notification proposed to #e iss"ed "nder s"#/section G1H, shall #e laid in draft #efore each 6o"se of &arliament, while it is in session, for a total period of thirty days which may #e comprised in one session or in two or more s"ccessi!e sessions, and if, #efore the expiry of the session immediately followin the session or the s"ccessi!e sessions aforesaid, #oth 6o"ses a ree in disappro!in the iss"e of the notification or #oth 6o"ses a ree in ma;in any modification in the notification, the notification shall not #e iss"ed or, as the case may #e, shall #e iss"ed only in s"ch modified form as may #e a reed "pon #y #oth the 6o"ses.

PART X:
),2.

WINDING UP OF UNREGISTERED COMPANIES

(eaning o! $unregistered compan%$

3or the p"rposes of this &art, the expression ""nre istered company"/ GaH shall not incl"de/ GiH GiiH GiiiH a railway company incorporated #y any Act of &arliament or other Indian law or any Act of &arliament of the <nited 9in domL a company re istered "nder this ActL or a company re istered "nder any pre!io"s companies law and not #ein a company the re istered office whereof was in 0"rma, Aden or &a;istan immediately #efore the separation of that co"ntry from India AJJJBL and

G#H

sa!e as aforesaid, shall incl"de any partnership, association or company consistin of more than se!en mem#ers Aat the time when the petition for windin "p the partnership, association or company, as the case may #e, is presented #efore the (aA.ri#"nalB.B

),#.
G1H

?inding up o! unregistered companies

S"#Cect to the pro!isions of this &art, any "nre istered company may #e wo"nd/"p "nder this Act, and all the pro!isions of this Act with respect to windin "p shall apply to an "nre istered company, with the exceptions and additions mentioned in (aAs"#/sections G3HB to G'H. (a A:mitted #y the .he *ompanies GSecond AmendmentH Act, 2002B 4o "nre istered company shall #e wo"nd/"p "nder this Act !ol"ntarily (aA#y the .ri#"nalB . .he circ"mstances in which an "nre istered company may #e wo"nd/"p are as followsK/ GaH if the company is dissol!ed, or has ceased to carry on #"siness, or is carryin on #"siness only for the p"rpose of windin "p its affairsL

G2H G3H G$H

G#H GcH G'H

if the company is "na#le to pay its de#tsL if the (aA.ri#"nalB is of opinion that it is C"st and eD"ita#le that the company sho"ld #e wo"nd/ "p.

An "nre istered company shall, for the p"rpose of this Act, #e deemed to #e "na#le to pay its de#ts/ GaH if a creditor, #y assi nment or otherwise, to whom the company is inde#ted in a s"m exceedin fi!e h"ndred r"pees then d"e, has ser!ed on the company, #y lea!in at its principal place of #"siness, or #y deli!erin to the secretary, or some director, AJJJB mana er or principal officer of the company, or #y otherwise ser!in in s"ch manner as the (aA.ri#"nalB may appro!e or direct, a demand "nder his hand reD"irin the company to pay the s"m so d"e, and the company has, for three wee;s after the ser!ice of the demand, ne lected to pay the s"m or to sec"re or compo"nd for it to the satisfaction of the creditorL G#H if any s"it or other le al proceedin has #een instit"ted a ainst any mem#er for any de#t or demand d"e, or claimed to #e d"e, from the company, or from him in his character of mem#er, and notice in writin of the instit"tion of the s"it or other le al proceedin ha!in #een ser!ed on the company #y lea!in the same at its principal place of #"siness or #y deli!erin it to the secretary, or some director, AJJJB mana er or principal officer of the company or #y otherwise ser!in the same in s"ch manner as the (aA.ri#"nalB may appro!e or direct, the company has not, within ten days after ser!ice of the notice,/ GiH paid, sec"red or compo"nded for the de#t or demandL or GiiH GiiiH GcH proc"red the s"it or other le al proceedin to #e stayedL or indemnified the defendant to his satisfaction a ainst the s"it or other le al proceedin , and a ainst all costs, dama es and expenses to #e inc"rred #y him #y reason of the sameL if exec"tion or other process iss"ed on a decree or (aAorder of any *o"rt or .ri#"nalB in fa!o"r of a creditor a ainst the company, or any mem#er thereof as s"ch, or any person a"thorised to #e s"ed as nominal defendant on #ehalf of the company, is ret"rned "nsatisfied in whole or in partL if it is otherwise pro!ed to the (aAsatisfaction of the .ri#"nalB that the company is "na#le to pay its de#ts.

GdH

),'.

Power to wind1up !oreign companies, although dissolved

=here a #ody corporate incorporated o"tside India which has #een carryin on #"siness in India, ceases to carry on #"siness in India, it may #e wo"nd/"p as an "nre istered company "nder this &art, notwithstandin that the #ody corporate has #een dissol!ed or otherwise ceased to exist as s"ch "nder or #y !irt"e of the laws of the co"ntry "nder which it was incorporated.

),). Contri&utories in winding up o! unregistered compan%

G1H In the e!ent of an "nre istered company #ein wo"nd/"p, e!ery person shall #e deemed to #e a contri#"tory, who is lia#le to pay, or contri#"te to the payment of,/ GaH G#H G2H G3H any de#t or lia#ility of the companyL or any s"m for the adC"stment of the ri hts of the mem#ers amon themsel!esL or

GcH the costs, char es and expenses of windin "p the company. 1!ery contri#"tory shall #e lia#le to contri#"te to the assets of the company all s"ms d"e from him in respect of any lia#ility to pay or contri#"te as aforesaid. In the e!ent of the death or insol!ency of any contri#"tory, the pro!isions of this Act with respect to the le al representati!es of deceased contri#"tories, or with respect to the assi nees of insol!ent contri#"tories, as the case may #e, shall apply.

),*.

Power to sta% or restrain proceedings

.he pro!isions of this Act with respect to stayin and restrainin s"its and le al proceedin s a ainst a company at any time after the presentation of a petition for windin "p and #efore the ma;in of a windin "p order,

shall, in the case of an "nre istered company, where the application to stay or restrain is #y a creditor, extend to s"its and le al proceedin s a ainst any contri#"tory of the company.

),+. Suits, etc., sta%ed on winding up order

=here an order has #een made for windin "p an "nre istered company, no s"it or other le al proceedin shall #e proceeded with or commenced a ainst any contri#"tory of the company in respect of any de#t of the company, except #y lea!e of the (aA.ri#"nalB and except on s"ch terms as the (aA.ri#"nalB may impose.

),,.
G1H

irections as to propert% in certain cases

If an "nre istered company has no power to s"e and #e s"ed in a common name, or if for any reason it appears expedient, the (aA.ri#"nalB may, #y the windin "p order or #y any s"#seD"ent order, direct that all or any part of the property, mo!a#le or immo!a#le Gincl"din actiona#le claimsH, #elon in to the company or held #y tr"stees on its #ehalf, shall !est in the :fficial 2iD"idator #y his official nameL and there"pon the property or the part thereof specified in the order shall !est accordin ly. .he :fficial 2iD"idator may, after i!in s"ch indemnity, if any, as the (aA.ri#"nalB may direct, #rin or defend in his official name any s"it or le al proceedin relatin to the property, or which it is necessary to #rin or defend for the p"rpose of effect"ally windin "p the company and reco!erin its property.

G2H

),..
G1H

Provisions o! Part cumulative

.he pro!isions of this &art with respect to "nre istered companies shall #e in addition to and not in dero ation of, any pro!isions herein#efore in this Act contained with respect to the windin "p of companies #y the (aA.ri#"nalB. .he (aA.ri#"nalB or :fficial 2iD"idator may exercise any powers or do any act in the case of "nre istered companies which mi ht #e exercised or done #y the (aA.ri#"nalB or :fficial 2iD"idator in windin "p companies formed and re istered "nder this Act.. Provided that an "nre istered company shall not, except in the e!ent of its #ein wo"nd/"p, #e deemed to #e a company "nder this Act, and then only to the extent pro!ided #y this &art.

G2H

).0.

Saving and construction o! enactments con!erring power to wind1up partnership, association or compan% in certain cases

4othin in this &art shall affect the operation of any enactment which pro!ides for any partnership, association or company #ein wo"nd/"p, or #ein wo"nd/"p as a company or as an "nre istered company, "nder the Indian *ompanies Act, 1,13, or any Act repealed #y that ActK Provided that reference in any s"ch enactment to any pro!ision contained in the Indian *ompanies Act, 1,13 or in any Act repealed #y that Act shall #e read as references to the correspondin pro!ision, if any contained in this Act.

PART XI:

COMPANIES INCORPORATED OUTSIDE INDIA

Provisions as to establishment of place of business in #ndia

).1.
AG1H

Application o! sections ).2 to *02 to !oreign companies

Sections ',2 to (02, #oth incl"si!e, shall apply to all forei n companies, that is to say, companies fallin "nder the followin two classes, namelyK/

GaH G#H

companies incorporated o"tside India which, after the commencement of this Act, esta#lish a place of #"siness within IndiaL and companies incorporated o"tside India which ha!e, #efore the commencement of this Act, esta#lished a place of #"siness within India and contin"e to ha!e an esta#lished place of #"siness within India at the commencement of this Act.

AG2H

4otwithstandin anythin contained in s"#/section G1H, where not less, than fifty per cent, of the paid/ "p share capital Gwhether eD"ity or preference or partly eD"ity and partly preferenceH of a company incorporated o"tside India and ha!in an esta#lished place of #"siness in India, is held #y one or more citiFens of India or #y one or more #odies corporate incorporated in India, or #y one or more citiFens of India and one or more #odies corporate incorporated in India, whether sin ly or in the a re ate, s"ch company shall comply with s"ch of the pro!isions of this Act as may #e prescri#ed with re ard to the #"siness carried on #y it in India, as if it were a company incorporated in India.B

).2.

ocuments, etc., to &e delivered to :egistrar &% !oreign companies carr%ing on &usiness in "ndia
3orei n companies which, after the commencement of this Act, esta#lish a place of #"siness within India shall, within 23Athirty daysB of the esta#lishment of the place of #"siness, deli!er to the 8e istrar for re istration/ GaH a certified copy of the charter, stat"tes, or memorand"m and articles, of the company or other instr"ment constit"tin or definin the constit"tion of the companyL and if the instr"ment is not in the 1n lish lan "a e, a certified translation thereof, the f"ll address of the re istered or principal office of the companyL a list of the directors and secretary of the company, containin the partic"lars mentioned in s"#/ section G2HL

G1H

G#H GcH GdH

G2H

the name and address or the names and addresses of some one or more persons resident in India, a"thorised to accept on #ehalf of the company ser!ice of process and any notices or other doc"ments reD"ired to #e ser!ed on the companyL and GeH the f"ll address of the office of the company in India which is to #e deemed its principal place of #"siness in India. .he list referred to in cla"se GcH of s"#/section G1H shall contain the followin partic"lars, that is to sayK/ GaH with respect to each director,/ GiH in the case of an indi!id"al, his present name and s"rname in f"ll, any former name or names and s"rname or s"rnames in f"ll, his "s"al residential address, his nationality, and if that nationality is not the nationality of ori in, his nationality of ori in, and his #"siness occ"pation, if any, or if he has no #"siness occ"pation #"t holds any other directorship or directorships, partic"lars of that directorship or of some one of those directorshipL and

GiiH

G#H

in the case of a #ody corporate, its corporate name and re istered or principal officeL and the f"ll name, address, nationality and nationality of ori in, if different from that nationality of each of its directorsL with respect to the secretary, or where there are Coint secretaries with respect to each of them/ in the case of an indi!id"al, his present name and s"rname, any former name or names and s"rname or s"rnames, and his "s"al residential addressL and

GiH

GiiH in the ca e of a #ody corporate, its corporate name and re istered or principal officeK Provided that, where all the partners in a firm are Coint secretaries of the company, the name and principal office of the firm may #e stated instead of the partic"lars mentioned in cla"se G#H of this s"#/ section. G3H *la"ses G2H and G3H of the 1xplanation to s"#/section G1H of section 303 shall apply for the p"rpose of the constr"ction of references in s"#/section G2H to present and former names and s"rnames as they apply for the p"rposes of the constr"ction of s"ch references in s"#/section G1H of section 303. 3orei n companies, other than those mentioned in s"#/section G1H, shall, if they ha!e not deli!ered to the 8e istrar #efore the commencement of this Act the doc"ments and partic"lars specified in s"#/

G$H

section G1H of section 277 of the Indian *ompanies Act, 1,13 contin"e to #e s"#Cect to the o#li ation to deli!er those doc"ments and partic"lars in accordance with that Act.

).#.

:eturn to he delivered to :egistrar &% !oreign compan% where documents, etc., altered

If any alteration is made or occ"rs in/ GaH the charter, stat"tes, or memorand"m and articles of a forei n company or other instr"ment constit"tin or definin the constit"tion of a forei n companyL or G#H the re istered or principal office of a forei n companyL or GcH GdH GeH the directors or secretary of a forei n company 2'AJJJBL or the name or address of any of the persons a"thorised to accept ser!ice on #ehalf of a forei n companyL or the principal place of #"siness of the company in IndiaL

the company shall, within the prescri#ed time, deli!er to the 8e istrar for re istration a ret"rn containin the prescri#ed partic"lars of the alteration.

).'.
G1H

Accounts o! !oreign compan%

1!ery forei n company shall, in e!ery calendar year,/ GaH ma;e o"t a #alance sheet and profit and loss acco"nt in s"ch form, containin s"ch partic"lars and incl"din or ha!in annexed or attached thereto s"ch doc"ments Gincl"din , in partic"lar doc"ments relatin to e!ery s"#sidiary of the forei n companyH as "nder the pro!isions of this Act it wo"ld, if it had #een a company within the meanin of this Act, ha!e #een reD"ired to ma;e o"t and lay #efore the company in eneral meetin L and deli!er three copies of those doc"ments to the 8e istrarK

G#H

G2H G3H

Provided that the *entral +o!ernment may, #y notification in the :fficial +aFette, direct that, in the case of any forei n company or class of forei n company the reD"irements of/cla"se GaH shall not apply, or shall apply, s"#Cect to s"ch exceptions and modifications as may #e specified in the notification. If any s"ch doc"ment as is mentioned in s"#/section G1H is not in the 1n lish lan "a e, there shall #e annexed to it a certified translation thereof. 1!ery forei n company shall send to the 8e istrar with the doc"ments reD"ired to #e deli!ered to him "nder s"#/section G1H, three copies of a list in the prescri#ed form of all places of #"siness esta#lished #y the company in India as at the date with reference to which the #alance sheet referred to in s"#/ section G1H is made o"t.

).).

<&ligation to state name o! !oreign compan%, whether limited, and countr% where incorporated

1!ery forei n company shall/ GaH G#H in e!ery prospect"s in!itin s"#scriptions in India for its shares or de#ent"res, state the co"ntry in which the company is incorporatedL conspic"o"sly exhi#it on the o"tside of e!ery office or place where it carries on #"siness in India, the name of the company and the co"ntry in which it is incorporated, in letters easily le i#le in 1n lish characters, and also in the characters of the lan "a e or one of the lan "a es in eneral "se in the locality in which the office or place is sit"ateL ca"se the name of the company and of the co"ntry in which the company is incorporated, to #e stated in le i#le 1n lish characters in all #"siness letters, #ill/heads and letter paper, and in all notices, AJJJB and other official p"#lications of the companyL and if the lia#ility of the mem#ers of the company is limited, ca"se notice of that fact/

GcH

GdH

GiH

to #e stated in e!ery s"ch prospect"s as aforesaid and in all #"siness letters, #ill/heads, letter paper, notices, ad!ertisements and other official p"#lications of the company, in le i#le 1n lish charactersL and to #e conspic"o"sly exhi#ited on the o"tside of e!ery office or place where it carries on #"siness in India, in le i#le 1n lish characters and also in le i#le characters of the lan "a es or one of the lan "a e in eneral "se in the locality in which the office or place is sit"ate.

GiiH

).*.

Service on !oreign compan%

Any process, notice, or other doc"ment reD"ired to #e ser!ed on a forei n company shall #e deemed to #e s"fficiently ser!ed, if addressed to any person whose name has #een deli!ered to the 8e istrar "nder the fore oin pro!isions of this &art and left at, or sent #y post to, the address which has #een so deli!eredK Provided that/ GaH where any s"ch company ma;es defa"lt in deli!erin to the 8e istrar the name and address of a person resident in India who is a"thorised to accept on #ehalf of the company ser!ice of processL notices or other doc"mentsL or G#H if at any time/all the persons whose names and addresses ha!e #een so deli!ered are dead or ha!e so to reside, or ref"se to ser!ice on #ehalf of the company or for any mean, cannot #e ser!icedL a doc"ment may #e ser!ed on the company #y lea!in it at, or sendin it #y post to, any place of #"siness esta#lished #y the company in India.

).+.
G1H

<!!ice where documents to &e delivered

Any doc"ment which any forei n company is reD"ired to deli!er to the 8e istrar shall #e deli!ered to the 8e istrar ha!in C"risdiction o!er 4ew Delhi, and references to the 8e istrar in this &art Aexcept in s"#/section G2HB shall #e constr"ed accordin ly. Any s"ch doc"ment as is referred to in s"#/section G1H shall also #e deli!ered to the 8e istrar of the State in which the principal place of #"siness of the company is sit"ate. If any forei n company ceases to ha!e a place of #"siness in India, it shall forthwith i!e notice of the fact to the 8e istrar, and as from the date on which notice is so i!en, the o#li ation of the company to deli!er any doc"ment to the 8e istrar shall cease, pro!ided it has no other place of #"siness in India.

G2H G3H

).,.

Penalties

If any forei n company fails to comply with any of the fore oin pro!isions of this &art, the company, and e!ery officer or a ent of the company who is in defa"lt, shall #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB, and in the case of a contin"in offence, with an additional fine which may extend to Aone tho"sand r"peesB for e!ery day d"rin which the defa"lt contin"es.

)...

Compan%Es !ailure to compl% with Part not to a!!ect "ts lia&ilit% under contracts, etc.

Any fail"re #y a forei n company to comply with any of the fore oin pro!isions of this &art shall not affect the !alidity of any contract, dealin or transaction entered into #y the company or its lia#ility to #e s"ed in respect thereofL #"t the company shall not #e entitled to #rin any s"it, claim any set/off, ma;e any co"nter claim or instit"te any le al proceedin in respect of any s"ch contract, dealin or transaction, "ntil it has complied with the pro!isions of this &art.

*00.
G1H

:egistration o! charges, appointment o! receiver and &oo=s o! account

.he pro!isions of &art 7 Gsections 12$ to 1$'H shall apply m"tatis m"tandis to/

GaH G#H

char es on properties in India which are created #y a forei n company after the 1'th day of -an"ary, 1,37L and char es on property in India which is acD"ired #y any forei n company after the day aforesaidK

G2H

Provided that where a char e is created, or the completion of the acD"isition of the property ta;es place o"tside India, s"#/section G'H of section 12' and the pro!iso to s"#/section G1H of section 127 shall ha!e effect as if the property, where!er sit"ated, were sit"ated o"tside India. .he pro!isions of section 11) shall apply m"tatis m"tandis to a forei n company.

G3HAGaHB .he pro!isions of section 20, shall apply to a forei n company to the extent of reD"irin it to ;eep at its principal place of #"siness in India the #oo;s of acco"nt referred to in that section, with respect to moneys recei!ed and expended, sales and p"rchases made, and assets and lia#ilities, in the co"rse of or in relation to its #"siness in India. AG#H :n and from the commencement of the *ompanies GAmendmentH Act, 1,7$,/ GiH the pro!isions of section 1', shall, s"#Cect to s"ch modifications or adaptations as may #e made therein #y the r"les made "nder this Act, apply to a forei n company ha!in an esta#lished place of #"siness in India, as they apply to a company incorporated in IndiaL GiiH the pro!isions of sections 20,, 20,A, 233A and 2330 and sections 23$ to 2$( G#oth incl"si!eH shall, so far as may #e, apply only to the Indian #"siness of a forei n company ha!in an esta#lished place of #"siness in India, as they apply to a company incorporated in India.B In applyin the sections referred to in s"#/sections G1H, G2H and G3H to a forei n company as aforesaid, references in those sections to the 8e istrar shall #e deemed to #e references to the 8e istrar ha!in C"risdiction o!er 4ew Delhi, and references to the re istered office of the forei n company shall #e deemed to #e references to its principal place of #"siness in India.

G$H

*01.

5ees !or registration o! documents under Part

.here shall #e paid to the 8e istrar for re isterin any doc"ment reD"ired #y the fore oin pro!isions of this &art to #e re istered #y him, s"ch fees as may #e prescri#ed.

*02.

"nterpretation o! !oregoing sections o! Part

3or the p"rposes of the fore oin pro!isions of this &art/ GaH G#H GcH GdH GeH the expression "certified" means certified in the prescri#ed manner to #e a tr"e copy or a correct translationL the expression "director", in relation to a company, incl"des any person in accordance with whose directions or instr"ctions the 0oard of directors of the company is acc"stomed to actL the expression "place of #"siness" incl"des a share transfer or share re istration officeL the expression "prospect"s" has the same meanin as when "sed in relation to a company incorporated "nder this ActL and the expression "secretary" incl"des any person occ"pyin the position of secretary, #y whate!er name called.

Prospectuses *0#.
G1H

ating o! prospectus and particulars to &e contained therein

4o person shall iss"e, circ"late or distri#"te in India any prospect"s offerin for s"#scription shares in or de#ent"res of a company incorporated or to #e incorporated o"tside India, whether the company has or has not esta#lished, or when formed will or will not esta#lish, a place of #"siness in India, "nless the prospect"s is datedL and GaH contains partic"lars with respect to the followin mattersK/ GiH the instr"ment constit"tin or definin the constit"tion of the companyL

GiiH GiiiH

the enactments or pro!isions ha!in the force of enactments, #y or "nder which the incorporation of the company was effectedL an address in India where the said instr"ment, enactments or pro!ision, or copies thereof, and if the same are not in 1n lish, a translation thereof certified in the prescri#ed manner, can #e inspectedL

Gi!H G!H G#H

the date on which and the co"ntry in which the company was incorporatedL whether the company has esta#lished a place of #"siness in India, and, if so, the address of its principal office in IndiaL and s"#Cect to the pro!isions of this section, states the matters specified in &art I of Sched"le II and sets o"t the reports specified in &art II of that Sched"le, s"#Cect always to the pro!isions contained in &art III of that Sched"leK

G2H

Provided that s"#/cla"ses GiH, GiiH and GiiiH of cla"se GaH shall not apply in the case of a prospect"s iss"ed more than two years after the date at which the company is entitled to commence #"sinessL and in the application of &art I of Sched"le II for the p"rposes of this s"#/section, cla"se GaH thereof shall ha!e effect with the s"#stit"tion, for references to the articles, of references to the constit"tion of a company. Any condition reD"irin or #indin an applicant for shares or de#ent"res to wai!e compliance with any reD"irement imposed #y !irt"e of cla"se GaH or G#H of s"#/section G1H, or p"rportin to affect him with notice of any contract, doc"ments or matter not specifically referred to in the prospect"s, shall #e !oid. 4o person shall iss"e to any person in India a form of application for shares in or de#ent"res of s"ch a company or intended company as is mentioned in s"#/section G1H, "nless the form is iss"ed with a prospect"s which complies with the pro!isions of this &art and the iss"e whereof in India does not contra!ene the pro!isions of section (0$K Provided that this s"#/section shall not apply if it is shown that the form of application was iss"ed in connection with a #ona fide in!itation to a person to enter into an "nderwritin a reement with respect of the shares or de#ent"res. In the e!ent of non/compliance with or contra!ention of any of the reD"irements imposed #y cla"ses GaH and G#H of s"#/section G1H, a director or other person responsi#le for the prospect"s shall not inc"r any lia#ility #y reason of the non/compliance or contra!ention, if/ GaH G#H GcH as re ards any matter not disclosed, he pro!es that he had no ;nowled e thereof, or he pro!es that the non/compliance or contra!ention arose from an honest mista;e of fact on his partL or the non/compliance or contra!ention was in respect of matters which, in the opinion of the *o"rt dealin with the case, were immaterial, or was otherwise s"ch as o" ht in the opinion of that *o"rt, ha!in re ard to all the circ"mstances of the case, reasona#ly to #e exc"sedK

G3H

G$H

G'H

Provided that, in the e!ent of fail"re to incl"de in a prospect"s a statement with respect to the matters contained in cla"se 1) of Sched"le II, no director or other person shall inc"r any lia#ility in respect of the fail"re, "nless it #e pro!ed that he had ;nowled e of the matters not disclosed. .his section/ GaH shall not apply to the iss"e to existin mem#ers or de#ent"re holders of a company of a prospect"s or form of application relatin to shares in or de#ent"res of the company, whether an applicant for shares or de#ent"res will or will not ha!e the ri ht to reno"nce in fa!o"r of other personsL and

G#H

G(H

except in so far as it reD"ires a prospect"s to #e dated, shall not apply to the iss"e of a prospect"s relatin to shares or de#ent"res which are or are to #e in all respects "niform with shares or de#ent"res pre!io"sly iss"ed and for the time #ein dealt in or D"oted on a reco nised stoc; exchan e, #"t, s"#Cect as aforesaid, this section shall apply to a prospect"s or form of application whether iss"ed on or with reference to the formation of a company or s"#seD"ently. 4othin in this section shall limit or diminish any lia#ility which any person may inc"r "nder the eneral law or "nder this Act apart from this section.

*0'.

Provisions as to expertIs consent and allotment

G1H

4o person shall iss"e circ"late or distri#"te in India any prospect"s offerin for s"#scription shares in or de#ent"res of a company incorporated or to #e incorporated o"tside India, whether the company has or has not esta#lished, or when formed will or will not esta#lish, a place of #"siness in India/ GaH if, where the prospect"s incl"des a statement p"rportin to #e made #y an expert, he has not i!en, or has #efore deli!ery of the prospect"s for re istration withdrawn, his written consent to the iss"e of the prospect"s with the statement incl"ded in the form and context in which it is incl"ded, or there does not appear in the prospect"s a statement that he has i!en and has not withdrawn his consent as aforesaidL or if the prospect"s does not ha!e the effect, where an application is made in p"rs"ance thereof, of renderin all persons concerned #o"nd #y all the pro!isions Gother than penal pro!isionsH of sections 72, 73 and 7$, so far as applica#le.

G#H

G2H

In this section, the expression "expert" incl"des an en ineer, a !al"er, an acco"ntant and any other person whose profession i!es a"thority to a statement made #y himL and for the p"rposes of this section a statement shall #e deemed to #e incl"ded in a prospect"s if it is contained in any report or memorand"m appearin on the face thereof or #y reference incorporated therein or iss"ed therewith.

*0).
AG1HB

:egistration o! prospectus
4o person shall iss"e, circ"late or distri#"te in India any prospect"s offerin for s"#scription shares in or de#ent"res of a company incorporated or to #e incorporated o"tside India, whether the company has or has not esta#lished, or when formed will or will not esta#lish, a place of #"siness in India, "nless #efore the iss"e, circ"lation or distri#"tion of the prospect"s in India, a copy thereof certified #y the chairman and two other directors of the company as ha!in #een appro!ed #y resol"tion of the mana in #ody has #een deli!ered for re istration to the 8e istrar and the prospect"s states on the face of it that a copy has #een so deli!ered, and there is endorsed on or attached to the copy/ GaH G#H any consent to the iss"e of the prospect"s reD"ired #y section (0$L a copy of any contract reD"ired #y cla"se 1( of Sched"le II to #e stated in the prospect"s or, in the case of a contract not red"ced into writin , a memorand"m i!in f"ll partic"lars thereofL and where the persons ma;in any report reD"ired #y &art II of Sched"le II ha!e made therein, or ha!e, witho"t i!in the reasons, indicated therein, any s"ch adC"stments as are mentioned in cla"se 32 of that Sched"le, a written statement si ned #y those persons settin o"t the adC"stments and i!in the reasons therefor.

GcH

G2H

.he references in cla"se G#H of s"#/section G1H to the copy of a AcontractB reD"ired there#y to #e endorsed on or attached to a copy of the prospect"s shall, in the case of a contract wholly or partly in a lan "a e other than 1n lish, #e ta;en as references to a copy of a translation of the contract in 1n lish or a copy em#odyin a translation in 1n lish of the parts which are not in 1n lish, as the case may #e, #ein a translation certified in the prescri#ed manner to #e a correct translation.

*0)A. <!!er o! "ndian epositor% :eceipts

4otwithstandin anythin contained in any other law for the time #ein in force, the *entral +o!ernment may ma;e r"les applica#le for/ GaH G#H GcH GdH the offer of Indian Depository 8eceiptsL the reD"irement of disclos"res in prospect"s or letter of offer iss"ed in connection with Indian Depository 8eceiptsL the manner in which the Indian Depository 8eceipts shall #e dealt in a depository mode and #y c"stodian and "nderwritersL the manner of sale, transfer or transmission of Indian Depository 8eceipts,

#y a company incorporated, or to #e incorporated o"tside India, whether the company has or has not #een esta#lished or, will not esta#lish any place of #"siness in India.B

*0*.

Penalt% !or contravention o! sections *0#, *0', #2CG*0) and *0)AH

Any person who is ;nowin ly responsi#le/ GaH for the iss"e, circ"lation or distri#"tion of a prospect"sL or G#H for the iss"e of a form of Aapplication for shares, de#ent"res or Indian Depository 8eceiptsBL in contra!ention of any of the pro!isions of sections (03, (0$, 32*A(0' and (0'AB, shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine which may extend to 1AAfifty tho"sand r"peesB, or with #oth.

*0+.

Civil lia&ilit% !or misstatements in prospectus

Section (2 shall extend to e!ery prospect"s offerin for s"#scription shares in or de#ent"res of a company incorporated or to #e incorporated o"tside India, whether the company has or has not esta#lished, or when formed will or will not esta#lish, a place of #"siness in India, with the s"#stit"tion for references in section (2 to section (0 of this Act, of references to section (0$ thereof.

*0,.
G1H

"nterpretation o! provisions as to prospectuses

=here any doc"ment #y which any shares in, or de#ent"res of, a company incorporated o"tside India are offered for sale to the p"#lic,, wo"ld, if the company concerned had #een a company within the meanin of this Act, ha!e #een deemed #y !irt"e of section ($, to #e a prospect"s iss"ed #y the company, that doc"ment shall #e deemed, for the p"rposes of this &art, to #e a prospect"s iss"ed #y the company offerin s"ch shares or de#ent"res for s"#scription. An offer of shares or de#ent"res for s"#scription or sale to any person whose ordinary #"siness it is to #"y or sell shares or de#ent"res, whether as principal or as a ent, shall not #e deemed to #e an offer to the p"#lic for the p"rposes of this &art. In this &art, the expressions "prospect"s", "shares" and "de#ent"res" ha!e the same meanin s as when "sed in relation to a company incorporated "nder this Act.

G2H

G3H

PART XII:
*0..
G1H G2H

REGISTRATION OFFICES AND OFFICERS AND FEES

:egistration o!!ices
3or the p"rposes of the re istration of companies "nder this Act, there shall #e offices at s"ch places as the *entral +o!ernment thin;s fit. .he *entral +o!ernment may appoint s"ch 8e istrars, and s"ch Additional, -oint, Dep"ty and Assistant 8e istrars as it thin;s necessary for the re istration of companies "nder this Act, and may ma;e re "lations with respect to their d"ties. .he salaries of the persons appointed "nder this section shall #e fixed #y the *entral +o!ernment. .he *entral +o!ernment may direct a seal or seals to #e prepared for the a"thentication of doc"ments reD"ired for, or connected with, the re istration of companies. =hene!er any act is #y this Act directed to #e done to or #y the 8e istrar, it shall, "ntil the *entral +o!ernment otherwise directs, #e done to or #y the existin 8e istrar of companies or Coint stoc; companies, or in his a#sence, to or #y s"ch person as the *entral +o!ernment may for the time #ein a"thoriseK Provided that in the e!ent of the *entral +o!ernment alterin the *onstit"tion of the existin re istry offices or any of them, any s"ch act shall #e done to or #y s"ch officer and at s"ch place, with reference to the local sit"ation of the re istered offices of the companies concerned, as the *entral +o!ernment may appoint.

G3H G$H G'H

*10.

"nspection, production and evidence o! documents =ept &% :egistrar

G1H

ASa!e as otherwise pro!ided elsewhere in this Act, any person mayB/ GaH inspect any doc"ments ;ept #y the 8e istrar Ain accordance with the r"les made "nder the Destr"ction of 8ecords Act, 1,17B #ein doc"ments filed or re istered #y him in p"rs"ance of this Act, or ma;in a record of any fact reD"ired or a"thorised to #e recorded or re istered in p"rs"ance of this Act, on payment for each inspection of 3'As"ch fees as may #e prescri#edBL

G#H

reD"ire a certificate of the incorporation of any company, or a copy or extract of any other doc"ment or any part of any other doc"ment to #e certified #y the 8e istrar, 3(Aon payment in ad!ance of 37As"ch fees as may #e prescri#edKB Provided that the ri hts conferred #y this s"#/section shall #e exercisa#le/ GiH in relation to doc"ments deli!ered to the 8e istrar with a prospect"s in p"rs"ance of s"#/cla"se GiH of cla"se G#H of s"#/section G1H of section (0, only d"rin the fo"rteen days #e innin with the date of p"#lication of the prospect"sL and at other times, only with the permission of the *entral +o!ernmentL and

GiiH

G2H

in relation to doc"ments so deli!ered in p"rs"ance of cla"se G#H of s"#/section G1H of section (0', only d"rin the fo"rteen days #e innin with the date of the prospect"sL and at other times, only with the permission of the *entral +o!ernment. 4o process for compellin the prod"ction of any doc"ment ;ept #y the 8e istrar shall iss"e from any *o"rt or the (aA.ri#"nalB except with the lea!e of that *o"rt or the (aA.ri#"nalB and any s"ch process, if iss"ed, shall #ear thereon a statement that it is iss"ed with the lea!e of the *o"rt or the (aA.ri#"nalBB. A copy of, or extract from, any doc"ment ;ept and re istered at any of the officers for the re istration of companies "nder this Act, certified to #e a tr"e copy "nder the hand of the 8e istrar Gwhose official position it shall not #e necessary to pro!eH, shall, in all le al proceedin s, #e admissi#le in e!idence as of eD"al !alidity with the ori inal doc"ment. A:mitted #y the *ompanies GAmendmentH Act, 1,(0B

G3H

AJJJB G$H

*10A. Admissi&ilit% o! micro !ilms, !acsimile copies o! documents, computer printouts and documents on computer media as documents and as evidence
G1H 4otwithstandin anythin contained in any other law for the time #ein in force,/ GaH a microfilm of a doc"ment or the reprod"ction of the ima e or ima es em#odied in s"ch microfilm Gwhether enlar ed or notHL or G#H a facsimile copy of a doc"mentL or GcH a statement contained in a doc"ment and incl"ded in a printed material prod"ced #y a comp"ter Ghereinafter referred to as a "comp"ter printo"t"H, if the conditions mentioned in s"#/section G2H are satisfied, shall #e deemed to #e also a doc"ment for the p"rposes of this Act and the r"les made there"nder and shall #e admissi#le in any proceedin s there"nder, witho"t f"rther proof or prod"ction of the ori inal, as e!idence of any contents of the ori inal or of any fact stated therein of which direct e!idence sho"ld #e admissi#le. .he conditions referred to in s"#/section G1H in respect of a comp"ter printo"t shall #e the followin , namely/ GaH the information contained in the statement reprod"ces or is deri!ed from ret"rns and doc"ment filed #y the company on paper or on comp"ter networ;, floppy, dis;ette, ma netic cartrid e tape, *D/rom or any other comp"ter reada#le mediaL G#H while recei!in ret"rns or doc"ments on comp"ter media, necessary chec;s #y scannin the doc"ments filed on comp"ter media will #e carried o"t and media will #e d"ly a"thenticated #y the 8e istrarL and the 8e istrar shall also ta;e d"e care to preser!e the comp"ter media #y d"plicatin , transferrin , masterin or stora e witho"t loss of data.B

G2H

GcH

*11.

5ees in Schedule @ to &e paid

AG1HB

In respect of the se!eral matters mentioned in Sched"le >, there shall, s"#Cect to the limitations imposed #y that Sched"le, #e paid to the 8e istrar the se!eral fees therein specifiedK Provided that no fees shall #e char ed in respect of the re istration in p"rs"ance of &art I> of a company, if it is not re istered as a limited company, or if, #efore its re istration as a limited company, the lia#ility of the shareholders was limited #y some other Act of &arliament or any other Indian law or #y an Act of &arliament of the <nited 9in dom, 8oyal *harter or 2etters &atent in force in IndiaK AProvided !urther that in the case of resol"tions to which section 1,2 applies, not more than one fee shall #e reD"ired for the filin of more resol"tions than one passed in the same meetin if s"ch resol"tions are filed with the 8e istrar at the same time.B Any doc"ment reD"ired or a"thorised #y this Act to #e filed or re istered, or any fact reD"ired or a"thorised #y this Act to #e re istered, with the 8e istrar on payment of the fee specified therefor in Sched"le >, may, witho"t preC"dice to any other lia#ility, #e filed or re istered after the time, if any, specified in this Act for its filin or re istration on payment of s"ch additional fee not exceedin ten times the amo"nt of the fee so specified as the 8e istrar may determine.B

AG2H

*12.

5ees, etc., paid to :egistrar and other o!!icers to he accounted !or to Central -overnment

All fees, char es, and other s"ms paid to any 8e istrar, and Additional, -oint, Dep"ty, or Assistant 8e istrar, or any other officer of the *entral +o!ernment in p"rs"ance of this Act shall #e paid into the p"#lic acco"nt of India in the 8eser!e 0an; of India.

*1#.
G1H

Power o! Central -overnment to reduce !ees, charges, etc.

.he *entral +o!ernment may, #y order notified in the :fficial +aFette, red"ce the amo"nt of any fee, char e, or other s"m specified in any pro!ision contained in this Act, as paya#le in respect of any matter, either to the *entral +o!ernment or to any 8e istrar, any Additional, -oint, Dep"ty, or Assistant 8e istrar or any other officer of the *entral +o!ernmentL and there"pon s"ch pro!ision shall, d"rin the period for which the order is in force, ha!e effect as if the red"ced fee had #een s"#stit"ted for the fee specified in s"ch pro!ision. Any order notified "nder s"#/section G1H may, #y a li;e order, #e cancelled or !aried at any time #y the *entral +o!ernment. 4othin in this section shall #e deemed to affect the power of the *entral +o!ernment "nder section ($1 to alter any of the fees specified in Sched"le >.

G2H G3H

*1'.
G1H

3n!orcement o! dut% o! compan% to ma=e returns, etc., to :egistrar

If a company, ha!in made defa"lt in complyin with any pro!ision of this Act which reD"ires it to file or re ister with, or deli!er or send to, the 8e istrar any ret"rn, acco"nt or other doc"ment, or to i!e notice to him of any matter, fails to ma;e ood the defa"lt within fo"rteen days after the ser!ice of a notice on the company reD"irin it to do so, the (aA.ri#"nalB may on an application made to it #y any mem#er or creditor of the company or #y the 8e istrar, ma;e an order directin the company and any officer thereof to ma;e ood the defa"lt within s"ch time as may #e specified in the order. Any s"ch order may pro!ide that all costs of and incidental to the application shall #e #orne #y the company or #y any officers of the company responsi#le for the defa"lt. 4othin in this section shall #e ta;en to preC"dice the operation of any pro!isions in this or any other Act imposin penalties on a company or its officers in respect of any s"ch defa"lt as aforesaid.

G2H G3H

*1'A. Power o! Court tr%ing o!!ences under the Act to direct the !iling o! documents with :egistrar
G1H Any *o"rt tryin an offence for a defa"lt in compliance with any pro!ision of this Act which reD"ires a company or its officers to file or re ister with, or deli!er or send to, the 8e istrar, any ret"rn, acco"nt or other doc"ment, may at the time of sentencin , acD"ittin or dischar in the acc"sed, direct #y

G2H

order, if it thin;s fit to do so, any officer or other employee of the company to file or re ister with, deli!er or send to, the 8e istrar on payment of the fee incl"din the additional fee reD"ired to #e paid "nder section (11, s"ch ret"rn, acco"nt or other doc"ment within s"ch time as may #e specified in the order. Any officer or other employee of the company who fails to comply with an order of the *o"rt "nder s"#/section G1H shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine, or with #oth.

PART XIII:

GENERAL
Collection of information and statistics from companies

*1).
G1H

Power o! Central -overnment to direct companies to !urnish in!ormation or statistics

.he *entral +o!ernment may, #y order, reD"ire companies enerally, or any class of companies, or any company, to f"rnish s"ch information or statistics with re ard to their or its constit"tion or wor;in , and within s"ch time, as may #e specified in the order. 1!ery order "nder s"#/section G1H addressed to companies enerally or to any class of companies, shall #e p"#lished in the :fficial +aFette and in s"ch other manner, if any, as the *entral +o!ernment may thin; fit. .he date of p"#lication of the order in the :fficial +aFette shall #e deemed to #e the date on which the demand for information or statistics is made on s"ch companies or class of companies, as the case may #e. 1!ery order "nder s"#/section G1H addressed to an indi!id"al company shall #e ser!ed on it in the manner laid down in section '1. 3or the p"rpose of satisfyin itself that any information or statistics f"rnished #y a company in &"rs"ance of any order "nder s"# section G1H is correct and complete, the *entral +o!ernment may reD"ire s"ch company/ GaH G#H to prod"ce s"ch records or doc"ments in its possession or "nder its control for inspection, #efore s"ch officer and at s"ch time as may #e specified #y the *entral +o!ernmentL or to f"rnish s"ch f"rther information as may #e specified #y the *entral +o!ernment and within s"ch time as may #e fixed #y it.

G2HGaH

G#H

G3H G$H

G'H

.he *entral +o!ernment may also, #y order, direct an inD"iry to #e made #y any person or persons named in the order/ GaH G#H for the p"rpose of o#tainin any information or statistics which a company has failed to f"rnish as reD"ired of it #y an order "nder s"#/section G1HL or

G(H

G7H

for the p"rpose of satisfyin itself that any information or statistics f"rnished #y a company in p"rs"ance of an order made "nder s"#/section G1H is correct and completeL and in so far as s"ch information or statistics may #e fo"nd to #e incorrect or incomplete, for the p"rpose of o#tainin s"ch information or statistics as may #e necessary to ma;e the information or statistics f"rnished correct and completeL and a person or persons so appointed shall, for the p"rposes of s"ch inD"iry, ha!e s"ch powers as may #e prescri#ed. If any company fails to comply with an order made "nder s"#/section G1H or G$H, or ;nowin ly f"rnishes any information or statistics which is incorrect or incomplete in any material respect, the company, and e!ery officer thereof who is in defa"lt, shall #e p"nisha#le with imprisonment which may extend to three months, or with fine which may extend to 7AAten tho"sand r"peesB, or with #oth. An order reD"irin any information or statistics to #e f"rnished #y a company may also #e addressed to any person who is, or has at any time #een, an officer or employee of the company, and all the pro!isions of this section, so far as may #e, shall apply in relation to s"ch persons as they apply in relation to the companyK Provided that no s"ch person shall #e p"nisha#le "nder s"#/section G(H "nless the *o"rt is satisfied that he was in a position to comply with the order and made wilf"l defa"lt in doin so.

G)H

=here a #ody corporate incorporated o"tside India and ha!in esta#lished an office within India, carries on #"siness in India, all references to a company in this section shall #e deemed to incl"de references to the #ody corporate in relation, and only in relation, to s"ch #"siness.

Application of act to companies governed by "pecial Acts *1*. Application o! Act to "nsurance, &an=ing, electricit% suppl% and other companies governed &% special Acts

.he pro!isions of this Act shall apply/ GaH to ins"rance companies, except in so far as the said pro!isions are inconsistent with the pro!isions of the Ins"rance Act, 1,3)G$ of 1,3)HL G#H to #an;in companies, except in so far as the said pro!isions are inconsistent with the pro!isions of the 0an;in *ompanies Act, 1,$,G10 0f 1,$,HL GcH to companies en a ed in the eneration or s"pply of electricity, except in so far as the said pro!isions are inconsistent with the pro!isions of Athe Indian 1lectricity Act, 1,10 orB the 1lectricity S"pply 1,$)G'$ of 1,$)HL GdH AGeH to any other company o!erned #y any special Act for the time #ein in force, except in so far, as the said pro!isions are inconsistent with the pro!isions of s"ch special ActL to s"ch #ody corporate, incorporated #y any Act for the time #ein in force, as the *entral +o!ernment may, #y notification in the :fficial +aFette, specify in this #ehalf, s"#Cect to s"ch exceptions, modifications or adaptation, as may #e specified in the notification.B

Application of Act to *overnment Companies *1+. e!inition o! $-overnment Compan%$

3or the p"rposes of Athis ActB +o!ernment company, means any company in which not less than fifty one per cent of the Apaid/"p share capitalB is held #y the *entral +o!ernment, or #y any State +o!ernment or +o!ernments, or partly #y the *entral +o!ernment and partly #y one or more State +o!ernments, Aand incl"des a company which is a s"#sidiary of a +o!ernment company as th"s definedB. ASection (1) omitted #y the *ompanies GAmendmentH Act, 2000, w.e.f. 13 th. Decem#er, 2000B

*1..
G1H G2H

Application o! sections 22' to 2## to -overnment companies

In the case of a +o!ernment company, the followin pro!isions shall apply, notwithstandin anythin contained in sections 22$ to 233. .he a"ditor of a +o!ernment company shall #e appointed or re/appointed #y the AJJJB the *omptroller and A"ditor/+eneral of IndiaK AProvided that the limits specified in s"#/sections G10H and G1*H of section 22$ shall apply in relation to the appointment or re/appointment of an a"ditor "nder this s"#/section.B .he *omptroller and A"ditor/+eneral of India shall ha!e power/ GaH to direct the manner in which the companyEs acco"nts shall #e a"dited #y the a"ditor appointed in p"rs"ance of s"#/section G2H and to i!e s"ch a"ditor instr"ctions in re ard to any matter relatin to the performance of his f"nctions as s"chL to cond"ct a s"pplementary or test a"dit of the companyEs acco"nts #y s"ch person or persons as he may a"thorise in this #ehalfL and for the p"rposes of s"ch a"dit, to reD"ire information or additional information to #e f"rnished to any person or persons, so a"thorised, on s"ch matters,

G3H

G#H

G$H

#y s"ch person or persons, and in s"ch form, as the *omptroller and A"ditor/+eneral may, #y eneral or special order, direct. .he a"ditor aforesaid shall s"#mit a copy of his a"dit report to the *omptroller and A"ditor/+eneral of India who shall ha!e the ri ht to comment "pon or s"pplement, the a"dit report in s"ch manner as he may thin; fit. Any s"ch comments "pon, or s"pplement, to the a"dit report shall #e placed #efore the ann"al eneral meetin of the/company at the same time and in the same manner as the a"dit report.

G'H

*1.A. Annual reports on -overnment companies

G1H =here the *entral +o!ernment is a mem#er of a +o!ernment company, the *entral +o!ernment shall ca"se an ann"al report on the wor;in and affairs of that company to #e/ GaH prepared within three months of its ann"al eneral meetin #efore which the a"dit report is placed "nder s"#/section G'H of section (1,L and G#H as soon as may #e after s"ch preparation, laid #efore #oth 6o"ses of &arliament to ether with a copy of the a"dit report and any comments "pon, or s"pplement to, the a"dit report, made #y the *omptroller, and A"ditor/+eneral of India. =here in addition to the *entral +o!ernment, any State +o!ernment is also a mem#er of a +o!ernment *ompany, that State +o!ernment shall ca"se a copy of the ann"al report prepared "nder s"#/section G1H to #e laid #efore the 6o"se or #oth 6o"ses of the State 2e islat"re to ether with a copy of the a"dit report and the comments or s"pplement referred to in s"#/section G1H. =here the *entral +o!ernment is not a mem#er of a +o!ernment company, e!ery State +o!ernment which is a mem#er of that company, or where only one State +o!ernment is a mem#er of the company, that State +o!ernment shall ca"se an ann"al report on the wor;in and affairs of the company to #e/ GaH prepared within the time specified in s"#/section G1HL and G#H as soon as may #e after s"ch preparation laid #efore the 6o"se or #oth 6o"ses of the State 2e islat"re with a copy of the a"dit report and comments or s"pplement referred to in s"#/ section G1H.B .he pro!isions of this section shall, so far as may #e, apply to a +o!ernment *ompany in liD"idation as they apply to any other +o!ernment company.B

G2H

G3H

AG$H

*1.2. Provisions o! section *1. to appl% to certain companies

.he pro!isions of section (1, shall apply to a company in which not less than fifty/one per cent of the paid/"p share capital is held #y one or more of the followin or any com#ination thereof, as if it were a +o!ernment company, namely K/ GaH the *entral +o!ernment and one or more +o!ernment companiesL G#H GcH GdH GeH GfH G H any State +o!ernment or +o!ernments and one or more +o!ernment companiesL the *entral +o!ernment, one or more State +o!ernments and one or more +o!ernment companiesL the *entral +o!ernment and one or more corporations owned or controlled #y the *entral +o!ernmentL the *entral +o!ernment, one or more State +o!ernments and one or more corporations owned or controlled #y the *entral +o!ernmentL one or more corporations owned or controlled #y the *entral +o!ernment or the State +o!ernmentL more than one +o!ernment company.B

*20.
G1H

Power to modi!% Act in relation to -overnment companies

.he *entral +o!ernment may, #y notification in the :fficial +aFette, direct that any of the pro!isions of this Act Gother than sections (1), (1, and A(1,AB specified in the notificationK/ GaH shall not apply to any +o!ernment companyL or

G#H AG2H

shall apply to any +o!ernment company, only with s"ch exceptions, modifications and adaptations, as may #e specified in the notification. A copy of e!ery notification proposed to #e iss"ed "nder s"#/section G1H, shall #e laid in draft #efore each 6o"se of &arliament, while it is in session, for a total period of thirty days which may #e comprised in one session or in two or more s"ccessi!e sessions, and if, #efore the expiry of the session immediately followin the session or the s"ccessi!e sessions aforesaid, #oth 6o"ses a ree in disappro!in the iss"e of the notification or #oth 6o"ses a ree in ma;in any modification in the notification, the notification shall not #e iss"ed or, as the case may #e, shall #e iss"ed only in s"ch modified form as may #e a reed "pon #y #oth the 6o"ses.B

Modification of act in its application to Nidhis and Mutual -enefit "ocieties *20A. Power to modi!% Act in its application to 6idhis, etc.
G1H In this section, "4idhi" or "%"t"al 0enefit Society" means a company which the *entral +o!ernment may, #y notification in the :fficial +aFette, declare to #e a 4idhi or %"t"al 0enefit Society, as the case may #e. .he *entral +o!ernment may, #y notification in the :fficial +aFette, direct that any of the pro!isions of this Act specified in the 4otification/ GaH G#H G3H shall not apply to any 4idhi or %"t"al 0enefit Society, or shall apply to any 4idhi or %"t"al 0enefit Society with s"ch exceptions, modifications and adaptations as may #e specified in the notification. A copy of e!ery notification iss"ed "nder s"#/section G1H shall #e laid as soon as may #e after it is iss"ed, #efore each 6o"se of &arliament.B

G2H

*202. Special 1provisions as to companies in -oa, aman and iu

.he *entral +o!ernment may, #y notification in the :fficial +aFette, direct that for s"ch period or periods with effect from the 2(th -an"ary, 1,(3 or any s"#seD"ent date, any of the pro!isions of this Act specified in the notification shall not apply or shall apply only with s"ch exceptions, and modifications or adaptations as may #e specified in the notification, to,/ GaH G#H any existin company in the <nion .erritories of +oa, Daman and Di"L any company re istered in the said <nion .erritory "nder this Act on or after the 2(th -an"ary, 1,(3B.

"pecial provisions as to companies in 5ammu and 'ashmir *20C. Special provisions as to companies in /ammu and ;ashmir
.he *entral +o!ernment may, #y notification in the :fficial +aFette, direct that with effect from the commencement of the *entral 2aws G1xtension to -amm" and 9ashmirH Act, 1,() or any s"#seD"ent date, any of the pro!isions of this Act specified in the notification shall not apply, or shall apply only with s"ch exceptions and modifications or adaptations as may #e specified in the notification, to/ GaH any existin company in the State of -amm" and 9ashmirL G#H any company re istered in that State "nder this Act after the commencement of the *entral 2aws G1xtension to -amm" and 9ashmirH Act, 1,().B

4ffences *21. <!!ences against Act to &e cogniFa&le onl% on complaint &% :egistrar, shareholder or -overnment

G1H

4o co"rt shall ta;e co niFance of any offence a ainst this Act (aA:mittedB, which is alle ed to ha!e #een committed #y any company or any officer thereof, except on the complaint in writin of the 8e istrar, or of a shareholder of the company, or of a person a"thorised #y the *entral +o!ernment in that #ehalfK Provided that nothin in this s"#/section shall apply to a prosec"tion #y a company of any of its officersK AProvided !urther that the co"rt may ta;e co niFance of offence relatin to iss"e and transfer of sec"rities and non/payment of di!idend on a complaint in writin #y a person a"thorised #y the Sec"rities 1xchan e 0oard of India.B 4otwithstandin anythin contained in the *ode of *riminal &roced"re, 1),) G' of 1),)H, (2 where the complainant "nder s"#/section G1H is the 8e istrar or a person a"thorised #y the *entral +o!ernment, the personal attendance of the complainant #efore the *o"rt tryin the offence shall not #e necessary "nless the *o"rt for reasons to #e recorded in writin reD"ires his personal attendance at the trial.B S"#/section G1H shall not apply to any action ta;en #y the liD"idator of a company in respect of any offence alle ed to ha!e #een committed in respect of any of the matters incl"ded in &art 7II Gsections $2' to '(0H or in any other pro!isions of this Act relatin to the windin "p of the companies. A liD"idator of a company shall not #e deemed to #e an officer of the company, within the meanin of s"#/section G1H.

AG1AH

G2H

G3H

*a*21A.
G1H

Composition o! certain o!!ences

4otwithstandin anythin contained in the *ode of *riminal &roced"re, 1,73G2 of 1,7$H, any offence p"nisha#le "nder this Act Gwhether committed #y a company or any officer thereofH, not #ein an offence p"nisha#le with imprisonment only, or with imprisonment and also with fine, may, either #efore or after the instit"tion of any prosec"tion, #e compo"nded #y the *entral +o!ernment on payment or credit, #y the company or the officer, as the case may #e, to the *entral +o!ernment of s"ch s"m as that +o!ernment may prescri#eK Provided that the s"m prescri#ed shall not, in any case, exceed the maxim"m amo"nt of the fine which may #e imposed for the offence so compo"ndedK Provided !urther that in prescri#in the s"m reD"ired to #e paid or credited for the compo"ndin of an offence "nder this s"#/section, the s"m, if any, paid #y way of additional fee "nder s"#/section G 2H of section (11 shall #e ta;en into acco"nt. 4othin in s"#/section (1# shall apply to an offence committed #y a company or its officer within a period of three years from the date on which a similar offence committed #y it or him was compo"nded "nder this section. Explanation( M3or the p"rposes of this section, any second or s"#seD"ent offence committed after the expiry of a period of three years from the date on which the offence was pre!io"sly compo"nded, shall #e deemed to #e a first offence. 1!ery application for the compo"ndin of an offence shall #e made to the 8e istrar who shall forward the same, to ether with his comments thereon to the *entral +o!ernment. =here any offence is compo"nded "nder this section, whether #efore or after the instit"tion of any prosec"tion, an intimation thereof shall #e i!en #y the company to the 8e istrar within se!en days from the date on which the offence is so compo"nded. =here any offence is compo"nded #efore the instit"tion of any prosec"tion, no prosec"tion shall #e instit"ted in relation to s"ch offence, either #y the 8e istrar or #y any shareholder of the company or #y any person a"thorised #y the *entral +o!ernment a ainst the offender in relation to whom the offence is so compo"nded. =here the composition of any offence is made after the instit"tion of any prosec"tion, s"ch composition shall #e #ro" ht #y the 8e istrar in writin , to the notice of the *o"rt in which the prosec"tion is pendin and on s"ch notice of the composition of the offence #ein i!en, the company or its officer in relation to whom the offence is so compo"nded shall #e dischar ed. .he *entral +o!ernment while dealin with a proposal for the compo"ndin of an offence for a defa"lt in compliance with any pro!ision of this Act which reD"ires a company or its officer to file or re ister with, or deli!er or send to, the 8e istrar any ret"rn, acco"nt or other doc"ment, may, direct, #y order, if it or he thin;s fit to do so, any officer or other employee of the company to file or re ister with, or on

G2H

G3HGaH G#H

GcH

GdH

G$H

G'H

payment of the fee, and the additional fee, reD"ired to #e paid "nder section (11, s"ch ret"rn, acco"nt or other doc"ment within s"ch time as may #e specified in the order. Any officer or other employee of the company who fails to comply with any order made #y the *entral +o!ernment "nder s"#/section G4H shall #e p"nisha#le with imprisonment for a term which may extend to six months, or with fine not exceedin fifty tho"sand r"pees or with #oth. 4otwithstandin anythin contained in the *ode of *riminal &roced"re, 1,73M GaH any offence which is p"nisha#le "nder this Act with imprisonment or with fine, or with #oth, shall #e compo"nda#le with the permission of the *o"rt, in accordance with the proced"re laid down in that Act for compo"ndin of offencesL G#H any offence which is p"nisha#le "nder this Act G2 of 1,7$Hwith imprisonment only or with imprisonment and also with fine shall not #e compo"nda#le.

G(H

G7H

4o offence specified in this section shall #e compo"nded except "nder and in accordance with the pro!isions of this section.B

*22.

/urisdiction to tr% o!!ences

4o *o"rt inferior to that of a &residency %a istrate or a %a istrate of the first class shall try any offence a ainst this Act.

*2#.

Certain o!!ences tria&le summaril% in Presidenc% towns

If any offence a ainst this Act which is p"nisha#le with fine only is committed #y any person within a &residency town, s"ch person may #e tried s"mmarily and p"nished #y any &residency %a istrate of that &residency town.

*2'.

<!!ences to &e non1cogniFa&le

4otwithstandin anythin in the *ode of *riminal &roced"re, 1),)G' of 1),)H, e!ery offence a ainst this Act shall #e deemed to #e non/co niFa#le within the meanin of the said *ode.

*2'A. Power, o! Central -overnment to appoint compan% prosecutors

4otwithstandin anythin contained in the *ode of *riminal &roced"re, 1),) G' of 1),)H the *entral +o!ernment may appoint enerally, or in any case, or for any specified class of cases in any local area, one or more persons, as company prosec"tors for the cond"ct of prosec"tions arisin o"t of this ActL and the persons so appointed as company prosec"tors shall ha!e all the powers and pri!ile es conferred #y the *ode on &"#lic &rosec"tors appointed #y a State +o!ernment "nder section $,2 of the *ode.

*2'2. Appeal against acDuittal

4otwithstandin anythin contained in the *ode of *riminal &roced"re, 1),), the *entral +o!ernment may, in any case arisin o"t of this Act, direct any company prosec"tor or a"thorise any other person either #y name or #y !irt"e of his office, to present an appeal from an order of acD"ittal passed #y any *o"rt other than a 6i h *o"rt and an appeal presented #y s"ch prosec"tor or other person shall #e deemed to ha!e #een !alidly presented to the appellate *o"rt.B

*2).
G1H

Pa%ment o! compensation in cases o! !rivolous or vexatious prosecution

In respect of any case instit"ted "pon the complaint of a shareholder a ainst the company or any officer thereof in p"rs"ance of section (21, the pro!isions of section 2'0 of the *ode of *riminal &roced"re, 1),), shall not applyL and the followin pro!isions shall apply instead.

G2H

If the %a istrate #y whom any s"ch case is heard dischar es or acD"its all or any of the acc"sed and is of opinion that the acc"sation a ainst them or any :f them was false and either fri!olo"s or !exatio"s, the %a istrate may, #y his order of dischar e or acD"ittal, if the shareholder "pon whose complaint the acc"sation was made is present, call "pon him forthwith to show ca"se why he sho"ld not pay compensation to s"ch acc"sed, or to each or any of s"ch acc"sed when there is more than one, or if s"ch shareholder is not present, direct the iss"e of a s"mmons to him to appear and show ca"se as aforesaid. .he %a istrate shall record and consider any ca"se which s"ch shareholder may showL and if the %a istrate is satisfied that the acc"sation was false and either fri!olo"s or !exatio"s, he may, for reasons to #e recorded, direct that compensation to s"ch amo"nt as he may determine #e paid #y s"ch shareholder to the acc"sed or to each or any of them, not exceedin one tho"sand r"pees in all. .he %a istrate may, #y the order directin payment of the compensation "nder s"#/section G3H, f"rther order that, in defa"lt of payment, the shareholder ordered to pay s"ch compensation shall s"ffer imprisonment for a term not exceedin two months. =hen any person is imprisoned "nder s"#/section G$H, the pro!isions of sections () and (, of the Indian &enal *ode shall, so far as may #e, apply. 4o person who has #een directed to pay compensation "nder this section shall, #y reason of s"ch order, #e exempted from any ci!il or criminal lia#ility in respect of the complaint made #y himK Provided that any amo"nt paid to an acc"sed person "nder this section shall #e ta;en into acco"nt in awardin compensation to s"ch person in any s"#seD"ent ci!il s"it relatin to the same matter. A complainant who has #een ordered to pay compensation "nder s"#/section G3H #y a %a istrate may appeal from the order, in so far as it relates to the payment of compensation, as if s"ch complainant had #een con!icted on a trial held #y s"ch %a istrate. =here an order for payment of compensation to an acc"sed person is made, the compensation shall not #e paid to him #efore the period allowed for the presentation of the appeal "nder s"#/section G7H has elapsedL or, if an appeal is presented, #efore the appeal has #een decided.

G3H

G$H

G'H G(H

G7H

G)H

*2*.

Application o! !ines

.he (aA*o"rt or .ri#"nalB imposin any fine "nder this Act may direct that the whole or any part thereof shall #e applied in or towards payment of the costs of the proceedin s, or in or towards the rewardin of the person on whose information or at whose instance the fine is reco!ered.

*2+.
G1H

Production and inspection o! &oo=s where o!!ence suspected

If, on an application made to a -"d e of a 6i h *o"rt in *ham#ers (aAor the .ri#"nal, as the case may #eB #y the &"#lic &rosec"tor of the State or #y the *entral +o!ernment, Aor #y a company prosec"tor appointed "nder section (2$AB it is shown that there is reasona#le ca"se to #elie!e that any person has, while he was an officer of a company, committed an offence in connection with the mana ement of the companyEs affairs, and that e!idence of the commission of the offence is to #e fo"nd in any #oo;s or papers of or "nder the control of the company, an order may #e made/ GiH GiiH a"thorisin any person named therein to inspect the said #oo;s or papers or any of them for the p"rpose of in!esti atin , and o#tainin e!idence of the commission of, the offenceL or

G2H

G3H

reD"irin the AJJJB mana er of the company or s"ch other officer thereof as may #e named in the order, to prod"ce the said #oo;s or papers or any of them to a person, and at a place and time, named in the order. S"#/section G1H shall apply also in relation to any #oo;s or papers of a person carryin on the #"siness of #an;in so far as they relate to the companyEs affairs, as it applies to any #oo;s or papers of or "nder the control of the company, except that no s"ch order as is referred to in cla"se GiiH thereof shall #e made #y !irt"e of this s"#/section. 4o appeal shall lie from the decision of a -"d e of the 6i h *o"rt (aAor the .ri#"nal, as the case may #eB "nder this section.

*2,.

Penalt% !or !alse statements

If in any ret"rn, report, certificate, #alance sheet, prospect"s, statement or other doc"ment reD"ired #y or for the p"rposes of any of the pro!isions of this Act, any person ma;es a statement/ GaH G#H which is false in any material partic"lar, ;nowin it to #e falseL or which omits any material fact ;nowin it to #e materialL

he shall, sa!e as otherwise expressly pro!ided in this Act, #e p"nisha#le with imprisonment for a term which may extend to two years, and shall also #e lia#le to fine.

*2..

Penalt% !or !alse evidence

If any person intentionally i!es false e!idence,/ GaH G#H "pon any examination "pon oath or solemn affirmation, a"thorised "nder this ActL or in any affida!it, deposition or solemn affirmation, in or a#o"t the windin "p of any company "nder this Act, or otherwise in or a#o"t any matter arisin "nder this Act, he shall #e p"nisha#le with imprisonment for a term which may extend to se!en years and shall also #e lia#le to fine.

*2.A. Penalt% where no speci!ic penalt% is provided elsewhere in the Act

If a company or any other person contra!enes any pro!ision of this Act for which no p"nishment is pro!ided elsewhere in this Act or any condition, limitation or restriction s"#Cect to which any appro!al, sanction, consent, confirmation, reco nition, direction or exemption in relation to any matter has #een accorded, i!en or ranted, the company and e!ery officer of the company who is in defa"lt or s"ch other person shall #e p"nisha#le with fine which may extend to 3AAfi!e tho"sand r"peesB, and where the contra!ention is a contin"in one, with a f"rther fine which may extend to 11AAfi!e h"ndred r"peesB for e!ery day after the first d"rin which the contra!ention contin"es.

*#0.
G1H

Penalt% !or wrong!ul withholding o!1propert%

If any officer or employee of a company/ GaH wron f"lly o#tains possession of any property of a companyL or G#H ha!in any s"ch property in his possession, wron f"lly withholds it or ;nowin ly applies it to p"rposes other than those expressed or directed in the articles and a"thorised #y this ActL

he shall, on the complaint of the company or any creditor or contri#"tory thereof, #e p"nisha#le with fine which may extend to Aten tho"sand r"peesB. G2H .he *o"rt tryin the offence may also order s"ch officer or employee to deli!er "p or ref"nd, within a time to #e fixed #y the *o"rt, any s"ch property wron f"lly o#tained or wron f"lly withheld or ;nowin ly misapplied, or in defa"lt, to s"ffer imprisonment for a term which may extend to two years.

*#1.

Penalt% !or improper use o! words $4imited$ and $Private 4imited$

If any person or persons trade or carry on #"siness "nder any name or title of which the word "2imited" or the words "&ri!ate 2imited", or any contraction or imitation thereof is or are the last word or words, that person or each of those persons shall, "nless d"ly incorporated with limited lia#ility, or "nless d"ly incorporated as a pri!ate company with limited lia#ility, as the case may #e, #e p"nisha#le with fine which may extend to 11AAfi!e h"ndred r"peesB for e!ery day "pon which that name or title has #een "sed.

Legal proceedings *#2. Power to reDuire limited compan% to give securit% !or costs

=here a limited company is plaintiff or petitioner in any s"it or other le al proceedin , any (aA*o"rt or the .ri#"nalB ha!in C"risdiction in the matter may, if there is reason to #elie!e that the company will #e "na#le to pay the costs of the defendant if he is s"ccessf"l in his defence, reD"ire s"fficient sec"rity to #e i!en for those costs, and may stay all proceedin s "ntil the sec"rity is i!en.

*##. Power o! Court to grant relie! in certain cases

G1H If in any proceedin for ne li ence, defa"lt, #reach of d"ty, misfeasance or #reach of tr"st a ainst an officer of a company, it appears to the *o"rt hearin the case that he is or may #e lia#le in respect of the ne li ence, defa"lt, #reach of d"ty, misfeasance or #reach of tr"st, #"t that he has acted honestly and reasona#ly, and that ha!in re ard to all the circ"mstances of the case, incl"din those connected with his appointment, he o" ht fairly to #e exc"sed, the *o"rt may relie!e him, either wholly or partly, from his lia#ility on s"ch terms as it may thin; fitK AProvided that in a criminal proceedin "nder this s"#/section, the *o"rt shall ha!e no power to rant relief from any ci!il lia#ility which may attach to an officer in respect of s"ch ne li ence, defa"lt, #reach of d"ty, misfeasance or #reach of tr"st.B =here any s"ch officer has reason to apprehend that any proceedin will or mi ht #e #ro" ht a ainst him in respect of any ne li ence, defa"lt, #reach of d"ty, misfeasance or #reach of tr"st, he may apply to the 6i h *o"rt for relief and the 6i h *o"rt on s"ch application shall ha!e the same power to relie!e him as it wo"ld ha!e had if it had #een a *o"rt #efore which a proceedin a ainst that officer for ne li ence, defa"lt, #reach of d"ty, misfeasance or #reach of tr"st had #een #ro" ht "nder s"#/ section G1H. 4o *o"rt shall rant any relief to any officer "nder s"#/section G1H or s"#/section G2H "nless it has, #y notice ser!ed in the manner specified #y it, reD"ired the 8e istrar and s"ch other person, if any, as it thin;s necessary, to show ca"se why s"ch relief sho"ld not #e ranted.B

AG2H

G3H

*#'.

3n!orcement o! orders o! Courts

Any order made #y a *o"rt "nder this Act may #e enforced in the same manner as a decree made #y the *o"rt in a s"it pendin therein.

*#'A. 3n!orcement o! orders o! Compan% 4aw 2oard

Any order made #y the *ompany 2aw 0oard AJJJB may #e enforced #y that 0oard in the same manner as if it were a decree made #y a *o"rt in a s"it pendin therein, and it shall #e lawf"l for that 0oard to send, in the case of its ina#ility to exec"te s"ch order, to the *o"rt within the local limits of whose C"risdiction,/ GaH G#H in the case of an order a ainst a company, the re istered office of the company is sit"ated, or in the case of an order a ainst any other person, the person concerned !ol"ntarily resides, or carries on #"siness or personally wor;s for ain.B (a AProvided that the pro!isions of this section shall not apply on and after the commencement of the *ompanies GSecond AmendmentH Act, 2002.B

*#).
G1H G2H G3H AG$H

3n!orcement o! orders o! one Court &% other Courts

=here any order made #y one *o"rt is reD"ired to #e enforced #y another *o"rt, a certified copy of the order shall #e prod"ced to the proper officer of the *o"rt reD"ired to enforce the order. .he prod"ction of s"ch certified copy shall #e s"fficient e!idence of the order. <pon the prod"ction of s"ch certified copy, the *o"rt shall ta;e the reD"isite steps for enforcin the order, in the same manner as if it had #een made #y itself. =here any order made #y the (aA*ompany 2aw 0oard or .ri#"nalB AJJJB is reD"ired to #e enforced #y a *o"rt, a certified copy of the order shall #e prod"ced to the proper officer of the *o"rt reD"ired to

enforce the order and the pro!isions of s"#/sections G2H and G3H shall, as far as may #e, apply to e!ery s"ch order in the same manner and to the same extent as they apply to an order made #y a *o"rt.B

*#)A. Protection o! acts done in good !aith

4o s"it, prosec"tion or other le al proceedin s shall lie a ainst the +o!ernment or any officer of +o!ernment or any other person in respect of anythin which is in ood faith done or intended to #e done in p"rs"ance of this Act or any r"les or orders made there"nder, or in respect of the p"#lication #y or "nder the a"thority of the +o!ernment or s"ch officer of any report, paper or proceedin s

*#)AA. 6on1disclosure o! in!ormation in certain cases

4otwithstandin anythin contained in any other law for the time #ein in force, the 8e istrar, any officer of +o!ernment or any other person shall not #e compelled to disclose to any *o"rt, tri#"nal or other a"thority whence he ot any information which/ GaH G#H has led the *entral +o!ernment to direct a special a"dit "nder section 233A or to order an in!esti ation "nder section 23', 237, Aor 2$7BL or is or has #een material or rele!ant in connection with s"ch special a"dit or in!esti ation.B

Temporary protection of employees *#)2. Protection o! emplo%ees during investigation &% inspector or pendenc% or proceeding &e!ore *aGAppellate 0ri&unalH in certain cases
G1H If/ GaH d"rin the co"rse of any in!esti ation of the affairs and other matters of or relatin to a company, #ody or person "nder section 23', section 237 or section 23, or of the mem#ership and other matters of or relatin to a company, or the ownership of shares in or de#ent"res of a company or #ody corporate, or the affairs and other matters of or relatin to a company, #ody or person, "nder section 2$7, AJJJBL or G#H d"rin the pendency of any proceedin a ainst any person concerned in the cond"ct and mana ement of the affairs of a company "nder *hapter I7A of &art 7I, s"ch company, #ody or person proposes/ GiH GiiH to dischar e, or to p"nish, whether #y dismissal, remo!al, red"ction in ran; or otherwise, any employee, the company, #ody or person, as the case may #e, shall send #y post to the (aA.ri#"nalB pre!io"s intimation in writin of the action proposed a ainst the employee and if the (aA.ri#"nalB has any o#Cection to the action proposed, it shall send #y post notice thereof in writin to the company, #ody or person concerned.

G2H

If the company, #ody or person concerned does not recei!e within thirty days of the sendin of the pre!io"s intimation of the action proposed a ainst the employee, any notice of the o#Cection from the (a A.ri#"nalB, then and only then, the company, #ody or person concerned may proceed to ta;e a ainst the employee the action proposed. If the company, #ody or person concerned is dissatisfied with the o#Cection raised #y the (aA.ri#"nalB, it may, within thirty days of the receipt of the notice of the o#Cection, prefer an appeal to the (a AAppellate .ri#"nalB in the prescri#ed manner and on payment of the prescri#ed fee. .he decision of the (aAAppellate .ri#"nalB on s"ch appeal shall #e final and #e #indin on the (a A.ri#"nalB and on the company, #ody or person concerned. 3or the remo!al of do"#t, it is here#y declared that the pro!isions of this section shall ha!e effect witho"t preC"dice to the pro!isions of any other law for the time #ein in force.B

G3H

G$H G'H

Reduction of fees payable to company *#*.

G1H

:eduction o! !ees, charges, etc., pa%a&le to compan%

A company which is entitled to any specified fee, char e or other s"m #y !irt"e of any pro!ision contained in this Act or in its articles, may red"ce the amo"nt thereof to s"ch extent as it thin;s fitL and there"pon s"ch pro!ision shall, so lon as the red"ction is in force, ha!e effect as if the red"ced amo"nt had #een s"#stit"ted for the fee, char e or s"m specified in s"ch pro!ision. Any red"ction made "nder s"#/section G1H may, at any time, #e cancelled or !aried #y the company.

G2H

+elegation of powers and functions of Central *overnment *#+.

AG1H

elegation &% Central -overnment o! its powers and !unctions under Act
.he *entral +o!ernment may, #y notification in the :fficial +aFette, and s"#Cect to s"ch conditions, restrictions and limitations as may #e specified therein, dele ate any of its powers or f"nctions "nder this Act Gother than the power to appoint a person as p"#lic tr"stee "nder section 1'3A and the power to ma;e r"les,H to s"ch a"thority or officer as may #e specified in the notification.B .he powers and f"nctions which cannot #e dele ated "nder AJJJB s"#/section G1H are those conferred #y or mentioned in the followin pro!isions of this Act, namely, sections 10, )1, ),G$H, 211G3H and G$H, 212, 213, 23', 237, 23,, 2$1, 2$2, 2$3, 2$$, 2$', 2$7, AJJJB 2'0, 2',, 2(), 2(,, 27$G2H, 2,', 300, 310, 311, AJJJB 3$,, AJJJB 372, 3,(, 3,,G$H and G'H, $01, $0), AJJJB $10, $11 G#H, $$), (0,, (13, (20, (3), ($1 and ($2.B A:mitted #y the *ompanies Act, 1,)), w.e.f. 31/'/1,,1.BB A copy of e!ery notification iss"ed "nder s"#/section G1H shall, as soon as may #e after it is iss"ed, #e placed #efore #oth 6o"ses of &arliament.

G2H

AJJJB G2AH G3H

*rant of approval etc! sub6ect to conditions and levy of fees on applications *a*#+A. Power o! Central -overnment or 0ri&unal to accord approval, etc., su&Cect to conditions and to prescri&e !ees on applications
G1H =here the *entral +o!ernment or .ri#"nal is reD"ired or a"thorised #y any pro!ision of this Act,M GaH to accord appro!al, sanction, consent, confirmation or reco nition to or in relation to, any matterL or G#H to i!e any direction in relation to any matterL or GcH to rant any exemption in relation to any matter, then, in the a#sence of anythin to the contrary contained in s"ch or any other pro!ision of this Act, the *entral +o!ernment or .ri#"nal may accord, i!e or rant s"ch appro!al, sanction, consent, confirmation, reco nition, direction or exemption, s"#Cect to s"ch conditions, limitations or restrictions as it may thin; fit to impose and may, in the case of contra!ention of any s"ch condition, limitation or restriction, rescind or withdraw s"ch appro!al, sanction, consent, confirmation, reco nition, direction or exemption. Sa!e as otherwise expressly pro!ided in this Act, e!ery application which may #e, or is reD"ired to #e, made to the *entral +o!ernment or .ri#"nal "nder any pro!ision of this ActM GaH in respect of any appro!al, sanction, consent, confirmation or reco nition to #e accorded #y that +o!ernment or .ri#"nal to, or in relation to, any matterL or G#H in respect of any direction or exemption to #e i!en or ranted #y that +o!ernment or .ri#"nal in relation to any matterL or

G2H

GcH

in respect of any other matter,

shall #e accompanied #y s"ch fee as may #e prescri#ed K Provided that different fees may #e prescri#ed for applications in respect of different matters or in case of applications #y companies, for applications #y different classes of companies.B

*#+AA. Power o! Central -overnment to !ix a 4imit with regard to remuneration

4otwithstandin anythin contained in section 1,), section 30, or section (37A, the *entral +o!ernment may, while accordin , its appro!al "nder section 2(,, to any appointment or to any rem"neration "nder section 30,, section 310, section 311 or section 3)7, fix the rem"neration of the person so appointed or the rem"neration, as the case may #e, within the limits specified in this Act, at s"ch amo"nt or percenta e of profits of the company, as it may deem fit and while fixin the rem"neration, the *entral +o!ernment shall ha!e re ard to / GaH the financial position of the companyL G#H GcH GdH GeH the rem"neration or commission drawn #y the indi!id"al concerned in any other capacity, incl"din his capacity as a sole sellin a entL the rem"neration or commission drawn #y him from any other companyL professional D"alifications and experience of the indi!id"al concernedL p"#lic policy relatin to the remo!al of disparities in income.B

*#+2. Condonation o! dela%s in certain cases

4otwithstandin anythin contained in this Act,/ GaH where any application reD"ired to #e made to the *entral +o!ernment "nder any pro!ision of this Act in respect of any matter is not made within the time specified therein, that +o!ernment may, for reasons to #e recorded in writin , condone the delayL G#H where any doc"ment reD"ired to #e filed with the 8e istrar "nder any pro!ision of this Act is not filed within the time specified therein, the *entral +o!ernment may, for reasons to #e recorded in writin , condone the delay.B

Annual Report on wor3ing of Act *#,. Annual report &% Central -overnment

.he *entral +o!ernment shall ca"se a eneral ann"al report on the wor;in and administration of this Act to #e prepared and laid #efore #oth 6o"ses of &arliament within one year of the close of the year to which the report relates.

*#..

Annual reports on -overnment companies to &e placed &e!ore Parliament, etc.

Ann"al reports on +o!ernment companies to #e placed #efore &arliament, etc./ 8epealed #y the *ompanies GAmendmentH Act, 1,(0B

(alidation of registration of firms in certain cases *'0. 9alidation o! registration o! !irms as mem&ers o! charita&le and other companies

Any firm which stood re istered at the commencement of this Act, as a mem#er of any association or company licensed "nder section 2( of the Indian *ompanies Act, 1,13 shall #e deemed to ha!e #een !alidly so re istered with effect on and from the date of its re istration.

Computation of time for filing orders of $Court or the /a$Tribunal%% *a*'0A. 3xclusion o! time reDuired in o&taining copies o! order o! Court or 0ri&unal

1xcept as expressly pro!ided in this #ehalf elsewhere in this Act, where #y any pro!ision of this Act, any order of the *o"rt or .ri#"nal is reD"ired to #e filed with the 8e istrar, or a company or any other person within a period specified therein, then, in comp"tin that period, the time ta;en in drawin "p the order and in o#tainin a copy thereof shall #e excl"ded.B

"chedules forms and rules *'02. 5orms o!, and procedure in relation to, certain applications
G1H G2HGaH 1!ery application made to the *entral +o!ernment "nder sections 2',, 2(), 2(,, 310, ,3Aor 311B shall #e in s"ch form as may #e prescri#ed. 0efore any application is made #y a company to the *entral +o!ernment "nder any of the sections aforesaid, there shall #e iss"ed #y or on #ehalf of the company a eneral notice to the mem#ers thereof, indicatin the nat"re of the application proposed to #e made. S"ch notice shall #e p"#lished at least once in a newspaper in the principal lan "a e of the district in which the re istered office of the company is sit"ate and circ"latin in that district, and at least once in 1n lish in an 1n lish newspaper circ"latin in that district. *opies of the notices, to ether with a certificate #y the *ompany as to the d"e p"#lication thereof, shall #e attached to the application. AJJJB.

G#H

GcH GdH

*'1.
G1H

Power to alter Schedules

S"#Cect to the pro!isions of this section, the *entral +o!ernment may, #y notification in the :fficial +aFette, alter any of the re "lations, r"les, ta#les, forms and other pro!isions contained in any of the Sched"les to this Act, except Sched"les >I and >II. Any alteration notified "nder s"#/section G1H shall ha!e effect as if enacted in this Act and shall come into force on the date of the notification, "nless the notification otherwise directs K Provided that no s"ch alteration in .a#le A of Sched"le I shall apply to any company re istered #efore the date of s"ch alteration.

G2H

AG3H

1!ery alteration made #y the *entral +o!ernment "nder s"#/section G1H shall #e laid as soon as may #e after it is made #efore each 6o"se of &arliament while it is in session for a total period of thirty days which may #e Acomprised in one session or in two or more s"ccessi!e sessions, and if, #efore the expiry of the session immediately followin the session or the s"ccessi!e sessions aforesaid, #oth 6o"ses a ree in ma;in any modification in the alteration, or #oth 6o"ses a ree that the alteration sho"ld not #e made, the alteration shall thereafter ha!e effect only in s"ch modified form or #e of no effect, as the case may #e, so, howe!er, that any s"ch modification or ann"lment shall #e witho"t preC"dice to the !alidity of anythin pre!io"sly done in p"rs"ance of that alteration.B

*'2.
G1H

Power o! Central -overnment to ma=e rules

In addition to the powers conferred #y section ($1, the *entral +o!ernment may, #y notification in the :fficial +aFette, ma;e r"les/ GaH for all or any of the matters which #y this Act are to #e, or may #e, prescri#ed #y the *entral +o!ernmentL and G#H enerally to carry o"t the p"rposes of this Act.

AG2H

G3H

AG$H

Any r"le made "nder s"#/section G1H may pro!ide that a contra!ention thereof shall #e p"nisha#le with fine which may extend to Afi!e tho"sand r"peesB and where the contra!ention is a contin"in one, with a f"rther fine which may extend to Afi!e h"ndred r"peesB for e!ery day after the first d"rin which s"ch contra!ention contin"es. 1!ery r"le made #y the *entral +o!ernment "nder s"#/section G1H shall #e laid as soon as may #e after it is made #efore each 6o"se of &arliament while it is in session for a total period of thirty days which may #e Acomprised in one session or in two or more s"ccessi!e sessions, and if, #efore the expiry of the session immediately followin the session or the s"ccessi!e sessions aforesaid,B #oth 6o"ses a ree in ma;in any modification in the r"le or #oth 6o"ses a ree that the r"le sho"ld not #e made, the r"le shall thereafter ha!e effect only in s"ch modified form or #e of no effect, as the case may #e, so, howe!er, that any s"ch modification or ann"lment shall #e witho"t preC"dice to the !alidity of anythin pre!io"sly done "nder that r"le.B 1!ery re "lation made #y the Sec"rities and 1xchan e 0oard of India "nder this Act shall #e laid, as soon as may #e after it is made, #efore each 6o"se of &arliament, while it is in session, for a total period of thirty days which may #e comprised in one session or in two or more s"ccessi!e sessions, and if, #efore the expiry of the session immediately followin the session or the s"ccessi!e sessions aforesaid, #oth 6o"ses a ree in ma;in any modification in the re "lation or #oth 6o"ses a ree that the re "lation sho"ld not #e made, the re "lation shall thereafter ha!e effect only in s"ch modified form or #e of no effect, as the case may #eL so howe!er, that any s"ch modification or ann"lment shall #e witho"t preC"dice to the !alidity of anythin pre!io"sly done "nder that re "lation.B

*a*'#. Power o! Central -overnment to ma=e rules relating to winding up

G1H .he *entral +o!ernment shall, ma;e r"les consistent with the *ode of *i!il &roced"re, 1,0), pro!idin for all matters relatin to the windin "p of companies, which #y this Act, are to #e prescri#ed, and may ma;e r"les pro!idin for all s"ch matters as may #e prescri#ed. In partic"lar, and witho"t preC"dice to the enerality of the for oin power, s"ch r"le may pro!ide for all or any of the followin matters, namelyKM GiH as to the mode of proceedin s to #e held for windin "p of a company #y the .ri#"nalL GiiH GiiiH Gi!H G!H G!iH G!iiH for the !ol"ntary windin "p of companies, whether #y mem#ers or #y creditorsL for the holdin of meetin s of creditors and mem#ers in connection with proceedin s "nder section 3,1L for i!in effect to the pro!isions of this Act as to the red"ction of the capitalL enerally for all applications to #e made to the .ri#"nal "nder the pro!isions of this ActL the holdin and cond"ctin of meetin s to ascertain the wishes of creditors and contri#"toriesL the settlin of lists of contri#"tories and the rectifyin of the re ister of mem#ers where reD"ired and collectin and applyin the assetsL

G2H

G!iiiH the payment, deli!ery, con!eyance, s"rrender or transfer of money, property, #oo;s or papers to the liD"idatorL GixH GxH G3H the ma;in of callsL and the fixin of a time within which de#ts and claims shall #e pro!ed.

All r"les made #y the S"preme *o"rt on the matters referred to in this section as it stood immediately #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002, and in force at s"ch commencement, shall contin"e to #e in force, in so far as they are not inconsistent with the pro!isions of this Act, till s"ch time the r"les are made #y the *entral +o!ernment and any reference to the 6i h *o"rt in relation to windin "p of a company in s"ch r"les shall #e constr"ed as a reference to the .ri#"nal.B

Repeals and savings *''. :epeal o! Acts speci!ied in Schedule @""

.he enactments mentioned in Sched"le >II are here#y repealed.

*').

Saving o! orders, rules, etc., in !orce at commencement o! Act

4othin in this Act shall affect any order, r"le, re "lation, appointment, con!eyance, mort a e, deed, doc"ment or a reement made, fee directed, resol"tion passed, direction i!en, proceedin ta;en, instr"ment exec"ted or iss"ed, or thin done, "nder or in p"rs"ance of any pre!io"s companies lawL #"t any s"ch order, r"le, re "lation, appointment, con!eyance, mort a e, deed, doc"ment, a reement, fee, resol"tion, direction, proceedin , instr"ment or thin shall, if in force at the commencement of this Act, contin"e to #e in force, and so far as it co"ld ha!e #een made, directed, passed, i!en, ta;en, exec"ted, iss"ed or done "nder or in p"rs"ance of this Act, shall ha!e effect as if made, directed, passed, i!en, ta;en, exec"ted, iss"ed or done "nder or in p"rs"ance of this Act.

*'*.

Saving o! operation o! section 1#, o! Act + o! 1.1#

4othin in this Act shall affect the operation of section 13) of the Indian *ompanies Act, 1,13, as respects inspectors, or as respects the contin"ation of an inspection #e "n #y inspectors, appointed #efore the commencement of this Act, and the pro!isions of this Act shall apply to or in relation to a report of inspectors appointed "nder the said section 13) as they apply to or in relation to a report of inspectors appointed "nder section 23' or 237 of this Act.

*'+.

Saving o! pending proceedings !or winding up

=here the windin "p of a company has commenced #efore the commencement of this Act/ GiH s"#/section G7H of section ''' shall apply in respect of any moneys paid into the *ompanies 2iD"idation Acco"nt whether #efore or after s"ch commencementL and GiiH the other pro!isions with respect to windin "p contained in this Act shall not apply, #"t the company shall #e wo"nd/"p in the same manner and with the same incidents as if this Act had not #een passed K AProvided that where the proceedin s in any s"ch windin "p are pendin at the commencement of the *ompanies GAmendmentH Act, 1,(0,/ GaH sections $(3, '02, '1' and '2$ shall, as far as may #e, also apply in relation theretoL G#H the liD"idator appointed #y the *o"rt and f"nctionin in any s"ch windin "p shall in s"ch manner and at s"ch time as may #e prescri#ed #y the *entral +o!ernment, pay the moneys recei!ed #y him as s"ch liD"idator, into the p"#lic acco"nt of India in the 8eser!e 0an; of India.

*a*'+A.

0rans!er o! winding up proceedings to 0ri&unal

All proceedin s Gincl"din proceedin s relatin to ar#itration, compromises, arran ements and reconstr"ction and windin "p of a companyH pendin #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002 #efore any District *o"rt or 6i h *o"rt, "nder this Act, or the Ins"rance Act, 1,3) G$ of 1,3)H or any other law for the time #ein in force other than "nder the 0an;in 8e "lation Act, 1,$, G10 of 1,$,H, shall #e transferred to the .ri#"nal from the date to #e notified #y the *entral +o!ernment, in the :fficial +aFette, and the .ri#"nal may proceed with the matter either de no0o or from the sta e it was so transferredK Provided that where the windin "p of a company has commenced, s"#Cect to the s"per!ision of the District *o"rt or a 6i h *o"rt, #efore the commencement of the *ompanies GSecond AmendmentH Act, 2002, s"ch windin "p shall contin"e to #e "nder the s"per!ision of the District *o"rt or the 6i h *o"rt, as the case may #e, and the company shall #e wo"nd "p in the same manner and in the same incidents as if the *ompanies GSecond AmendmentH Act, 2002 had not #een passed.B

*',. Saving o! prosecutions instituted &% liDuidator or Court under section 2#+ o! Act, 1.1#

4othin in this Act shall affect any prosec"tion instit"ted or ordered #y the *o"rt to #e instit"ted "nder section 237 of the Indian *ompanies Act, 1,13, and the *o"rt shall ha!e the same power of directin how any costs, char es, and expenses properly inc"rred in any s"ch prosec"tion are to #e defrayed as it wo"ld ha!e had, if this Act had not #een passed.

*'..

Construction o! re!erences to !ormer enactments in documents

Any doc"ment referrin to any former enactment relatin to companies shall #e constr"ed as referrin to the correspondin enactment in this Act.

*)0.

Construction o! $registrar o! Coint stoc= companies$ in Act 21 o! 1,*0

Gepealed by t e !ompanies (Amendment# A$t% 196-

*)1.

Construction o! re!erences to extraordinar% resolution in articles etc

Any reference to an extraordinary resol"tion in the articles of a company, or in any resol"tion passed in eneral meetin #y the company, or in any other instr"ment, or in any law in force immediately #efore the commencement of this Act, shall, with effect on and from s"ch commencement, he constr"ed as a reference to a special resol"tion.

*a*)1A.

:e!erence o! winding up o! companies in an% law

<nless the context otherwise reD"ires,M GaH any reference to the windin "p of a company #y a *o"rt or 6i h *o"rt or windin "p of a company s"#Cect to s"per!ision of a *o"rt or 6i h *o"rt in any law Gexcept the 0an;in 8e "lation Act, 1,$,H G10 of 1,$,H shall, in so far as it relates to windin "p of a company, #e constr"ed as windin "p of a company #y the .ri#"nal in accordance with the pro!isions of this ActLB any reference to the *ompany 2aw 0oard in any law, so far as it relates to the *ompany 2aw 0oard, shall #e constr"ed as the .ri#"nal "nder this Act.

G#H

*)2.

Appointment under previous companies laws to have e!!ect as i! made under Act

Any person appointed to any office "nder or #y !irt"e of any pre!io"s companies law shall #e deemed to ha!e #een appointed to that office "nder or #y !irt"e of this Act.

*)#.

5ormer registration o!!ices continued

.he offices existin at the commencement of this Act for the re istration of companies shall #e contin"ed as if they had #een esta#lished "nder this Act.

*)'.

:egisters under previous companies laws to &e deemed to &e part o! registers under Act

Any re ister ;ept "nder the pro!isions of any pre!io"s companies law shall #e deemed to #e part of the re ister to #e ;ept "nder the correspondin pro!isions of this Act.

*)).

5unds and accounts under Act to &e in continuation o! !unds and accounts under previous companies laws

All f"nds constit"ted and acco"nts ;ept "nder this Act shall #e deemed to #e in contin"ation of the correspondin f"nds constit"ted and acco"nts ;ept "nder pre!io"s companies laws.

*)*.

Saving o! incorporation under repealed Acts

4othin in this Act shall affect the incorporation of any company re istered "nder any enactment here#y repealed.

*)+.

Saving o! certain 0a&les under previous companies laws

4othin in this Act shall affect/ GaH G#H GcH .a#le 0 in the Sched"le annexed to Act 4o. 1, of 1)'7, or any part thereof, so far as the same applies to any company existin at the commencement of this ActL .a#le A in the 3irst Sched"le annexed to the Indian *ompanies Act, 1))2 G( of 1))2H , or any part thereof, so far as the same applies to any company existin at the commencement of this ActL .a#le A in the 3irst Sched"le to the Indian *ompanies Act, 1,13 G7 o 1,13H, either as ori inally contained in that Sched"le or as altered in p"rs"ance of section 1'1 of that Act, so far as the same applies to any company existin at the commencement of this Act.

*),.

Section * o! the -eneral Clauses Act, 1,.+ to appl% in addition to sections *') to *)+ o! Act

.he mention of partic"lar matters in sections ($' to ('7 or in any other pro!ision of this Act shall not preC"dice the eneral application of section ( of the +eneral *la"ses Act, 1),7G10 of 1),7H, with respect to the effect of repeals.

SCHEDULE I
A,ee

se$tions 2(2#% 14% 2A(1#% 29 and 223B

:egulations !or management o! a compan% limited &% shares

0a&le AJ

#nterpretation
1.G1H In these re "lations/ GaH "the Act" means the *ompanies Act, 1,'(, G#H "the seal" means the common seal of the company. <nless the context otherwise reD"ires, words or expressions contained in these re "lations shall #ear the same meanin as in the Act or any stat"tory modification thereof in force at the date at which these re "lations #ecome #indin on the company.

G2H

"hare Capital and (ariation of Rights

2. S"#Cect to the pro!isions of section )0, any preference shares may, with the sanction of an ordinary resol"tion, #e iss"ed on the terms that they are, or at the option of the company are lia#le, to #e redeemed on s"ch terms and in s"ch manner as the company #efore the iss"e of the shares may, #y special resol"tion, determine. If at any time the share capital is di!ided into different classes of shares, the ri hts attached to any class G"nless otherwise pro!ided #y the terms of iss"e of the shares of that classH may, s"#Cect to the pro!isions of sections 10( and 107, and whether or not the company is #ein wo"nd/"p, #e !aried with the consent in writin of the holders of three/fo"rths of the iss"ed shares of that class, or with the sanction of a special resol"tion passed at a separate AJJJB meetin of the holders of the shares of that class. .o e!ery s"ch separate AJJJB meetin , the pro!isions of these re "lations relatin to eneral meetin s shall m"tatis m"tandis apply, #"t so that the necessary D"or"m shall #e two persons at least holdin or representin #y proxy one/third of the iss"ed shares of the class in D"estion. .he ri hts conferred "pon the holders of the shares of any class iss"ed with preferred or other ri ht shall not, "nless otherwise expressly pro!ided #y the terms of iss"e of the shares of that class, #e deemed to #e !aried #y the creation or iss"e of f"rther shares ran;in pari passu therewith. .he company may exercise the powers of payin commissions conferred #y section 7(, pro!ided that the rate per cent or the amo"nt of the commission paid or a reed to #e paid shall #e disclosed in the manner reD"ired #y that section. .he rate of the commission shall not exceed the rate of fi!e per cent of the price at which the shares in respect whereof the same is paid are iss"ed or an amo"nt eD"al to fi!e per cent of s"ch price, as the case may #e. .he commission may #e satisfied #y the payment of cash or the allotment of f"lly or partly paid shares or partly in the one way and partly in the other. .he company may also, on any iss"e of shares, pay s"ch #ro;era e as may #e lawf"l. 1xcept as reD"ired #y law, no person shall #e reco nised #y the company as holdin any shares "pon any tr"st, and the company shall not #e #o"nd #y, or #e compelled in any way to reco nise Ge!en when ha!in notice thereofH any eD"ita#le, contin ent, f"t"re or partial interest in any share, or any interest in any fractional part of a share, or Gexcept only as #y these re "lations or #y law otherwise pro!idedH any other ri hts in respect of any share except an a#sol"te ri ht to the entirety thereof in the re istered holder. 1!ery person whose name is entered as a mem#er in the re ister of mem#ers shall #e entitled to recei!e within three months after allotment or 10$Awithin two months after the application for the re istration of transfer Gor within s"ch other period as the conditions of iss"e shall pro!ideH/

3.G1H

G2H

$.

'.G1H

G2H

G3H G$H (.

7. G1H

GaH G#H G2H G3H

one certificate for all his shares witho"t paymentL or se!eral certificates, each for one or more of his shares, "pon payment of one r"pee for e!ery certificate after the first.

1!ery certificate shall #e "nder the seal and shall specify the shares to which it relates and the amo"nt paid/"p thereon. In respect of any share or shares held Cointly #y se!eral persons, the company shall not #e #o"nd to iss"e more than one certificate, and deli!ery of a certificate for a share to one of se!eral Coint holders shall #e s"fficient deli!ery to all s"ch holders. If a share certificate is defaced, lost or destroyed, it may #e renewed on payment of s"ch fee, if any, not exceedin 10'Atwo r"peesB, and on s"ch terms, if any, as to e!idence and indemnity and the payment of o"t/of/poc;et expenses inc"rred #y the company in in!esti atin e!idence, as the directors thin; fit.

).

Lien
,.G1H .he company shall ha!e a first and paramo"nt lien/ GaH G#H on e!ery share Gnot #ein a f"lly/paid shareH, for all moneys Gwhether presently paya#le or notH called, or paya#le at a fixed time, in respect of that shareL and on all shares Gnot #ein f"lly/paid sharesH standin re istered in the name of a sin le person, for all moneys presently paya#le #y him or his estate to the company K

Provided that the 0oard of directors may at any time declare any share to #e wholly or in part exempt from the pro!isions of this cla"se. G2H 10. .he companyIs lien, if any, on a share shall extend to all di!idends paya#le thereon. .he company may sell, in s"ch manner as the 0oard thin;s fit, any shares on which the company has a lien K Provided that no sale shall #e made/ GaH G#H

"nless a s"m in respect of which the lien exists is presently paya#leL or "ntil the expiration of fo"rteen days after a notice in writin statin and demandin payment of s"ch part of the amo"nt in respect of which the lien exists as is presently paya#le, has #een i!en to the re istered holder for the time #ein of the share or the person entitled thereto #y reason of his death or insol!ency. 11. G1H .o i!e effect to any s"ch sale, the 0oard may a"thorise some person to transfer the shares sold to the p"rchaser thereof. G2H .he p"rchaser shall #e re istered as the holder of the shares comprised in any s"ch transfer. G3H .he p"rchaser shall not #e #o"nd to see to the application of the p"rchase money, nor shall his title to the shares #e affected #y any irre "larity or in!alidity in the proceedin s in reference to the sale. 12. G1H .he proceeds of the sale shall #e recei!ed #y the company and applied in payment of s"ch part of the amo"nt in respect of which the lien exists as is presently paya#le. G2H .he resid"e, if any, shall, s"#Cect to a li;e lien for s"ms not presently paya#le as existed "pon the shares #efore the sale #e paid to the person entitled to the shares at the date of the sale.

Calls on shares
13.G1H .he 0oard may, from time to time, ma;e calls "pon the mem#ers in respect of any moneys "npaid on their shares Gwhether on acco"nt of the nominal !al"e of the shares or #y way of premi"mH and not #y the conditions of allotment thereof made paya#le at fixed times K Provided that no call shall exceed one/fo"rth of the nominal !al"e of the share or #e paya#le at less than one month from the date fixed for the payment of the last precedin call. G2H 1ach mem#er shall, s"#Cect to recei!in at, least fo"rteen daysI notice specifyin the time or times and place of payment, pay to the company, at the time or times and place so specified, the amo"nt called on his shares. G3H A call may #e re!o;ed or postponed at the discretion of the 0oard.

1$. 1'. 1(.G1H

A call shall #e deemed to ha!e #een made at the time when the resol"tion of the 0oard a"thorisin the call was passed and may #e reD"ired to #e paid #y instalments. .he Coint holders of a share shall #e Cointly and se!erally lia#le to pay all calls in respect thereof. If a s"m called in respect of a share is not paid #efore or on the day appointed for payment thereof, the person from whom the s"m is d"e shall pay, interest thereon from the day appointed for payment thereof to the time of act"al payment at fi!e per cent per ann"m or at s"ch lower rate, if any, as the 0oard may determine. .he 0oard shall #e at li#erty to wai!e payment of any s"ch interest wholly or in part. Any s"m which #y the terms of iss"e of a share #ecomes paya#le on allotment or at any fixed date, whether on acco"nt of the nominal !al"e of the share or #y way of premi"m, shall, for the p"rposes of these re "lations, #e deemed to #e a call d"ly made and paya#le on the date on which #y the terms of iss"e s"ch s"m #ecomes paya#le. In case of non/payment of s"ch s"m, all the rele!ant pro!isions of these re "lations as to payment of interest and expenses, forfeit"re or otherwise shall apply as if s"ch s"m had #ecome paya#le #y !irt"e of a call d"ly made and notified. .he 0oard/ GaH may, if it thin;s fit, recei!e from any mem#er willin to ad!ance the same, all or any part of the moneys "ncalled and "npaid "pon any shares held #y himL and G#H "pon all or any of the moneys so ad!anced, may G"ntil the same wo"ld, #"t for s"ch ad!ance, #ecome presently paya#leH pay interest at s"ch rate not exceedin , "nless the company in eneral meetin shall otherwise direct, six percent per ann"m, as may #e a reed "pon #etween the 0oard and the mem#er payin the s"m in ad!ance.

G2H 17.G1H

G2H

1).

Transfer of shares
1,. G1H .he instr"ment of transfer of any share in the company shall #e exec"ted #y or on #ehalf of #oth the transferor and transferee. G2H 20. .he transferor shall #e deemed to remain a holder of the share "ntil the name of the transferee is entered in the re ister of mem#ers in respect thereof. S"#Cect to the pro!isions of section 10), the shares in the company shall #e transferred in the followin form, namely K/

S8A:3 0:A6S53: 5<:( Date of presentation to the PPPPPPPP G&"rs"ant to Section 10)G1AHH of the *ompanies Act, 1,'(B prescri#ed a"thority 5<: 083 C<6S" 3:A0"<6 stated #elow the ".ransferorGsH" named do here#y transfer to the ".ransfereeGsH" named the shares specified #elow s"#Cect to the condition on which the said shares are now held #y the .ransferorGsH and .ransfereeGsH do here#y a ree to accept and hold the said shares s"#Cect to the conditions aforesaid. 3<22 4A%1 :3 *:%&A4? 4A%1 :3 .61 81*:+4IS1D S.:*9 1>*6A4+1 =6181 D1A2. I4 , I3 A4?

D1S*8I&.I:4 :3 15<I.? O &8131814*1 S6A81S 4o. in fi "res 4"m#er in words *onsideration Gin fi "resH *onsideration Gin wordsH

Distincti!e n"m#ers

3rom .o

*orrespondin *ertificate 4os. .8A4S318:8GSH AS12218GSHB &A8.I*<2A8S 8e d. 3olio 4o Si nat"reGsH 1.PPPPPPPPPPP 2.PPPPPPPPPPP 3.PPPPPPPPPPP $.PPPPPPPPPPP Si nat"re of =itness PPPPPPPPPPPP 4ame Q Address of =itness PPPPPPPPPPPP PPPPPPPPPPPP PPPPPPP &I4 PPPPPP A..1S.A.I:4 I, here#y attest the si nat"re of the .ransferorGsH herein mentioned Si nat"re 4ame Address O Seal J&lease see o!erleaf for instr"ction .8A4S31811GSH A0<?18GSHB &A8.I*<2A8S 4ameGsH in f"ll 1 PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP 2 PPPPPPPPPPPPPPPPPP 3 PPPPPPPPPPPPPPPPPP <CC>PA0"<6 1 A :3SS Si nat"reGsH 1 PPPPPPPPPPPPPPPPPP 2 PPPPPPPPPPPPPPPPPP 3 PPPPPPPPPPPPPPPPPP 5A083:IS M 8>S2A6 IS 6A(3

2 3 .ransfereeGsH existin 3olio, 7al"e of stamps affixed if any, in same :rder of names DA.1D this PPPPPP day of PPPPPPPone .ho"sand 4ine 6"ndred PPPPP &2A*1 PPPPPP 3or office "se only *hec;ed #y PPPPPPPPPPPPPPPPP Si nat"res tallied #y PPPPPPPPPPPP 1ntered in 8e ister of .ransfer 4o. PPPPPPPPPPPPPPPPP Appro!al Date PPPPPPPPPPPPPPPPP 3olio *ompany code Specimen 1. PPPPPPPPPPPPPPPP Si nat"reGsH 2. PPPPPPPPPPPPPPP of transfereeGsH 3. PPPPPPPPPPPPPP

*ontin"ation of front pa e G6erein enter the Distincti!e n"m#ers when the space on the front pa e is fo"nd to #e ins"fficientH istinctive num&ers Corresponding Certi!icate 6os. I4S.8<*.I:4S 3:8 A..1S.A.I:4K Attestation, where reD"ired Gth"m# impression, mar;s, si nat"re difference, etc.H sho"ld #e done #y a %a istrate, 4otary &"#lic or Special 1xec"ti!e %a istrate or a similar a"thority holdin a &"#lic :ffice and a"thorised to "se the Seal of his office or a mem#er of a reco nised Stoc; 1xchan e thro" h whom the shares are introd"ced or a mana er of the transferorIs #an;. 4:.1 K 4ames m"st #e r"##er stamped prefera#ly in a strai ht line. *hronolo ical order sho"ld #e maintained. 0ro;erIs *learin 4"m#er sho"ld #e stated when deli!ery is i!en #y a *learin %em#er 0an;. 5rom 0o

4ame of deli!ery 0ro;er or *learin 4"m#er

Date

&:=18 :3 A..:841?

&8:0A.1

D1A.6 *18.I3I*A.1

21..18S :3 AD%I4IS.8A.I:4 8e istered with the *ompany 4o.PPPPPPPPPPPPPPPPPPPPPPPP Date PPPPPPPPPPPPPPPPPPP GSi nat"re Gnot initialsH of 0ro;er, 0an;, *ompany or Stoc; 1xchan e *learin 6o"se H J2:D+1D 0? PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP 3<22 ADD81SS PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP S8A:3 C3:0"5"CA03S 0< 23 :30>:63 0< G3ill in the name and address to which the certificates are reD"ired to #e ret"rnedH 4A%1 Q ADD81SS PPPPPPPPPPPPPPPPPPPPPPPP S6A81 .8A4S318 S.A%&S

J .o #e filled only if the doc"ments are lod ed #y a person other than the transferee 21. .he 0oard may, s"#Cect to the ri ht of appeal conferred #y section 111, decline to re ister/ GaH G#H 22. the transfer of a share, not #ein a f"lly paid share, to a person of whom they do not appro!eL or any transfer of shares on which the company has a lien.

.he 0oard may also decline to reco nise any instr"ment of transfer "nless/ GaH a fee of two r"pees in paid to the company is respect thereofL G#H the instr"ment of transfer is accompanied #y the certificate of the shares to which it relates, and s"ch other e!idence as the 0oard may reasona#ly reD"ire to show the ri ht of the transferor to ma;e the transferL and the instr"ment of transfer is in respect of only one class of shares.

GcH 23.

S"#Cect to the pro!isions of section 1'$, the re istration of transfers may #e s"spended at s"ch times and for s"ch periods as the 0oard may from time to time determine K Provided that s"ch re istration shall not #e s"spended for more than thirty days at any one time or for more than forty/fi!e days in the a re ate in any year.B

2$.

.he company shall #e entitled to char e a fee not exceedin two r"pees on the re istration of e!ery pro#ate, letters of administration, certificate of death or marria e, power of attorney, or other instr"ment.

Transmission of shares
2'. G1H :n the death of a mem#er, the s"r!i!or or s"r!i!ors where the mem#er was a Coint holder, and his le al representati!es where he was a sole holder, shall #e the only persons reco nised #y the company as ha!in any title to his interest in the shares. G2H 4othin in cla"se G1H shall release the estate of a deceased Coint holder from any lia#ility in respect of any share which had #een Cointly held #y him with other persons.

2(. G1H Any person #ecomin entitled to a share in conseD"ence of the death or insol!ency of a mem#er may, "pon s"ch e!idence #ein prod"ced as may from time to time properly #e reD"ired #y the 0oard and s"#Cect as hereinafter pro!ided, elect, either/ GaH G#H to #e re istered himself as holder of the shareL or to ma;e s"ch transfer of the share as the deceased or insol!ent mem#er co"ld ha!e made.

G2H .he 0oard shall, in either case, ha!e the same ri ht to decline or s"spend re istration as it wo"ld ha!e had, if the deceased or insol!ent mem#er had transferred the share #efore his death or insol!ency. 27. G1H If the person so #ecomin entitled shall elect to #e re istered as holder of the share himself, he shall deli!er or send to the company a notice in writin si ned #y him statin that he so elects. G2H If the person aforesaid shall elect to transfer the share, he shall testify his election #y exec"tin a transfer of the share. G3H All the limitations, restrictions and pro!isions of these re "lations relatin to the ri ht to transfer and the re istration of transfers of shares shall #e applica#le to any s"ch notice or transfer as aforesaid as if the death or insol!ency of the mem#er had not occ"rred and the notice or transfer were a transfer si ned #y that mem#er. 2). A person #ecomin entitled to a share #y reason of the death or insol!ency of the holder shall #e entitled to the same di!idends and other ad!anta es to which he wo"ld #e entitled if he were the re istered holder of the share, except that he shall not, #efore #ein re istered as a mem#er in respect of the share, #e entitled in respect of it to exercise any ri ht conferred #y mem#ership in relation to meetin s of the companyK Provided that the 0oard may, at any time, i!e notice reD"irin any s"ch person to elect either to #e re istered himself or to transfer the share, and if the notice is not complied with within ninety days, the 0oard may thereafter withhold payment of all di!idends, #on"ses or other moneys paya#le in respect of the share, "ntil the reD"irements of the notice ha!e #een complied with.

&orfeiture of shares
2,. If a mem#er fails to pay any call, or instalment of a call, on the day appointed for payment thereof, the 0oard may, at any time thereafter d"rin s"ch time as any part of the call or instalment remains "npaid, ser!e a notice on him reD"irin payment of so m"ch of the call or instalment as is "npaid, to ether with any interest which may ha!e accr"ed. .he notice aforesaid shall/ GaH name a f"rther day Gnot #ein earlier than the expiry of fo"rteen days from the date of ser!ice of the noticeH on or #efore which the payment reD"ired #y the notice is to #e madeL and G#H state that, in the e!ent of non/payment on or #efore the day so named, the shares in respect of which the call was made will #e lia#le to #e forfeited. If the reD"irements of any s"ch notice as aforesaid are not complied with, any share in respect of which the notice has #een i!en may, at any time thereafter, #efore the payment reD"ired #y the notice has #een made, #e forfeited #y a resol"tion of the 0oard to that effect.

30.

31.

32. G1H A forfeited share may #e sold or otherwise disposed of on s"ch terms and in s"ch manner as the 0oard thin;s fit. G2H At any time #efore a sale or disposal as aforesaid, the 0oard may cancel the forfeit"re on s"ch terms as it thin;s fit. 33. G1H A person whose shares ha!e #een forfeited shall cease to #e a mem#er in respect of the forfeited shares, #"t shall, notwithstandin the forfeit"re, remain lia#le to pay to the company all moneys which, at the date of forfeit"re, were presently paya#le #y him to the company in respect of the shares. G2H .he lia#ility of s"ch person shall cease if and when the company shall ha!e recei!ed payment in f"ll of all s"ch moneys in respect of the shares. 3$. G1H A d"ly !erified declaration in writin that the declarant is a director, AJJJB the mana er or the secretary, of the company, and that a share in the company has #een d"ly forfeited on a date stated in the declaration, shall #e concl"si!e e!idence of the facts therein stated as a ainst all persons claimin to #e entitled to the share.

G2H .he company may recei!e the consideration, if any, i!en for the share on any sale or disposal thereof and may exec"te a transfer of the share in fa!o"r of the person to whom the share is sold or disposed of. G3H .he transferee shall there"pon #e re istered as the holder of the share. G$H .he transferee shall not #e #o"nd to see to the application of the p"rchase money, if any, nor shall his title to the share #e affected #y any irre "larity or in!alidity in the proceedin s in reference to the forfeit"re, sale or disposal of the share. 3'. .he pro!isions of these re "lations as to forfeit"re shall apply in the case of non/payment of any s"m which, #y the terms of iss"e of a share, #ecomes paya#le at a fixed time, whether on acco"nt of the nominal !al"e of the share or #y way of premi"m, as if the same had #een paya#le #y !irt"e of a call d"ly made and notified.

Conversion of shares into stoc3

3(. .he company may, #y ordinary resol"tion,/ GaH G#H 37. con!ert any paid/"p shares into stoc;L and recon!ert any stoc; into paid/"p shares of any denomination.

.he holders of stoc; may transfer the same or any part thereof in the same manner as, and s"#Cect to the same re "lations "nder which, the shares from which the stoc; arose mi ht #efore the con!ersion ha!e #een transferred, or as near thereto as circ"mstances admit K Provided that the 0oard may, from time to time, fix the minim"m amo"nt of stoc; transfera#le, so howe!er that s"ch minim"m shall not exceed the nominal amo"nt of the shares from which the stoc; arose. .he holders of stoc; shall, accordin to the amo"nt of stoc; held #y them, ha!e the same ri hts, pri!ile es and ad!anta es as re ards di!idends, !otin at meetin s of the company, and other matters, as if they held the shares from which the stoc; aroseL #"t no s"ch pri!ile e or ad!anta e Gexcept participation in the di!idends and profits of the company and in the assets on windin "pH shall #e conferred #y an amo"nt of stoc; which wo"ld not, if existin in shares, ha!e conferred that pri!ile e or ad!anta e. S"ch of the re "lation of the company Gother than those relatin to share warrantsH, as are applica#le to paid/"p shares shall apply to stoc; and the words "share" and "shareholder" in those re "lations shall incl"de "stoc;" and "stoc;holder" respecti!ely. .he company may iss"e share warrants s"#Cect to, and in accordance with, the pro!isions of sections 11$ and 11'L and accordin ly the 0oard may in its discretion, with respect to any share which is f"lly paid/"p, on application in writin si ned #y the person re istered as holder of the share, and a"thenticated #y s"ch e!idence Gif anyH as the 0oard may, from time to time, reD"ire as to the identity of the person si nin the application, and on recei!in the certificate Gif anyH of the share, and the amo"nt of the stamp d"ty on the warrant and s"ch fee as the 0oard may from time to time reD"ire, iss"e a share warrant. .he #earer of a share warrant may at any time deposit the warrant at the office of the company, and so lon as the warrant remains so deposited, the depositor shall ha!e the same ri ht of si nin a reD"isition for callin a meetin of the company, and of attendin , and !otin and exercisin the other pri!ile es of a mem#er at any meetin held after the expiry of two clear days from the time of deposit, as if his name were inserted in the re ister of mem#ers as the holders of the shares incl"ded in the deposited warrant.

3).

3,.

$0.

$1.G1H

G2H 4ot more than one person shall #e reco nised as depositor of the share warrant. G3H .he company shall, on two days" written notice, ret"rn the deposited share warrant to the depositor. $2. G1H S"#Cect as herein otherwise expressly pro!idedL no person shall, as #earer of a share warrant, si n a reD"isition for callin a meetin of the company, or attend, or !ote or exercise any other pri!ile e of a mem#er at a meetin of the company, or #e entitled to recei!e any notices from the company. G2H .he #earer of a share warrant shall #e entitled in all other respects to the same pri!ile e and ad!anta es as if he were named in the re ister of mem#ers as the holder of the shares incl"ded in the warrant, and he shall #e a mem#er of the company.

$3.

.he 0oard may, from time to time, ma;e r"les as to the terms on which Gif it shall thin; fitH a new share warrant or co"pon may #e iss"ed #y way of renewal in case of defacement, loss or destr"ction.

Alteration of capital
$$. $'. .he company may, from time to time, #y ordinary resol"tion increase the share capital #y s"ch s"m, to #e di!ided into shares of s"ch amo"nt, as may #e specified in the resol"tion. .he company may, #y ordinary, resol"tion,/ GaH consolidate and di!ide all or any of its share capital into shares of lar er amo"nt than its existin sharesL G#H s"#/di!ide its existin shares or any of them into shares of smaller amo"nt than is fixed #y the memorand"m, s"#Cect, ne!ertheless, to the pro!isions of cla"se GdH of s"#/section G1H of section ,$L GcH $(. cancel any shares which, at the date of the passin of the resol"tion ha!e not #een ta;en or a reed to #e ta;en #y any person.

.he company may, #y special resol"tion, red"ce in any manner and with, and s"#Cect to, any incident a"thorised and consent reD"ired #y law,/ GaH AG#H GcH its share capitalL any capital redemption reser!e acco"ntL orB any share premi"m acco"nt.

*eneral meetings
$7. All eneral meetin s other than ann"al eneral meetin s shall #e called extraordinary eneral meetin s.

$). G1H .he 0oard may, whene!er it thin;s fit, call an extraordinary eneral meetin . G2H If at any time there are not within India directors capa#le of actin who are s"fficient in n"m#er to form a D"or"m, any director or any two mem#ers of the company may call an extraordinary eneral meetin in the same manner, as nearly as possi#le, as that in which s"ch a meetin may #e called #y the 0oard.

Proceedings at general meetings

$,. G1H 4o #"siness shall #e transacted at any eneral meetin "nless a D"or"m of mem#ers is present at the time when the meetin proceeds to #"siness. G2H Sa!e as herein otherwise pro!ided, fi!e mem#ers present in person Gin the case of a p"#lic company/ two mem#ers present in person, in the case of a pri!ate companyH shall #e a D"or"m. '0. '1. .he chairman, if any, of the 0oard shall preside as chairman at e!ery eneral meetin of the company. If there is no s"ch chairman, or if he is not present within fifteen min"tes after the time appointed for holdin the meetin , or is "nwillin to act as chairman of the meetin , the directors present shall elect one of their n"m#er to #e chairman of the meetin .

'2.

If at any meetin no director is willin to act as chairman or if no director is present within fifteen min"tes after the time appointed for holdin the meetin , the mem#ers present shall choose one of their n"m#er to #e chairman of the meetin . '3. G1H .he chairman may, with the consent of any meetin at which a D"or"m is present, and shall, if so directed #y the meetin , adCo"rn the meetin from time to time and from place to place. G2H 4o #"siness shall #e transacted at any adCo"rned meetin other than the #"siness left "nfinished at the meetin from which the adCo"rnment too; place. G3H =hen a meetin is adCo"rned for thirty days or more, notice of the adCo"rned meetin shall #e i!en as in the case of an ori inal meetin .

G$H Sa!e as aforesaid, it shall not #e necessary to i!e any notice of an adCo"rnment or of the #"siness to #e transacted at an adCo"rned meetin . '$. In the case of an eD"ality of !otes, whether on a show of hands or on a poll, the chairman of the meetin at which the show of hands ta;es place, or at which the poll is demanded, shall #e entitled to a second or castin !ote. ''. Any #"siness other than that "pon which a poll has #een demanded may #e proceeded with, pendin the ta;in (f the poll.

(otes of members
'(. S"#Cect to any ri hts or restrictions for the time #ein attached to any class or classes of shares,/ GaH G#H '7. on a show of hands, e!ery mem#er present in person shall ha!e one !oteL and on a poll, the !otin ri hts of mem#ers shall #e as laid down in section )7.

In the case of Coint holders, the !ote of the senior who tenders a !ote, whether in person or #y proxy, shall #e accepted to the excl"sion of the !otes of the other Coint holders. 3or this p"rpose, seniority shall #e determined #y the order in which the names stand in the re ister of mem#ers.

').

A mem#er of "nso"nd mind, or in respect of whom an order has #een made #y any *o"rt ha!in C"risdiction in l"nacy, may !ote, whether on a show of hands or on a poll, #y his committee or other le al "ardian, and any s"ch committee of "ardian may, on a poll, !ote #y proxy. ',. 4o mem#er shall #e entitled to !ote at any eneral meetin "nless all calls or other s"ms presently paya#le #y him in respect of shares in the company ha!e #een paid. (0. G1H 4o o#Cection shall #e raised to the D"alification of any !oter except at the meetin or adCo"rned meetin at which the !ote o#Cected to is i!en or tendered, and e!ery !ote not disallowed at s"ch meetin shall #e !alid for all p"rposes. G2H Any s"ch o#Cection made in d"e time shall #e referred to the chairman of the meetin , whose decision shall #e final and concl"si!e. (1. .he instr"ment appointin a proxy and the power of attorney or other a"thority, if any, "nder which it is si ned or a notarially certified copy of that power or a"thority, shall #e deposited at the re istered office of the company not less than $) ho"rs #efore the time for holdin the meetin or adCo"rned meetin at which the person named in the instr"ment proposes to !ote, or, in the case of a poll, not less than 2$ ho"rs #efore the time appointed for the ta;in of the pollL and in defa"lt the instr"ment of proxy shall not #e treated as !alid. An instr"ment appointin a proxy shall #e in either of the forms in Sched"le I> to the Act or a form as near thereto as circ"mstances admit. A !ote i!en in accordance with the terms of an instr"ment of proxy shall #e !alid, notwithstandin the pre!io"s death or insanity of the principal or the re!ocation of the proxy or of the a"thority "nder which the proxy was exec"ted, or the transfer of the shares in respect of which the proxy is i!en K Provided that no intimation in writin of s"ch death, insanity re!ocation or transfer shall ha!e #een recei!ed #y the company at its office #efore the commencement of the meetin or adCo"rned meetin at which the proxy is "sed.

(2. (3.

-oard of directors
($. .he n"m#er of the directors and the names of the first directors shall #e determined in writin #y the s"#scri#ers of the memorand"m or a maCority of them. ('. G1H .he rem"neration of the directors shall, in so far as it consists of a monthly payment, #e deemed to accr"e from day to day. G2H In addition to the rem"neration paya#le to them in p"rs"ance of the Act, directors may #e paid all tra!ellin , hotel and other expenses properly inc"rred #y them/ GaH in attendin and ret"rnin from meetin s of the 0oard of directors or any committee thereof or eneral meetin of the companyL or

G#H ((. (7. (). (,.

in connection with the #"siness of the company.

.he D"alification of a director shall #e the holdin of at least one share in the company. .he 0oard may pay all expenses inc"rred in ettin "p and re isterin the company. .he company may exercise the powers conferred #y section '0 with re ard to ha!in an official seal for "se a#road, and s"ch powers shall #e !ested in the 0oard.

.he company may exercise the powers conferred on it #y sections 1'7 and 1') with re ard to the ;eepin of a forei n re isterL and the 0oard may Gs"#Cect to the pro!isions of those sectionsH ma;e and !ary s"ch re "lations as it may thin; fit respectin the ;eepin of any s"ch re ister. 70. All cheD"es, promissory notes, drafts, h"ndis, #ills of exchan e and other ne otia#le instr"ments, and all receipts for moneys paid to the company, shall #e si ned, drawn, accepted, endorsed, or otherwise exec"ted, as the case may #e, AJJJB #y s"ch person and in s"ch manner as the 0oard shall from time to time #y resol"tion determine. 71. 1!ery director present at any meetin of the 0oard or of a committee thereof shall si n his name in a #oo; to #e ;ept for that p"rpose. A72.G1H .he 0oard shall ha!e power at any time, and from time to time, to appoint a person as an additional director, pro!ided the n"m#er of the directors and additional directors to ether shall not at any time exceed the maxim"m stren th fixed for the 0oard #y the articles. G2H S"ch person shall hold office only "p to the date of the next ann"al eneral meetin of the company #"t shall #e eli i#le for appointment #y the company as a director at that meetin s"#Cect to the pro!isions of the Act.B

Proceedings of -oard
73.G1H G2H 7$.G1H G2H 7'. .he 0oard of directors may meet for the despatch of #"siness, adCo"rn and otherwise re "late its meetin s, as it thin;s fit. A director may, and the AJJJB mana er or secretary on the reD"isition of a director shall, at anyH time, s"mmon a meetin of the 0oard. Sa!e as otherwise expressly pro!ided in the Act, D"estion arisin at any meetin of the 0oard shall #e decided #y a maCority of !otes. In case of an eD"ality of !otes, the chairman of the 0oard, if any, shall ha!e a second or castin !ote. .he contin"in directors may act notwithstandin any !acancy in the 0oardL #"t, if and so lon as their n"m#er is red"ced #elow the D"or"m fixed #y the Act for a meetin of the 0oard, the contin"in directors or director may act for the p"rpose of increasin the n"m#er of directors to that fixed for the D"or"m, or of s"mmonin a eneral meetin of the company, #"t for no other p"rpose. .he 0oard may, elect a chairman of its meetin s and determine the period for which he is to hold office. If no s"ch chairman is elected, or if at any meetin the chairman is not present within fi!e min"tes after the time appointed for holdin the meetin , the directors present may choose one of their n"m#er to #e chairman of the meetin . .he 0oard may, s"#Cect to the pro!isions of the Act, dele ate any of its powers to committees consistin of s"ch mem#er or mem#ers of its #ody as it thin;s fit. Any committee so formed shall, in the exercise of the powers so dele ated, conform to any re "lations that may #e imposed on it #y the 0oard. A committee may elect a chairman of its meetin s. If no s"ch chairman is elected, or if at any meetin the chairman is not present within fi!e min"tes after the time appointed for holdin the meetin , the mem#ers present may choose one of their n"m#er to #e chairman of the meetin . A committee may meet and adCo"rn as it thin;s proper. 5"estions arisin at any meetin of a committee shall #e determined #y a maCority of !otes of the mem#ers present, and in case of an eD"ality of !otes, the chairman shall ha!e a second or castin !ote. All acts done #y any meetin of the 0oard or of a committee thereof or #y any person actin as a director, shall, notwithstandin that it may #e afterwards disco!ered that there was some defect in the appointment of any one or more s"ch directors or of any person actin as aforesaid or that they or any

7(.G1H G2H

77.G1H G2H 7).G1H G2H

7,.G1H G2H )0.

)1.

of them were disD"alified, #e as !alid as if e!ery s"ch director or s"ch person had #een d"ly appointed and was D"alified to #e a director. Sa!e as otherwise expressly pro!ided in the Act, a resol"tion in writin si ned #y all the mem#ers of the 0oard of a committee thereof, for the entitled to recei!e notice of a meetin of the 0oard or committee, shall #e as !alid and effect"al as if it had #een passed at a meetin of the 0oard or committee, d"ly con!ened and held.

Manager or secretary
)2. S"#Cect to the pro!isions of the Act,/ G1H a mana er or secretary may #e appointed #y the 0oard for s"ch term sat s"ch rem"neration and "pon s"ch conditions as it may thin; fitL and any mana er or secretary so appointed may #e remo!ed #y the 0oardL G2H a director may #e appointed as mana er or secretary.B A pro!ision of the Act or these re "lations reD"irin or a"thorisin a thin to #e done #y or to a director and the mana er or secretary shall not #e satisfied #y its #ein done #y or to the same person actin #oth as director and as, or in place of, the mana er or secretary.

)3.

The seal
)$.G1H G2H .he 0oard shall pro!ide for the safe c"stody of the seal. .he seal of the company shall not #e affixed to any instr"ment except #y the a"thority of a resol"tion of the 0oard or of a committee of the 0oard a"thorised #y it in that #ehalf, and except in the presence of at least two directors and of the secretary or s"ch other person as the 0oard may appoint for the p"rposeL and those two directors and the secretary or other person as aforesaid shall si n e!ery instr"ment to which the seal of the company is so affixed in their presence.

+ividends and reserve

)'. )(. .he company in eneral meetin may declare di!idends, #"t no di!idend shall exceed the amo"nt recommended #y the 0oard. .he 0oard may from time to time pay to the mem#ers s"ch interim di!idends as appear to it to #e C"stified #y the profits of the company.

)7. G1H .he 0oard may, #efore recommendin any di!idend, set aside o"t of the profits of the company s"ch s"ms as it thin;s proper as a reser!e or reser!es which shall, at the discretion of the 0oard, #e applica#le for any p"rpose to which the profits of the company may #e properly applied, incl"din pro!ision for meetin contin encies or for eD"alisin di!idendsL and pendin s"ch application, may, at the li;e discretion, either #e employed in the #"siness of the company or #e in!ested in s"ch in!estments Gother than shares of the companyH as the 0oard may, from time to time, thin; fit. G2H )).G1H .he 0oard may also carry forward any profits which it may thin; pr"dent not to di!ide, witho"t settin them aside as a reser!e. S"#Cect to the ri hts of persons, if any, entitled to shares with special ri hts as to di!idends, all di!idends shall #e declared and paid accordin to the amo"nts paid or credited as paid on the shares in respect whereof the di!idend is paid, #"t if and so lon as nothin is paid "pon any of the shares in the company, di!idends may #e declared and paid accordin to the amo"nts of the shares. 4o amo"nt paid or credited as paid on a share in ad!ance of calls shall #e treated for the p"rposes of this re "lation as paid on the share. All di!idends shall #e apportioned and paid proportionately to the amo"nts paid or credited as paid on the shares d"rin any portion or portions of the .period in respect of which the di!idend is paidL #"t if any share is iss"ed on terms pro!idin that it shall ran; for di!idend as from a partic"lar date s"ch share shall ran; for di!idend accordin ly.

G2H G3H

),.

.he 0oard may ded"ct from any di!idend paya#le to any mem#er all s"ms of money if any, presently paya#le #y him to the company on acco"nt of calls or otherwise in relation to the shares of the company. Any di!idend, interest or other moneys paya#le in cash in respect of shares may #e paid #y cheD"e or warrant sent thro" h the post directed to the re istered address of the holder or, in the case of Coint holders, to the re istered address of that one of the Coint holders who is first named on the re ister of mem#ers, or to s"ch person and to s"ch address as the holder or Coint holders may in writin direct. G2H 1!ery s"ch cheD"e or warrant shall #e made paya#le to the order of the person to whom it is sent. Any one of two or more Coint holders of a share may i!e effect"al receipts for any di!idends, #on"ses or other moneys paya#le in respect of s"ch share. 4otice of any di!idend that may ha!e #een declared shall #e i!en to the persons entitled to share therein in the manner mentioned in the Act. 4o di!idend shall #ear interest a ainst the company.

AJJJB ,1.G1H

,2. ,3. ,$.

Accounts
,'. G1H .he 0oard shall from time to time determine whether and to what extent and at what times and places and "nder what conditions or re "lations, the acco"nts and #oo;s of the company, or any of them, shall #e open to the inspection of mem#ers not #ein directors. G2H 4o mem#er Gnot #ein a directorH shall ha!e any ri ht of inspectin any acco"nts or #oo;s or doc"ment of the company except as conferred #y law or a"thorised #y the 0oard or #y, the company in eneral meetin .

Capitalisation of profits
,(.G1H .he company in eneral meetin may, "pon the recommendation of the 0oard, resol!e/ GaH that it is desira#le to capitalise any part of the amo"nt for the time #ein standin to the credit of any of the companyEs reser!e acco"nts, or to the credit of the profit and loss acco"nt, or otherwise a!aila#le for distri#"tionL and G#H that s"ch s"m #e accordin ly set free for distri#"tion in the manner specified in cla"se G2H amon st the mem#ers who wo"ld ha!e #een entitled thereto, if distri#"ted #y way of di!idend and in the same proportions. .he s"m aforesaid shall not #e paid in cash #"t shall #e applied, s"#Cect to the pro!ision contained in cla"se G3H, either in or towards/ GiH payin "p any amo"nts for the time #ein "npaid or any shares held #y s"ch mem#ers respecti!elyL GiiH payin "p in f"ll, "niss"ed shares AJJJB of the company to #e allotted and distri#"ted, credited as f"lly paid/"p, to and amon st s"ch mem#ers in the proportions aforesaidL or GiiiH partly in the way specified in s"#/cla"se GiH and partly in that specified in s"#/cla"se GiiH. A share premi"m acco"nt and 10(Aa capital redemption reser!e acco"ntB may, for the p"rposes of this re "lation, only #e applied in the payin "p of "niss"ed shares to #e iss"ed to mem#ers of the company as f"lly paid #on"s shares. .he 0oard shall i!e effect to the resol"tion passed #y the company in p"rs"ance of this re "lation. =hene!er s"ch a resol"tion as aforesaid shall ha!e #een passed, the 0oard shall/ GaH ma;e all appropriations and applications of the "ndi!ided profits resol!ed to #e capitalised there#y, and all the allotments and iss"es of f"lly paid shares, 111AJJJB if anyL and G#H enerally do all acts and thin s reD"ired to i!e effect thereto. .he 0oard shall ha!e f"ll power/ GaH to ma;e s"ch pro!ision, #y the iss"e of fractional certificates or #y payment in cash or otherwise as it thin;s fit, for the case of shares or de#ent"res #ecomin distri#"ta#le in fractionsL and also

G2H

G3H

G$H ,7.G1H

G2H

G#H

G3H

to a"thorise any person to enter, on #ehalf of all the mem#ers entitled thereto, into an a reement with the company pro!idin for the allotment to them respecti!ely, credited as f"lly paid "p, of any f"rther shares 111AJJJB to which they may #e entitled "pon s"ch capitalisation, or Gas the case may reD"ireH for the payment "p #y the company on their #ehalf, #y the application thereto of their respecti!e proportions of the profits resol!ed to #e capitalised, of the amo"nts or any part of the amo"nts remainin "npaid on their existin shares. Any a reement made "nder s"ch a"thority shall #e effecti!e and #indin on all s"ch mem#ers.

1inding up
,).G1H If the company shall #e wo"nd/"p, the liD"idator may, with the sanction of a special resol"tion of the company and any other sanction reD"ired #y the Act, di!ide amon the mem#ers, in spe$ie or ;ind, the whole or any part of the assets of the company, whether they shall consist of property of the same ;ind or not. 3or the p"rpose aforesaid, the liD"idator may set s"ch !al"e as he deems fair "pon any property to #e di!ided as aforesaid and may determine how s"ch di!ision shall #e carried o"t as #etween the mem#ers or different classes of mem#ers. .he liD"idator may, with the li;e sanction, !est the whole or any part of s"ch assets in tr"stees "pon s"ch tr"sts for the #enefit of the contri#"tories as the liD"idator, with the li;e sanction, shall thin; fit, #"t so that no mem#er shall #e compelled to accept any shares or other sec"rities whereon there is any lia#ility.

G2H

G3H

#ndemnity
,,. 1!ery officer or a ent for the time #ein of the company shall #e indemnified o"t of the assets of the company a ainst any lia#ility inc"rred #y him in defendin any proceedin s, whether ci!il or criminal, in which C"d ment is i!en in his fa!o"r or in which he is acD"itted or in connection with any application "nder section (33 in which relief is ranted to him #y the *o"rt.

0a&le 2J

(emorandum o! Association o! a Compan% limited &% shares

1st/.he name of the company is ".he 1astern Steam &ac;et *ompany, 2imited". 2nd/.he re istered office of the company will #e sit"ated in the State of 0om#ay. 3rd./GaH .he main o#Cects to #e p"rs"ed #y the company on its incorporation are "the con!eyance of passen ers and oods in ships or #oats #etween s"ch places as the company may from time to time determine". G#H .he o#Cects incidental or ancillary to the attainment of the a#o!e main o#Cects are "the acD"isition, constr"ction, #"ildin , settin "p and pro!ision of esta#lishments for repairin ships or #oats for the trainin of personnel reD"ired for the r"nnin of ships or #oats and the doin of all s"ch other thin s as are cond"ci!e to the attainment of the fore oin main o#Cects". GcH .he other o#Cects for which the company is esta#lished are "carryin on the #"siness of carriers #y land, air and the r"nnin of hotels for to"rists".B $th./.he lia#ility of the mem#ers is limited. 'th./.he share capital of the company is two h"ndred tho"sand r"pees, di!ided into one tho"sand shares of two h"ndred r"pees each. =e, the se!eral persons whose names and addresses are s"#scri#ed, are desiro"s of #ein formed into a company in p"rs"ance of this memorand"m of association, and we respecti!ely a ree to ta;e the n"m#er of shares in the capital of the company set opposite o"r respecti!e names. 4ames, addresses, descriptions and occ"pations of s"#scri#ers 1. A.0. of 2. *.D. of 3. 1.3. of $. +.6. of '. I.-. of (. 9.2. of 7. %.4. of ............ ............ ............ ............ ............ ............ ............ %erchant %erchant %erchant %erchant %erchant %erchant %erchant .otal shares ta;en 4"m#er of shares ta;en #y each s"#scri#er ............ ............ ............ ............ ............ ............ ............ 200 2' 30 $0 1' ' 10 32'

Dated the .............day of .....................1, =itness to the a#o!e si nat"res >.?. of ............................... 0a&le CJ (emorandum and Articles o! Association o! a Compan% limited &% guarantee and not having a share capital

Memorandum of Association
1st./.he name of the company is ".he %"t"al *alc"tta %arine Association, 2imited." 2nd./.he re istered office of the company will #e sit"ate in the State of =est 0en al. A3rd./GaH .he main o#Cects to #e p"rs"ed #y the company on its incorporation are "the m"t"al ins"rance of ships #elon in to mem#ers of the company". G#H .he o#Cects incidental or ancillary to the attainment of the a#o!e main o#Cects are "&ro!idin for the welfare of employees or ex/employees of the company and the ma;in , drawin , acceptin , endorsin , exec"tin and iss"in of any ne otia#le or transfera#le doc"ments and the doin of s"ch other thin s as are cond"ci!e to the attainment of the fore oin main o#Cects". GcH .he other o#Cects for which the company is esta#lished are "#"ildin , eD"ippin and maintainin charita#le hospitals, r"nnin of schools and "nderta;in any other social ser!ice".B $th./".he lia#ility of the mem#ers is limited.

'th./1!ery mem#er of the company "nderta;es to contri#"te to the assets of the company in the e!ent of its #ein wo"nd/"p while he is a mem#er, or within one year after he ceases to #e a mem#er, for payment of the de#ts and lia#ilities of the company contracted #efore he ceases to #e a mem#er, and the costs, char es and expenses of windin "p and for the adC"stment of the ri hts of the contri#"tories amon themsel!es, s"ch amo"nt as may #e reD"ired, not exceedin one h"ndred r"pees. =e, the se!eral persons whose names and addresses are s"#scri#ed, are desiro"s of #ein formed into a company, in p"rs"ance of this memorand"m of association. 4ames, addresses, descriptions and occ"pations of s"#scri#ers 1. A.0. of 2. *.D. of 3. 1.3. of $. +.6. of '. I.-. of (. 9.2. of 7. %.4. of ......................... ......................... ......................... ......................... ......................... ......................... ......................... %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. %erchant.

Dated the ................. day of .................. 1, =itness to the a#o!e si nat"res >.?. of........................... Articles of Association of a *ompany 2imited #y +"arantee and not ha!in a share capital

#nterpretation
1.G1H In these articles/ GaH "the Act" means the *ompanies Act, 1,'(, G#H "the seal" means the common seal of the company. <nless the context otherwise reD"ires, words or expressions contained in these re "lations shall #ear the same meanin as in the Act or any stat"tory modification thereof in force at the date at which these re "lations #ecome #indin on the company.

G2H

Members
2. .he n"m#er of mem#ers with which the company proposes to #e re istered is '00, #"t the 0oard of directors may, from time to time, whene!er the company or the #"siness of the company reD"ires it, re ister an increase of mem#ers.

3. .he s"#scri#ers to the memorand"m and s"ch other person as the 0oard shall admit to mem#ership shall #e mem#ers of the company.

*eneral meetings
$. '.G1H G2H All eneral meetin s other than ann"al eneral meetin s shall #e called extraordinary eneral meetin s. .he 0oard may, whene!er it thin;s fit, call an extraordinary eneral meetin . If at any time there are not within India directors capa#le of actin who are s"fficient in n"m#er to form a D"or"m, any director or any two mem#ers of the company may call an extraordinary eneral meetin in the same manner as nearly as possi#le, as that in which s"ch a meetin may #e called #y the 0oard.

Proceedings at general meetings

(.G1H G2H 7.G1H G2H G3H ). ,.

4o #"siness shall #e transacted at any eneral meetin "nless a D"or"m of mem#ers is present at the time when the meetin proceeds to #"siness. Sa!e as herein otherwise pro!ided, fi!e mem#ers present in person shall #e a D"or"m. If within half an ho"r from the time appointed for holdin the meetin , a D"or"m is not present, the meetin , if called "pon the reD"isition of mem#ers, shall #e dissol!ed. In any other case, the meetin shall stand adCo"rned to the same day in the next wee;, at the same time and place, or to s"ch other day and at s"ch other time and place as the 0oard may determine. If at the adCo"rned meetin a D"or"m is not present within half an ho"r from the time appointed for the meetin , the mem#ers present shall #e a D"or"m. .he chairman, if any, of the 0oard shall preside as chairman at e!ery eneral meetin of the company. If there is no s"ch chairman, or if he is not present within fifteen min"tes after the time appointed for holdin the meetin , or is "nwillin to act as chairman of the meetin , the directors present shall elect one of their n"m#er to #e chairman of the meetin . If at any meetin no director is willin to act as chairman or if no director is present within fifteen min"tes after the time appointed for holdin the meetin , the mem#ers present shall choose one of their n"m#er to #e chairman of the meetin . .he chairman may, with the consent of any meetin at which a D"or"m is present, and shall if so directed #y the meetin , adCo"rn the meetin from time to time and from place to place. 4o #"siness shall #e transacted at any adCo"rned meetin other than the #"siness left "nfinished at the meetin from which the adCo"rnment too; place. =hen a meetin is adCo"rned for thirty days or more, notice of the adCo"rned meetin shall #e i!en as in the case of an ori inal meetin . Sa!e as aforesaid, it shall not #e necessary to i!e any notice of an adCo"rnment or of the #"siness to #e transacted at an adCo"rned meetin . In the case of an eD"ality of !otes, whether on a show of hands or on a poll, the chairman of the meetin at which the show of hands ta;es place, or at which the poll is demanded, shall #e entitled to a second or castin !ote. Any #"siness other than that "pon which a poll has #een demanded may #e proceeded with, pendin the ta;in of the poll.

10.

11.G1H G2H G3H G$H 12.

13.

(otes of members
1$. 1'. 1!ery mem#er shall ha!e one !ote. A mem#er of "nso"nd mind, or in respect of whom an order has #een made #y any *o"rt ha!in C"risdiction in l"nacy, may !ote, whether on a show of hands or on a poll, #y his committee or other le al "ardian, and any s"ch committee or "ardian may, on a poll, !ote #y proxy. 4o mem#er shall #e entitled to !ote at any eneral meetin "nless all s"ms presently paya#le #y him to the company ha!e #een paid. 4o o#Cection shall #e raised to the D"alification of any !oter except at the meetin or adCo"rned meetin at which the !ote o#Cected to is i!en or tendered, and e!ery !ote not disallowed at s"ch meetin shall #e !alid for all p"rposes. Any s"ch o#Cection made in d"e time shall #e referred to the chairman of the meetin , whose decision shall #e final and concl"si!e. A !ote i!en in accordance with the terms of an instr"ment of proxy shall #e !alid, notwithstandin the pre!io"s death or insanity of the principal or the re!ocation of the proxy or of the a"thority "nder which the proxy was exec"tedK Provided that no intimation in writin of s"ch death, insanity, re!ocation or transfer shall ha!e #een recei!ed #y the company at its office #efore the commencement of the meetin or adCo"rned meetin at which the proxy is "sed.

1(. 17.G1H

G2H 1).

-oard of directors

1,. 20.G1H G2H

.he n"m#er of the directors and the names of the first directors shall #e determined in writin #y the s"#scri#ers of the memorand"m or a maCority of them. .he rem"neration of the directors shall, in so far as it consists of a monthly payment, #e deemed to accr"e from day to day. .he directors may also #e paid all tra!ellin , hotel and other expenses properly inc"rred #y them/ GaH in attendin and ret"rnin from meetin s of the 0oard or any committee thereof or eneral meetin s of the companyL or G#H in connection with the #"siness of the company.

Proceedings of meetings of board

21.G1H G2H 22.G1H G2H 23. .he 0oard of directors may meet for the despatch of #"siness, adCo"rn and otherwise re "late its meetin s, as it thin;s fit. A director may, and the AJJJB mana er or secretary on the reD"isition of a director shall, at any time, s"mmon a meetin of the 0oard. Sa!e as otherwise expressly pro!ided in this Act, D"estions arisin at any meetin of the 0oard shall #e decided #y a maCority of !otes. In case of an eD"ality of !otes, the chairman shall ha!e a second or castin !ote. .he contin"in directors may act notwithstandin any !acancy in the 0oardL #"t, if and so lon as their n"m#er is red"ced #elow the D"or"m fixed #y the Act for a meetin of the 0oard, the contin"in directors or director may act for the p"rpose of increasin the n"m#er of directors to that fixed for the D"or"m, or of s"mmonin a eneral meetin of the company, #"t for no other p"rpose. .he 0oard may elect a chairman of its meetin s and determine the period for which he is to hold office. If no s"ch chairman is elected, or if at any meetin the chairman is not present within fi!e min"tes after the time appointed for holdin the meetin , the directors present may choose one of their n"m#er to #e chairman of the meetin . .he 0oard may, s"#Cect to the pro!isions of the Act, dele ate any of its powers to committees consistin of s"ch mem#er or mem#ers of its #ody as it thin;s fit. Any committee so formed shall, in the exercise of the powers so dele ated conform to any re "lations that may #e imposed on it #y the 0oard. A committee may elect a chairman of its meetin s. If no s"ch chairman is elected, or if at any meetin the chairman is not present within fi!e min"tes after the time appointed for holdin the meetin , the mem#ers present may choose one of their n"m#er to #e chairman of the meetin . A committee may meet and adCo"rn as it thin;s proper. 5"estions arisin at any meetin of a committee shall #e determined #y a maCority of !otes of the mem#ers present, and in case of an eD"ality of !otes, the chairman shall ha!e a second or castin !ote. All acts done #y any meetin of the 0oard or of a committee thereof, or #y any person actin as a director, shall, notwithstandin that it may #e afterwards disco!ered that there was sonar defect in the appointment of any one or more of s"ch directors or of any person actin as aforesaid, or that they or any of them were disD"alified, #e as !alid as if e!ery s"ch director or s"ch person had #een d"ly appointed and was D"alified to #e a director. Sa!e as otherwise expressly pro!ided in the Act, a resol"tion in writin , si ned #y all the mem#ers of the 0oard or a committee thereof for the time #ein entitled to recei!e notice of a meetin of the 0oard or committee, shall #e as !alid and effect"al as if it had #een passed at a meetin of the 0oard or committee, d"ly con!ened and held.

2$.G1H G2H

2'.G1H G2H 2(.G1H G2H

27.G1H G2H 2).

2,.

Manager or secretary

30.G1H

A mana er or secretary may #e appointed #y the 0oard for s"ch term, at s"ch rem"neration and "pon s"ch conditions as it may thin; fitL and any mana er or secretary so appointed may #e remo!ed #y the 0oard. A director may #e appointed as mana er or secretary. A pro!ision of the Act or these re "lations reD"irin or a"thorisin thin to #e done #y or to a director and the mana er or secretary shall not #e satisfied #y its #ein done #y or to the same person actin #oth as director and as, or in place of, the mana er or secretary.

G2H 31.

The seal
32.G1H G2H .he 0oard shall pro!ide for the safe c"stody of the seal. .he seal of the company shall not #e affixed to any instr"ment except #y the a"thority of a resol"tion of the 0oard of directors, and except in the presence of at least two directors and of the secretary or s"ch other person as the 0oard may appoint for the p"rposeL and those two directors and the secretary or other person as aforesaid shall si n e!ery instr"ment to which the seal of the company is so affixed in their presence.

4ames, addresses, descriptions and occ"pations of s"#scri#ers 1. A.0. of 2. *.D. of 3. 1.3. of $. +.6. of '. I.-. of (. 9.2. of 7. %.4. of ................., ................., ................., .................., .................., ..................., .................., %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. %erchant.

Dated the ...........day of ...............1, =itness to the a#o!e si nat"res >.?. of................................ 0a&le J (emorandum and articles o! association o! a compan% limited &% guarantee and having a share capital

Memorandum of Association
lst./.he name of the company is ".he Snowy 8an e 6otel *ompany, 2imited". 2nd./.he re istered office of the company will #e sit"ate in the State of =est 0en al. A3rd./GaH .he main o#Cects to #e p"rs"ed #y the company on its incorporation are "the facilitatin of tra!ellin in the Snowy 8an e, #y pro!idin hotels and con!eyances #y sea and #y land for the accommodation of tra!ellers". G#H .he o#Cects incidental or ancillary to the attainment of the a#o!e main o#Cects are "cond"ctin coachin classes in caterin , hotel mana ement, etc., and the doin of s"ch other thin s as are cond"ci!e to the attainment of the fore oin main o#Cects". GcH .he other o#Cects for which the company is esta#lished are "r"nnin a &"#lishin 6o"se and the p"#lishin of periodical ma aFinesOnewspapers caterin to !ario"s interests pertainin to the o#Cects aforesaid". $th./.he lia#ility of the mem#ers is limited. 'th./1!ery mem#er of the company "nderta;es to contri#"te to the assets of the company in the e!ent of its #ein wo"nd/"p while he is a mem#er, or within one year after he ceases to #e a mem#er for payment of the de#ts and lia#ilities of the company, contracted #efore he ceases to #e a mem#er, and the costs, char es and expenses of windin "p the same and for the adC"stment of the ri hts of the contri#"tories amon themsel!es, s"ch amo"nt as may #e reD"ired, not exceedin fifty r"pees.

(th./.he share capital of the company shall consist of fi!e h"ndred tho"sand r"pees, di!ided into fi!e tho"sand shares of one h"ndred r"pees each. =e, the se!eral persons whose names and addresses are s"#scri#ed, are desiro"s of #ein formed into a company in p"rs"ance of this memorand"m of association, and we respecti!ely a ree to ta;e the n"m#er of shares in the capital of the company set opposite o"r respecti!e names. 4ames, address, descriptions and occ"pations of s"#scri#ers 1. A.0. of 2. *.D. of 3. 1.3. of $. +.6. of '. I.-. of (. 9.2. of 7. %.4. of ................, ................, ................, ................, ..............., ................, ................, %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. .otal shares ta;en Dated the ...............day of .......................1, =itness to the a#o!e si nat"res >.?. of ................................ Articles o! Association o! a Compan% 4imited &% -uarantee and having a Share Capital 1. 2. .he n"m#er of mem#ers with which the company proposes to #e re istered is 100, #"t the directors may from time to time re ister an increase of mem#ers. All the articles of .a#le A in Sched"le 1 annexed to the *ompanies Act, 1,'(, shall #e deemed to #e incorporated with these articles and to apply to the company. 4"m#er of shares ta;en #y each s"#scri#er ................. ................. ................. ................. ................. ................. ................. 200 2' 30 $0 1' ' 10 32'

4ames, addresses, descriptions and occ"pations of s"#scri#ers 1. A.0. of 2. *.D. of 3. 1.3. of $ +.6. of '. I.-. of (. 9.2. of 7. %.4. of .................., ................., .................., ................., .................., .................., .................., %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. %erchant.

Dated the ...........day of............ 1,=itness to the a#o!e si nat"res >.?. of ............................. 0a&le 3J (emorandum and Articles o! Association o! an unlimited compan%

Memorandum of Association
lst./.he name of the company is ".he &atent Stereotype *ompany". 2nd./.he re istered office of the company will #e sit"ate in the State of =est 0en al. A3rd./GaH .he main o#Cects to #e p"rs"ed #y the company on its incorporation are "the wor;in of a patent method of fo"ndin and castin stereotype plates of which method, &.5. of 0om#ay, is the sole patentee"

G#H .he o#Cects incidental or ancillary to the attainment of the a#o!e main o#Cects are "p"rchasin , ta;in on lease or licence or concession or otherwise, lands, #"ildin s, wor;s and any ri hts and pri!ile es or interest therein for esta#lishin the necessary wor;shopOfactories and the doin of s"ch other thin s as are cond"ci!e to the attainment of the fore oin main o#Cects." GcH .he other o#Cects for which the company is esta#lished are "cond"ctin research in any field pertainin to the science of metall"r y and t"rnin to acco"nt the res"lts of the same". =e, the se!eral persons whose names are s"#scri#ed, are desiro"s of #ein formed into a company in p"rs"ance of this memorand"m of association, and we respecti!ely a ree to ta;e the n"m#er of shares in the capital of the company set opposite o"r respecti!e names.B 4ames, addresses, descriptions and occ"pations of s"#scri#ers 1.A.0. of 2. *.D. of 3. 1.3. of $. +.6. of '. I.-. of (. 9.2. of 7. %.4. of ................., ................., ................., ................., .................., ................., .................., %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. %erchant. .otal shares ta;en Dated the ................day of ...............1, =itness to the a#o!e si nat"re >.?. of ................................. Articles o! Association o! an unlimited compan% 1. 2. 3. .he n"m#er of mem#ers with which the company proposes to #e re istered is 20, #"t the 0oard may from time to time re ister an increase of mem#ers. .he share capital of the company is twenty tho"sand r"pees, di!ided into twenty shares of one tho"sand r"pees each. .he company may #y special resol"tion/ GaH G#H GcH GdH increase the share capital #y s"ch s"m to #e di!ided into shares of s"ch amo"nt as the resol"tion may prescri#eL consolidate its shares into shares of a lar er amo"nt than its existin sharesL s"#/di!ide its shares into shares of a smaller amo"nt than its existin sharesL cancel any shares which at the date of the passin of the resol"tion ha!e not #een ta;en or a reed to #e ta;en #y any personL 4"m#er of shares ta;en #y each s"#scri#er ................., ................., ................., ................., ................., ................., ................., 3 2 1 2 2 1 1 12

$.

GeH red"ce its share capital in any way. All the articles of .a#le A in Sched"le I to the *ompanies Act, 1,'(, except articles G3(, 37, 3), 3,, $$, $' and $(H shall #e deemed to #e incorporated with these articles and to apply to the company.

4ames, addresses, descriptions and occ"pations of s"#scri#ers 1. A.0. of 2. *.D. of 3. 1.3. of $. +.6. of '. I.-. of (. 9.2. of ...................., ...................., ...................., ...................., ....................., ................., %erchant %erchant %erchant %erchant %erchant %erchant

7. %.4. of

.................,

%erchant

Dated the................ day of....................1, =itness to the a#o!e si nat"res >.?. of .......................... 0a&le 5J 5orm o! statement to &e pu&lished &% limited &an=ing companies, insurance companies and deposit, provident or &ene!it societies

J.he share capital of the company is 8s ............................. di!ided into ........................... shares of 8s ............................... each. .he n"m#er of shares iss"ed is ...............................*alls to the amo"nt of 8s ....................... per share ha!e #een made, "nder which the s"m of 8s ......................... has #een recei!ed. .he lia#ilities of the company on the thirty/first day of Decem#er Gor thirtieth day of -"neH were/ De#ts owin to s"ndry persons #y the companyK <nder decree, :n mort a es or #onds, :n notes, #ills or h"ndis, :n other contracts, :n estimated lia#ilities, .he assets of the company on that day wereK +o!ernment sec"rities Astatin themB, 0ills of exchan e, h"ndis, and promissory notes, *ash at the #an;ers, :ther sec"rities, 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. ///////////////////////////// 8s. /////////////////////////////

JIf the company has no capital di!ided into shares, the portion of the statement relatin to capital and shares m"st #e omitted.

SCHEDULE IA
ASee section (GcHB 4ist o! :elatives 1. 3ather. 2. %other Gincl"din step/motherH. 3. Son Gincl"din step/sonH. $. SonEs wife. '. Da" hter Gincl"din step/da" hterH. (. 3atherEs father. 7. 3atherEs mother. ). %otherEs mother. ,. %otherEs father.

10. SonEs son. 11. SonEs SonEs wife. 12. SonEs da" hter. 13. SonEs da" hterEs h"s#and. 1$. Da" hterEs h"s#and. 1'. Da" hterEs son. 1(. Da" hterEs sonEs wife. 17. Da" hterEs da" hter. 1). Da" hterEs da" hterEs h"s#and. 1,. 0rother Gincl"din step/#rotherH. 20. 0rotherEs wife. 21. Sister Gincl"din step/sisterH. 22. SisterEs h"s#and. A23( to 49( Omitted by t e !ompanies (Amendment# A$t% 196C% 1Ct ( O$tober% 196C B

SCHEDULE II
%atters to #e specified in prospect"s and reports to #e set o"t therein ASee sections $$G2HGaH and '(B &A8. I ". -eneral in!ormation GaH 4ame and address of re istered office of the company. G#H GiH *onsent of the *entral +o!ernment for the present iss"e and declaration of the *entral +o!ernment a#o"t non/responsi#ility for financial so"ndness or correctness of statements. GiiH 2etter of intentOind"strial licence and declaration of the *entral +o!ernment a#o"t non/responsi#ility for financial so"ndness or correctness of statements. GcH 4ames of re ional stoc; exchan e and other stoc; exchan es where application made for listin of present iss"e. GdH &ro!isions of s"#/section G1H of section ()A of the *ompanies Act, relatin to p"nishment for fictitio"s applications. GeH StatementOdeclaration a#o"t ref"nd of the iss"e if minim"m s"#scription of ,0R is not recei!ed within ,0 days from clos"re of the iss"e. GfH Declaration a#o"t the iss"e of allotment lettersOref"nds within a period of 10 wee;s and interest in case of any delay in ref"nd at the prescri#ed rate "nder section 73G2HOG2AH. G H Date of openin of the iss"e. Date of closin of the iss"e. Date of earliest closin of the iss"e. GhH 4ame and address of a"ditors and lead mana ers. GiH 4ame and address of tr"stee "nder de#ent"re tr"st deed Gin case of de#ent"re iss"eH. GCH =hether ratin from *8ISI2 or any ratin a ency has #een o#tained for the proposed de#ent"reOpreference shares iss"e. If no ratin has #een o#tained, this sho"ld #e answered as "4o". If "?es" the ratin sho"ld #e indicated. G;H <nderwritin of the iss"e. G4ames and addresses of the "nderwriters and the amo"nt "nderwritten #y them.H

GDeclaration #y #oard of directors that the "nderwriters ha!e s"fficient reso"rces to dischar e their respecti!e o#li ations.H 11'AGlH a statement #y the #oard of directors statin that/ GiH all monies recei!ed o"t of iss"e of shares or de#ent"res to p"#lic shall #e transferred to a separate #an; acco"nt other than the #an; acco"nt referred to in s"#/section G3H of section 73L GiiH details of all monies "tilised o"t of iss"e referred to in s"#/item GiH shall #e disclosed "nder an appropriate separate head in the 0alance Sheet of the company indicatin the p"rpose for which s"ch monies had #een "tilisedL and GiiiH details of all "n"tilised monies o"t of iss"e of shares or de#ent"res, if any, referred to in s"#/item GiH shall #e disclosed "nder an appropriate separate head in the 0alance Sheet of the company indicatin the form in which s"ch "n"tilised monies ha!e #een in!ested.B "". Capital structure o! the compan% GaH A"thorised, iss"ed, s"#scri#ed and paid/"p capital. G#H SiFe of present iss"e i!in separately reser!ation for preferential allotment to promoters and others. GcH &aid/"p capital GiH after the present iss"e GiiH after con!ersion of de#ent"res Gif applica#leH """. 0erms o! the present issue GaH .erms of payments. G#H 8i hts of the instr"ment holders. GcH 6ow to apply / a!aila#ility of forms, prospect"s and mode of payment. GdH Any special tax #enefits for company and its shareholders. "9. Particulars o! the issue GaH :#Cects. G#H &roCect cost. GcH %eans of financin Gincl"din contri#"tion of promotersH 9. Compan%, management and proCect GaH 6istory and main o#Cects and present #"siness of the company. G#H S"#sidiaryGiesH of the company, if any. G3or financial data, refer to a"ditorEs report in &art IIH. GcH &romoters and their #ac; ro"nd. GdH 4ames, addresses and occ"pation of mana er, mana in director and other directors incl"din nominee/ directors, whole/time directors G i!in their directorships in other companiesH. GeH 2ocation of proCect. GfH &lant and machinery, technolo y, process, etc. G H *olla#oration, any performance "arantee or assistance in mar;etin #y the colla#orators. GhH Infrastr"ct"re facilities for raw materials and "tilities li;e water, electricity, etc. GiH Sched"le of implementation of the proCect and pro ress made so far, i!in details of land acD"isition, ci!il wor;s installation of plant and machinery, trial prod"ction, date of commercial prod"ction, etc. GCH .he prod"ctsK GiH 4at"re of the prod"ctGsH N cons"mer Oind"strial and end/"sers. GiiH Approach to mar;etin and proposed mar;etin set "p. GiiiH 1xport possi#ilities and export o#li ations, if any Gin case of a company pro!idin any "ser!ice" partic"lars, as applica#le, #e f"rnishedH. G;H 3"t"re prospects / expected capacity "tilisation d"rin the first three years from the date of commencement of prod"ction, and the expected year when the company wo"ld #e a#le to earn cash profits and net profits. Stoc; mar;et data for sharesOde#ent"res of the company Ghi hOlow priceH in each of the last three years and monthly hi hOlow d"rin the last six months Gwhere applica#leH.

9". 5ollowing particulars in regard to the compan% and other listed companies under the same management within the meaning o! section #+0(12), which made an% capital issue during the last three %earsJ 4ame of the company ?ear of iss"e .ype of iss"e G&"#licOri htsOcompositeH Amo"nt of iss"e Date of clos"re of iss"e Date of completion of deli!ery of shareOde#ent"re certificates. Date of completion of the proCect, where o#Cect of the iss"e was financin of a proCect 8ate of di!idend paid 9"". GaH :"tstandin liti ation pertainin to/ GiH matters li;ely to affect operation and finances of the company incl"din disp"ted tax lia#ilities of any nat"reL and GiiH criminal prosec"tion la"nched a ainst the company and the directors for alle ed offences "nder the enactments specified in para raph 1 of &art I of Sched"le >III to the *ompanies Act, 1,'(. G#H &artic"lars of defa"lt, if any, in meetin stat"tory d"es, instit"tional d"es, and towards instr"ment holders li;e de#ent"res, fixed deposits, and arrears on c"m"lati!e preference shares, etc. Galso i!e the same partic"lars a#o"t the companies promoted #y the same pri!ate promoters and listed on stoc; exchan esH. GcH Any material de!elopment after the date of the latest #alance sheet and its impact on performance and prospects of the company. 7III. %ana ement perception of ris; factors Ge. ., sensiti!ity to forei n exchan e rate fl"ct"ations, diffic"lty in a!aila#ility of raw materials or in mar;etin of prod"cts, costOtime o!err"n, etc.H. &A8. II A. +eneral information 1. *onsent of directors, a"ditors, solicitorsO ad!ocates, mana ers to the iss"e, 8e istrar of iss"e, #an;ers to the company, #an;ers to the iss"e and experts. 2. 1xpert opinion o#tained, if any. 3. *han e, if any, in directors and a"ditors d"rin the last three years, and reasons thereof. $. A"thority for the iss"e and details of resol"tion passed for the iss"e. '. &roced"re and time sched"le for allotment and iss"e of certificates. (. 4ames and addresses of the company secretary, le al ad!iser, lead mana ers, co/mana ers, a"ditors, #an;ers to the company, #an;ers to the iss"e and #ro;ers to the iss"e. 0. 3inancial information 8eports to #e set o"t 1. A report #y the a"ditors of the company with respect to/ GaH profits and losses and assets and lia#ilities, in accordance with s"#/cla"se G2H or G3H of this cla"se, as the case may reD"ireL and G#H the rates of the di!idends, if any, paid #y the company in respect of each class of shares in the company for each of the fi!e financial years immediately precedin the iss"e of the prospect"s, i!in partic"lars of each class of shares on which s"ch di!idends ha!e #een paid and partic"lars of the cases in which no di!idends ha!e #een paid in respect of any class of shares for any of those years, and, if no acco"nts ha!e #een made "p in respect of any part of the period of fi!e years endin on a date of three months #efore the iss"e of the prospect"s, containin a statement of that fact Gand accompanied #y a statement of the acco"nts of the company in respect of that part of the said period "p to a date not earlier than six months of the date of iss"e of prospect"s indicatin the profit or loss for that period and the assets and lia#ilities position as at the end of that period to ether with a certificate from the a"ditors that s"ch acco"nts ha!e #een examined and fo"nd correct #y them. .he said statement may indicate the nat"re of pro!ision or adC"stments made or are yet to #e madeH. 2. If the company has no s"#sidiaries, the report shall/

GaH so far as re ards profits and losses, deal with the profits or losses of the company Gdistin "ishin items of a non/rec"rrin nat"reH for each of the fi!e financial years immediately precedin the iss"e of the prospect"sL and G#H so far as re ards assets and lia#ilities, deal with the assets and lia#ilities of the company at the last date to which the acco"nts of the company were made "p. 3. If the company has s"#sidiaries the report shall/ GaH so far as re ards profits and losses, deal separately with the companyEs profits or losses as pro!ided #y s"#/ cla"se G2H and in addition deal either/ GiH as a whole with the com#ined profits or losses of its s"#sidiaries so far as they concern mem#ers of the companyL or GiiH indi!id"ally with the profits or losses of each s"#sidiary, so far as they concern mem#ers of the companyL or, instead of dealin separately with the companyEs profits or losses deal as a whole with the profits or losses of the company, and, so far as they concern mem#ers of the company, with the com#ined profits or losses of its s"#sidiariesL and G#H so far as re ards assets and lia#ilities, deal separately with the companyEs assets and lia#ilities as pro!ided #y s"#/cla"se G2H and in addition, deal eitherK/ G#H GiH as a whole with the com#ined assets and lia#ilities of its s"#sidiaries, with or witho"t the companyEs assets and lia#ilities, or GiiH indi!id"ally with the assets and lia#ilities of each s"#sidiaryL and shall indicate as respects the assets and lia#ilities of the s"#sidiaries, the allowance to #e made for persons other than mem#ers of the company. $. If the proceeds, or any part of the proceeds, of the iss"e of the shares or de#ent"res are or is to #e applied directly or indirectly/ GiH in the p"rchase of any #"sinessL or GiiH in the p"rchase of an interest in any #"siness and #y reason of that p"rchase, or anythin to #e done in conseD"ence thereof, or in connection therewithL the company will #ecome entitled to an interest as respects either the capital or profits and losses or #oth, in s"ch #"siness exceedin fifty per cent, thereofL a report made #y acco"ntants Gwho shall #e named in the prospect"sH "pon/ GaH the profits or losses of the #"siness for each of the fi!e financial years immediately precedin the iss"e of the prospect"s., and G#H the assets and lia#ilities of the #"siness at the last date to which the acco"nts of the #"siness were made "p, #ein a date not more than one h"ndred and twenty days #efore the date of the iss"e of the prospect"s. '.GiH If/ GaH the proceeds, or any part of the proceeds, of the iss"e of the shares or de#ent"res are or is to #e applied directly or indirectly in any manner res"ltin in the acD"isition #y the company of shares in any other #ody corporateL and G#H #y reason of that acD"isition or anythin to #e done in conseD"ence thereof or in connection therewith, that #ody corporate will #ecome a s"#sidiary of the companyL a report made #y acco"ntants Gwho shall #e named in the prospect"sH "pon/ GiH the profits or losses of the other #ody corporate for each of the fi!e financial years immediately precedin the iss"e of the prospect"sL and GiiH the assets and lia#ilities of the other #ody corporate at the last date to which its acco"nts were made "p. GiiH .he said report shall/ GaH indicate how the profits or losses of the other #ody corporate dealt with #y the report wo"ld, in respect of the shares to #e acD"ired, ha!e concerned mem#ers of the company and what allowance wo"ld ha!e fallen to #e made, in relation to assets and lia#ilities so dealt with for holders of other shares, if the company had at all material times held the shares to #e acD"iredL and G#H where the other #ody corporate as s"#sidiaries deal with the profits or losses and the assets and lia#ilities of the #ody corporate and its s"#sidiaries in the manner pro!ided #y s"#/cla"se G2H a#o!e in relation to the company and its s"#sidiaries. (. &rincipal terms of loan and assets char ed as sec"rity. *. Stat"tory and other information 1. %inim"m s"#scription

2. 1xpenses of the iss"e i!in separately fee paya#le toK GaH Ad!isers. G#H 8e istrars to the iss"e. GcH %ana ers to the iss"e. GdH .r"stees for the de#ent"reholders. 3. <nderwritin commission and #ro;era e $. &re!io"s iss"e for cash '. &re!io"s p"#lic or ri hts iss"e, if anyK Gd"rin last fi!e yearsH GaH Date of allotment K Date of ref"nds K Date of listin on the stoc; exchan e K G#H If the iss"eGsH at premi"m or disco"nt and the amo"nt thereof. GcH .he amo"nt paid or paya#le #y way of premi"m, if any, on each share which had #een iss"ed within the two years precedin the date of the prospect"s or is to #e iss"ed, statin the dates or proposed dates of iss"e and, where some shares ha!e #een or are to #e iss"ed at a premi"m and other shares of the same class at a lower premi"m, or at par or at a disco"nt, the reasons for the differentiation and how many premi"ms recei!ed ha!e #een or are to #e disposed. (. *ommission or #ro;era e on pre!io"s iss"e. 7. Iss"e of shares otherwise than for cash. ). De#ent"res and redeema#le preference shares and other instr"ments iss"ed #y the company o"tstandin as on the date of prospect"s and terms of iss"e. ,. :ption to s"#scri#e. 11(A,A. .he details of option to s"#scri#e for sec"rities to #e dealt with in a depository.B 10. &"rchase of property K/ GiH As respects any property to which this cla"se applies/ GaH the names, addresses, descriptions and occ"pations of the !endorsL G#H the amo"nt paid or paya#le in cash, shares or de#ent"res to the !endor and, where there is more than one separate !endor, or the company is a s"#/p"rchaser, the amo"nt so paid or paya#le to each !endor, specifyin separately the amo"nt, if any, paid or paya#le for oodwillL GcH the nat"re of the title or interest in s"ch property acD"ired or to #e acD"ired #y the companyL GdH short partic"lars of e!ery transaction relatin to the property completed within the two precedin years, in which any !endor of the property to the company or any person who is, or was at the time of the transaction, a promoter, or a director or proposed director of the company had any interest, direct or indirect, specifyin the date of the transaction and the name of s"ch promoter, director or proposed director and statin the amo"nt paya#le #y or to s"ch !endor, promoter, director or proposed director in respect of the transaction. GiiH .he property to which s"#/cla"se GiH applies is a property p"rchased or acD"ired #y the company or proposed to #e p"rchased or acD"ired, which is to #e paid for wholly or partly o"t of the proceeds of the iss"e offered for s"#scription #y the prospect"s or the p"rchase or acD"isition of which has not #een completed at the date of iss"e of the prospect"s, other than property/ GaH the contract for the p"rchase or acD"isition whereof was entered into in the ordinary co"rse of the companyEs #"siness, the contract not #ein made in contemplation of the iss"e nor the iss"e in conseD"ence of the contractL or G#H as respects which the amo"nt of the p"rchase money is not material. GiiiH 3or the p"rpose of this cla"se, where a !endor is a firm, the mem#ers of the firm shall not #e treated as separate !endors. Gi!H If the company proposes to acD"ire a #"siness which has #een carried on for less than three years, the len th of time d"rin which the #"siness has #een carried on. 11. GiH Details of directors, proposed directors, whole/time directors, their rem"neration, appointment and rem"neration of mana in directors, interest of directors, their #orrowin powers and D"alification shares. *losin date

Any amo"nt or #enefit paid or i!en within the two precedin years or intended to #e paid or i!en to any promoter or officer and consideration for payment of i!in of the #enefit. GiiH .he dates, parties to, and eneral nat"re of/ GaH e!ery contract appointin or fixin the rem"neration of a mana in director mana er whene!er entered into, that is to say, whether within or more than, two years #efore the date of the prospect"sL G#H e!ery other material contract, not #ein a contract entered into in the ordinary co"rse of the #"siness carried on or intended to #e carried on #y the company or a contract entered into more than two years #efore the date of the prospect"s. A reasona#le time and place at which any s"ch contract or a copy thereof may #e inspected. GiiiH 3"ll partic"lars of the nat"re and extent of the interest, if any, of e!ery director or promoter/ GaH in the promotion of the companyL or G#H in any property acD"ired #y the company within two years of the date of the prospect"s or proposed to #e acD"ired #y it. =here the interest of s"ch a director or promoter consists in #ein a mem#er of a firm or company, the nat"re and extent of the interest of the firm or company, with a statement of all s"ms paid or a reed to #e paid to him or to the firm or company in cash or shares or otherwise #y any person either to ind"ce him to #ecome, or to D"alify him as, a director, or otherwise for ser!ices rendered #y him or #y the firm or company, in connection with the promotion or formation of the company. 12. 8i hts of mem#ers re ardin !otin , di!idend, lien on shares and the process for modification of s"ch ri hts and forfeit"re of shares. 13. 8estrictions, if any, on transfer and transmission of sharesO de#ent"res and on their consolidationO splittin . 1$. 8e!al"ation of assets, if any Gd"rin last fi!e yearsH. 1'. %aterial contracts and inspection of doc"ments, e. . A. %aterial contracts. 0. Doc"ments. *. .ime and place at which the contracts to ether with doc"ments will #e a!aila#le for inspection from the date of prospect"s "ntil the date of closin of the s"#scription list. &A8. III &ro!isions applyin to &arts I and II of the Sched"le 1(. 1!ery person shall, for the p"rpose of this Sched"le, #e deemed to #e a !endor who has entered into any contract, a#sol"te or conditional, for the sale or p"rchase or for any option of p"rchase, of any property to #e acD"ired #y the company, in any case where/ GaH the p"rchase money is not f"lly paid at the date of the iss"e of the prospect"sL G#H the p"rchase money is to #e paid or satisfied, wholly or in part, o"t of the proceeds of the iss"e offered for s"#scription #y the prospect"sL GcH the contract depends for its !alidity or f"lfilment on the res"lt of that iss"e. 17. =here any property to #e acD"ired #y the company is to #e ta;en on lease, this Sched"le ha!e effect as if the expression "!endor" incl"ded the lessor, the expression "p"rchase money" incl"ded the consideration for the lease, and the expression "s"#/p"rchaser" incl"ded a s"#/lessee. 1). If in the case of a company which has #een carryin on #"siness, or of a #"siness which has #een carried on for less than fi!e financial years, the acco"nts of the company or #"siness ha!e only #een made "p in respect of fo"r s"ch years, three s"ch years, two s"ch years or one s"ch year, &art II of this Sched"le shall ha!e effect as if references to fo"r financial years, three financial years, two financial years or one financial years, as the case may #e, were s"#stit"ted for references to fi!e financial years. 1,. =here the fi!e financial years immediately precedin the iss"e of prospect"s which are referred to in &art II of this Sched"le or in this part co!er a period of less than fi!e years, references to the said fi!e financial years in either &art shall ha!e effect as if references to a n"m#er of financial years the a re ate period co!ered #y which is not less than fi!e years immediately precedin the iss"e of the prospect"s were s"#stit"ted for references to the fi!e financial years aforesaid. 20. Any report reD"ired #y &art II of this Sched"le shall either N GaH indicate #y way of note any adC"stments as respects the fi "res of any profits or losses or assets and lia#ilities dealt with #y the report which appear to the persons ma;in the report necessaryL or

G#H ma;e those adC"stments and indicate that adC"stments ha!e #een made . 21. Any report #y acco"ntants reD"ired #y &art II of this Sched"le N GaH shall #e made #y acco"ntants D"alified "nder this Act for appointment as a"ditors of the companyL and G#H shall not #e made #y any acco"ntant who is an officer or ser!ant, or a partner or in the employment of an officer or ser!ant, of the company or of the companyIs s"#sidiary or holdin company or of a s"#sidiary of the companyIs holdin company. 3or the p"rposes of this cla"se, the expression "officer" shall incl"de a proposed director #"t not an a"ditor. 22. Inspection of doc"mentsK 8easona#le time and place at which copies of all #alance sheets and profit and loss acco"nts, if any , on which the report of the a"ditors is #ased, and material contracts and other doc"ments may #e inspected. 6ote K .erm "year " where!er "sed hereinearlier, means financial year. eclaration K .hat all the rele!ant pro!isions of the *ompanies Act, 1,'(, and the "idelines iss"ed #y the +o!ernment ha!e #een complied with and no statement made in prospect"s is contrary to the pro!isions of *ompanies Act, 1,'(, and r"les there"nder . &lace K ASi nat"re of directorsB Date K

SCHEDULE III
3orm of Statement in lie" of &rospect"s to #e deli!ered to 8e istrar #y a company which does not iss"e a &rospect"s or which does not o to allotment on a &rospect"s iss"ed, and reports to #e set o"t therein GSee section 70H &A8. I 3orm of Statement and partic"lars to #e contained therein .he *ompanies Act, 1,'( Statement in lie" of prospect"s deli!ered for re istration #y PPPPPPPPPPPPPPPPPPPPPPPPPPPPP AInsert the name of the companyB &"rs"ant to section 70 of the *ompanies Act, 1,'( Deli!ered for re istration #y PPPPPPPPPPPPPPPPPPPPPPPP .he nominal share capital of the company PPPPPPPPPPPPPPPPPPPPPPP Di!ided into PPPPPPPPPPPPPPPPPP 8s. Shares of 8s. "" "" each. " "

Amo"nt Gif anyH of a#o!e capital which consists of PPPPPPPPPPPPPPPPPPPPPPPPPPPP shares of 8s. PPPPPPPPPPPPPPPPPPP each. redeema#le preference shares. .he earliest date on which the company has power to redeem these shares 4ames, addresses, descriptions and occ"pations of/ GaH G#H directors or proposed directorsL mana in director or proposed mana in directorL

GcH GdH GeH

1AJJJB 2AJJJB mana er or proposed mana er.

Any pro!ision in the articles of the company, or in any contract irrespecti!e of the time when it was entered into, as to the appointment of and rem"neration paya#le to the persons referred to in GaH, G#H 2AJJJB and GeH a#o!e. If the share capital of the company is di!ided into different classes of shares, the ri ht of !otin at meetin s of the company conferred #y, and the ri hts in respect of capital and di!idends attached to, the se!eral classes of shares respecti!ely. 4"m#er and amo"nt of shares and de#ent"res a reed to #e iss"ed as f"lly or partly paid "p otherwise than in cash. 1. PPPPPPPP shares of 8s.PPPPPPPP f"lly paid. 2. PPPPPPPPP shares "pon which 8s.PPPPPP per share credited as paid. 3. PPPPPPPPPP de#ent"res. .he consideration for the intended iss"e of those shares and de#ent"res $. *onsiderationK

4"m#er, description and amo"nt of any shares or de#ent"res 1. PPPPPPP Shares of which any person has or is entitled to #e i!en an option to 8s.PPPPPPPPP and de#ent"res of s"#scri#e for, or to acD"ire from, a person to whom they ha!e #een 8s. PPPPPPPPP allotted or a reed to #e allotted with a !iew to his offerin them for sale. &eriod d"rin which the option is exercisa#le 2. <ntil &rice to #e paid for shares or de#ent"res s"#scri#ed for or acD"ired 3. "nder the option. *onsideration for the option or the ri ht to option &ersons to whom the option or the ri ht to option was i!en or, if i!en to existin shareholders or de#ent"re holders as s"ch, the rele!ant shares or de#ent"res. 4ames, occ"pations and addresses of !endors of property p"rchased or acD"ired, or proposed to #e p"rchased or acD"ired #y the company except where the contract for its p"rchase or acD"isition was entered into in the ordinary co"rse of the #"siness intended to #e carried on #y the company or the amo"nt of the p"rchase money is not material Amo"nt Gin cash, shares or de#ent"resH paya#le to each separate !endor. Amo"nt Gif anyH paid or paya#le Gin cash, shares or de#ent"resH for each s"ch property, specifyin amo"nt Gif anyH paid or paya#le for oodwill *ash Shares De#ent"res +oodwill Short partic"lars of e!ery transaction relatin to each s"ch property which was completed within the two precedin years and in which any !endor to the company or any person who is, or was 8s.PPPPPPPPP 8s.PPPPPPPPP 8s.PPPPPPPPP 8s.PPPPPPPPP .otal p"rchase priceK 8s.PPPPPPPPPPPPPP $. *onsiderationK '. 4ames and addresses/

at the time thereof, a promoter, director or proposed director of the company had any interest, direct or indirect. Amo"nt Gif anyH paid or paya#le as commission for s"#scri#in or a reein to s"#scri#e or proc"rin or a reein to proc"re s"#scriptions for any shares or de#ent"res in the companyL or 8ate of the commission .he n"m#er of shares, if any, which persons ha!e a reed to s"#scri#e for a commission. If it is proposed to acD"ire any #"siness, the amo"nt, as certified #y the persons #y whom the acco"nts of the #"siness ha!e #een a"dited, of the net profits of the #"siness in respect of each of the fi!e years immediately precedin the date of this statement, pro!ided that in the case of a #"siness which has #een carried on for less than fi!e years and the acco"nts of which ha!e only #een made/"p in respect of fo"r years, three years, two years or one year, the a#o!e reD"irements shall ha!e effect as if references to fo"r years, three years, two years or one year, as the case may #e, were s"#stit"ted for references to fi!e years, and in any s"ch case the statement shall say how lon the #"siness to #e acD"ired has #een carried on. =here the financial year with respect to which the acco"nts of the #"siness ha!e #een made/"p is reater or less than a year, references to fi!e years, fo"r years, three years, two years, and one year, in this para raph shall ha!e effect as if references to s"ch n"m#er of financial years as in the a re ate, co!er a period of not less than fi!e years, fo"r years, three years, two years or one year, as the case may #e, were s"#stit"ted for references to three years, two years and one year respecti!ely. 1stimated amo"nt of preliminary expenses 0y whom those expenses ha!e #een paid or are paya#le. Amo"nt paid or intended to #e paid to any promoter *onsideration for the payment Any other #enefit i!en or intended to #e i!en to any promoter 8s. PPPPPPPPPP 4ame of promoter PPPPPPPPPPPP Amo"nt 8s.PPPPPPPPPPPP *onsideration PPPPPPPPPPPP 4ame of promoterK 4at"re and !al"e of #enefit PPPPPPPP *onsideration for the #enefit Dates of, parties to, and eneral nat"re of/ GaH contract appointin or fixin the rem"neration of directors, mana in director 3AJJJB or mana erL and G#H e!ery other material contract Gother than GiH contracts entered into in the ordinary co"rse of the #"siness intended to #e carried on #y the company or GiiH entered into more than two years #efore the deli!ery of this statementH. .ime and place at which G1H the contracts or copies thereof or G2H GiH in the case of a contract not red"ced into writin , a memorand"m i!in f"ll partic"lars thereof, and GiiH in the case of a contract wholly or partly in a lan "a e other than 1n lish, a copy of a translation thereof in 1n lish or em#odyin a translation in 1n lish of the parts in the other lan "a e, as the case may #e, #ein a translation certified in the prescri#ed manner to #e a correct translation, may #e inspected. 4ames and addresses of the a"ditors of the company Gif anyH. *onsideration PPPPPPPPPP Amo"nt paid PPPPPPPPPPP " &aya#le PPPPPPPPPPPPPP 8ate per cent

3"ll partic"lars of the nat"re and extent of the interests of e!ery director, mana in director 2AJJJB or mana er in the promotion of or in the property proposed to #e acD"ired #y the company, or where the interest of s"ch a director consists in #ein a partner in a firm, the nat"re and extent of the interest of the firm, with a statement of all s"ms paid or a reed to #e paid to him or to the firm in cash or shares, or otherwise, #y any person either to ind"ce him to #ecome, or to D"alify him as, a director, or otherwise for ser!ices rendered #y him or #y the firm in connection with the promotion or formation of the company. GSi nat"res of the persons a#o!e named as directors or proposed directors, or of their a ents a"thorised in writin .H Date PPPPPPPPPPPPP &A8. II 8eports to #e set o"t 1. =here it is proposed to acD"ire a #"siness, a report made #y acco"ntants Gwho shall #e named in the statementH "pon/ GaH the profits or losses of the #"siness in respect of each of the fi!e financial years immediately precedin the deli!ery of the statement to the 8e istrarL and G#H the assets and lia#ilities of the #"siness as at the last date to which the acco"nts of the #"siness were made/ "p. 2. G1H =here it is proposed to acD"ire shares in a #ody corporate which #y reason of the acD"isition or anythin to #e done in conseD"ence thereof or in connection therewith will #ecome a s"#sidiary of the company, a report made #y acco"ntants Gwho shall #e named in the statementH with respect to the profits and losses and assets and lia#ilities of the other #ody corporate in accordance with s"#/cla"se G2H or G3H of this cla"se, as the case may reD"ire, indicatin how the profits or losses of the other #ody corporate dealt with #y the report wo"ld, in respect of the shares to #e acD"ired, ha!e concerned mem#ers of the company, and what allowance wo"ld ha!e fallen to #e made, in relation to assets and lia#ilities so dealt with, for holders of other shares, if the company had at all material times held the shares to #e acD"ired. G2H If the other #ody corporate has no s"#sidiaries, the report referred to in s"#/cla"se G1H shall/ GaH so far as re ards profits and losses, deal with the profits or losses of the #ody corporate in respect of each of the fi!e financial years immediately precedin the deli!ery of the statement to the 8e istrarL and G#H so far as re ards assets and lia#ilities, deal with the assets and lia#ilities of the #ody corporate as at the last date to which the acco"nts of the #ody corporate were made/"p. G3H If the other #ody corporate has s"#sidiaries, the report referred to in s"#/cla"se G1H shall/ GaH so far as re ards profits and losses, deal separately with the other #ody corporateIs profits or losses as pro!ided #y s"#/cla"se G2H and in addition deal either/ GiH as a whole with the com#ined profits or losses of its s"#sidiaries so far as they concern mem#ers of the other #ody corporateL or GiiH indi!id"ally with the profits or losses of each s"#sidiary, so far as they concern mem#ers of the other #ody corporateL or, instead of dealin separately with the other #ody corporateEs profits or losses, deal as a whole with the profits or losses of the other #ody corporate, and, so far as they concern mem#ers of the other #ody corporate, with the com#ined profits or losses of its s"#sidiariesL and G#H so far as re ards assets and lia#ilities, deal separately with the other #ody corporateEs assets and lia#ilities as pro!ided #y s"#/cla"se G2H and, in addition, deal either/ GiH as a whole with the com#ined assets and lia#ilities of its s"#sidiaries, with or witho"t the other #ody corporateEs assets and lia#ilitiesL or GiiH indi!id"ally with the assets and lia#ilities of each s"#sidiaryL and shall indicate, as respects the assets and lia#ilities of the s"#sidiaries, the allowance to #e made for persons other than mem#ers of the company. &A8. III PPPPPPPPPPPP PPPPPPPPPPPP PPPPPPPPPPPP

&ro!isions applyin to &arts I and II of this Sched"le 3. G1H In this Sched"le, the expression "!endor" incl"des a !endor as defined in &art III of Sched"le II. G2H *la"se 31 of Sched"le II shall apply to the interpretation of &art II of this Sched"le as it applies to the interpretation of &art II of Sched"le II. $. If in the case of a #"siness which has #een carried on, or of a #ody corporate which has #een carryin on #"siness, for less than fi!e financial years, the acco"nts of the #"siness or #ody corporate ha!e only #een made/ "p in respect of fo"r s"ch years, three s"ch years, two s"ch years or one s"ch year, &art II of this Sched"le shall ha!e effect as if references to fo"r financial years, three financial years, two financial years or one financial year, as the case may #e, were s"#stit"ted for reference to fi!e financial years. '. Any report reD"ired #y &art II of this Sched"le shall either/ GaH indicate #y way of note any adC"stments as respects the fi "res of any profits or losses or assets and lia#ilities dealt with #y the report which appear to the person ma;in the report necessaryL or G#H ma;e those adC"stments and indicate that adC"stments ha!e #een made. (. Any report #y acco"ntants reD"ired #y &art II of this Sched"le/ GaH shall #e made #y acco"ntants D"alified "nder this Act for appointment as a"ditors of a companyL and G#H shall not #e made #y any acco"ntant who is an officer or ser!ant, or a partner or in the employment of an officer or ser!ant, of the company or of the companyEs s"#sidiary or holdin company or of a s"#sidiary of the companyEs holdin company. 3or the p"rposes of this cla"se the expression "officer" shall incl"de a proposed director #"t not an a"ditor.

SCHEDULE IV
3orm of Statement in lie" of prospect"s to #e deli!ered to 8e istrar #y a pri!ate company on #ecomin a p"#lic company and reports to #e set o"t therein [,ee se$tion 44(2#(b#+ &A8. I 3orm of statement and partic"lars to #e contained therein .he *ompanies Act, 1,'( Statement in lie" of prospect"s deli!ered for re istration #y PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP GInsert the name of the companyH &"rs"ant to cla"se G#H of s"#/section G2H of section $$ of the *ompanies Act, 1,'( Deli!ered for re istration #y .he nominal share capital of the company Di!ided into 8s.PPPPPPPPPPPPPPPPP PPP ,, ,, ,, Amo"nt Gif anyH of a#o!e capital which consists of redeema#le preference shares. .he earliest date on which the company has power to redeem these shares 4ames, addresses, descriptions and occ"pations of/ GaH G#H directors or proposed directorsL mana in director or proposed mana in directorL shares of 8s.PPP ,, ,, ,, ,, ,, ,, each ,, ,, ,,

GcH GdH GeH

1AJJJB 2AJJJB mana er or proposed mana er.

Any pro!ision in the articles of the company, or in any contract irrespecti!e of the time when it was entered into as to the appointment of and rem"neration paya#le to the persons referred to in GaH, G#H 3AJJJB and GeH a#o!e Amo"nt of shares iss"ed. Amo"nt of commission paid or paya#le in connection therewith. Amo"nt of disco"nt, if any, allowed on the iss"e of any shares, or so m"ch thereof as has not #een written off at the date of the statement. <nless more than two years ha!e elapsed since the date on which the company was entitled to commence #"sinessK/ Amo"nt of preliminary expenses. 0y whom those expenses ha!e #een paid or are paya#le. Amo"nt paid or intended to #e paid to any promoter. *onsideration for the payment. Any other #enefit i!en or intended to #e i!en to any promoter. *onsideration for the #enefit. If the share capital of the company is di!ided into different classes of shares, the ri ht of !otin at meetin s of the company conferred #y, and the ri hts in respect of capital and di!idends attached to, the se!eral classes of shares respecti!ely. 4"m#er and amo"nt of shares and de#ent"res iss"ed within the two years precedin the date of that statement as f"lly or partly paid/"p otherwise than for cash or a reed to #e so iss"ed at the date of this statement. 1. PPPPPPPPPPPP shares of 8s.PPPPPP f"lly paid 2. PPPPPPPPPPPPP share "pon which 8s.PPPPPPPPPPPPPP per share credited as paid. 4ame of promoter PPPPPPPPP Amo"nt 8s.PPPPPPPPPPPPP *onsideration PPPPPPPPPPPP 4ame of promoter 4at"re and !al"e PPPPPPPPP of #enefit PPPPPPPPPPPPPPPP *onsideration PPPPPPPPPPPPP 8s. PPPPPPPPPP PPPPPPPPP shares

*onsideration for the iss"e of those shares or de#ent"res. 3. PPPPPPPPPP de#ent"res of 8s.PPPPPPPPPP each $. *onsiderationK 4"m#er, description and amo"nt of any shares or de#ent"res which any person has or is entitled to #e i!en an option to s"#scri#e for, or to acD"ire from, a person to whom they ha!e #een allotted or a reed to #e allotted with a !iew to his offerin them or sale. &eriod d"rin which the option is exercisa#le. &rice to #e paid for shares or de#ent"res s"#scri#ed for or acD"ired "nder the option. *onsideration for the option or ri ht to option. 1. PPPPPPPPP shares of 8s.PPPPPPPPPPP and PPPPPPPPPP de#ent"res of 8s.PPPPPPPPPPP

2. <ntil 3. $. *onsiderationK

&ersons to whom the option or the ri ht to option was i!en or, if i!en to existin shareholders or de#ent"re holders as s"ch, the rele!ant shares or de#ent"res. 4ames, addresses, descriptions and occ"pations of !endors of property G1H p"rchased or acD"ired #y the company within the two years precedin the date of this statement or G2H a reed or proposed to #e p"rchased or acD"ired #y the company, except where the contract for its p"rchase or acD"isition was entered into in the ordinary co"rse of #"siness and there is no connection #etween the transaction and the company ceasin to #e a pri!ate company or where the amo"nt of the p"rchase money is not material. Amo"nt Gin cash, shares or de#ent"resH paid or paya#le to each separate !endor.

'. 4ames and addresses PPPPPPPPPPPPPPPPPP

.otal p"rchase price 8s.PPPPPPPPP 8s.PPPPPPP

Amo"nt paid or paya#le in cash, shares or de#ent"res for *ash each s"ch property, specifyin the amo"nt paid or paya#le for oodwill. Shares De#ent"res +oodwill Short partic"lars of e!ery transaction relation to each s"ch property which was completed within the two precedin years and in which any !endor to the company or any person who is, or was at the time thereof, a promoter, director or proposed director of the company had any interest direct or indirect. Amo"nt Gif anyH paid or paya#le as commission for s"#scri#in or a reein to s"#scri#e or proc"rin or a reein to proc"re s"#scriptions for any shares or de#ent"res in the companyL or rate of the commission. .he n"m#er of shares, if any, which persons ha!e a reed to s"#scri#e for a commission. If it is proposed to acD"ire any #"siness, the amo"nt, as certified #y the persons #y whom the acco"nts of the #"siness ha!e #een a"dited, of the net profits of the #"siness in respect of each of the fi!e years immediately precedin the date of this statement, pro!ided that in the case of a #"siness which has #een carried on for less than fi!e years, and the acco"nts of which ha!e only #een made/"p in respect of fo"r years, three years, two years or one year, the a#o!e reD"irements shall ha!e effect as if references to fo"r years, three years, two years, or one year, as the case may #e, were s"#stit"ted for references to fi!e years, and in any s"ch case, the statement shall say how lon the #"siness to #e acD"ired has #een carried on. =here the financial year with respect to which the acco"nts of the #"siness ha!e #een made/"p is reater or less than a year, references, to fi!e years, fo"r years, three years, two years and one year in this para raph shall ha!e effect as if references to s"ch n"m#er of financial years as, in the a re ate, co!er a period of not less than fi!e years, fo"r years, three years, two years or one year, as the case may #e, were s"#stit"ted for

8s.PPPPPPP 8s.PPPPPPP 8s.PPPPPPP

Amo"nt paid PPPPPPPPPP Amo"nt paya#le PPPPPPPPP 8ate per cent PPPPPPPPP

references to three years, two years and one year respecti!ely. Dates of, parties to, and eneral nat"re of/ GaH contract appointin or fixin the rem"neration of directors, mana in director 3AJJJB or mana erL and G#H e!ery other material contract Aother than GiH contracts entered into in the ordinary co"rse of the #"siness intended to #e carried on #y the company or GiiH entered into more than two years #efore the deli!ery of this statement.B .ime and place at which G1H the contracts or copies thereofL or G2HGiH in the case of a contract not red"ced into writin , a memorand"m i!in f"ll partic"lars thereof, and GiiH in the case of a contract wholly or partly in a lan "a e other than 1n lish, a copy of translation thereof in 1n lish or em#odyin a translation in 1n lish of the parts in the other lan "a e, as the case may #e, #ein a translation certified in the prescri#ed manner to #e a correct translation, may #e inspected. 4ames and addresses of the a"ditors of the company. 3"ll partic"lars of the nat"re and extent of the interest of e!ery director, mana in director 2AJJJB or mana er, in any property p"rchased or acD"ired #y the company within the two years precedin the date of this statement or proposed to #e p"rchased or acD"ired #y the company or, where the interest of s"ch a director consists in #ein a partner in a firm, the nat"re and extent of the interest of the firm, with a statement of all s"ms paid or a reed to #e paid to him or to the firm in cash or shares, or otherwise, #y any person either to ind"ce him to #ecome, or to D"alify him as, a director, or otherwise for ser!ices rendered or to #e rendered to the company #y him or #y the firm. 8ates of the di!idends Gif anyH paid #y the company in respect of each class of shares in the company in each of the fi!e financial years immediately precedin the date of this statement or since the incorporation of the company, whiche!er period is shorter. &artic"lars of the cases in which no di!idends ha!e #een paid in respect of any class of shares in any of these years. GSi nat"res of the persons a#o!e named as directors or proposed directors, or of their a ents a"thorised in writin .H Date PPPPPPPPPPPP &A8. II 8eport to #e set o"t 1. If "niss"ed shares or de#ent"res of the company are to #e applied in the p"rchase of a #"siness, a report made #y acco"ntants Gwho shall #e named in the statementH "pon/ GaH the profits or losses of the #"siness in respect of each of the fi!e financial years immediately precedin the deli!ery of the statement to the 8e istrarL and G#H the assets and lia#ilities of the #"siness as at the last date to which the acco"nts of the #"siness were made/ "p. PPPPPPPPPPPPPPP PPPPPPPPPPPPPPP PPPPPPPPPPPPPPP PPPPPPPPPPPPPPP

2. G1H If "niss"ed shares or de#ent"res of the company are to #e applied directly or indirectly in any manner res"ltin in the acD"isition of shares in a #ody corporate which #y reason of the acD"isition or anythin to #e done in conseD"ence thereof or in connection therewith will #ecome a s"#sidiary of the company a report made #y acco"ntants Gwho shall #e named in the statementH with respect to the profits and losses and assets and lia#ilities of the other #ody corporate in accordance with s"#/cla"se G2H or G3H of this cla"se, as the case may reD"ire, indicatin how the profits or losses of the other #ody corporate dealt with #y the report wo"ld, in respect of the shares to #e acD"ired, ha!e concerned mem#ers of the company, and what allowance wo"ld ha!e fallen to #e made, in relation to assets and lia#ilities so dealt with, for holders of other shares, if the company had at all material times held the shares to #e acD"ired. G2H If the other #ody corporate has no s"#sidiaries, the report referred to in s"#/cla"se G1H shall/ GaH so far as re ards profits and losses, deal with the profits or losses of the #ody corporate in respect of each of the fi!e financial years immediately precedin the deli!ery of the statement to the 8e istrarL and G#H so far as re ards assets and lia#ilities, deal with the assets and lia#ilities of the #ody corporate as at the last date to which the acco"nts of the #ody corporate were made/"p. G3H If the other #ody corporate has s"#sidiaries, the report referred to in s"#/cla"se G1H shall/ GaH so far as re ards profits and losses, deal separately with the other #ody corporateEs profits or losses as pro!ided #y s"#/cla"se G2H, and in addition deal either/ GiH as a whole with the com#ined profits or losses of its s"#sidiaries, so far as they concern mem#ers of the other #ody corporateL or GiiH indi!id"ally with the profits or losses of each s"#sidiary, so far as they concern mem#ers of the other #ody corporateL or, instead of dealin separately with the other #ody corporateEs profits or losses, deal as a whole with the profits or losses of the other #ody corporate and, so far as they concern mem#ers of the other #ody corporate, with the com#ined profits or losses of its s"#sidiariesL and G#H so far as re ards assets and lia#ilities, deal separately with the other #ody corporateEs assets and lia#ilities as pro!ided #y s"#/cla"se G2H and in addition, deal either/ GiH as whole with the com#ined assets and lia#ilities of its s"#sidiaries, with or witho"t the other #ody corporateL assets and lia#ilitiesL or GiiH indi!id"ally with the assets and lia#ilities of each s"#sidiaryL and shall indicate, as respects the assets and lia#ilities of the s"#sidiaries, the allowance to #e made for persons other than mem#ers of the company. &A8. III &ro!isions applyin to &arts I and II of this Sched"le 3. G1H In this Sched"le, the expression "!endor" incl"des a !endor as defined in &art III of Sched"le II. G2H *la"se 31 of Sched"le II shall apply to the interpretation of &arts I and II of this Sched"le as it applies to the interpretation of &art II of Sched"le II. $. If in the case of a #"siness which has #een carried on, or of a #ody corporate which has #een carryin on #"siness, for less than fi!e financial years, the acco"nts of the #"siness or #ody corporate ha!e only #een made/ "p in respect of fo"r s"ch years, three s"ch years, two s"ch years or one s"ch year, &arts I and II of this Sched"le shall ha!e effect as if reference to fo"r financial years, three financial years, two financial years or one financial year, as the case may #e, were s"#stit"ted for references to fi!e financial years. '. Any report reD"ired #y &art II of this Sched"le shall either/ GaH indicate #y way of note any adC"stments as respects the fi "res of any profits or losses or assets and lia#ilities dealt with #y the report which appear to the persons ma;in the report necessaryL or G#H ma;e those adC"stments and indicate that adC"stments ha!e #een made. (. Any report #y acco"ntants reD"ired #y &art II of this Sched"le shall/ GaH #e made #y acco"ntants D"alified "nder this Act for appointment as a"ditors of a companyL and G#H shall not #e made #y any acco"ntant who is an officer or ser!ant or a partner or in the employment of an officer or ser!ant, of the company, or of the companyEs s"#sidiary or holdin company or of a s"#sidiary of the companyEs holdin company. 3or the p"rposes of this cla"se, the expression "officer" shall incl"de a proposed director #"t not an a"ditor.

SCHEDULE V

Ann"al 8et"rn (,ee se$tion 1C9# *ontents and 3orm of Ann"al 8et"rn of a *ompany ha!in a share capital &art I *ontents 1. .he address of the re istered office of the company. 2. A s"mmary specifyin the followin in respect of each class of sharesK GaH the amo"nt of the a"thorised share capital of the company and the n"m#er of shares into which it is di!idedL G#H the n"m#er of shares iss"ed, from the date of commencement of the company to the date of the companyEs last ann"al eneral meetin L GcH the n"m#er of shares s"#scri#ed "pto the date aforesaidL GdH the paid "p share capital "pto that dateL 3. .he total n"m#er of non/con!erti#le, partly con!erti#le and f"lly con!erti#le de#ent"res iss"ed and o"tstandin on the date referred to in s"#/cla"se G#H of cla"se 2. $. &artic"lars of the total amo"nt of the inde#tedness of the company on the date referred to in s"#/cla"se G#H of cla"se 2 in respect of all char es incl"din mort a es which are reD"ired to #e re istered with the 8e istrar "nder this Act. '. A list/ GaH containin the names and addresses of all persons who, on the date of the companyEs last ann"al eneral meetin , are mem#ers or de#ent"re holders of the company and of persons who ha!e ceased to #e mem#ers or de#ent"re holders on or #efore that day and since the date of the ann"al eneral meetin with reference to which the last ret"rn was s"#mitted or in the case of the first ret"rn, since the incorporation of the companyL G#H statin the n"m#er of shares or de#ent"res held #y each of the existin mem#ers or de#ent"re holders, as the case may #e, at the date referred to in s"#/cla"se G#H of cla"se 2, specifyin the n"m#er of shares or de#ent"res transferred since the date of the ann"al eneral meetin with reference to which the last ret"rn was s"#mitted or in the case of the first ret"rn, since the date of the incorporation of the company #y persons who are still mem#ers or de#ent"re holders respecti!ely, the dates or re istration of transfers, and the names of transferees and rele!ant folio containin partic"lars thereofL GcH if the names aforesaid are not arran ed in alpha#etical order ha!in annexed thereto in index s"fficient to ena#le the name of the person therein to #e easily fo"nd. (. &artic"lars specifyin name, nationality, date of #irth, date of appointment, 1lection *ommissionEs Identity *ard 4o., if iss"ed, and residential address with respect to the persons who at the date of the companyEs last ann"al eneral meetin are the directors of the company and with respect to any person who at the date is the mana er or the secretary of the company to ether with all s"ch partic"lars, with respect to those who had ceased to hold s"ch office that is the office of director, mana er or secretary on or #efore the date of the last ann"al eneral meetin and since the date of the ann"al eneral meetin with respect to which the last ret"rn was s"#mitted or in the case of the first ret"rn, since the incorporation of the company. 7. Information whether the shares of the company are listed on a reco nised stoc; exchan e. 3:8% :3 A44<A2 81.<84 :3 A *:%&A4? 6A7I4+ A S6A81 *A&I.A2 A44<A2 81.<84 .he *ompanies Act, 1,'( G1 of 1,'(H Sched"le 7, &art II (,ee se$tion 1C9# 1. 8e istration Details 8e istration 4o. 8e istration Date Date %onth ?ear If ?es, Stoc; exchan e code G.otalsH G8efer *ode list 2H State *ode G8efer *ode 2ist 1H =hether shares listed on reco nised Stoc; 1xchan eGsH ? / ?es, 4 / 4o A 0

A+% 6eld

?/?es 4/4o

Date of A+%O D"e Date Date%onth ?ear

II. 4ame and 8e istered :ffice Address of *ompany *ompany 4ame

Address

.ownO *ity State .elephone with S.D Area *ode 3ax 4"m#er 1mail Address III. *apital Str"ct"re of the *ompany GAmo"nt in 8s. .ho"sandsH A"thorised Share *apital 0rea;/"p .ype of Shares GiH 1D"ity GiiH &reference .otal A"thorised *apital Iss"ed Share *apital 0rea;/"p .ype of Shares GiH 1D"ity GiiH &reference .otal Iss"ed *apital S"#scri#ed Share *apital 0rea;/"p .ype of Shares GiH 1D"ity GiiH &reference .otal S"#scri#ed *apital &aid <p Share *apital 0rea;/"p .ype of Shares 4o. of Shares Amo"nt &aid "p Gin 8s.H 4o. of Shares 4ominal 7al"e Gin 8s.H 4o. of Shares 4ominal 7al"e Gin 8s.H 4o. of Shares 4ominal 7al"e Gin 8s.H 4"m#er &in *ode

GiH 1D"ity GiiH &reference .otal &aid "p *apital De#ent"res 0rea;/"p .ype of De#ent"re GiH 4on/ *on!erti#le GiiH &artly *on!erti#le GiiiH 3"lly *on!erti#le .otal amo"nt I7. DirectorsO %ana erO Secretary Information G&ast and &resentHJ A 8efer cla"se ( of &art I of Sched"le 7B 4ame S"rname %iddle 4ame3irst 4ame 4ationality Desi nation I / Indian 3 N 3orei n * / *hairman/c"m/%ana in Director = / =hole .ime Director, S / Secretary, 8 / %ana er D / Director, % / %ana in director Date of Appointment 1lection *ommission Identity *ard 4o. Gif iss"edH 4ame S"rname %iddle 4ame3irst 4ame 4ationality Desi nation I / Indian 3 N 3orei n * / *hairman/c"m/%ana in Director = / =hole .ime Director, S / Secretary, 8 / %ana er D / Director, % / %ana in director Date of Appointment 1lection *ommission Identity *ard 4o. Gif iss"edH 4ame S"rname %iddle 4ame3irst 4ame 4ationality I / Indian 3 N 3orei n Date of #irth Date %onth ?ear Date of *easin Date %onth ?ear Date %onth ?ear Date of #irth Date %onth ?ear Date of *easin Date %onth ?ear Date %onth ?ear Date of #irth Date %onth ?ear 4o. of De#ent"res 4ominal 7al"e Gin 8s.H

Desi nation

* / *hairman/c"m/%ana in Director = / =hole .ime Director, S / Secretary, 8 / %ana er D / Director, % / %ana in director

Date of Appointment 1lection *ommission Identity *ard 4o. Gif iss"edH 8esidential Address .ownO *ity District State &in *ode 8esidential Address .ownO*ity District State &in *ode 8esidential Address .ownO *ity District State &in *ode

Date of *easin Date %onth ?ear Date %onth ?ear

J4oteK Additional Sheets may #e attached if needed. 7. Details of SharesO De#ent"res 6eld at Date of A+%J 2ed er 3olio of ShareO De#ent"re 6older ShareO De#ent"re 6olderEs 4ame S"rname %iddle 4ame3irst 4ame 3atherEsO 6"s#andEs 4ame .ypes of ShareO De#ent"re 4"m#er of ShareO De#ent"re 6eldO Stoc;, if any Amo"nt per share 1/1D"ity, 2/&reference Shares, 3 / De#ent"res, $ / Stoc;

Gin 8s.H 2ed er 3olio of ShareO De#ent"re 6older ShareO De#ent"re 6olderEs 4ame S"rname %iddle 4ame3irst 4ame 3atherEsO 6"s#andEs 4ame .ypes of ShareO De#ent"re 4"m#er of SharesO De#ent"res 6eldO Stoc;, if any Amo"nt per share Gin 8s.H J4oteK Separate sheet may #e attached if needed. If n"m#er of s"ch shareholders exceed 10, if so desired, a text file may #e s"#mitted on a floppy or a cartrid e tape in the format i!en in Annex"re III. Address .ownO *ity District State &in *ode Address .ownO *ity District State &in *ode Address .ownO *ity District State &in *ode 7I. Details of SharesO De#ent"res .ransfers since date of last A+% Gor in the case of the first ret"rn at the time since the incorporation of the companyHJ Date of &re!io"s A+% Date %onth ?ear 1/1D"ity, 2/&reference Shares, 3 / De#ent"res, $ / Stoc;

Date of 8e istration of .ransfer of shares .ype of transfer 4"m#er of SharesO De#ent"res transferred 2ed er 3olio of .ransferor .ransferorEs 4ame

Date %onth ?ear 1/ 1D"ity, 2 / &reference Shares, 3 / De#ent"res, $ / Stoc; Amo"nt per share Gin 8s.H

S"rname %iddle 4ame3irst 4ame 2ed er 3olio of .ransferee .ransfereeEs 4ame S"rname %iddle 4ame3irst 4ame Date of 8e istration of .ransfer of shares .ype of transfer 4"m#er of SharesO De#ent"res transferred 2ed er 3olio of .ransferor .ransferorEs 4ame S"rname %iddle 4ame3irst 4ame 2ed er 3olio of .ransferee .ransfereeEs 4ame S"rname %iddle 4ame3irst 4ame J4oteK Separate sheet may #e attached if needed. If n"m#er of s"ch transactions exceed 10, if so desired, a text file may #e s"#mitted on a floppy or cartrid e in the format i!en in Annex"re I7. 7II. Inde#tedness of the *ompany GAmo"nt in 8s. .ho"sandsH ASec"red 2oans incl"din interest o"tstandin O accr"ed #"t not d"e for paymentB Amo"nt 7III. 1D"ity Share *apital 0rea;/"p G&ercenta e of .otal 1D"ityH GiH +o!ernment A*entral Q StateGsHB GiiH +o!ernment *ompanies GiiiH &"#lic 3inancial Instit"tions

Date %onth ?ear 1/ 1D"ity, 2 / &reference Shares, 3 / De#ent"res, $ / Stoc; Amo"nt per share Gin 8s.H

Gi!H 4ationalisedO:ther 0an;s G!H %"t"al 3"nds G!iH 7ent"re *apital G!iiH 3orei n 6oldin s G3IIsO 3*sO 33IsO 48IsO :*0sH G!iiiH 0odies *orporate G4ot %entioned A#o!eH GixH DirectorsO 8elati!es of Directors GxH :ther top '0 Share 6olders A:ther than those listed a#o!eB =e certify thatK GaH the ret"rn states the facts as they stood on the date of the ann"al eneral meetin aforesaid, correctly and completelyL G#H since the date of the last ann"al ret"rn the transfer of all shares, de#ent"res, the iss"e of all f"rther certificates of shares and de#ent"res ha!e #een appropriately recorded in the #oo;s maintained for the p"rposeL GcH the whole of the amo"nt of di!idend remainin "npaid or "nclaimed for a period of three years from the date of transfer to the special acco"nt has #een transferred to the +eneral 8e!en"e Acco"nt of the *entral +o!ernment as reD"ired "nder s"#/section G'H of section 20'AL GdH the company has not, since the date of the ann"al eneral meetin with reference to which the last ret"rn was s"#mitted, or in the case of a first ret"rn, since the date of the incorporation of the company, iss"ed any in!itation to the p"#lic to s"#scri#e for any shares or de#ent"res of the companyL GeH where the ann"al ret"rn discloses the fact that the n"m#er of mem#ers of the company exceeds fifty, the excess consists wholly of persons who "nder s"#/cla"se G1H section 3 are not to #e incl"ded in rec;onin the n"m#er of fiftyL GfH since the date of ann"al eneral meetin with reference to which the first ret"rn was s"#mitted or in the case of a first ret"rn since the date of the incorporation of the pri!ate company, no p"#lic company or deemed p"#lic company has or ha!e held twenty/fi!e per cent, or more of its paid "p share capitalL G H the company did not ha!e an a!era e t"rno!er of 8s. ten crores or more d"rin the rele!ant periodL GhH since the date of the ann"al eneral meetin with reference to which the last ann"al ret"rn was s"#mitted or since the date of incorporation of the company, if it is first ret"rn, the company did not hold twenty/fi!e per cent or more of the paid "p share capital of one or more p"#lic companiesL and GiH the pri!ate company did not accept or renew or in!ite deposits from the p"#lic. Si ned DirectorK PPPPPPPPPPPPPPPPPPPPPPPPPP Director O %ana in Director O %ana er O SecretaryK PPPPPPPPPPPPPPPPPPPPPPPPPPP Secretary in whole time practiceK PPPPPPPPPPPPPPPPPPPPPPPP *& 4o.K PPPPPPPPPPPPPPPPPPPPPP 4oteK *ertificates to #e i!en #y a Director and %ana erO Secretary or #y two Directors where there is no mana er or secretary. In the case of a company whose shares are listed on a reco nised stoc; exchan e, the certificates shall also #e si ned #y a secretary in whole time practice. Annex"re I *ode 2ist 1K State *odes

State *ode 01 03 0' 07 0, 11 13 1' 17 20 22 2$ '3 '' '7 ',

State 4ame Andhra &radesh 0ihar 6aryana -amm" Q 9ashmir 9erala %aharashtra %e halaya :rissa 8aCasthan <ttar &radesh Si;;im +oa *handi arh Delhi 2a;shadweep &ondicherry

State *ode 02 0$ 0( 0) 10 12 1$ 1( 1) 21 23 '2 '$ '( ')

State 4ame Assam +"Carat 6imachal &radesh 9arnata;a %adhya &radesh %anip"r 4a aland &"nCa# .amil 4ad" =est 0en al Ar"nachal &radesh Andaman Islands Dadra Islands Daman Q Di" %iForam

Annex"re II *ode 2ist 2K Stoc; 1xchan e *odes 1xchan e *ode A1 A2 A$ A) A1( A32 A($ A12) A2'( A'12 A102$ Stoc; 1xchan e 0om#ay Delhi *alc"tta %adras 0an alore 6ydera#ad Ahmeda#ad &"ne 9anp"r 2"dhiana 4ational Stoc; 1xchan e 1xchan e *ode 01 02 0$ 0) 01( 032 0($ 012) 02'( 0'12 0102$ 020$) Stoc; 1xchan e :.*1I 4a p"r *oim#atore *ochin %& -aip"r 8aC;ot +a"hati 0h"#aneshwar %a adh 7adodra 8aC;ot

4oteK If listed in more than one exchan e, add the respecti!e codes to arri!e at the .otals "nder the same cate ory. 3or example a company listed in 0om#ay, &"ne, 4a p"r and *ochin will fill the exchan e codes as followsK A 1 2 , 0 1 0

Annex"re III SharesO De#ent"res heldK Gformat for floppiesH 1. 8e istration Details

3ield State *ode 8e istration 4o. Date of A+% Date of last A+%

.ype 4"m#er 4"m#er Date Date

2en th 2 ) ) )

3ormatO 7al"e

GDDO %%O ??H GDDO %%O ??H

4oteK .he first text file cid.txt will contain the data for a#o!e field for company identification. 7. Shares held #y Share 6olders 3ield 2ed er folio of Shareholder 4ame of shareholder 3atherEsO 6"s#andEs 4ame 8esidential Address .ownO *ity State &in *ode .ype of ShareO De#ent"re 4"m#er of sharesO De#ent"re Amo"nt per ShareO De#ent"re .ype *haracter *haracter *haracter *haracter *haracter *haracter 4"m#er 4"m#er 4"m#er 4"m#er 2en th ) 20 20 $0 20 20 ( 1 ( ( 1. 1D"ity, 2. &reference. 3. De#ent"res, $. Stoc; S"rname %iddle name 3irst name S"rname %iddle name 3irst name 3ormatO 7al"e

4oteK .he second text file shh.txt will contain the data for a#o!e fields for the shareholdersO de#ent"re holders. .he files may #e s"#mitted in '.2'" or 3.'" floppies Gprefera#ly 3.'"H or (0O1'0 %0 4ormal *artrid e .apes Gmini *artrid es not accepta#leH. .he 3loppiesO *artrid es may #e formatted in D:SO <nix. Annex"re I7 Shares transferredK Gformat for floppiesH I. 8e istration Details 3ield State *ode 8e istration 4o. Date of A+% Date of last A+% 7I. .ransactions after the last A+% 3ield Date of .ransfer of Shares .ype of ShareODe#ent"re 4"m#er of SharesO De#ent"re Amo"nt per ShareO De#ent"re 2ed er folio of .ransferor .ype Date 4"m#er 4"m#er 4"m#er *haracter 2en th ) 1 ( ( ) 3ormatO 7al"e GDDO %%O ??H 1. 1D"ity, 2. &reference. 3. De#ent"res, $. Stoc; .ype 4"m#er 4"m#er Date Date 2en th 2 ( ) ) GDDO %%O ??H GDDO %%O ??H 3ormatO 7al"e

4oteK .he first text file cid.txt will contain the data for a#o!e field for company identification.

4ame of .ransferor 2ed er 3olio of .ransferee 4ame of .ransferee

*haracter *haracter *haracter

20 ) 20

S"rname %iddle name 3irst name S"rname %iddle name 3irst name

6oteK .he second text file sht.txt will contain the data for a#o!e fields for each s"ch share transfer. .he files may #e s"#mitted in '.2'" or 3.'" floppies Gprefera#ly 3.'"H or (0O1'0 %0 4ormal *artrid e .apes Gmini *artrid es not accepta#leH. .he 3loppiesO *artrid es may #e formatted in D:SO <nix.B

SCHEDULE VI
(,ee se$tion 211# 'A&A8. I 3orm of 0alance/sheetB (A.he #alance sheet of a company shall #e either in horiFontal form or !ertical form A. 6:8I@:4.A2 3:8%B 0alance sheet of PPPPPPPPPPPP A6ere enter the name of the *ompanyB As at PPPPPPPPPPPPPPPPP A6ere enter the date as at which the #alance/sheet is made o"t.B Instr"ctions in accordance with which lia#ilities sho"ld #e made o"t 2IA0I2I.I1S ASS1.S Instr"ctions in accordance with which assets sho"ld #e made o"t 3i "res for the c"rrent year 8s. G#H

3i "res for 3i "res for 3i "res for the pre!io"s the c"rrent the pre!io"s year 8s. G#H year 8s. year 8s. G#H G#H JS6A81 *A&I.A2

J3I>1D ASS1.S

J.erms of A"thorised PPP shares of redemption or 8s.PPP each. con!ersion Gif anyH, or any redeema#le preference capital to #e stated, to ether with earliest date of redemption or con!ersion.

Distin "ishin as far as possi#le #etween expendit"re "pon GaH oodwill, G#H land, GcH #"ildin s, GdH leaseholds, GeH railway sidin s, GfH plant and machinery, G H f"rnit"re and fittin s, GhH de!elopment of property, GiH patents, trade mar;s and desi ns, GCH li!e/ stoc; and G;H !ehicles, etc.

J<nder each head the ori inal cost, and the additions thereto and ded"ctions therefrom d"rin the year, and total depreciation written off or pro!ided "p to the end of the year to #e stated. 7A=here the ori inal cost aforesaid and additions and ded"ctions thereto, relate to any fixed asset which has #een acD"ired from a co"ntry o"tside India, and in conseD"ence of a chan e in the rate of exchan e at any time after the acD"isition of s"ch asset, there has #een an increase or red"ction in the lia#ility of the company, as expressed in Indian c"rrency, for ma;in payment towards the whole or a part of the cost of the asset or for repayment of the whole or a part of moneys #orrowed #y the company from any person, directly or indirectly in any forei n c"rrency specifically for the p"rpose of acD"irin the asset G#ein in either case the lia#ility existin immediately #efore the date on which the chan e in the rate of exchan e ta;es effectH, the amo"nt #y which the lia#ility is so increased or red"ced d"rin the year, shall #e added to, or, as the case may #e ded"cted from the cost, and the amo"nt arri!ed at after s"ch addition or ded"ction shall #e ta;en to #e the cost of the fixed asset. 3xplanation 1K .his para raph shall apply in relation to all #alance/ sheets that may #e made o"t as at the (th day of -"ne, 1,((, or any day thereafter and where, at the date of iss"e of the notification of the +o!ernment of India, in the %inistry of Ind"strial

S&artic"lars of any option on "n/iss"ed share capital to #e specified.

SIss"ed Gdistin "ishin #etween the !ario"s classes of capital and statin the partic"lars specified #elow, in respect of each classH PPP shares of 8s.PPPP each SS"#scri#ed Gdistin "ishin #etween the !ario"s classes of *apital and statin the partic"lars specified #elow in respect of each class.H GcH PP shares of 8s.PP each. 8s.PPPPP called "p. :f the a#o!e shares PPPPPP shares are allotted as f"lly paid/"p p"rs"ant to a contract witho"t payments #ein recei!ed in cash.

S&artic"lars of the different classes of preference shares to #e i!en.

)ASSpecify the so"rce from which #on"s shares are iss"ed, e. ., capitalisation of profits or 8eser!es or from Share &remi"m Acco"nt.B )ASAny capital profit on reiss"e of forfeited shares sho"ld #e transferred to *apital 8eser!e.

,A:f the a#o!e shares PPP shares are allotted as f"lly paid/"p #y way of #on"s sharesSB

2essK calls "npaidK 1AGiH 0y mana in a ent or secretaries and treas"rers and where the mana in a ent or secretaries and treas"rers are a firm, #y the partners thereof, and where the mana in a ent or secretaries and treas"rers are a pri!ate company #y the directors or mem#ers of that company.B GiiH 0y directors. GiiiH 0y others. 10ASAddK 3orfeited shares Gamo"nt ori inally paid "pHB.

JAdditions and ded"ctions since last #alance sheet to #e shown "nder each of the specified heads.

K:3S3:93S A6 S>:P4>S ,AG1H *apital 8eser!es. G2H *apital 8edemption 8eser!e.

"693S0(360S

JA re ate amo"nt of companyIs D"oted Showin nat"re of in!estments and mode of in!estment and also the mar;et !al"e thereof !al"ation, for example, cost or mar;et !al"e and shall #e shown. distin "ishin #etween/ A re ate amo"nt of

.he word "f"nd" in relation to any "8eser!e" sho"ld #e "sed only where s"ch 8eser!e is specifically represented #y earmar;ed in!estments.

G3H Share &remi"m Acco"nt GccH. G$H :ther 8eser!es specifyin the nat"re of each 8eser!e and the amo"nt in respect thereof.

JG1H In!estments in +o!ernment or .r"st Sec"rities.

companyIs "nD"oted in!estments shall also #e shown. 12AAll "n"tilised monies o"t of the iss"e m"st #e separately disclosed in the 0alance Sheet of the company indicatin the form in which s"ch "n"tilised f"nds ha!e #een in!ested.B

JG2H In!estments in shares, de#ent"res or #onds Gshowin separately shares f"lly paid/"p and partly paid/ 2essK De#it #alance in "p and also profit and loss acco"nt distin "ishin the Gif anyH GhH. different classes of shares G'H S"rpl"s i.e., #alance and showin also in in profit and loss acco"nt similar details after pro!idin for in!estments in shares, proposed allocations, de#ent"res or #onds of namelyK/ s"#sidiary companies. Di!idend, 0on"s or G3H Immo!a#le 8eser!es. properties. G(H &roposed additions to 13AG$H In!estments in the 8eser!es. *apital of partnership firms.B G7H Sin;in 3"nds.B 12AG'H 0alance of "n"tilised monies raised #y iss"e.B S1*<81D 2:A4SK *<8814. ASS1.S, 2:A4S A4D AD7A4*1SK A. *<8814. ASS1.S G1H Interest accr"ed on In!estments SG2H Stores and spare parts. ,AG3H 2oose .ools.B SG$H Stoc;/in/trade. SSG'H =or;s/in/ &ro ress. TG(H S"ndry de#tors/

,A2oans from Directors, 1AJJJB, %ana er sho"ld #e shown separately.

SG1H De#ent"res SS SG2H 2oans and Ad!ances from 0an;s. SG3H 2oans and Interest accr"ed and Ad!ances from d"e on Sec"red s"#sidiaries. 2oans sho"ld #e SG$H :ther 2oans and incl"ded "nder the Ad!ances. appropriate s"#/ heads "nder the head "S1*<81D 2:A4S". S.he nat"re of the sec"rity to #e specified in each case. =here loans ha!e #een "aranteed #y 1AJJJB mana ers andOor directors, a mention thereof shall also #e made and the a re ate amo"nt of s"ch loans "nder each head SS.erms of redemption or con!ersion Gif anyH of de#ent"res iss"ed

S%ode of !al"ation of stoc; shall #e stated and the amo"nt in respect of raw material shall also #e stated separately where practica#le.

SS%ode of !al"ation of wor;s/in/pro ress shall #e stated. TIn re ard to S"ndry De#tors partic"lars to #e i!en separately of/ GaH GaH De#ts o"tstandin de#ts considered ood for a period exceedin and in respect of which six months. the company is f"lly sec"redL and G#H de#ts G#H :ther de#ts. considered ood for ,A2essK &ro!isionB which the company holds 1$AG7AH *ash #alance on no sec"rity other than the hand. de#torIs personal sec"rityL and GcH de#ts G70H 0an; #alances/ considered do"#tf"l or GaH with Sched"led #ad. 0an;s, and De#ts d"e #y directors or G#H with others. other officers of the company or any of them either se!erally or Cointly with any other person or de#ts d"e #y firms or pri!ate companies

to #e stated to ether with earliest date of redemption or con!ersion.

respecti!ely in which any director is a partner or a director or a mem#ers to #e separately stated. 1$ADe#ts d"e from other companies "nder the same mana ement within the meanin of s"#/ section G10H of section 370, to #e disclosed with the names of the *ompanies. .he maxim"m amo"nt d"e #y directors or other officers of the company at any time d"rin the year to #e shown #y way of a note. .he ,Apro!isionsB to #e shown "nder this head sho"ld not exceed the amo"nts of de#ts stated to #e considered do"#tf"l or #ad and any s"rpl"s of s"ch 2Apro!isionB if already created, sho"ld #e shown at e!ery closin "nder "8eser!es and S"rpl"s" Gin the lia#ilities sideH "nder a separate s"#/head "8eser!e for Do"#tf"l or 0ad De#ts". 2AJIn re ard to #an; #alances, partic"lars to #e i!en separately of/ GaH the #alances lyin with Sched"led 0an;s on c"rrent acco"nts, call acco"nts and deposit acco"ntsL G#H the name of the #an;ers other than Sched"led 0an;s and the #alance lyin with each s"ch #an;er on c"rrent acco"nts, call acco"nts and deposit acco"nt the maxim"m amo"nt o"tstandin at any time d"rin the year from each s"ch #an;erL and GcH the nat"re of the interest, if any, of any director or his relati!e or the 3AJJJB in each of the #an;ers Gother than Sched"led 0an;sH referred to in G#H a#o!e.B

1'AAll "n"tilised monies o"t of the iss"e m"st #e separately disclosed in the 0alance Sheet of the company indicatin the form in which s"ch "n"tilised f"nds ha!e #een in!ested.B 0.2:A4S A4D AD7A4*1S G)H 1(AGaHB Ad!ances and loans to s"#sidiaries. 17AG#H Ad!ances and loans to partnership firms in which the company or any of its s"#sidiaries is a partner.B G,H 0ills of 1xchan e. G10H Ad!ances reco!era#le in cash or in ;ind or for !al"e to #e recei!ed, e. ., 8ates, .axes, Ins"rance, etc. 1AG11H JJJB. G12H 0alances with *"stoms, &ort .r"st, etc. Gwhere paya#le on demandH. <4S1*<81D 2:A4SK %IS*122A41:<S 1>&14DI.<81 Gto the extent not written off 1,Aor adC"stedBHK G1H &reliminary expenses. G2H 1xpenses incl"din commission or #ro;era e on "nderwritin or s"#scription of shares or de#ent"res. G3H Disco"nt allowed on the iss"e of shares or de#ent"res. G$H Interest paid o"t of capital d"rin constr"ction Galso statin the rate or interest.H G'H De!elopment expendit"re not adC"sted. G(H :ther items Gspecifyin nat"reH. J.he a#o!e instr"ctions re ardin "S"ndry De#tors" apply to "2oans and Ad!ances" also.

S)A2oans from directors, 3AJJJB mana er sho"ld #e shown separately. Interest accr"ed ant d"e on <nsec"red 2oans sho"ld #e incl"ded "nder the appropriate s"#/ heads "nder the head "<nsec"red 2oans".B S=here loans ha!e #een "aranteed #y 3AJJJB mana ers andO or directors, a mention thereof shall #e made and also a re ate amo"nt of s"ch loans "nder each head. JSee note GdH at foot of 3orm

G1H 3ixed Deposits. SG2H 2oans and Ad!ances from s"#sidiaries. SJG3H Short .erm 2oans and Ad!ancesK GaH 3rom 0an;s. G#H 3rom others. G$H :ther 2oans and Ad!ancesK GaH 3rom 0an;s. G#H 3rom others.

*<8814. 2IA0I2I.I1S A4D &8:7ISI:4SK

,AS&8:3I. A4D 2:SS A**:<4..B

20ASShow here the de#it #alance of profit and loss acco"nt carried forward after ded"ction of the "ncommitted reser!es, if any.B

1)A.he nameGsH of the small scale ind"strial "nderta;in GsH to whom the *ompany owe a s"m exceedin 8s. 1 la;h which is o"tstandin for more than 30 days, are to #e disclosed.B

A. *<8814. 2IA0I2I.I1S 1$AG1H Acceptances. G2H S"ndry creditors. 1)AGiH .otal o"tstandin d"es of small scale ind"strial "nderta;in GsHL and GiiH .otal o"tstandin d"es of creditors other than small scale ind"strial "nderta;in sGsH.B G3H S"#sidiary companies. G$H Ad!ance payments and "nexpired disco"nts for the portion for which !al"e has still to #e i!en e. ., in the case of the followin classes of companiesK/ 4ewspaper, 3ire Ins"rance, .heatres, *l"#s, 0an;in , Steamship *ompanies, etc. G'H <nclaimed Di!idends. G(H :ther 2ia#ilities Gif anyH. G7H Interest accr"ed #"t not d"e on loans.B 0. &8:7ISI:4S ,AG)H &ro!isions for taxation. G,H &roposed di!idends. G10H 3or contin encies. G11H 3or pro!ident f"nd scheme. G12H 3or ins"rance, pension and similar staff #enefit schemes. G13H :ther pro!isions.B A foot/note to the #alance/sheet may #e added to show separatelyK

G1H *laims a ainst the company not ac;nowled ed as de#ts. G2H <ncalled lia#ility on shares partly paid. .he period for which the di!idends are in arrear of if there is more than one class of shares, the di!idends on each s"ch class are in arrear, shall #e stated. .he amo"nt shall #e stated #efore ded"ction of income/tax, except that in the case of tax/free di!idends the amo"nt shall #e shown free of income/tax and the fact that it is so shown shall #e stated. .he amo"nt of any "arantees i!en #y the company on #ehalf of Directors or other officers of the company shall #e stated and where practica#le, the eneral nat"re and amo"nt of each s"ch contin ent lia#ility, if material, shall also #e specified. SSG3H Arrears of fixed c"m"lati!e di!idends. G$H 1stimated amo"nt of contracts remainin to #e exec"ted on capital acco"nt and not pro!ided for. SG'H :ther money for which the company is contin ently lia#le.

+eneral instr"ctions for preparation of #alance sheet./ GaH .he information reD"ired to #e i!en "nder any of the items or s"#/items in this 3orm, if it cannot #e con!eniently incl"ded in the #alance sheet itself, shall #e f"rnished in a separate Sched"le or Sched"les to #e annexed to and to form part of the #alance sheet. .his is recommended when items are n"mero"s. G#H 4aye &aise can also #e i!en in addition to 8"pees, if desired. GcH In the case of ,As"#sidiary companiesB the n"m#er of shares held #y the holdin company as well as #y the "ltimate holdin company and its s"#sidiaries m"st #e separately stated. .he a"ditor is not reD"ired to certify the correctness of s"ch shareholdin s as certified #y the mana ement. 2AGccH .he item "Share &remi"m Acco"nt" shall incl"de details of its "tilisation in the manner pro!ided in section 7) in the year of "tilisation.B GdH Short .erm 2oans will incl"de those which are d"e for not more than one year as at the date of the #alance/ sheet. GeH Depreciation written off or pro!ided shall #e allocated "nder the different asset heads and ded"cted in arri!in at the !al"e of 3ixed Assets. GfH Di!idends declared #y s"#sidiary companies after the date of the #alance sheet ,Asho"ld not #e incl"dedB "nless they are in respect of period which closed on or #efore the date of the #alance sheet.

G H Any reference to #enefits expected from contracts to the extent not exec"ted shall not #e made in the #alance sheet #"t shall #e made in the 0oardEs report. 2AGhH .he de#it #alance in the &rofit and 2oss Acco"nt shall #e shown as a ded"ction from the "ncommitted reser!es, if any.B GiH As re ards 2oans and Ad!ances, 3Aamo"nts d"e #y the %ana in A ents or Secretaries and .reas"rers, either se!erally or Cointly with any other persons to #e separately statedLB ,Athe amo"nts d"e from other companies "nder the same mana ement within the meanin of s"#/section G10H of section 370 sho"ld also #e i!en with the names of the companiesB the maxim"m amo"nt d"e from e!ery one of these at any time d"rin the year m"st #e shown. GCH &artic"lars of any redeemed de#ent"res which the company has power to iss"e sho"ld #e i!en. G;H =here any of the companyEs de#ent"res are held #y a nominee or a tr"stee for the company, the nominal amo"nt of the de#ent"res and the amo"nt at which they are stated in the #oo;s of the company shall #e stated. 21AGlH A statement of in!estments Gwhether shown "nder "In!estment" or "nder "*"rrent Assets" as stoc;/in/ tradeH separately classifyin trade in!estments and other in!estments sho"ld #e annexed to the #alance sheet, showin the names of the #odies corporate Gindicatin separately the names of the #odies corporate "nder the same mana ementH in whose shares or de#ent"res, in!estments ha!e #een made Gincl"din all in!estments whether existin or not, made s"#seD"ent to the date as at which the pre!io"s #alance sheet was made o"tH and the nat"re and extent of the in!estment L so made in each s"ch #ody corporateL pro!ided that in the case of an in!estment company that is to say, a company whose principal #"siness is the acD"isition of shares, stoc;, de#ent"res or other sec"rities, it shall #e s"fficient if the statement shows only the in!estments existin on the date as at which the #alance sheet has #een made o"t. In re ard to the in!estments in the capital of partnership firms, the names of the firms G=ith the names of all their partners total capital and the shares of each partnerH shall #e i!en in the statement.B GmH If, in the opinion of the 0oard, any of the c"rrent assets, loans and ad!ances ha!e not a !al"e on realisation in the ordinary co"rse of #"siness at least eD"al to the amo"nt at which they are stated, the fact that the 0oard is of that opinion shall #e stated. GnH 1xcept in the case of the first #alance sheet laid #efore the company after the commencement of the Act, the correspondin amo"nts for the immediately precedin financial year for all items shown in the #alance sheet shall #e also i!en in the #alance sheet .he reD"irement in this #ehalf shall, in the case of companies preparin D"arterly or half/yearly acco"nts, etc., relate to the #alance sheet for the correspondin date in the pre!io"s year. GoH .he amo"nts to #e shown "nder S"ndry De#tors shall incl"de the amo"nts d"e in respect of oods sold or ser!ices rendered or in respect of other contract"al o#li ations #"t shall not incl"de the amo"nts which are in the nat"re of loans or ad!ances. ,AGpH *"rrent acco"nts with directors, 3AJJJB and %ana er, whether they are in credit or de#it, shall #e shown separately.B 1)AGDH A small scale ind"strial "nderta;in has the same meanin as assi ned to it "nder cla"se GCH of section 3 of the Ind"stries GDe!elopment and 8e "lationH Act, 1,'1.B

1A0. 718.I*A2 3:8% 4ame of the *ompany PPPPPPPPPPPPPPPPPPPPPPPPPPPPPP 0alance Sheet as at PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP Sched"le 4o. ". Sources o! !undsJ G1H , are olderIs )unds GaH *apital G#H 8eser!es and S"rpl"s G2H .oan )unds GaH Sec"red loans 3i "res as at the end of c"rrent 3i "res as at the end of financial year pre!io"s financial year

G#H <nsec"red loans .:.A2K "". Applications o! !undsJ G1H 8ixed assets GaH +ross #loc; G#H 2ess depreciation GcH 4et #loc; GdH *apital wor;/in/pro ress G2H In0estments G3H !urrent assets% loans% and ad0an$es3 GaH In!entories G#H S"ndry de#tors GcH *ash and #an; #alances GdH :ther c"rrent assets GeH 2oans and ad!ances .ess3 !urrent liabilities and pro0isions3 GaH 2ia#ilities G#H &ro!isions 9et $urrent assets G$H GaH %iscellaneo"s expendit"re to the extent not written off or adC"sted G#H &rofit and 2oss acco"nt .:.A2K 9otes(/ 1. Details "nder each of the a#o!e items shall #e i!en in separate Sched"les. .he Sched"les shall incorporate all the information reD"ired to #e i!en "nder A/6oriFontal 3orm read with notes containin eneral instr"ctions for preparation of #alance sheet. 2. .he Sched"les, referred to a#o!e, acco"ntin policies and explanatory notes that may #e attached shall form an inte ral part of the #alance sheet. 3. .he fi "res in the #alance sheet may #e ro"nded off to the nearest "000" or "00" as may #e con!enient or may #e expressed in terms of decimals of tho"sands. $. A foot/note to the #alance sheet may #e added to show separately contin ent lia#ilities. &A8. II :eDuirements as to Pro!it and 4oss Account 1. .he pro!isions of this &art shall apply to the income and expendit"re acco"nt referred to in s"#/section G2H of section 210 of the Act, in li;e manner as they apply to a profit and loss acco"nt, #"t s"#Cect to the modification of references as specified in that s"#/section. 2. .he profit and loss acco"nt/ GaH shall #e so made o"t as clearly to disclose the res"lt of the wor;in of the company d"rin the period co!ered #y the acco"ntL and G#H shall disclose e!ery material feat"re, incl"din credits or receipts and de#its or expenses in respect of non/ rec"rrin transactions or transactions of an exceptional nat"re. 3. .he profit and loss acco"nt shall set o"t the !ario"s items relatin to the income and expendit"re of the company arran ed "nder the most con!enient headsL and in partic"lar, shall disclose the followin information in respect of the period co!ered #y the acco"ntK/ GiH 2AGaH .he t"rno!er, that is, the a re ate amo"nt for which sales are effected #y the company, i!in the amo"nt of sales in respect of each class of oods dealt with #y the company, and indicatin the D"antities of s"ch sales for each class separately.B 3AG#H *ommission paid to sole sellin a ents within the meanin of section 2,$ of the Act.

GcH *ommission paid to other sellin a ents. GdH 0ro;era e and disco"nt on sales, other than the "s"al trade disco"nt.B 2AGiiH GaH In the case of man"fact"rin companies,/ G1H .he !al"e of the raw materials cons"med, i!in item/wise #rea;/"p and indicatin the D"antities thereof. In this #rea;/"p, as far as possi#le, all important #asic raw materials shall #e shown as separate items. .he intermediates or components proc"red from other man"fact"rers may, if their list is too lar e to #e incl"ded in the #rea;/"p, #e ro"ped "nder s"ita#le headin s witho"t mentionin the D"antities, pro!ided all those items which in !al"e indi!id"ally acco"nt for 10 per cent or more of the total !al"e of the raw material cons"med shall #e shown as separate and distinct items with D"antities thereof in the #rea;/"p. G2H .he openin and closin stoc;s of oods prod"ced, i!in #rea;/"p in respect of each class of oods and indicatin the D"antities thereof. G#H In the case of tradin companies, the p"rchases made and the openin and closin stoc;s, i!in #rea;/"p in respect of each class of oods trade in #y the company and indicatin the D"antities thereof. GcH In the case of companies renderin or s"pplyin ser!ices, the ross income deri!ed from ser!ices rendered or s"pplied. GdH In the case of a company, which falls "nder more than one of the cate ories mentioned in GaH, G#H and GcH a#o!e, it shall #e s"fficient compliance with the reD"irements herein if the total amo"nts are shown in respect of the openin and closin stoc;s, p"rchases, sales and cons"mption of raw material with !al"e and D"antitati!e #rea;/"p and the ross income from ser!ices rendered is shown. GeH In the case of other companies, the ross income deri!ed "nder different heads. 9ote 1./ .he D"antities of raw materials p"rchases, stoc;s, and the t"rno!er shall #e expressed in D"antitati!e denominations in which these are normally p"rchased or sold in the mar;et. 9ote 2./ 3or the p"rpose of items GiiHGaH, GiiHG#H and GiiHGdH, the items for which the company is holdin separate ind"strial licences, shall #e treated as separate classes of oods, #"t where a company has more than one ind"strial licence for prod"ction of the same item at different places or for expansion of the licensed capacity, the item co!ered #y all s"ch licences shall #e treated as one class. In the case of tradin companies, the imported items shall #e classified in accordance with the classification adopted #y the *hief *ontroller of Imports and 1xports in rantin the import licences. 9ote #./ In i!in the #rea;/"p of p"rchases, stoc;s and t"rno!er, items li;e spare parts and accessories, the list of which is too lar e to #e incl"ded in the #rea;/"p, may #e ro"ped "nder s"ita#le headin s witho"t D"antities, pro!ided all those items, which in !al"e indi!id"ally acco"nt for 10 per/cent or more of the total !al"e of the p"rchases, stoc;s, or t"rno!er, as the case may #e, are shown as separate and distinct items with D"antities thereof in the #rea;/"p.B GiiiH In the case of all concerns ha!in wor;s/in/pro ress, the amo"nts for which $As"ch wor;s ha!e #een completedB at the commencement and at the end of the acco"ntin period. Gi!H .he amo"nt pro!ided for depreciation, renewals or dimin"tion in !al"e of fixed assets. If s"ch pro!ision is not made #y means of a depreciation char e, the method adopted for ma;in s"ch pro!ision. If no pro!ision is made for depreciation, the fact that no pro!ision has #een made shall #e stated 'Aand the D"ant"m of arrears of depreciation comp"ted in accordance with section 20'G2H of the Act shall #e disclosed #y way of a note.B G!H .he amo"nt of interest on the companyEs de#ent"res and other fixed loans, that is to say, loans for fixed periods, statin separately the amo"nt of interest, if any, (Apaid or paya#leB to the mana in director 7AJ J JB and the mana er, if any. G!iH .he amo"nt of char e for Indian income/tax and other Indian taxation on profits, incl"din , where practica#le, with Indian income/tax any taxation imposed elsewhere to the extent of the relief, if any, from Indian income/tax and distin "ishin , where practica#le, #etween income/tax and other taxation. G!iiH .he 3Aamo"nts reser!ed for/B GaH repayment of share capitalL and G#H repayment of loans. G!iiiH GaH .he a re ate, if material, of any amo"nts set aside or proposed to #e set aside, to reser!es, #"t not incl"din pro!isions made to meet any specific lia#ility, contin ency or commitment ;nown to exist at the date as at which the #alance/sheet is made "p. G#H .he a re ate, if material, of any amo"nts withdrawn from s"ch reser!es.

GixH GaH .he a re ate, if material, of the amo"nts to set aside to pro!isions made for meetin specific lia#ilities, contin encies or commitments. G#H .he a re ate, if material, of the amo"nts withdrawn from s"ch pro!isions, as no lon er reD"ired. GxH 1xpendit"re inc"rred on each of the followin items, separately for each itemK/ GaH *ons"mption of stores and spare parts. G#H &ower and f"el. GcH 8ent. GdH 8epairs to #"ildin s. GeH 8epairs to machinery. GfH G1H Salaries, wa es and #on"s. G2H *ontri#"tion to pro!ident and other f"nds. G3H =or;men and staff welfare expenses (Ato the extent not adC"sted from any pre!io"s pro!ision or reser!e. 9ote ,G1H./Information in respect of this item sho"ld also #e i!en in the #alance sheet "nder the rele!ant pro!ision or reser!e acco"nt.B 9ote 2. ,AJ J JB G H Ins"rance. GhH 8ates and taxes, excl"din taxes on income. GiH %iscellaneo"s expensesK 10A&ro!ided that any item "nder which the expenses exceed one per cent of the total re!en"e of the company or 8s. ',000 whiche!er is hi her shall #e shown as a separate and distinct item a ainst an appropriate acco"nt head in the &rofit and 2oss Acco"nt and shall not #e com#ined with any other item to #e shown <nder "%iscellaneo"s expenses".B GxiH GaH .he amo"nt of income from in!estments, distin "ishin #etween trade in!estments and other in!estments. G#H :ther income #y way of interest, specifyin the nat"re of the income. GcH .he amo"nt of income/tax ded"cted if the ross income is stated "nder s"#/para raphs GaH and G#H a#o!e. GxiiH GaH &rofits or losses on in!estments 10Ashowin distinctly the extent of the profits and losses earned or inc"rred on acco"nt of mem#ership of a partnership firmB (Ato the extent not adC"sted from any pre!io"s pro!ision or reser!e. 9ote./ Information in respect of this item sho"ld also #e i!en in the #alance sheet "nder the rele!ant pro!ision or reser!e acco"nt.B G#H &rofits or losses in respect of transactions of a ;ind, not "s"ally "nderta;en #y the company or "nderta;en in circ"mstances of an exceptional or non/rec"rrin nat"re, if material in amo"nt. GcH %iscellaneo"s income. GxiiiH GaH Di!idends from s"#sidiary companies. G#H &ro!isions for losses of s"#sidiary companies. Gxi!H .he a re ate amo"nt of the di!idends paid, and proposed, and statin whether s"ch amo"nts are s"#Cect to ded"ction of income/tax or not. Gx!H Amo"nt, if material, #y which any items shown in the profit and loss acco"nt are affected #y any chan e in the #asis of acco"ntin . 12A$. .he profit and loss acco"nt shall also contain or i!e #y way of a note detailed information, showin separately the followin payments pro!ided or made d"rin the financial year to the directors Gincl"din mana in directorsH, 13AJJJB or mana er, if any, #y the company, the s"#sidiaries of the company and any other personK/ GiH mana erial rem"neration "nder section 1,) of the Act paid or paya#le d"rin the financial year to the directors Gincl"din mana in directorsH, 13AJJJB mana er, if anyL GiiH 11AJJJBL GiiiH 11AJJJBL Gi!H 11AJJJBL 1$AG!iH other allowances and commission incl"din "arantee commission Gdetails to #e i!enHBL

G!iiH any other perD"isites or #enefits in cash or in ;ind Gstatin approximate money !al"e where practica#leHL G!iiiH pensions, etc.,/ GaH pensions, G#H rat"ities, GcH payments from pro!ident f"nds, in excess of own s"#scriptions and interest thereon, GdH compensation for loss of office, GeH consideration in connection with retirement from office.B $A. .he profit and loss acco"nt shall contain or i!e #y way of a note a statement showin the comp"tation of net profits in accordance with section 3$, of the Act with rele!ant details of the calc"lation of the commissions paya#le #y way of &ercenta e of s"ch profits to the directors Gincl"din mana in directorsH, 13AJJJB or mana er Gif anyH. $0. .he profit and loss acco"nt shall f"rther contain or i!e #y way of a note detailed information in re ard to amo"nts paid to the a"ditor, 1$Awhether as fees, expenses or otherwise for ser!ices rendered/B GaH as a"ditorL 1'AJJJB 1(AG#H as ad!iser, or in any other capacity, in respect of/ GiH taxation mattersL GiiH company law mattersL GiiiH mana ement ser!icesL and GcH in any other mannerB.B 17A$*. In the case of a man"fact"rin companies, the profit and loss acco"nt shall also contain, #y way of a note in respect of each class of oods man"fact"red, detailed D"antitati!e information in re ard to the followin , namelyK/ GaH the licensed capacity Gwhere licence is in forceHL G#H the installed capacityL and GcH the act"al prod"ction. 9ote 1./ .he licensed capacity and installed capacity of the company as on the last date of the year to which the profit and loss acco"nt relates, shall #e mentioned a ainst items GaH and G#H a#o!e, respecti!ely. 9ote 2./ A ainst item GcH, the act"al prod"ction in respect of the finished prod"cts meant for sale shall #e mentioned. In cases where semi/processed prod"cts are also sold #y the company, separate details thereof shall #e i!en. 9ote 3./ 3or the p"rpose of this para raph, the items for which the company is holdin separate ind"strial licences shall #e treated as separate classes of oods #"t where a company has more than one ind"strial licence for prod"ction of the same item at different places or for expansion of the licensed capacity, the item co!ered #y all s"ch licences shall #e treated as one class. $D. .he profit and loss acco"nt shall also contain #y way of a note the followin information, namelyK/ GaH !al"e of imports calc"lated on *.I.3 #asis #y the company d"rin the financial year in respect ofK/ GiH raw materialsL GiiH components and spare partsL GiiiH capital oodsL G#H expendit"re in forei n c"rrency d"rin the financial year on acco"nt of royalty, ;now/how, professional, cons"ltation fees, interest, and other mattersL GcH !al"e of all imported raw materials, spare parts and components cons"med d"rin the financial year and the !al"e of all indi eno"s raw materials, spare parts and components similarly cons"med and the percenta e of each to the total cons"mptionL GdH the amo"nt remitted d"rin the year in forei n c"rrencies on acco"nt of di!idends, with a specific mention of the n"m#er of non/resident shareholders, the n"m#er of shares held #y them on which the di!idends relatedL GeH earnin s in forei n exchan e classified "nder the followin heads, namelyK/ GiH export of oods calc"lated on 3.:.0. #asisL GiiH royalty, ;now/how, professional and cons"ltation feesL GiiiH interest and di!idendL

Gi!H other income, indicatin the nat"re thereof.B '. .he *entral +o!ernment may direct that a company shall not #e o#li ed to show the amo"nt set aside to pro!isions other than those relatin to depreciation, renewal or dimin"tion in !al"e of assets, if the *entral +o!ernment is satisfied that the information sho"ld not #e disclosed in the p"#lic interest and wo"ld preC"dice the company, #"t s"#Cect to the condition that in any headin statin an amo"nt arri!ed at after ta;in into acco"nt the amo"nt set aside as s"ch, the pro!ision shall #e so framed or mar;ed as to indicate that fact. (. G1H 1xcept in the case of the first profit and loss acco"nt laid #efore the company after the commencement of the Act, the correspondin amo"nts for the immediately precedin financial year for all items shown in the profit and loss acco"nt shall also #e i!en in the profit and loss acco"nt. G2H .he reD"irement in s"#/cla"se G1H shall, in the case of companies preparin D"arterly or half/yearly acco"nts, relate to the profit and loss acco"nt for the period which entered on the correspondin date of the pre!io"s year. &A8. III "nterpretation 7. G1H 3or the p"rposes of &arts I and II of this Sched"le, "nless the context otherwise reD"ires,/ GaH the expression "pro!ision" shall, s"#Cect to s"#/cla"se G2H of this cla"se, mean any amo"nt written off or retained #y way of pro!idin for depreciation renewals or dimin"tion in !al"e of assets, or retained #y way of pro!idin for any ;nown lia#ility of which the amo"nt cannot #e determined with s"#stantial acc"racyL G#H the expression "reser!e" shall not, s"#Cect as aforesaid, incl"de any amo"nt written off or retained #y way of pro!idin for depreciation, renewals or dimin"tion in !al"e of assets or retained #y way of pro!idin for any ;nown lia#ilityL GcH the expression "capital reser!e" shall not incl"de any amo"nt re arded as free for distri#"tion thro" h the profit and loss acco"ntL and the expression "re!en"e reser!e" shall mean any reser!e other than a capital reser!eL and in this s"#/cla"se the expression "lia#ility" shall incl"de all lia#ilities in respect of expendit"re contracted for and all disp"ted or contin ent lia#ilities. G2H =here/ GaH any amo"nt written off or retained #y way of pro!idin for depreciation, renewals or dimin"tion in !al"e of assets, not #ein an amo"nt written off in relation to fixed assets #efore the commencement of this ActL or G#H any amo"nt retained #y way of pro!idin for any ;nown lia#ilityL is in excess of the amo"nt which in the opinion of the directors is reasona#ly necessary for the p"rpose, the excess shall #e treated for the p"rposes of this Sched"le as a reser!e and not as a pro!ision. ). 3or the p"rposes aforesaid, the expression "D"oted in!estment" means an in!estment as respects which there has #een ranted a D"otation or permission to deal on a reco nised stoc; exchan e, and the expression ""nD"oted in!estment" shall #e constr"ed accordin ly. 1)A&A8. I7 0alance Sheet A#stract and *ompanyEs +eneral 0"siness &rofile I. 8e istration Details 8e istration 4o. 0alance Sheet Date Date %onth ?ear II. *apital raised d"rin the year GAmo"nt in 8s. .ho"sandsH &"#lic Iss"e 0on"s Iss"e 8i hts Iss"e &ri!ate &lacement State *ode G8efer *ode 2istH

III. &osition of %o#ilisation and Deployment of 3"nds GAmo"nt in 8s. .ho"sandsH .otal 2ia#ilities .otal Assets

So"rce of 3"nds &aid/"p *apital Sec"red 2oans Application of 3"nds 4et 3ixed Assets 4et *"rrent Assets Acc"m"lated 2osses I7. &erformance of *ompany GAmo"nt in 8s. .ho"sandsH ."rno!er S/ &rofitO 2oss 0efore .ax .otal 1xpendit"re S/ &rofitO 2oss After .ax In!estments %isc. 1xpendit"re 8eser!es Q S"rpl"s <nsec"red 2oans

G&lease tic; appropriate #ox S for profit, / for lossH 1arnin &er Share in 8s. Di!ided rate R

7. +eneric 4ames of .hree &rincipal &rod"ctsO Ser!ices of *ompany Gas per monetary termsH Item *ode 4o. GI.* *odeH &rod"ct Description

Item *ode 4o. GI.* *odeH &rod"ct Description

Item *ode 4o. GI.* *odeH &rod"ct Description

K 6oteJ for I.* *ode of &rod"cts please refer to the p"#lication Indian .rade *lassification #ased on harmoniFed commodity description and codin system #y %inistry of *ommerce, Directorate +eneral of *ommercial Intelli ence Q Statistics, *alc"tta/700001 Annexure "

Code 4ist 1J State Codes State *ode 01 03 0' 07 0, 11 13 1' 17 20 22 2$ '3 '' '7 ', State 4ame Andhra &radesh 0ihar 6aryana -amm" and 9ashmir 9erala %aharashtra %e halaya :rissa 8aCasthan <tter &radesh Si;;im +oa *handi arh Delhi 2a;shadweep &ondicherry.B State *ode 02 0$ 0( 0) 10 12 1$ 1( 1) 21 23 '2 '$ '( ') State 4ame Assam +"Carat 6imachal &radesh 9arnata;a %adhya &radesh %anip"r 4a aland &"nCa# .amil 4ad" =est 0en al Ar"nachal &radesh Andaman Islands Dadra Islands Daman QDi" %iForam

ASched"les 7II and 7III, relatin to mana in a ents, secretaries and treas"rers omitted #y Act 4o. 17 of 1,(,, w.e.f. 3rd. April, 1,70B

SCHEDULE VII & VIII

Sched"les 7II and 7III, relatin to mana in a ents, secretaries and treas"rers omitted #y Act 4o. 17 of 1,(,, w.e.f. 3rd. April, 1,70B

SCHEDULE IX
3orm of &roxy ASee Article (2 of the .a#le A and also section 17(G(HB IK +eneral 3orm "...................... 4ame of *ompany IO=e PPPPP of PPPPP in the district of, PPPPP #ein a mem#erO mem#ers of the a#o!e/named *ompany here#y appoint PPPPPP of PPPPPPPPPP in the district of PPPPPPPPPP or failin him,PPPP of PPPP in the district of PPPPPP as myO :"r proxy to !ote for meO "s on myO o"r #ehalf at the ann"al eneral meetin O eneral meetin Gnot #ein an ann"al eneral meetin H of the company to #e held on the PPPPPPPPPP day of PPPPPPPPPP and at any adCo"rnment thereof. Si ned this PPPPPPP day of PPPPPPPPP 1,PPPPPPP". II 3orm for affordin mem#ers an opport"nity of !otin for or a ainst a resol"tionJ "PPPPPPPPPPPPPP 4ame of *ompany PPPPPPPPPP, IO =e PPPPPPP of PPPPPPPPP in the district of PPPPPPP #ein , a mem#erO mem#ers of the a#o!e/named *ompany, here#y appoint PPPPPPPPPPPP of PPPPPPPPPPPPPPPPPP in the district of PPPPPPPPPP or failin him

PPPPPPPP of PPPPPPP in the district of PPPPPPPPPPPPP as myO o"r proxy to !ote for meO "s on myO o"r #ehalf at the ann"al eneral meetin O eneral meetin Gnot #ein an ann"al eneral meetin Hof the company, to #e held on the PPPPPPP day of PPPPPP 1, PPPP and at any adCo"rnment thereof. Si ned this PPPPPP day of PPPPPP 1, PPPPP". J.his form is to #e "sed Jin fa!o"r ofO Ja ainst of the resol"tion. <nless otherwise instr"cted the proxy will act as he thin;s fit. JStri;e o"t whiche!er is not desired.

SCHEDULE X
.a#le of fees to #e paid to the 8e istrar GSee sections '7$ and (11H Amo"nt of fees to #e paid G8s.H ". "n respect o! a compan% having a share capitalJ 1. 2. 3or re istration of a company whose nominal share capital does not exceed 8s. 1,00,000. 3or re istration of a company whose nominal share capital exceeds 8s. 1,00,000, the a#o!e fee of 8s. $000 with the followin additional fees re "lated accordin to the amo"nt of nominal capital./ GaH for e!ery 8s. 10,000 of nominal share capital or part of 8s. 10,000 after the 8s. 300 1,00,000 "pto 8s. ',00,000 G#H for e!ery 8s. 10,000 of nominal share capital or part of 8s. 10,000 after the 8s. 200 ',00,000 "pto 8s. '0,00,000 GcH for e!ery 8s. 10,000 of nominal share capital or part of 8s. 10,000 after the first 8s. '0,00,000 "pto 8s. 1 crore GdH for e!ery 8s. 10,000 of nominal share capital or part of 8s. 10,000 after the first 8s. 1 crore 100 '0 $,000

&ro!ided that where the additional fees, re "lated accordin to the amo"nt of the nominal capital of a company, exceeds a s"m of r"pees two crores, the total amo"nt of additional fees paya#le for the re istration of s"ch company shall not, in any case, exceed r"pees two crores. 3. $3A3or filin a notice of any increase in the nominal share capital of a company, the difference #etween the fees paya#le on the increased share capital on the date of filin the notice for re istration of company and the fees paya#le on existin a"thorised capital, at the rates pre!ailin on the date of filin the notice.B 3or re istration of any existin company, except s"ch companies as are #y this Act exempted from payment of fees in respect of re istration "nder this Act, the same fee is char ed for re isterin a new company. 3or filin , re isterin or recordin any doc"ment #y this Act reD"ired or a"thorised to filed, re istered or recorded/ GaH in respect of a company ha!in a nominal share capital of less than 8s. 1,00,000 100

$.

'.

G#H in respect of a company ha!in a nominal share capital of 8s. 1,00,000 or more 200 #"t less than 8s. ',00,000 GcH in respect of a company ha!in a nominal share capital of 8s. ',00,000 or more 300 #"t less than 8s. 2',00,000

GdH in respect of a company ha!in a nominal share capital of 8s. 2',00,000 or more (. 3or ma;in a record of or re isterin any fact #y this Act reD"ired or a"thorised to #e recorded or re istered #y the 8e istrar/ GaH in respect of a company ha!in a nominal share capital of less than 8s. 1,00,000 G#H in respect of a company ha!in a nominal share capital of less than 8s. 1,00,000 or more #"t less than 8s. ',00,000

'00

100 200

GcH in respect of a company ha!in a nominal share capital of 8s. ',00,000 or more 300 #"t less than 8s. 2',00,000 GdH in respect of a company ha!in a nominal share capital of 8s. 2',00,000 or more II. In respect of a company not ha!in a share capitalK 7. ). ,. 3or re istration of a company whose n"m#er of mem#ers as stated in the articles of association, does not exceed 20 1,000 '00

3or re istration of a company whose n"m#er of mem#ers as stated in the articles of 2',00 association, exceeds 20 #"t does exceed 100 3or re istration of a company whose n"m#er of mem#ers as stated in the articles of association, exceeds 100 #"t is not stated to #e "nlimited, the a#o!e fee of 8s. 2,'00 with an additional 8s. 10 for e!ery '0 mem#ers, or less n"m#er than '0 mem#ers, after the first 100. ',000

10. 3or re istration of company in which the n"m#er of mem#ers is stated in the articles of association to #e "nlimited. 11. 3or re istration of any increase in the n"m#er of mem#ers made after the re istration of the company, the same fees as wo"ld ha!e #een paya#le in respect of s"ch increase, if s"ch increase had #een stated in the article of association at the time of re istrationK &ro!ided that no company shall #e lia#le to pay on the whole a reater fee than 8s. ',000 in respect of its n"m#er of mem#ers, ta;in into acco"nt the fee paid on the first re istration of the company. 12. 3or re istration of any existin company except s"ch companies as are #y this Act exempted from payment of fees in respect of re istration "nder this Act, the same fee as is char ed for re isterin a new company

13. 3or filin or re isterin any doc"ment #y this Act reD"ired or a"thorised to #e filed '0 or re istered with the 8e istrar. 1$. 3or ma;in a record of or re isterin any fact #y their this Act reD"ired or a"thorised to #e recorded or re istered #y the 8e istrar. '0B

SCHEDULE XI
3orm in which sections '3, to '$$ of Act are to apply to cases where an application is made "nder section 3,7 or 3,) GSee section $0(H '3,. &enalty for falsification of #oo;s If with intent to defra"d or decei!e any person, any officer or mem#er of a company in respect of which an application has #een made "nder section 3,7 or 3,)/ GaH destroys, m"tilates, alters, falsifies or secrets any #oo;s, papers or sec"rities, or is pri!y to the destr"ction, m"tilation, alteration, falsification, or secretin of any #oo;s, papers or sec"ritiesL or

G#H ma;es, or is pri!y to the ma;in of, any false or fra"d"lent entry in any re ister, #oo;s of acco"nt or doc"ment #elon in to the company, he shall #e p"nisha#le with imprisonment for a term which may extend to se!en years, and shall also #e lia#le to fine. '$0. &enalty for fra"ds #y officers If any person, #ein at the time of the commission of the alle ed offence, an officer of a company in respect of which the (aA.ri#"nalB s"#seD"ently ma;es an order "nder section 3,7 or 3,),/ GaH has, #y false pretences or #y means of any other fra"d, ind"ced any person to i!e credit to the companyL G#H with intent to defra"d creditors of the company, has made or ca"sed to #e made any ift or transfer of or char e on, or has ca"sed or conni!ed at the le!yin of any exec"tion a ainst the property of the companyL or GcH with intent to defra"d creditors of the company, has concealed or remo!ed any part of the property of the company since the date of any "nsatisfied C"d ment or order for payment of money o#tained a ainst the company, or within two months #efore that dateL he shall #e p"nisha#le with imprisonment for a term which may extend to two years and shall also #e lia#le to fine. '$1. 2ia#ility where proper acco"nts not ;ept G1H =here an application has #een made to the (aA.ri#"nalB "nder section 3,7 or 3,) in respect of a company, if it is shown that proper #oo;s of acco"nt were not ;ept #y the company thro" ho"t the period of two years immediately precedin the ma;in of the application, or the period #etween the incorporation of the company and the ma;in of the application, whiche!er is shorter, e!ery officer of the company who is in defa"lt shall, "nless he shows that he acted honestly and that in the circ"mstances in which the #"siness of the company was carried on, the defa"lt was exc"sa#le, #e p"nisha#le with imprisonment for a term which may extend to one year. G2H 3or the p"rposes of this section, proper #oo;s of acco"nt shall #e deemed not to ha!e #een ;ept in the case of any company, if there ha!e not #een ;ept/ GaH s"ch #oo;s of acco"nts as are necessary to exhi#it and explain the transactions and financial position of the #"siness of the company, incl"din #oo;s containin entries made from day to day in s"fficient detail of all cash recei!ed and all cash paidL and G#H where the #"siness of the company has in!ol!ed dealin s in oods, statements of the ann"al stoc; ta;in s and Gexcept in the case of oods sold #y way of ordinary retail tradeH of all oods sold and p"rchased showin the oods and the #"yers and sellers thereof in s"fficient detail to ena#le those oods and those #"yers and sellers to #e identified. '$2. 2ia#ility for fra"d"lent cond"ct of #"siness G1H If in the co"rse of the proceedin s on an application made to the (aA.ri#"nalB "nder section 3,7 or 3,) in respect of a company, it appears that any #"siness of the company has #een carried on with intent to defra"d creditors of the company, or any other persons, or for any fra"d"lent p"rpose, the (aA.ri#"nalB may, if it thin;s it proper so to do, declare that any persons who were ;nowin ly parties to the carryin on of the #"siness in the manner aforesaid shall #e personally responsi#le, witho"t any limitation of lia#ility, for all or any of the de#ts or other lia#ilities of the company as the (aA.ri#"nalB may direct. G2HGaH =here the (aA.ri#"nalB ma;es any s"ch declaration, it may i!e s"ch f"rther directions as it thin;s proper for the p"rpose of i!in effect to that declaration G#H In partic"lar, the (aA.ri#"nalB may ma;e pro!ision for ma;in the lia#ility of any s"ch person "nder the declaration a char e on any de#t or o#li ation d"e from the company to him, or on any mort a e or char e or any interest in any mort a e or char e on any assets of the company held #y or !ested in him, or any person on his #ehalf, or any person claimin as assi nee from or thro" h the person lia#le or any person actin on his #ehalf. GcH .he (aA.ri#"nalB may, from time to time, ma;e s"ch f"rther order as may #e necessary for the p"rpose of enforcin any char e imposed "nder this s"#/section. GdH 3or the p"rpose of this s"#/section, the expression "assi nee" incl"des any person to whom or in whose fa!o"r, #y the directions of the person lia#le, the de#t, o#li ation, mort a e or char e was created, iss"ed or transferred or the interest was created, #"t does not incl"de an assi nee for !al"a#le consideration Gnot incl"din consideration #y way of marria eH i!en in ood faith and witho"t notice of any of the matters on the ro"nd of which the declaration is made. G3H =here any #"siness of a company is carried on with s"ch intent or for s"ch p"rpose as is mentioned in s"#/ section G1H, e!ery person who was ;nowin ly a party to the carryin on of the #"siness in the manner aforesaid,

shall #e p"nisha#le with imprisonment for a term which may extend to two years, or with fine which may extend to fi!e tho"sand r"pees, or with #oth. G$H .his section shall apply, notwithstandin that the person concerned may #e criminally lia#le in respect of the matter on the ro"nd of which the declaration is to #e made. '$3. &ower of (aA.ri#"nalB to assess dama es a ainst delinD"ent directors, etc. G1H If, in the co"rse of the proceedin s on an application made to the (aA.ri#"nalB "nder section 3,7 or 3,), it appears that any person who has ta;en part in the promotion or formation of the company, or any past or present director, mana in a ent, secretaries and treas"rers, mana er or officer of the company / GaH has misapplied or retained or #ecome lia#le or acco"nta#le for any money or property of the companyL or G#H has #een "ilty of any misfeasance or #reach of tr"st in relation to the companyL the (aA.ri#"nalB may, on the application of any creditor or mem#er, examine into the cond"ct of s"ch person, director, mana in a ent, secretaries and treas"rers, mana er or officer aforesaid, and compel him to repay or restore the money or property or any part thereof respecti!ely, with interest at s"ch rate as the (aA.ri#"nalB thin;s C"st or to contri#"te s"ch s"m to the assets of the company #y way of compensation in respect of the misapplication, retainer, misfeasance or #reach of tr"st as the (aA.ri#"nalB thin;s C"st. G2H .his section shall apply notwithstandin that the matter is one for which the person concerned may #e criminally lia#le. '$$. 2ia#ility "nder sections '$2 and '$3 to extend to partners or directors in firm or company =here a declaration "nder section '$2 or an order "nder section '$3 is or may #e made in respect of a firm or #ody corporate, the (aA.ri#"nalB shall also ha!e power to ma;e a declaration "nder section '$2 or pass an order "nder section '$3, as the case may #e, in respect of any person who is a partner in that firm or a director of that #ody corporate.

SCHEDULE XII
1nactments repealed GSee section ($$H ?ear 1,13 1,$2 1,'1 1,'2 4o. 7II 2I7 2II 2I S"#Cect or short title .he Indian *ompanies Act, 1,13. .he 8e istration of .ransferred *ompanies :rdinance. .he Indian *ompanies GAmendmentH Act, 1,'1. .he Indian *ompanies GAmendmentH Act, 1,'2.

SCHEDULE XIII
*onditions to #e f"lfilled for the appointment of a mana in or whole/time director or a mana er witho"t the appro!al of the *entral +o!ernment GSee sections 1,), 2(,, 310 and 311H 2$A&A8. I Appointments 4o person shall #e eli i#le for appointment as a mana in or whole/time director or a mana er Ghereinafter referred to as mana erial personH of a company "nless he satisfies the followin conditions, namelyK/ GaH he had not #een sentenced to imprisonment for any period, or to a fine exceedin one tho"sand r"pees, for the con!iction of an offence "nder any of the followin Acts, namely./ GiH the Indian Stamp Act, 1),, G2 of 1),,H, GiiH the *entral 1xcise and Salt Act, 1,$$ G1 of 1,$$H, GiiiH the Ind"stries GDe!elopment and 8e "lationH Act, 1,'1 G(' of 1,'1H,

Gi!H the &re!ention of 3ood Ad"lteration Act, 1,'$ G37 of 1,'$H, G!H the 1ssential *ommodities Act, 1,'' G10 of 1,''H, G!iH the *ompanies Act, 1,'( G1 of 1,'(H, G!iiH the Sec"rities *ontracts G8e "lationH Act, 1,'( G$2 of 1,'(H, G!iiiH the =ealth/tax Act, 1,'7 G27 of 1,'7H, GixH the Income/tax Act, 1,(1 G$3 of 1,(1H, GxH the *"stoms Act, 1,(2 G'2 of 1,(2H, GxiH the %onopolies and 8estricti!e .rade &ractices Act, 1,(, G'$ of 1,(,H, GxiiH the 3orei n 1xchan e 8e "lation Act, 1,73 G$( of 1,73H, GxiiiH the Sic; Ind"strial *ompanies GSpecial &ro!isionsH Act, 1,)' G1 of 1,)(H, Gxi!H the Sec"rities and 1xchan e 0oard of India Act, 1,,2 G1' of 1,,2H, Gx!H the 3orei n .rade GDe!elopment and 8e "lationH Act, 1,,2 G22 of 1,,2HL G#H he had not #een detained for any period "nder the *onser!ation of 3orei n 1xchan e and &re!ention of Sm" lin Acti!ities Act, 1,7$ G'2 of 1,7$HK &ro!ided that where the *entral +o!ernment has i!en its appro!al to the appointment of a person con!icted or detained "nder s"#/para raph GaH or s"#/para raph G#H, as the case may #e, no f"rther appro!al of the *entral +o!ernment shall #e necessary for the s"#seD"ent appointment of that person if he had not #een so con!icted or detained s"#seD"ent to s"ch appro!alL 2'AGcH he has completed the a e of 2' years and has not attained the a e of 70 yearsK &ro!ided that where/ GiH he has not completed the a e of 2' years, #"t has attained the a e of maCorityL or GiiH he has attained the a e of 70 yearsL and where his appointment is appro!ed #y a special resol"tion passed #y the company in eneral meetin , no f"rther appro!al of the *entral +o!ernment shall #e necessary for s"ch appointmentL GdH where he is a mana erial person in more than one company he draws rem"neration from one or more companies s"#Cect to the ceilin pro!ided in section III of &art IILB GeH he is resident in India. Explanation ./3or the p"rpose of this Sched"le, resident in India incl"des a person who has #een stayin in India for a contin"o"s period of not less than twel!e months immediately precedin the date of his appointment as a mana erial person and who has come to stay in India,/ GiH for ta;in "p employment in India, or GiiH for carryin on a #"siness or !ocation in India. &A8. II :emuneration ,e$tion I(/ Gemuneration payable by $ompanies a0in2 pro)its S"#Cect to the pro!isions of section 1,) and section 30,, a company ha!in profits in a financial year may pay any rem"neration, #y way of salary, dearness allowance, perD"isites, commission and other allowances, which shall not exceed fi!e per cent of its net profits for one s"ch mana erial person, and if there is more than one s"ch mana erial person, ten per cent for all of them to ether. ,e$tion II(/ Gemuneration payable by $ompanies a0in2 no pro)its or inade:uate pro)its $$A1. 4otwithstandin anythin contained in this &art, where in any financial year d"rin the c"rrency of ten"re of the mana erial person, a company has no profits or its profits are inadeD"ate, it may pay rem"neration to a mana erial person #y way of salary dearness allowance, perD"isites and any other allowances,/ GAH 4ot exceedin the ceilin limit of 8s. 2$,00,000 per ann"m or 8s. 2,00,000 per month calc"lated on the followin scaleK/ ?here the e!!ective capital o! Compan% is GiH less than r"pees 1 crore GiiH r"pees 1 crore or more #"t less than r"pees ' crores (onthl% remuneration pa%a&le shall not exceed (:upees) 7',000 1,00,000

GiiiH r"pees ' crores or more #"t less than r"pees 2' crores Gi!H r"pees '0 crores or more #"t less than r"pees '0 crores G!H r"pees '0 crores or more #"t less than r"pees 100 crores G!iH r"pees 100 crores or more

1,2',000 1,'0,000 1,7',000 2,00,000

&ro!ided that the ceilin limits specified "nder this s"#/para raph shall apply, if/ GiH payment of rem"neration is appro!ed #y a resol"tion passed #y the 8em"neration *ommitteeL GiiH the company has not made any defa"lt in repayment of any of its de#ts Gincl"din p"#lic depositsH or de#ent"res or interest paya#le thereon for a contin"o"s period of thirty days in the precedin financial year #efore the date of appointment of s"ch mana erial person. G0H not exceedin the ceilin limit of 8s. $),00,000 per ann"m or 8s. $,00,000 per month calc"lated on the followin scaleK/ ?here the e!!ective capital o! Compan% is GiH less than r"pees 1 crore GiiH r"pees 1 crore or more #"t less than r"pees ' crores GiiiH r"pees ' crores or more #"t less than r"pees 2' crores Gi!H r"pees 2' crores or more #"t less than r"pees '0 crores G!H r"pees '0 crores or more #"t less than r"pees 100 crores G!iH r"pees 100 crores or more (onthl% remuneration pa%a&le shall not exceed (:upees) 1,'0,000 2,00,000 2,'0,000 3,00,000 3,'0,000 $,00,000

&ro!ided that the ceilin limits specified "nder this s"#/para raph shall apply, if/ GiH payment of rem"neration is appro!ed #y a resol"tion passed #y the 8em"neration *ommitteeL GiiH the company has not made any defa"lt in repayment of any of its de#ts Gincl"din p"#lic depositsH or de#ent"res or interest paya#le thereon for a contin"o"s period of thirty days in the precedin financial year #efore the date of appointment of s"ch mana erial personL GiiiH a special resol"tion has #een passed at the eneral meetin of the company for payment of rem"neration for a period not exceedin three yearsL Gi!H a statement alon with a notice callin the eneral meetin referred to in cla"se GiiiH is i!en to the shareholders containin the followin information, namelyK/ ". -eneral "n!ormation J G1H 4at"re of ind"stry G2H Date or expected date of commencement of commercial prod"ction G3H In case of new companies, expected date of commencement of acti!ities as per proCect appro!ed #y financial instit"tions appearin in the prospect"s. G$H 3inancial performance #ased on i!en indicators G'H 1xport performance and net forei n exchan e colla#orations G(H 3orei n in!estments or colla#orators, if any. "". "n!ormation a&out the appointee J G1H 0ac; ro"nd details G2H &ast rem"neration G3H 8eco nition or awards G$H -o# profile and his s"ita#ility

G'H 8em"neration proposed G(H *omparati!e rem"neration profile with respect to ind"stry, siFe of the company, profile of the position and person Gin case of expatriates the rele!ant details wo"ld #e w.r.t. the co"ntry of his ori inH G7H &ec"niary relationship directly or indirectly with the company, or relationship with the mana erial personnel, if any. """. <ther in!ormation G1H 8easons of loss or inadeD"ate profits G2H Steps ta;en or proposed to #e ta;en for impro!ement G3H 1xpected increase in prod"cti!ity and profits in meas"ra#le terms. "9. isclosures G1H .he shareholders of the company shall #e informed of the rem"neration pac;a e of the mana erial person. G2H .he followin disclos"res shall #e mentioned in the 0oard of directorEs report "nder the headin "*orporate +o!ernance", if any, attached to the ann"al report K/ GiH All elements of rem"neration pac;a e s"ch as salary, #enefits, #on"ses, stoc; options, pension etc of all the directorsL GiiH Details of fixed component and performance lin;ed incenti!es alon with the performance criteriaL GiiiH Ser!ice contracts, notice period, se!erance feesL Gi!H Stoc; option details, if any, and whether the same has #een iss"ed at a disco"nt as well as the period o!er which accr"ed and o!er which exercisa#le. G*H exceedin the ceilin limit of 8s. $),00,000 per ann"m or 8s. $,00,000 per month calc"lated on the followin scaleK ?here the e!!ective capital o! Compan% is GiH less than r"pees 1 crore GiiH r"pees 1 crore or more #"t less than r"pees ' crores GiiiH r"pees ' crores or more #"t less than r"pees 2' crores Gi!H r"pees 2' crores or more #"t less than r"pees '0 crores G!H r"pees '0 crores or more #"t less than r"pees 100 crores G!iH r"pees 100 crores or more (onthl% remuneration pa%a&le shall not exceed (:upees) 1,'0,000 2,00,000 2,'0,000 3,00,000 3,'0,000 $,00,000

&ro!ided that the ceilin limits specified "nder this s"#/para raph shall apply, if/ GiH payment of rem"neration is appro!ed #y a resol"tion passed #y the 8em"neration *ommitteeL GiiH the company has not made any defa"lt in repayment of any of its de#ts Gincl"din p"#lic depositsH or de#ent"res or interest paya#le thereon for a contin"o"s period of thirty days in the precedin financial year #efore the date of appointment of s"ch mana erial personL GiiiH a special resol"tion has #een passed at the eneral meetin of the company for payment of rem"neration for a period not exceedin three yearsL Gi!H a statement alon with a notice callin the eneral meetin referred to in cla"se GiiiH is i!en to the shareholders containin the followin information, namelyK/ ". -eneral "n!ormation G1H 4at"re of ind"stry G2H Date or expected date of commencement of commercial prod"ction G3H In case of new companies, expected date of commencement of acti!ities as per proCect appro!ed #y financial instit"tions appearin in the prospect"s. G$H 3inancial performance #ased on i!en indicators G'H 1xport performance and net forei n exchan e colla#orations

G(H 3orei n in!estments or colla#orators, if any. "". "n!ormation a&out the appointeeJ G1H 0ac; ro"nd details G2H &ast rem"neration G3H 8eco nition or awards G$H -o# profile and his s"ita#ility G'H 8em"neration proposed G(H *omparati!e rem"neration profile with respect to ind"stry, siFe of the company, profile of the position and person Gin case of expatriates the rele!ant details wo"ld #e w.r.t the co"ntry of his ori inH G7H &ec"niary relationship directly or indirectly with the company, or relationship with the mana erial personnel, if any. """. <ther in!ormation G1H 8easons of loss or inadeD"ate profits G2H Steps ta;en or proposed to #e ta;en for impro!ement G3H 1xpected increase in prod"cti!ity and profits in meas"ra#le terms. "9. isclosures G1H .he shareholders of the company shall #e informed of the rem"neration pac;a e of the mana erial person. G2H .he followin disclos"res shall #e mentioned in the 0oard of directorEs report "nder the headin "*orporate +o!ernance", if any attached to the ann"al reportK/ GiH All elements of rem"neration pac;a e s"ch as salary, #enefits, #on"ses, stoc; options, pension etc. of all the directorsL GiiH Details of fixed component and performance lin;ed incenti!es alon with the performance criteriaL GiiiH Ser!ice contracts, notice period, se!erance feesL Gi!H Stoc; option details, if any, and whether the same has #een iss"ed at a disco"nt as well as the period o!er which accr"ed and o!er which exercisa#le. &ro!ided f"rther that the conditions specified in s"#/para raph G*H shall apply in the case the effecti!e capital of the company is ne ati!e. &ro!ided also that the prior appro!al of the *entral +o!ernment is o#tained for payment of rem"neration on the a#o!e scale.B 2. A mana erial person shall also #e eli i#le to the followin perD"isites which shall not #e incl"ded in the comp"tation of the ceilin on rem"neration specified in para raph 1 of this sectionK GaH contri#"tion to pro!ident f"nd, s"perann"ation f"nd or ann"ity f"nd to the extent these either sin ly or p"t to ether are not taxa#le "nder the Income/tax Act, 1,(1, G#H rat"ity paya#le at a rate not exceedin half a monthEs salary for each completed year of ser!ice, and GcH encashment of lea!e at the end of the ten"re. 3. In addition to the perD"isites specified in para raph 2 of this section, an expatriate mana erial person Gincl"din a non/resident IndianH shall #e eli i#le to the followin perD"isites which shall not #e incl"ded in the comp"tation of the ceilin on rem"neration specified in para raph 1 of this sectionK (a# ChildrenEs education allowanceJ In case of children st"dyin in or o"tside India, an allowance limited to a maxim"m of 8s. ',000 per month per child or act"al expenses inc"rred, whiche!er is less. S"ch allowance is admissi#le "pto a maxim"m of two children. (b# 8olida% passage !or children stud%ing outside "ndiaM !amil% sta%ing a&road K 8et"rn holiday passa e once in a year #y economy class or once in two years #y first class to children and to the mem#ers of the family from the place of their st"dy or stay a#road to India if they are not residin in India with the mana erial person. ($# 4eave travel concessionK 8et"rn passa e for self and family in accordance with the r"les specified #y the company where it is proposed that the lea!e #e spent in home co"ntry instead of anywhere in India. Explanation "./3or the p"rposes of section II of this &art, "effecti!e capital" means the a re ate of the paid/"p share capital Gexcl"din share application money or ad!ances a ainst sharesHL amo"nt, if any, for the time #ein standin to the credit of share premi"m acco"ntL reser!es and s"rpl"s Gexcl"din re!al"ation reser!eHL lon / term loans and deposits repaya#le after one year Gexcl"din wor;in capital loans, o!er/drafts, interest d"e on loans "nless f"nded, #an; "arantee, etc., and other short/term arran ementsH as red"ced #y the a re ate of

any in!estments Gexcept in the case of in!estment #y an in!estment company whose principal #"siness is acD"isition of shares, stoc; de#ent"res or other sec"ritiesH, acc"m"lated losses and preliminary expenses not written off. Explanation II./ GaH =here the appointment of the mana erial person is made in the year in which company has #een incorporated, the effecti!e capital shall #e calc"lated as on the date of s"ch appointmentL G#H In any other case, the effecti!e capital shall #e calc"lated as on the last date of the financial year precedin the financial year in which the appointment of the mana erial person is made. Explanation """./3or the p"rposes of section II of this &art, family means the spo"se, dependent children and dependent parents of the mana erial person. ')G3xplanation "9K/ 3or the p"rposes of this section, "8em"neration *ommittee" means that a committee which consists of at least three non/exec"ti!e independent directors incl"din nominee director or nominee directors, if any. 3xplanation 9K/ 3or the p"rposes of this cla"se, the 8em"neration *ommittee while appro!in the rem"neration "nder this section, shall,/ GaH ta;e into acco"nt, financial position of the company, trend in the ind"stry, appointeeEs D"alification, experience, past performance, past rem"neration etc. G#H #e in a position to #rin a#o"t o#Cecti!ity in determinin the rem"neration pac;a e while stri;in a #alance #etween the interest of the company and the shareholders. 3xplanation 9" K/ for the p"rposes of &ara raph 1, "ne ati!e effecti!e capital" means the effecti!e capital which is calc"lated K/ GaH in accordance with the pro!isions contained in 1xplanation/ I of this &artL G#H less than Fero.B 26[,e$tion III / Gemuneration payable to a mana2erial person in t'o $ompanies S"#Cect to the pro!isions of section I and II, a mana erial person shall draw rem"neration from one or #oth companies, pro!ided that the total rem"neration drawn from the companies does not exceed the hi her maxim"m limit admissi#le from any one of the companies of which he is a mana erial person.B &A8./III Provisions applica&le to Parts " and "" o! this Schedule 1. .he appointment and rem"neration referred to in &arts I and II of this Sched"le shall #e s"#Cect to appro!al #y a resol"tion of the shareholders in eneral meetin . 2. .he a"ditor or the secretary of the company or where the company has not appointed a secretary, a secretary in whole/time practice shall certify that the reD"irements of this Sched"le ha!e #een complied with and s"ch certificate shall #e incorporated in the ret"rn filed with the 8e istrar "nder s"#/section G2H of section 2(,.B

SCHEDULE XIV
8ates of depreciation GSee sections 20' and 3'0H 4at"re of assets 1 I. GaH 2uildings Gother than factory #"ildin sH G41SDH G#H 3actory #"ildin s Sin le Shift 2 ' 3 1.(3 Do"#le Shift $ .. ' .. .riple Shift ( .. 7 .. =.D.7K S.2.%. =.D.7. S.2.%. =.D.7. S.2.%.

per cent per cent 10 3.3$ per cent per cent .. .. .. .

GcH &"rely temporary erections s"ch as wooden str"ct"res "". Plant and (achiner% 2)AGiH +eneral rate applica#le to, GaH plant and machinery Gnot #ein a shipH other than contin"o"s process plant for which no special rate has #een prescri#ed "nder GiiH #elowK

100

100

..

..

..

..

per cent per cent

13.,1 $.7' per cent per cent

20.)7 per cent ..

7.$2 per cent ..

27.)2 per cent ..

10.3$ per cent ..

G#H contin"o"s process plant, 2,AJ J 1'.33 '.2) JB for which no special rate has per cent per #een prescri#ed "nder GiiH #elow. cent G41SDHB GiiH Special rates A. 1. *inemato raph films/ %achinery "sed in the prod"ction and exhi#ition of cinemato raph films G41SDH GaH 8ecordin eD"ipment, reprod"cin eD"ipment, de!elopin machines, printin machines, editin machines, synchronisers and st"dio li hts except #"l#s G#H &roCectin eD"ipment of film exhi#itin concerns 2. *ycles G41SDH 20 7.07 per cent per cent 20 7.07 per cent per cent /do/ 20 /do/ 7.07

..

..

..

..

..

..

..

..

.. ..

.. ..

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per cent per cent 2)A3. 1lectrical %achinery, >/ray and electrothepe"tic, apparat"s and acces/sories thereto, medical, dia nostic eD"ipments, namely, *at/scan, <ltraso"nd %achines, 1*+ %onitors etc. G41SDH $. -"ice #oilin pairs G;arhaisH G41SDH '. %otor/cars, motor cycles, scooters and other mopeds G41SDH (. 1lectrically operated !ehicles incl"din #attery powered or f"el call powered !ehicles G41SDH 7. S" arcane cr"shers Gindi eno"s ;ol"s and #elansH G4.1.S.D.H ). +lass man"fact"rin concerns expect direct fire lass meltin 20 7.07 per cent per cent .. .. .. ..

20 7.07 per cent per cent 2'.), ,.' per cent per cent 20 7.07 per cent per cent 20 7.07 per cent per cent 20 7.07

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30

11.31

$0

1(.21

f"rnaces/ 8ec"perati!e and re enerati!e lass meltin f"rnaces ,. %achinery "sed in the man"fact"re of electronic oods and components.

per cent per cent 1'.(2 '.3) per cent per cent

per cent 23.$2 per cent

per cent ).$( per cent

per cent 31.23 per cent

per cent 11.)7 per cent

0. 30A1. Aeroplanes, Aero 1n ines, 1(.2 '.( Sim"lators, 7is"al System and per cent per 5"ic; 1n ine *han e 1D"ipment centB G41SDH 2. *oncrete pipes man"fact"re %o"lds G41SDH 3. Dr"m container man"fact"re dies G41SDH $. 1arth/mo!in machinery employed in hea!y constr"ction wor;s, s"ch as dams, t"nnels, canals, etc. G41SDH '. +lass man"fact"rin concerns expect direct fire lass meltin f"rnaces %o"ldsG41SDH (. %o"lds in iron fo"ndaries G41SDH 7. %ineral oil concerns 3ield operations Ga#o!e ro"ndH &orta#le #oilers drillin tools, well/head tan;s, ri s, etc. G41SDH ). %ines and D"arries/&orta#le "nder ro"nd machinery and earth mo!in machinery "sed in open cast minin G41SDH ,. %otor #"ses and motor lorries other than those "sed in a #"siness of r"nnin them on hire G41SDH ,A. %otor tractors, har!estin com#ines G41SDH 10. &atterns, dies and templates G41SDH 11. 8opeway str"ct"res/8opeways, ropes and trestle shea!es and connected partsG41SDH 12. Shoe and other leather oods factories/=ooden lasts "sed in the man"fact"re of shoes. *. 31A1. J J JB 2. %otor #"ses, motor lorries and motor taxies "sed in a #"siness of r"nnin them on hire G41SDH $0 1(.21 .. .. .. .. per cent per cent 30 11.31 .. .. .. .. per cent per cent /do/ /do/ /do/ /do/ .. .. .. .. .. .. .. ..

/do/

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/do/ /do/

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/do/

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30

11.31

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per cent per cent /do/ /do/ /do/ /do/ /do/ /do/ .. .. .. .. .. .. .. .. .. .. .. ..

30

11.31

$' per cent

1).,( per cent

(0 per cent

2,.0' per cent

per cent per cent

3. 8"##er and plastic oods factories %o"lds G41SDH $. Data processin machines incl"din comp"ters G41SDH '. +as cylinders incl"din !al"es and re "lators G41SDH D. 1. Artificial sil; man"fact"rin machinery wooden parts 2. *inemato raph films 0"l#s of st"dio li hts 3. 3lo"r mills 8ollers $. +lass man"fact"rin concerns Direct fire lass meltin f"rnaces 32A$A. 3loat +lass %eltin 3"rnaces G41SDH '. Iron and Steel ind"stries 8ollin mill rolls (. %atch factories =ooden match frames

/do/ /do/ /do/ 100

/do/ /do/ /do/ 100

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per cent per cent /do/ /do/ 100 /do/ /do/ 100 .. .. .. .. .. .. .. .. .. .. .. ..

per cent per cent 27 10 per cent per cent 100 100 per cent per cent /do/ /do/ .. .. .. .. .. .. .. .. .. .. .. ..

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7. %ineral oil concerns GaH/ &lant 100 100 "sed in field operations G#elow per cent per ro"ndH/ Distri#"tion N ret"rna#le cent pac;a es G#H &lant "sed in field operations G#elow ro"ndH #"t not incl"din assets "sed in field operations Gdistri#"tionH N 9er#side p"mps incl"din "nder ro"nd tan;s and fittin s ). %ines and D"arries N GaH ."#s, /do/ windin ropes, ha"la e ropes and sand stowin pipes G#H Safety lamps ,. Salt wor;s N Salt pans, reser!oirs /do/ and condensers, etc., made of earthy, sandy or clay material or any other similar material 10. S" ar wor;s 8ollers """. 5urniture and !ittings 2)A1. +eneral 8ates G41SDH 1).1 (.33 per cent per cent 2'.)) ,.' per cent per cent /do/ /do/

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2. 8ate for f"rnit"re and fittin s "sed in hotels, resta"rants and #oardin ho"sesL schools, colle es and other ed"cational instit"tions, li#rariesL welfare centresL meetin halls, cinema ho"sesL theatres and

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circ"sesL and for f"rnit"re and fittin s let o"t on hire for "se on the occasion of marria es and similar f"nctions. G41SDHB "9. Ships 1. :cean/ oin ships/ GiH 3ishin !essels with wooden h"ll G41SDH GiiH Dred ers, t" s, #ar es, s"r!ey la"nches and other similar ships "sed mainly for dred in p"rposes G41SDH GiiiH :ther ships G41SDH 27.0' 10 .. .. .. .. per cent per cent 1,.) 7 per cent per cent 1$.( ' per cent per cent .. .. .. ..

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2. 7essels ordinarily operatin on inland waters/ GiH Speed #oats G41SDH 20 7.07 .. .. .. .. per cent per cent GiiH :ther !essels G41SDH 10 3.3$ per cent per cent .. .. .. ..

=.D.7.K means =ritten Down 7al"e. S.2.%.K means Strai ht 2ine %ethod. 9otes./1. "#"ildin s" incl"de roads, #rid es, c"l!erts, wells and t"#e/wells. 2. "factory #"ildin s" does not incl"de offices, odowns, officers and employeesE D"arters, roads, #rid es, c"l!erts, wells and t"#e/wells. 3. "speed #oat" means a motor #oat dri!en #y a hi h speed internal com#"stion en ine capa#le of propellin the #oat at a speed exceedin 2$ 9ilometers per ho"r in still water and so desi ned that when r"nnin at a speed it will plane, i.e., its #ow will rise from the water. $. =here, d"rin any financial year, any addition has #een made to any asset, or where any asset has #een sold, discarded, demolished or destroyed, the depreciation on s"ch assets shall #e calc"lated on a pro rata #asis from the date of s"ch addition or, as the case may #e, "p to the date on which s"ch asset has #een sold, discarded, demolished or destroyed. '. .he followin information sho"ld also #e disclosed in the acco"ntsK GiH depreciation methods "sedL and GiiH depreciation rates or the "sef"l li!es of the assets, if they are different from the principal rates specified in the Sched"le. (. .he calc"lations of the extra depreciation for do"#le shift wor;in and for triple shift wor;in shall #e made separately in the proportion which the n"m#er of days for which the concern wor;ed do"#le shift or triple shift, as the case may #e, #ears to the normal n"m#er of wor;in days d"rin the year. 3or this p"rpose, the normal n"m#er of wor;in days d"rin the year shall #e deemed to #e/ GaH in the case of a seasonal factory or concern, the n"m#er of days on which the factory or concern act"ally wor;ed d"rin the year or 1)0 days, whiche!er is reaterL G#H in any other case, the n"m#er of days on which the factory or concern act"ally wor;ed d"rin the year or 2$0 days, whiche!er is reater. .he extra shift depreciation shall not #e char ed in respect of any item of machinery or plant which has #een specifically, excepted #y inscription of the letters "4.1.S.D." Gmeanin "4o 1xtra Shift Depreciation"H a ainst it

in s"#/items a#o!e and also in respect of the followin items of machinery and plant to which the eneral rate of depreciation of 33A13.,1 per centB applies/ G1H Acco"ntin machines G2H Air/conditionin machinery incl"din room air/conditioners G3H 0"ildin contractorEs machinery. G$H *alc"latin machines. G'H 1lectrical machinery / switch ear and instr"ments, transformers and other stationary plant and wirin and fittin of electric li ht and fan installations. G(H 6ydra"lic wor;s, pipelines and sl"ices G7H 2ocomoti!es, rollin stoc;s, tramways and railways "sed #y concerns, excl"din railway concerns. G)H %ineral oil concerns / field operationsK 3$AGaH J J JB G#H &rime mo!ers. 3'AGcH J J JB GdH Stora e tan;s Ga#o!e ro"ndH. GeH &ipelines Ga#o!e ro"ndH. GfH -etties and dry doc;s. G,H %ineral oil concerns / field operations Gdistri#"tionH / 9er#side p"mps, incl"din "nder ro"nd tan;s and fittin s. G10H %ineral oil concerns / refineriesK 3$AGaH J J JB G#H &rime mo!ers. 3(AGcH J J JB 37AGdH 2&+ &lantB G11H %ines and D"arriesK GaH S"rface and "nder ro"nd machinery Gother than electrical machinery and porta#le "nder ro"nd machineryH. G#H 6ead/ ears. GcH 8ails. 3)AGdH J J JB GeH Shafts and inclines. GfH .ramways on the s"rface. G12H 4eo/post fran;in machines. G13H :ffice machinery G1$H :!erhead ca#les and wires. G1'H 8ailway sidin s. G1(H 8efri eration plant containers, etc. Gother than rac;sH. G17H 8opeway str"ct"resK GaH .restle and station steel wor;. G#H Dri!in and tension earin . G1)H Salt wor;s / 8eser!oirs, condensers, salt pans, deli!ery channels and piers if constr"cted of masonry, concrete, cement, asphalt or similar materialsL #ar es and floatin plantL piers, D"ays and CettiesL and pipelines for con!eyin #rine if constr"cted of masonry, concrete, cement, asphalt or similar materials. G1,H S"r ical instr"ments G20H .ramways electric and tramways r"n #y internal com#"stion en ines/ permanent wayK cars/ car tr"c;s, car #odies, electrical eD"ipment and motorsL tram cars incl"din en ines and ears. G21H .ypewriters. G22H =ei hin machines.

G23H =ireless apparat"s and ear, wireless appliances and accessories.B 3,AJ J JB $0A7. "*ontin"o"s process plant" means a plant which is reD"ired and desi ned to operate 2$ ho"rs a day. ). 4otwithstandin anythin mentioned in this Sched"le depreciation on assets, whose act"al cost does not exceed fi!e tho"sand r"pees, shall #e pro!ided depreciation at the rate of h"ndred per centKB $1A&ro!ided that where the a re ate act"al cost of indi!id"al items of plant and machinery costin 8s. ',000 or less constit"tes more than 10 per cent of the total act"al cost of plant and machinery, rates of depreciation applica#le to s"ch items shall #e the rates as specified in Item II of the Sched"le.B

SCHEDULE XV
[,ee se$tion 1-AB(2#(b#+ 1. Arms and amm"nition and allied items of defence eD"ipment, defence aircrafts and warships. 2. Atomic ener y. 3. to (. $(AJJJB 7. %inerals specified in the Sched"le to the Atomic 1ner y G*ontrol of &rod"ction and <seH :rder, 1,'3. ). 8ailway transport.B

184S. Q ?:<4+ &7.. 2.D.

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