Companies Amendment Bill 2016- part 6

Sl.

Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

74

S e c t i o n

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3 8 4

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75

Amendment to Section (2) of Section 384 of the Act, to

Amendment to remove ambiguity.

Debentures,

Annual

include Section 135 of Act, thereby making the provisions of

Return, Registration of

Corporate Social responsibility CSR applicable to a Foreign

charges,

books

of

Company, in addition to the applicability of the provisions of

account

and  their

Section 71, 92, 128, Chapter-VI &Chapter-XIV of the Act.

inspection.

75

Section - 403 – Fee for

76

Amendment to replace the existing 1^st proviso to Sub-Section

Welcome Amendment, to remove

filing, etc.

(1) of Section 403 of the Act, with new a proviso, so as to

ambiguity

include the details of the relevant sections [i.e., 89, 92, 117,

121, 137 or 157] under which filings can be done within a

period of 270 days from the expiry of the period so provided in

those sections, on payment of such additional fee.

Amendment to replace the existing 2^nd proviso to Sub-Section

Welcome Amendment, to remove

(1) of Section 403 of the Act, with new a proviso, so as to

ambiguity and ease of operations.

enable filing of returns relating to the sections referred in the

1^st proviso, beyond the time frame as given in the 1^st proviso

and with regard to the other sections, beyond the time frame

given in the respective section, on payment of such higher

additional or additional fee.

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Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

Insertion of a 3^rd proviso to provide that in case of default on two

or more occasions in filing of returns under section 89, 92, 117,

121, 137 or 157, the provisions of the first and second provisos

shall not apply, until the return is submitted, filed, registered or

recorded, as the case may be, with additional fee, without

prejudice to any legal action or liability under this Act.

Amendment to Sub-Section (2) of Section 403 of the Act, to

Amendment to remove ambiguity.

substitute the words "first proviso to that sub-section" with

words "relevant section”.

76

Section - 406 -

77

Amendment to substitute the existing section 406 of the Act

Amendment to give more clarity.

with a new section 406 with 5 sub-sections..  The new section

Power to modify Act in

is titled: “Provision relating to Nidhis and its application, etc.”.

its  application  to

The gist of the sub-sections is as below:

Nidhis.

(1)  A word “Mutual Benefit Society” has been added, and

accordingly a Nidhi or a Mutual Benefit Society shall be a

company  which  the  Central  Government  may  by

notification in the Gazette, declare to be so.

(2)  The Central Government may by notification in the

Gazette, direct the applicability or non-applicability of the

provisions of the Act to a Nidhi or Mutual Benefit Society.

(3)  Placing of the draft of the proposed notification before

each House of Parliament, while it is in session, for a total

period  of  30  days,  and  if,  both  Houses  agree  in

disapproving the issue of notification or both Houses

agree in making any modification in the notification, the

notification shall not be issued or, as the case may be, shall

be issued only in such modified form as may be agreed

upon by both the Houses.

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Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

(4)  For the purpose of reckoning the period of 30 days, referred

to in sub-section (3), any period during which the House

referred to in sub-section (3), is prorogued or adjourned for

more than four consecutive days, shall not be counted.

(5)  Laying of Copies of every notification, before each House of

Parliament, as soon as may be after it has been issued.

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Section – 409 –

78

Amendment to Sub-Section (3) of Section 409 of the Act, in

Qualification of

connection with the eligibility of the Technical members of the

President and

National Company Law Tribunal.

Members of Tribunal.

78

Section 411–

79

Amendment to Sub-Section (3) of Section 411 of the Act, in

Qualifications of

connection with the eligibility of the Technical members of the

chairperson And

National Company Law Appellate Tribunal.

Members of Appellate

Tribunal.

79

Section – 412 -

80

Amendment to Sub-Section (2) of Section 412 of the Act, in

Selection of

connection with the constitution of the Selection Committee,

Members of Tribunal

to recommend the appointment of Members to the National

and Appellate

Company Law Tribunal and the National Company Law

Tribunal.

Appellate Tribunal.

80

Section - 435 –

81

Substitution of the existing Section 435 of the Act, with a new

Welcome Amendment to remove

section,  to

amend  provide  for

appointment

by

Central

ambiguity.

Establishment of

Government

of  Metropolitan

Magistrate  or

a

Judicial

Special Courts.

Magistrate of the First Class in Special Court in case of offences

punishable under the Act with imprisonment less than 2 years.

The appointment by the Central Government shall be with the

concurrence of the Chief Justice of the High Court within whose

jurisdiction the judge to be appointed is working.

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Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

81

Section – 438 –

82

Amendment of Section 438 of the Act, consequent upon the

proposed amendment to Section 435 of the Act, thereby to

Application of Code to

replace the words "deemed to be a Court of Session", with the

Proceedings  before

words "deemed to be a Court of Session or the court of

Special Court.

Metropolitan Magistrate or a Judicial Magistrate of the First

Class, as the case may be".

82

Section – 439 -

83

Amendment to Sub-section (2) of Section 439 of the Act to

Welcome Amendment to remove

include ”Member” in addition to the shareholders, for

ambiguity.

Offences to be non-

making a complaint with respect to taking cognizance of

cognizable.

offences under the Act by the Court.

83

Section – 440–

84

Amendment to Section 440 of the Act to provide that till

Special Courts are established, the trial of offences shall be

Transitional provisions.

continued with Court of Sessionor Court of Metropolitan

Magistrate or a Judicial Magistrate of the First Class, thereby

to replace the words  " Court of Session", appearing in the

section with the words " Court of Session or the court of

Metropolitan Magistrate or a Judicial Magistrate of the First

Class, as the case may be.

84

Section –441 –

85

Amendment to Sub-Section (1) of Section 441 of the Act to

Welcome  Amendment,  giving

replace the words "with fine only", appearing in the Sub-

further  scope  to  compound

Compounding of

Section, with the words "not being an offence punishable with

o f f e n c e s  p u n i s h a b l e  w i t h

certain offences

imprisonment only, or punishable with imprisonment and also

imprisonment or with Fine, with

with fine".

imprisonment or with Fine or both

with out the special permission of

NOTE: Consequent upon amendment to Sub-Section (1) of

the Special Court.

Section 441, the clause (a) of Sub-Section (6) of Section 441,

also needs amendment, but seems to have been missed out

in the proposed amendment bill.

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Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

85

New Section

86

Insertion of 2 new sections 446A & 446B, after the existing

Section 446.

Section 446A : Factors for determining level of punishment.

Welcome inclusion

The new Section provides that the court or the Special Court,

shall consider the following factors, to decide the amount of

fine or imprisonment under this Act.

(a) size of the company; (b) nature of business carried on by

the company;(c) injury to public interest;(d) nature of the

default; and(e) repetition of the default.

Section 446B: Lesser penalties for One Person Companies or

small companies

If a One Person Company or a small company fails to comply

Welcome inclusion in favour of One

with the provisions of Section 92(5), Section 117(2)(c),Section

Person  Companies  and  Small

137(3), such company and officer in default of such company

Companies  and  the  officers,

shall be punishable with fine or imprisonment or fine and

reducing fine and imprisonment.

imprisonment, as the case may be, which shall not be more

than one-half of the fine or imprisonment or fine and

imprisonment, as the case may be, of the minimum or

maximum fine or imprisonment or fine and imprisonment, as

the case may be, specified in such sections.

Note: It is noticed that in the amendment bill they have

referred Section 117 (2)(c), but the said sub-section does not

contain any clauses, and it is assumed probably it is relating to

Section 117 (3)(c) and not Section 117 (2)©.