THE COMPANIES BILL, 2009
Presentation on the salient features
Of new Bill
September 26, 2009
1
MANAGEMENT
AND
ADMINISTRATION
(Notice, AGM, Boards’ Report,
Annual Return)
2
Section 78 - Register of Members, etc.
 Registers to be kept and maintained by
every company :
• Register of members containing details of
both equity and preference shares held
by each member – residing in India and
outside
• Register of debenture holders
• Register of other security holders
 Registers to be in such form and manner as
may be prescribed
3
Section 78 - Register of Members, etc. (Cont…)
 Index of members and debenture-holders to
be part of the Registers
 Foreign Register - If authorized by articles,
a part of the above registers, containing
names and particulars of members,
debenture holders, other security holders
and beneficial owners residing outside India
can be maintained in any country outside
India
4
Section 78 - Register of Members, etc. (Cont…)
Particulars of the place where the
Register of members, Register of
debenture holders, Register of other
security holders and foreign registers
is kept and the fact of change or
discontinuance of the same shall be
filed with the Registrar within thirty
days (this is presently required only
for foreign registers)
5
Section 81 - Power to close Register of
Members, etc.
A company may after giving seven
days notice close the Register of
Members, Register of debenture
holders or Register of other security
holders
The extant provision of section 154
provides only for Register of members
and Register of debenture holders
6
Section 82 - Annual Return
Number of new requirements
introduced
Annual Return to contain particulars
as they stood on the close of the
financial year (Presently particulars
as on date of AGM required)
7
Section 82 - Annual Return (Cont…)
 Following additional information shall be
required :

Principal business activities of the company

Particulars of the holding company, subsidiary
and associate companies

Particulars of other securities (other than shares
and debentures)
8
Section 82 - Annual Return (Cont…)
 Particulars
of members and debenture
holders along with changes therein since
the close of the last financial year (Once
in 5 years provision deleted)
 Particulars
of promoters, directors and
key managerial personnel along with
changes therein since the close of the last
financial year (particulars of directors,
manager and company secretary required
presently)
9
Section 82 - Annual Return (Cont…)



Meetings of members or a class of
members,
Board
and
its
various
committees along with attendance details
Remuneration of directors
managerial personnel
and
key
Penalties imposed on the company, its
directors or officers and details of
compounding of offences
10
Section 82 - Annual Return (Cont…)
• Matters related to certification
compliances, disclosures

of
Such other matters as may be prescribed
(leaving flexibility for the Government to
add on to the list of information already
provided)
11
Section 82 - Annual Return (Cont…)
 Annual Return to be signed by a director
and company secretary and where there is
no company secretary, by a company
secretary in practice (No requirement for
managing director to sign)
 In case of OPC and Small Company, annual
return to be signed by the Company
Secretary and where there is no Company
Secretary, by one director of the company
12
Section 82 - Annual Return (Cont…)
 In case of a listed company and/or a
company having such paid up share capital
and turnover as may be prescribed, the
annual return shall also be signed by a
company secretary in whole time practice
certifying that the annual return states the
facts correctly and adequately and the
company has complied with all the
provisions of the Act (very high
responsibility cast on PCS)
13
Section 82 - Annual Return (Cont…)
 Extract of Annual Return in prescribed form shall
form part of Boards’ Report
 Annual return to be filed within 30 days from the
date of AGM (presently 60 days)
 New penal provisions :

Company punishable with fine

Officer in default is punishable with
imprisonment (new) or fine or with both

PCS punishable with fine
14
Section 83 - Place of keeping and inspection
of registers, returns etc. (Cont…)
 Registers and Returns to be kept at registered
office
 With approval of shareholders by special
resolution, they may also be kept at any other
place in India in which more than 1/10th of the
total members of the Company reside

Copy of such proposed special resolution should be
given to the Registrar in advance
15
Section 83 - Place of keeping and inspection
of registers, returns etc. (Cont…)
 Registers,
Indices and copies of
returns shall be open for inspection
for members, debenture holders, other
securities holder, or any beneficial
owner and not to any other person
as is presently allowed
16
Section 85 - Annual General Meeting (AGM)
 First AGM to be held within nine months
from the close of the first financial year
(Present provision is that first annual
general meeting shall be held within 18
months from the date of incorporation)
 The first financial year of a company
incorporated on or after the first day of
January of any year shall be the 31st day of
March of the following year. (Hence a period
of more than 18 months is available for first
AGM)
17
Section 85 - Annual General Meeting (AGM) (Cont…)
 Subsequent AGM shall be held within 6 months
from the close of the financial year and not more
than 15 months gap between two AGM’s
 OPC need not hold AGM
 AGM can now be held on a public holiday, but not
a National Holiday
 The business hours during which AGM to be held
is now specified as between 9.00 a.m. and 6.00
p.m.
18
Section 89 - Calling of Extraordinary General Meeting
 Meeting of members called by the Board on
its own shall also be now considered as an
extraordinary general meeting (presently
called general meeting)
19
Section 90 - Notice of general meeting

Notice for general meeting – Not less than
21 clear days

Notice of every meeting of the company - To
be given to every director of the company

Notice to be given to every member of the
company
(member
now
includes
preference shareholder)

Notice may be given in electronic mode; if
sent by post it shall be registered post
20
Section 91- Explanatory Statement to be
annexed to Notice
 Additional Information required to be disclosed in
the statement of special business :


Nature of concern or interest, if any, of every key
managerial personnel in addition to every
director and manager for items to be transacted
at a meeting
Extent of shareholding of every director,
manager or other key managerial personnel
holding more than 2 % of the paid up share
capital in any other company, if the special
business includes any item to be transacted at
the meeting relates to or affects such other
company. As per the extant provisions the limit
is 20 %.
21
Section 91- Explanatory Statement to be
annexed to Notice (Cont…)


Any benefit accruing to any director,
manager, key managerial persons or his
relatives as a result of non-disclosure or
insufficient disclosure shall be held in
trust for the company and shall be
compensated to the company
Default in compliance could result in a
fine of 5 times the amount of the benefit
accruing
22
Section 91- Explanatory Statement to be
annexed to Notice (Cont…)

Relative defined as the spouse,
brother,
sister
and
all
lineal
ascendants and descendants of such
individual related to him either by
marriage or adoption.
 Lineal
ascendants or descendants
should only include blood relatives –
in direct line – For eg. – children,
grand children, parent, grand parents
23
Section 92 - Quorum for Meetings

Meetings called by requisitionists shall stand
cancelled for lack of quorum

Any other meeting shall stand adjourned to the
same day, same time and same place in the next
week

Such adjourned meeting shall require not less
than 3 days notice

Notice to be given
announcement

At such adjourned meeting if quorum is not
present within half an hour, members present shall
be the quorum
individually
or
by
press
24
Section 94 - Proxies

Proxies can be in electronic mode
Section 97 - Voting

Electronic mode of voting acceptable in
such manner as may be prescribed
25
Section 98 -Demand for Poll

Limits for demanding poll enhanced from
50,000 to 5,00,000 (Paid up)

Chairman can appoint such number of
persons as he deems necessary as
scrutinisers
(presently
minimum
two
persons)
26
Section 99 - Postal Ballot
 Ordinary
business items and items in
respect of which directors or auditors
have a right to be heard cannot be
taken by postal ballot
 Approval
for merger can also be taken
by postal ballot
27
Section 100 - Circulation of Member’s
Resolution

No restriction on number of words to be
contained in the statement to be circulated
to the members upon requisition (presently
restricted to 1000 words)

Number of members who can requisition
increased to 1/10th of the total paid up
share capital or 1/10th of the total voting
power (presently it is not less than 1/20th
of the total voting power or 100 members
holding not less than Rs. 1 lakh paid-up
share capital)
28
Section 100 - Circulation of
Member’s Resolution (Cont…)
 Central
Government may direct the
requisitionists to reimburse the cost
incurred by the Company
29
Section 104 - Resolutions requiring
special notice

New provision to the effect that notice of
intention to move such resolution shall be
given by such number of persons as may be
prescribed. (Presently even one person
holding one share can give such notice)

This would prevent frivolous notices
30
Section 107 - Minutes

Minutes of meetings of class of shareholders or
creditors and every resolution passed by postal
ballot to be kept

Whether
minutes
of
meetings
shareholders/creditors approving scheme
arrangement/ amalgamation should be kept?

All appointments of officers made at any of the
meetings to be included in the minutes.- ‘Officer’ not
defined

Secretarial Standards as may be prescribed to be
observed for Board and General Meetings
of
of
31
Section 109 - Report on general meeting

New requirement

Every listed company to prepare a report of
each AGM confirming that the meeting was
convened, held and conducted as per the
provisions of the Act and the rules made
thereunder

Such report to be filed with RoC within 30
days of the conclusion of AGM
32
DECLARATION
AND
PAYMENT OF DIVIDEND
33
Section 110 - Declaration of Dividend

Transfer to reserves before declaring
dividend now optional

Even in case of inadequacy or absence in
profits in any financial year – dividend can
be declared
• with unanimous consent of all directors
• approval of financial institutions whose term
loans are subsisting
• approval of shareholders by special resolution at
AGM
• Central Government approval no longer required
34
Section 110 - Declaration of Dividend (Cont…)

Board may declare interim dividend during
any financial year only out of the profits of
the company for part of the year (Presently
interim dividend can be declared out of
accumulated profits kept in profit and loss
account)

No dividend can be declared by a company
contravening the provisions relating to
repayment of deposits
35
Section 110 - Declaration of Dividend (Cont…)
 Transfer
to IEPF required after 7 years
from the date of transfer to unpaid
dividend account (Date of declaration
+ 30 days + 7 days + 7 years)
 Dividend
warrant / ECS intimation
will have to be sent by registered post
36
Section 112 - IEPF
 Central Government to establish a separate IEPF subject to
CAG Audit
 IEPF will also be credited with the following

Unclaimed/Unpaid amount in the General
Revenue Account of the Central Government Extant section 205A transfers.

Unclaimed/unpaid amount lying to the credit of
IEPF under extant Section 205C

Amount received for penalties imposed for
disgorgement
of
securities
acquired
by
impersonation
and
by
making
multiple
applications in an IPO
37
Section 112 – IEPF (Cont..)

Only unclaimed/unpaid dividend to be transferred
to IEPF

No reference to the following items presently
required to be credited to IEPF

Unclaimed matured debentures

Unclaimed interest on debentures

Unclaimed application money received on any
securities
38
Section 112 – IEPF (Cont..)

Any person claiming to be entitled to the
dividend transferred to IEPF may apply to
the authority prescribed

The amount transferred to IEPF can be
utilized for refund of unclaimed dividends,
application money due for refunds and
interest thereon
39
BOARD’S REPORT
40
Section 120 - Board’s Report

New requirements set out for Board’s
Report to include –
• Extract of the Annual Return in such
form as may be prescribed
• Number of Board Meetings held
• Directors’ Responsibility Statement
• Declaration by independent directors
required to be appointed for listed
companies and other public companies
as may be prescribed
41
Section 120 – Board’s Report (Cont..)
• Report of the Remuneration Committee of
directors
• Explanations or comments by the Board on
every qualification, reservation or adverse
remark made by the auditor in his report
• Particulars of loans, guarantees or
investments exceeding the prescribed limits
and has been approved by shareholders by a
special resolution
• Particulars of contracts or arrangements
(related party contracts)
42
Section 120 – Board’s Report (Cont..)

In case of a listed company, the Directors’
Responsibility Statement, shall also state that ‘the
directors had laid down internal financial controls
to be followed by the company and that such
internal financial controls have been complied with’
The statement should be reworded to confirm the
adequacy or otherwise of the internal financial
controls and their operating effectiveness.
43
Section 120 – Board’s Report (Cont..)

The following information presently being provided
in / along with the Board’s Report would not be
required :
• Information on the state of company’s affairs
• Details of amounts proposed to be transferred to
reserves (probably because the requirement to
transfer to reserves before declaring dividend is
done away with)
• Amount recommended for dividend
• Material changes and commitments which have
occurred between the end of the financial year
and the date of report affecting the financial
position of the company
44
Section 120 – Board’s Report (Cont..)
• Particulars relating to conservation of
energy, technology, absorption, foreign
exchange earnings and outgo
• Particulars
of
employees
drawing
remuneration in excess of a prescribed
limit
• Reasons for failure to complete
buyback within stipulated time
the
45
Section 120 – Board’s Report (Cont..)

Board’s Report and any annexures thereto
shall be signed by its Chairman, if he is
authorised by the Board or shall be signed
by at least two directors, one of whom shall
be a managing director

In case of OPC the Report shall be signed
by one director

Board’s Report along with the financial
statements and notice for the AGM should
be sent to members by registered post or by
such electronic mode as may be prescribed
46
REGISTERED VALUERS
47
Sections 218 to 223 - Registered Valuers

New concept

Valuation of any property, stocks, shares,
debentures, securities, goodwill, net worth or
assets of a company required under the Act,
shall be carried by a registered valuer

Registered valuer to be appointed by the
Audit Committee or in its absence by the
Board of Directors
48
Sections 218 to 223 - Registered Valuers (Cont..)

Valuer should be
Central Government
registered
with
the

Persons qualified to be registered as
valuers:
 Chartered Accountant
 Cost and Works Accountant
 Company Secretary
 Any
other person possessing such
qualifications as may be prescribed
49
Sections 218 to 223 - Registered Valuers (Cont..)

Company and body corporate not eligible to
apply for being registered as valuer

Central Government to maintain a Register
of Valuers which shall contain the names
and addresses of persons registered as
valuer
50
Sections 218 to 223 - Registered Valuers (Cont..)

Central Government to have the power to
remove and restore the names of valuers
from the Register

Central
Government
to
review
the
performance of the registered valuers once
in 3 years and may remove the name of any
person from the Register of Valuers if it
thinks that the performance of the valuer is
such that its name should not remain on
the Register of Valuers
51
Sections 218 to 223 - Registered
Valuers (Cont..)

No person either alone or as a partner of
another person, can practice, describe or
project himself as a registered valuer or
permit himself to be so described or
projected, unless he or all his partners are
registered under the Act

Rates to be charged by Registered valuer
not to exceed prescribed rates
52
COMPROMISES, ARRANGEMENTS
AND
AMALGAMATIONS
53
Section 201 - Power to compromise or make
arrangements with creditors and members

Provisions revamped to provide flexibility

Proposals for corporate debt restructuring and
/or takeover offers of companies other than
listed companies also covered

Takeover offer means offer to acquire all or part
of shares of another company

Takeover offer of listed companies to comply
with SEBI guidelines
54
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

Arrangements for reorganization of company’s
share capital by consolidation or division of
shares or both the methods, also included

Reduction of share capital can be included in
the scheme and specific provisions in section
59 for reduction of capital shall not apply

Authority to Tribunal to deal with such matter

Time bound approval / deemed approval
55
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

Notice can be by advertisement

Persons who can object - to hold
shareholding or 5% outstanding debt

Valuation report required

Approval of majority representing three-fourths
in value required (not number any longer)

Approval may be sought by postal ballot
10%
56
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)
 The
Application to Tribunal
following by an affidavit :
to
disclose
the

all material facts relating to the company, such
as the latest financial position of the company,
the latest auditors’ report on the accounts of the
company and the pendency of any investigation
or proceedings against the company

Reduction of share capital of the company, if
any, included in the scheme
57
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

In case of a scheme of Corporate Debt
Restructuring (CDR) with approval of 75% of
secured creditors in value:



A creditor’s responsibility statement
Safeguards for the protection of other secured
and unsecured creditors
Report by auditor that the fund requirements of
the company after the CDR will conform to the
liquidity test based on estimates provided by the
Board
58
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)



Where CDR is as per RBI guidelines, a statement
to that effect
A valuation report in respect of the shares and
the property and all assets, tangible and
intangible,
movable
and
immovable,
by
registered valuer
Tribunal may order for a meeting to be held for the
purpose of considering the compromise or
arrangement
59
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

The notice for the meeting can be served either
individually or by an advertisement, along with a
statement disclosing :
• The details of the scheme




The valuation report, if any
The effects thereof the creditors, members
and debenture holders
The effect of the scheme on any material
interests of the directors of the company or
the debenture trustees
Such other matters as may be prescribed
60
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

If an advertisement is issued it should indicate the
time when the copies of the scheme will be
available to concerned persons free of charge from
the registered office of the company

Notice to also provide that written consent for the
scheme can be sent by the persons within one
month from the date of receipt of the notice

Objection can be made only by persons holding
not less than 10% of the shareholding or having
not less than 5% outstanding debt as per latest
audited financial statement
61
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

Notice along with all the accompanying documents should
also be sent to:









Central Government
RBI
SEBI
Registrar
respective stock exchanges
Official Liquidator
Competition Commission of India
Such authorities who may require to represent in the
matter
The above authorities to make representations within one
month from the date of receipt of such notice, else deemed to
be approved
62
Section 201 - Power to compromise or make
arrangements with creditors and members
(Cont…)

The order of Tribunal shall also provide for the
following :
• Conversion of preference shares into equity
shares – with option to receive arrears of
dividend in cash or equity shares
• Protection of any class of creditors
• If scheme is agreed by creditors, any
proceedings pending before BIFR shall abate
• Variation of shareholders’ rights in compliance
with applicable provisions of the Act
63
Section 203 – Merger and Amalgamation
of companies

Provides for both merger and demerger
(division of undertaking)

Merging companies –
• for a merger by absorption means both transferor
and transferee companies and
• for a merger by formation of a new company, the
transferor companies
64
Section 203 – Merger and Amalgamation
of companies (Cont…)
 Where a meeting is required to be held pursuant to
the Order of the Tribunal, the following documents
/ information shall be circulated :
• Draft scheme approved by the Board of the
merging company
• Confirmation that a copy of the draft scheme
has been filed with the Registrar
65
Section 203 – Merger and Amalgamation
of companies (Cont…)
• Report adopted by the directors of the merging
companies explaining the effect of the
compromise on each class of shareholders, the
share exchange ratio and specifying valuation
difficulties, if any
• Report of expert with regard to valuation, if any
• Supplementary accounting statement if the last
annual accounts of any of the merging company
relate to a financial year ending more than six
months before the first meeting of the company
summoned for approving the scheme
66
Section 203 – Merger and Amalgamation
of companies (Cont…)
 In case of a merger by formation of a new company,
in addition to all the above, copy of the ordinary
resolution approving the draft scheme, passed by
each of the transferor companies would be required
to be circulated
 The order of the Tribunal approving the
arrangement shall also include:
 Foreign direct investment if any, to be allocated
to the transferor and transferee company
 Transfer of employees of the transferor company
to the transferee company
67
Section 203 – Merger and Amalgamation
of companies (Cont…)

Where the transferor is a listed company and
the transferee is an unlisted company –

the transferee company shall continue to be
an unlisted company (not favourable in case
of a demerger)

shareholders of transferor company desiring to
opt out of the transferee company should be
paid at a pre-determined price or as per
valuation made and as provided by the
Tribunal
68
Section 203 – Merger and Amalgamation
of companies (Cont…)
 the
transferor company if not dissolved, will
become an unlisted company and its
shareholders if desiring to opt out should also
be paid at a pre-determined price or as per
valuation
• Where transferor company is dissolved, the fee
for authorized capital can be set-off against the
fees payable by the transferee company

Certified copy of the order to be filed with Registrar
within 30 days of making the order
69
Section 204 – M & A of small companies,
Holding and WOS

Simplified process and easy time lines for mergers
and amalgamations of small companies and
holding company and wholly owned subsidiary

Small company – paid up share capital less than
Rs 5 crore and turnover not over Rs. 20 crore as
per latest audited profit and loss account; not a
holding or subsidiary; not a charitable company;
not formed under any Special Act
70
Section 204 – M & A of small companies,
Wholly and WOS (Cont…)
Notice of scheme inviting objections from
any persons affected by the scheme
within 30 days, to be issued both by
transferor and transferee company
 Objections
received, if any,
to be
considered in respective general meetings
and scheme to be approved by a special
resolution

71
Section 204 – M & A of small companies,
Wholly and WOS (Cont…)
 In case of creditors meeting –
• notice of 21 days
• Scheme to be approved by three-fourths
in value of creditors or class of creditors
at a meeting
• or by approval in writing
 Transferee company to file copy of the
approved scheme with ROC and Official
Liquidator (OL)
72
Section 204 – M & A of small companies,
Wholly and WOS (Cont…)

If ROC and OL have no objections, the scheme
shall be registered and confirmation given

If OL does not communicate his objections within
30 days – no objection presumed and Registrar can
register and confirm

Upon objection from OL or any other person,
Registrar may apply to Tribunal within 90 days of
receipt of the scheme and Tribunal may issue
necessary directions
73
Section 204 – M & A of small companies,
Wholly and WOS (Cont…)

If no comments or objection is received from the
Registrar or any other person, the Tribunal may
pass an order confirming the scheme

The Registrar shall register the scheme and issue
confirmation to the companies

Registration of the scheme shall be deemed to have
the effect of dissolution of the transferor company
without winding up

Transferee company can avail set-off of fees
payable on authorized capital
74
Section 205 - Amalgamation by
mutual agreement

New concept to facilitate cross border
mergers

In case of a foreign company merging with
an Indian company, the scheme may
provide for payment of consideration to the
shareholders of the merging company in
cash or in Indian Depositary Receipts or
partly in cash and partly in Indian
Depositary Receipts
75
Section 205 - Amalgamation by
mutual agreement
 Indian
Depositary Receipts means any
instrument in the form of a depositary
receipt created by a domestic
depositary in India and authorized by
a company incorporated outside India
making an issue of such depositary
receipts
76
Section 207 - Purchase of minority
shareholding

Where any acquirer or a person acting in
concert with such acquirer, becomes a
registered holder of 90% or more of the
issued equity share capital of a company
or any person or group of persons becoming
90% majority or holds 90% of the issued
equity share capital by virtue of a merger,
amalgamation, share exchange, conversion
of securities or for any other reason,
such acquirer, person or group of persons,
shall make an offer to the remaining
shareholders to buy their shares.
77
Section 207 - Purchase of minority
shareholding (Cont…)
 The
minority shareholders may on
their own make an offer to the
majority shareholders to purchase
their shares.
 Offer price shall be as determined by a
registered valuer
78
Section 207 - Purchase of minority
shareholding (Cont…)
 The
majority shareholders shall
deposit required amount in a separate
bank account to be operated by
transferor company
 Transferor company responsible to
receive shares and to make payment
to shareholders within 60 days
79
Section 207 - Purchase of minority
shareholding (Cont…)
In the absence of physical delivery of shares
by shareholders within specified time, the
share certificates shall be deemed to be
cancelled and payment made
 In case of an offer for full purchase by a
majority shareholder the heirs, successors
etc, of the minority shareholder can avail
the amount up to three years from the date
of acquisition of majority shareholding

80
Section 207 - Purchase of minority
shareholding (Cont…)
Minority shareholders entitled to receive on
pro rata basis such higher price, at which
the majority shareholders holding at least
75% of the minority shareholding, have
negotiated or have an understanding with
any other person for transfer of the said
shares.
 ‘Acquirer’ and ‘persons acting in concert’ to
have same meaning as in SEBI Takeover
Regulations

81
Section 209 - Registration of offer of schemes
involving transfer of shares
Circular containing an offer of a scheme or
contract involving transfer of shares or any
class of shares, shall be presented to the
Registrar for registration and shall not be
issued unless registered
 Registrar to communicate refusal to register
within 30 days of application

82
Section 211 - Liability of officers in respect
of offences committed prior
to amalgamation, transfer, etc.

Liability in respect of offences committed
under the Act by officers in default of the
transferor company prior to its merger,
amalgamation or acquisition will continue
after such merger, amalgamation or
acquisition
83
SPECIAL COURTS
84
Sections 396 to 405 - Special Courts

New concept

Central Government to establish special
courts for the purpose of providing speedy
trial of offences under the Act.

Special Courts situated in the area where
the registered office of the company is
situated to have jurisdiction and if there are
more than one Special Courts in an area,
the one specified by the High Court
concerned will have jurisdiction
85
Sections 396 to 405 - Special Courts (Cont..)

All offences under Companies Act to be
triable only by Special Courts

Every offence under the Act shall be
deemed to be non-cognizable

Special Court may based upon a police
report of the facts constituting an offence or
upon a complaint made, take cognizance of
the offence without the accused being
committed for trial
86
Sections 396 to 405 - Special Courts (Cont..)

Extant provisions of section 621A relating
to non-cognizable offences and provisions of
section 621A relating to composition of
offences have been retained

Matters relating to accusation without
reasonable cause shall now be dealt with by
the Special Court or Court of Session in
accordance with Section 250 of the Code of
Criminal Procedure, 1973
87
Sections 396 to 405 - Special Courts (Cont..)

Special Courts may try in a Summary Way any
offence under this Act which is punishable with
imprisonment for a term not exceeding 3 years (like
a civil suit) – in such cases punishment cannot
exceed one year. If necessary the Special Court
may try the matter as a regular trial

Appeals shall lie with the High Court

Transitional provisions that existing Court of
Sessions will continue to exercise jurisdiction
88
NATIONAL COMPANY LAW TRIBUNAL
(NCLT)
AND
APPELLATE TRIBUNAL
89
Sections 368 to 395 - NCLT and Appellate
Tribunal
 Provisions
relating to establishment,
constitution and functioning of NCLT
and Appellate Tribunal laid down
elaborately
90
Sections 368 to 395 - NCLT and Appellate
Tribunal (Cont…)

Criteria/qualification/experience for Chairperson/
members of Tribunal and Appellate Tribunal
clearly set out

Some matters presently dealt with by Company
Law Board which shall be handled by the Tribunal


Default in repayment of principal amount and
interest thereon on Debentures
Failure to repay deposits on time
91
Sections 368 to 395 - NCLT and Appellate
Tribunal (Cont…)

Some matters presently requiring approval of
Central Government to go to Tribunal :

Alteration of articles for conversion of a public
company into a private company

power to call annual general meeting,

refusal for transfer of securities,
92
Sections 368 to 395 - NCLT and Appellate
Tribunal (Cont…)



to give notice in case of an
application for reduction of share
capital
default in repayment of principal on
debentures
to decide on the financial year
93
THANK YOU
94