COMPANIES (SECOND AMENDMENT) ACT, 2002
(1) This Act may be called the Companies (Second Amendment) Act, 2002.
(2) It shall come into force on such date1as the Central Government may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.
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1. Enforcement date of Section 2 and Section 6 is 01.04.2003 vide Notification No. SO344(E) dated 31.03.2003
Section 1 of the Companies (Second Amendment) Act, 2002, primarily deals with the short title, commencement, and extent of the Act. It sets the foundational scope and official nomenclature for the legislation, indicating its purpose to amend the existing Companies Act, 1956, and to establish the framework for the revival and rehabilitation of sick industrial companies through the creation of the National Company Law Tribunal (NCLT).
Note: The references are based on the provided sources, primarily focusing on the legislative and procedural aspects of Section 1 of the Companies (Second Amendment) Act, 2002.
In section 2 of the Companies Act, 1956 (1 of 1956) (hereinafter referred to as the principal Act),--
(a) after clause (1a), the following clause shall be inserted, namely:--
'(1B) "Appellate Tribunal" means the National Company Law Appellate Tribunal constituted under sub-section (1) of section 10FR;';
(b) after clause (19A), the following clauses shall be inserted, namely:--
'(19AA) "industrial company" means a company which owns one or more industrial undertakings;
(19AB) "industrial undertaking" means any undertaking, pertaining to any industry carried on in one or more factories or units by any company, as defined in clause (aa) of section 3 of the Industries (Development and Regulation) Act, 1951 (6
Section 2 of the Companies (Second Amendment) Act, 2002, primarily deals with the definitions of key terms used throughout the Act, including the term "information memorandum." It plays a crucial role in clarifying the scope and interpretation of various provisions related to securities issuance, company regulation, and the functioning of the regulatory authorities.
Section 2 of the Act provides definitions for various terms, notably:- "Information memorandum" (Section 2(19B)): Describes the pre-issue process to elicit demand and assess price and terms before filing a prospectus.- "Prospectus" (Section 2(36)): Defines a prospectus as any document inviting deposits or offers for shares or debentures.- "Sick company" (Section 2(46AA)): Defines a company with accumulated losses exceeding its net worth as a sick company.- The section also includes other definitions relevant for interpreting the Act's provisions.
Note: The analysis primarily draws from the provided sources, especially [SAHARA INDIA REAL ESTATE CORPORATION LIMITED VS SECURITIES AND EXCHANGE BOARD OF INDIA], which elaborates on the definitions and procedural aspects introduced or clarified by the 2002 Amendment.
In section 10E of the principal Act, in sub-section (1A), for the words "conferred on it", at both the places where they Occur, the words, brackets and figures "conferred on it before the commencement of the Companies (Second Amendment) Act, 2002" shall be substituted.
In section 10F of the principal Act, after the words "any decision or order of the Company Law Board", the words, brackets and figures "made before the commencement of the Companies (Second Amendment) Act, 2002" shall be inserted.
After section 10F of the principal Act, the following section shall be inserted, namely:-- "
"10FA. Dissolution of Company Law Board.--
(1) On and from the commencement of the Companies (Second Amendment) Act, 2002, the Board of Company Law Administration constituted under sub-section (1) of section 10E shall stand dissolved.
(2) On the dissolution of the Company Law Board, the persons appointed as Chairman, Vice-Chairman and members and officers and other employees of that Board and holding office as such immediately before such commencement shall vacate their respective offices and no such Chairman, Vice-Chairman and member and officer and other employee shall be entitled to claim any compensation for the premature termination of the term of his office or of any contract of service:
After Part IA of the principal Act, the following Parts shall be inserted, namely:--
'PART IB
National Company Law Tribunal
10FB. Constitution of National Company Law Tribunal.--The Central Government shall, by notification in the Official Gazette, constitute a Tribunal to be known as the National Company Law Tribunal to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force.
10FC. Composition of Tribunal.--The Tribunal shall consist of a President and such number of Judicial and Technical Members not exceeding sixty-two, as the Central Government deems fit, to be appointed by that Government, by notification in the Official Gazette.
For section 17 of the principal Act, the following section shall be substituted, namely:--
17. Special resolution and confirmation by Central Government required for alteration of memorandum.--(1) A company may, by special resolution, alter the provisions of its memorandum so as to change the place of its registered office from one State to another, or with respect to the objects of the company so far as may be required to enable it--
(a) to carry on its business more economically or more efficiently; or
(b) to attain its main purpose by new or improved means; or
(c) to enlarge or change the local area of its operations; or
(d) to carry on some business which under existing circumstances may conveniently
In sections 18, 19, 43 and 49 of the principal Act, for the words "Company Law Board", wherever they occur, the words "Central Government" shall be substituted.
In sections 55A and 58A of the principal Act, for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 58AA of the principal Act,--
(a) for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted;
(b) in sub-section (3), in the first proviso, for the words" the Board", the words "the Tribunal" shall be substituted.
In section 75 of the principal Act, in sub-section (1), in clause (c), in sub-clause (ii), for the word "Court", the word "Tribunal" shall be substituted.
In section 79 of the principal Act,--
(a) for the words "Company Law Board", wherever they occur, the words "Central Government" shall be substituted:
(b) in sub-section (2), in clause (ii), in the proviso, for the words "unless that Board is of opinion", the words "unless the Central Government is of opinion" shall be substituted;
(c) after sub-section (3), the following proviso shall be inserted, namely:--
'Provided that in the case of revival and rehabilitation of sick industrial companies under Chapter VIA, the provisions of this section shall have effect as if for the words "Central Government", the word 'Tribunal" had been substituted.'
In section 80A of the principal Act,--
(a) in sub-section (1), in the proviso, for the words "Company Law Board", the word "Tribunal" shall be substituted;
(b) in sub-section (2), for the words "any court", the words "any court or the Tribunal" shall be substituted.
In sections 100 to 104 and 107 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In sections 111 and 111A of the principal Act, for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 113 of the principal Act, for the words "Company Law Board", wherever they occur, the words "Central Government" shall be substituted.
In section 117B of the principal Act,--
(a) in sub-section (4), for the words "Company Law Board", wherever they occur, the words "Central Government" shall be substituted;
(b) after sub-section (4) the following proviso shall be inserted namely:--
'Provided that in the case of revival and rehabilitation of a sick industrial company under Part VIA, the provisions of this section shall have effect as if for the words "Central Government", the word "Tribunal" had been substituted.';
In section 117C of the principal Act, for the words "Company Law Board", at both the places where they occur, the word "Tribunal" shall be substituted.
In section 118 of the principal Act, for the words "Company Law Board", the words "Central Government" shall be substituted.
For section 141 of the principal Act, the following section shall be substituted, namely:--
141. Rectification by Central Government of register of charges.--(1) The Central Government, on being satisfied--
(a) that the omission to file with the Registrar the particulars of any charge created by a company or of any charge subject to which any property has been acquired by the company or of any modification of any such charge or of any issue of debentures of a series, or that the omission to register any charge within the time required by this Part or that the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required by this Part, or that the omission or m is statement of any particular with respect to any such charge, modification or issue of debentures of a series or with respect t
In sections 144 and 163 of the principal Act, for the words "Company Law Board", the word "Central Government" shall be substituted.
For section 167 of the principal Act, the following section shall be substituted, namely:--
"167. Power of Central Government to call annual general meeting.--(1) If default is made in holding an annual general meeting in accordance with section 166, the Central Government may, notwithstanding anything contained in this Act or in the articles of the company, on the application of any member of the company, call, or direct the calling of, a general meeting of the company and give such ancillary or consequential directions as the Central Government thinks expedient in relation to the calling, holding and conducting of the meeting.
Explanation.--The directions that may be given under this sub-section may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.
&
In section 168 of the principal Act, for the words "Central Government", the word "Tribunal or the Central Government, as the case may be" shall be substituted.
For section 186 of the principal Act, the following section shall be substituted, namely:--
"186. Power of Tribunal to order meeting to be called.--(1) If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting, in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles, the Tribunal may, either of its own motion or on the application of any director of the company, or of any member of the company who would be entitled to vote at the meeting,--
(a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit; and
(b) give such ancillary or consequential directions as the Tribunal thinks expedient, i
In sections 188 and 196 of the principal Act, for the words "Company Law Board" wherever they occur, the word "Central Government" shall be substituted.
In section 203 of the principal Act,--
(a) in sub-section (1), for the word "Court", at both the places where it occurs, the words "Court or the Tribunal, as the case may be" shall be substituted;
(b) in sub-section (2),--
(i) in clause (a), for the words "includes the Court by which he is convicted as well as any Court having jurisdiction to wind up", the words "includes the Court or the Tribunal by which he is convicted, as well as any Court or Tribunal having jurisdiction to wind up" shall be substituted;
(ii) in clause (b), for the word "Court", the words "Court or Tribunal" shall be substituted;
(c) in sub-sections (3) and (4), for the words "Court having jurisdiction to wind up a company", the words
In sections 219 and 225 of the principal Act, for the words "Company Law Board" wherever they occur, the words "Central Government" shall be substituted.
In section 227 of the principal Act, in sub-section (3), after clause (f), the following clause shall be inserted, namely:--:
"(g) whether the cess payable under section 441A has been paid and if not, the details of amount of cess not so paid.".
In sections 235 and 236 of the principal Act, for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 237 of the principal Act, in clause (b), in the opening portion, for the words "if in the opinion of the Company Law Board", the words "in its opinion or in the opinion of the Tribunal" shall be substituted.
In section 241 of the principal Act, in sub-section (2), in clause (dd), for the words "Company Law Board", the word "Tribunal" shall be substituted.
In section 243 of the principal Act, for the word "Court", at both the places where it occurs, the word "Tribunal" shall be substituted.
In sections 247, 250, 251 and 269 of the principal Act, for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 284 of the principal Act, in sub-section (4), in the proviso, for the words "Company Law Board", the words "Central Government" shall be substituted.
In sections 304 and 307 of the principal Act, for the words "Company Law Board'', the words "Central Government or Tribunal, as the case may be" shall be substituted.
In section 318 of the principal Act, in sub-section (3), in clause (d), for the words "or subject to the supervision of Court", the words "order of the Tribunal" shall be substituted.
In section 349 of the principal Act, in sub-section (4), after clause (o), the following clause shall be inserted, namely:--
"(p) amount paid as cess under section 441A.".
In Part VI of the principal Act, in Chapter IVA, for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 391 of the principal Act,--
(a) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted;
(b) sub-section (7) shall be omitted;
(c) below sub-section (7), the portion beginning with the words "The provisions of and ending with the words "the application" shall be omitted.
For section 392 of the principal Act, the following section shall be substituted, namely:--
"392. Power of Tribunal to enforce compromise and arrangement.--(1) Where the Tribunal makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it--
(a) shall have power to supervise the carrying out of the compromise or an arrangement; and
(b) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement.
(2) If the Tribunal aforesaid is satisfied that a compromise or an arrangement sanctioned under section 391 cannot be work
In section 394 of the principal Act,--
(a) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted;
(b) in the first proviso to sub-section (1), the words "the Company Law Board or" shall be omitted.
In sections 394A and 395 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 396 of the principal Act, for the words "Company Law Board", at both the places where they occur, the word "Tribunal" shall be substituted.
In Part VI of the principal Act, in Chapter VI, for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 410 of the principal Act,--
(a) for the words "Company Law Board", the word "Tribunal" shall be substituted;
(b) for the words "or Board", the words "or the Tribunal" shall be substituted,
For section 424 of the principal Act, the following section shall be substituted, namely:--
"424. Application of section 421 to 423 to receivers and managers appointed by Tribunal and managers appointed in pursuance of an instrument.--The provisions of sections 421 to 423 shall apply to the receiver of, or any person appointed to manage, the property of a company, appointed by the Tribunal or to any person appointed to manage, the property of a company under any powers contained in an instrument, in like manner as they apply to a receiver appointed under any powers contained in an instrument.".
After Part VI of the principal Act, the following Part shall be inserted, namely:--
'PART VIA
Revival and Rehabilitation of Sick Industrial Companies
424A. Reference to Tribunal.--(1) Where an industrial company, has become a sick industrial company, the Board of directors of such company shall make a reference to the Tribunal, and prepare a scheme of its revival and rehabilitation and submit the same to the Tribunal along with an application containing such particulars as may be prescribed, for determination of the measures which may be adopted with respect to such company:
Provided that nothing contained in this sub-section shall apply to a Government company:
Provided further that a Government company
In section 425 of the principal Act, in sub-section (1),--
(i) in clause (a), for the word "Court", the word "Tribunal" shall be substituted;
(ii) in clause (b), the word "or" occurring at the end shall be omitted;
(iii) clause (c) shall be omitted.
In sections 426 and 427 of the principal Act, for the word "Court", the word "Tribunal" shall be substituted.
In the heading and sub-heading before section 433 of the principal Act, for the word "Court", the word "Tribunal" shall be substituted.
For section 433 of the principal Act, the following section shall be substituted, namely:--
"433. Circumstances in which company may be wound up by Tribunal.-- A company may be wound up by the Tribunal, --
(a) if the company has, by special resolution, resolved that the company be wound up by the Tribunal;
(b) if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting;
(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
(d) if the number of members is reduced, in the case of a public company, below seven, and in the case of a private company, below two;
In section 434 of the principal Act, in sub-section (1),--
(i) in clause (a), for the words "five hundred rupees", the words "one lakh rupees" shall be substituted;
(ii) in clause (b), for the words "any Court", the words "any Court or Tribunal" shall be substituted;
(iii) in clause (c), for the word "Court", at both the places where it occurs, the word "Tribunal" shall be substituted.
Heading occurring before section 435 and sections 435 to 438 of the principal Act shall be omitted.
In section 439 of the principal Act,--
(i) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted;
(ii) in sub-section (1), after clause (f), the following clause shall be inserted, namely:--
"(g) in a case falling under clause (h) of section 433, by the Central Government or a State Government;";
(iii) in sub-section (5), for the word, brackets and letter "and (f)" the brackets, letters and word "(f) and (g)" shall be substituted.
After section 439 of the principal Act, the following section shall be inserted, namely:--
"439A. Statement of affairs to be filed on winding up of a company.-- (1) Every company shall file with the Tribunal a statement of its affairs alongwith the petition for winding up.
(2) Where a company opposes a petition for its winding up, it shall file with the Tribunal a statement of its affairs.
(3) The statement of affairs referred to in sub-section (1) or sub-section (2) shall be accompanied by --
(a) the last known addresses of all directors and company, secretary of such company;
(b) the details of location of assets of the company and their value;
(c) the detail
For sections 440 and 441 of the principal Act, the following sections shall be substituted, namely:--
440. Right to present winding up petition where company is being wound up voluntarily.-- (1) Where a company is being wound up voluntarily, a petition for its winding up by the Tribunal may be presented by --
(a) any person authorised to do so under section 439; or
(b) the Official Liquidator.
(2) The Tribunal shall not make a winding up order on a petition presented to it under sub-section (1), unless it is satisfied that the voluntary winding up cannot be continued with due regard to the interests of the creditors or contributories or both.
441. Commencement of winding up by Tribunal.-- (1) Where, befor
After section 441 of the principal Act, the following shall be inserted, namely:--
Levy by way of cess and formation of Rehabilitation and Revival Fund
441 A. Levy and collection of cess on turnover or gross receipts of companies.-- (1) There shall be levied and collected, for the purposes of rehabilitation or revival or protection of assets of the sick industrial company, a levy by way of cess at such rate not less than 0.005 per cent, and not more than 0.1 per cent, on the value of annual turnover of every company or its annual gross receipt, whichever is more as the Central Government may, from time to time, specify by notification in the Official Gazette.
(2) Every company shall pay to the Central Government the cess referred to in sub-section (1) within three months from the close of ever
In the heading before section 442, for the word "Court", the word "Tribunal" shall be substituted.
Section 442 of the principal Act shall be omitted.
For sections 443 and 444 of the principal Act, the following sections shall be substituted, namely:--
"443. Power of Tribunal on hearing petition.-- (1) On hearing a winding up petition, the Tribunal may --
(a) dismiss it, with or without costs; or
(b) adjourn the hearing conditionally or unconditionally; or
(c) make any interim order that it thinks fit; or
(d) make an order for winding up the company with or without costs, or any other order that it thinks fit:
Provided that the Tribunal shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that t
In section 446 of the principal Act,--
(a) in sub-section (1), for the word "Court" at both the places where it occurs, the word "Tribunal" shall be substituted;
(b) in sub-section (2), for the words "The court which is winding up the company", the words "The Tribunal" shall be substituted;
(c) sub-section (3) shall be omitted.
After section 446, the following section shall be inserted, namely:--
"446A. Responsibility of directors and officers to submit to Tribunal audited books and accounts.-- The directors and other officers of every company shall ensure that books of account of the company are completed and audited up to date of winding up order made by the Tribunal and submitted to it at the cost of the company, failing which such directors and officers shall be liable for punishment for a term not exceeding one year and fine for an amount not exceeding one lakh rupees.".
For section 448 of the principal Act, the following section shall be substituted, namely:--
'448. Appointment of Official Liquidator.-- (1) For the purposes of this Act, so far as it relates to the winding up of a company by the Tribunal, there shall be an Official Liquidator who--
(a) may be appointed from a panel of professional firms of chartered accountants, advocates, company secretaries, costs and works accountants or firms having a combination of these professions, which the Central Government shall constitute for the Tribunal; or
(b) may be a body corporate consisting of such professionals as may be approved by the Central Government from time to time; or
(c) may be a whole-time or a pan-time officer appointed by the Central Government:
&
In section 450 of the principal Act, for the word "Court" wherever it occurs, the word "Tribunal" shall be substituted.
In section 451 of the principal Act,--
(a) in sub-section (1), for the word "Court", the word "Tribunal" shall be substituted;
(b) in sub-section (2), for the words "Official Liquidator", the words, brackets, letter and figures "the Official Liquidator referred to in clause (c) of sub-section (1) of section 448" shall be substituted.
In sections 453 to 456 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 457 of the principal Act,--
(a) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted;
(b) in sub-section (1), after clause (c), the following clause shall be inserted, namely:--
"(ca) to sell whole of the undertaking of the company as a going concern;"; (c) after sub-section (2), the following sub-sections shall be inserted, namely:--
"(2A) The liquidator shall --
(a) appoint security guards to protect the property of the company taken into his custody and to make out an inventory of the assets in consultation with secured creditors after giving them notice;
(b) appoint, as the case may be, valuer, chartered surveyors or
In sections 458 and 458A of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
For section 459 of the principal Act, the following section shall be substituted, namely:--
"459. Provision for legal assistance to liquidator.-- The liquidator may, with the sanction of the Tribunal, appoint one or more chartered accountants or company secretaries or cost accountants or legal practitioners entitled to appear before the Tribunal under section 10GD to assist him in the performance of his duties.".
In sections 460 to 465 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In the heading before section 466 of the principal Act, for the word "Court", the word "Tribunal" shall be substituted.
For section 466 of the principal Act, the following section shall be substituted, namely:--
"466. Power of Tribunal to stay winding up.-- (1) The Tribunal may at any time after making a winding up order, on the application either of the Official Liquidator or of any creditor or contributory, and on proof to the satisfaction of the Tribunal that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Tribunal thinks fit.
(2) On any application under this section, the Tribunal may, before making an order, require the Official Liquidator to furnish to the Tribunal a report with respect to any facts or matters which are in his opinion relevant to the application.
(3) A copy
In sections 467 to 469 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
For section 470 of the principal Act, the following section shall be substituted, namely:--
"470. Power of Tribunal to make calls.-- (1) The Tribunal may, at any time after making winding up order, and either before or after it has ascertained the sufficiency of the assets of the company,--
(a) make calls on all or any of the contributories for the time being on the list of the contributories, to the extent of their liability, for payment of any money which the Tribunal considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves; and
(b) make an order for payment of any calls so made.
(2) In making a call, the T
In section 471 of the principal Act, for the word "Court", at both the places where it occurs, the word "Tribunal" shall be substituted.
For section 472 of the principal Act, the following section shall be substituted, namely:--
"472. Moneys and securities paid into bank to be subject to order of Tribunal.--All moneys, bills, hundis, notes and other securities paid or delivered into the Reserve Bank of India in the course of the winding up of a company by the Tribunal, shall be subject in alt respects to the orders of the Tribunal.".
In sections 473 to 477 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 478 of the principal Act,--
(a) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted;
(b) in sub-section (3) and clause (b) of sub-section (6), for the words "advocate, attorney or pleader entitled to appear before the Court", the words, figures and letters "chartered accountants or company secretaries or cost accountants or legal practitioners entitled to appear before the Tribunal under section 10GD" shall be substituted;
(c) for sub-section (10), the following sub-section shall be substituted, namely:--
"(10) An examination under this section may, if the Tribunal so directs, be held before any person or authority authorised by the Tribunal.";
(d) in sub-section
In section 479 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
For section 480 of the principal Act, the following section shall be substituted, namely:--
"480. Saving of existing powers of Tribunal.-- Any powers conferred on the Tribunal by this Act shall be in addition to, and not in derogation of, any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.".
In section 481 of the principal Act, for the word "Court" at both the places where it occurs, the word "Tribunal" shall be substituted.
In section 483 of the principal Act, for the words "any order made, or decision given", the words, brackets and figures "any order made or decision given before the commencement of the Companies (second Amendment) Act, 2002" shall be substituted.
In sections 490 and 492 of the principal Act, for the word "Court,", wherever it occurs, the word "Tribunal" shall be substituted.
In section 494 of the principal Act, in sub-section (5),--
(a) for the words "or subject to the supervision of the Court", the words "the Tribunal" shall be substituted;
(b) for the words "sanctioned by the Court", the words "sanctioned by the Tribunal" shall be substituted.
In section 497 of the principal Act,--
(a) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted;
(b) for the words "Official Liquidator", wherever they occur, the words, brackets, letter and figures "Official Liquidator referred to in clause (c) of sub-section (1) of section 448" shall be substituted.
In sections 502 to 504, 506 and 507 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 509 of the principal Act,--
(a) for the words "Official Liquidator", wherever it occurs, the words, brackets, letter and figures "Official Liquidator referred to in clause (c) of sub-section (1) of section 448" shall be substituted;
(b) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In sections 511A and 512 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 513 of the principal Act, after sub-section (3), the following proviso shall be inserted, namely;--
"Provided that, notwithstanding anything contained in any other law for the time being in force, a body corporate consisting of such professionals as may be approved by the Central Government from time to time, shall be qualified for appointment as Official Liquidator under section 448".
For section 515 of the principal Act, the following section shall be substituted, namely:--
"515. Power of Tribunal to appoint and remove liquidator in voluntary winding up.-- (1) If from any cause whatever, there is no liquidator acting, the Tribunal may appoint the Official Liquidator or any other person as a liquidator.
(2) The Tribunal may, on cause shown, remove a liquidator and appoint the Official Liquidator or any other person as a liquidator in place of the removed liquidator.
(3) The Tribunal may also appoint or remove a liquidator on the application made by the Registrar in this behalf.
(4) If the Official Liquidator is appointed as liquidator under the proviso to sub-section (2) of section 502 or under this section, the remuneration to b
In section 517 of the principal Act, for the word "Court" at both the places where it occurs, the word "Tribunal" shall be substituted.
For sections 518 and 519 of the principal Act, the following sections shall be substituted, namely:--
"518. Power to apply to Tribunal to have questions determined or powers exercised.-- (1) The liquidator or any contributory or creditor may apply to the Tribunal--
(a) to determine any question arising in the winding up of a company; or
(b) to exercise, as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the Tribunal might exercise if the company were being wound up by the Tribunal.
(2) The liquidator or any creditor or contributory may apply to the Tribunal for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after
Sections 522 to 527 of the principal Act shall be omitted.
In sections 531 and 531A of the principal Act, for the words "or subject to the supervision of the Court", the words "the Tribunal" shall be substituted.
In sections 533 and 535 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 536 of the principal Act, in sub-section (2),--
(a) for the words "or subject to the supervision of the Court", the word: "the Tribunal" shall be substituted;
(b) for the words "unless the Court", the words "unless the Tribunal" shall be substituted.
For section 537 of the principal Act, the following section shall be substituted, namely:--
"537. Avoidance of certain attachments, executions, etc., in winding up by.-- (1) Where any company is being wound up by the Tribunal--
(a) any attachment, distress or execution put in force, without leave of the Tribunal against the estate or effects of the company, after the commencement of the winding up; or
(b) any sale held, without leave of the Tribunal of any of the properties or effects of the company after such commencement,
shall be void.
(2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government".
In section 538 of the principal Act, in sub-section (1),--
(a) for the words "or subject to the supervision of the Court", the words "the Tribunal" shall be substituted;
(b) for the words "by the Court", the words "by the Tribunal" shall be substituted.:
In sections 540 and 542 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
For section 543 of the principal Act, the following section shall be substituted, namely:--
"543. Power of Tribunal to assess damages against delinquent directors, etc.-- (1) If in the course of winding up of a company, it appears that any person who has taken part in the promotion or formation of the company, or any past or present director, manager, liquidator or officer of the company --
(a) has misapplied, or retained, or become liable or accountable for, any money or property of the company; or
(b) has been guilty of any misfeasance or breach of trust in relation to the ; company, the Tribunal may, on the application of the Official Liquidator, or the liquidator, or of any creditor or contributory, made within the time specified in that behalf in sub-section (2), examine into the conduct
In section 544 of the principal Act, for the word "Court", the word "Tribunal" shall be substituted.
In section 545 of the principal Act,--
(a) in sub-section (1), for the words "or subject to the supervision of Court", the words "the Tribunal" shall be substituted;
(b) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 546 of the principal Act,--
(a) in sub-section (1),--
(i) for the words "sanction of the Court", the word "sanction of the Tribunal" shall be substituted;
(ii) for the words "or subject to the supervision of the Court", the words "the Tribunal" shall be substituted;
(b) in sub-section (1A),--
(i) for the words "winding up by the Court", the words "winding up by the Tribunal" shall be substituted;
(ii) for the words "sanction of the Court", the words "sanction of the Tribunal" shall be substituted;
(c) in sub-sections (2) and (3), for the word "Court", wherever it occurs, the word "Tribunal" shall be substi
In section 547 of the principal Act, in sub-section (1), for the words "or under the supervision of the Court", the words "the Tribunal" shall be substituted.
In section 549 of the principal Act, for the words "or subject to the supervision of Court", the words "the Tribunal" shall be substituted.
In section 550 of the principal Act,--
(i) in sub-section (1), for clause (a), the following clause shall be substituted, namely:--
"(a) in the case of winding up by the Tribunal, in such manner as the Tribunal directs;";
(ii) in sub-section (3), in clause (b), for the words "appeal to the Court", the words "appeal to the Tribunal" shall be substituted.
In section 551 of the principal Act,--
(a) in sub-section (1), for clause (a), the following clause shall be substituted, namely:--
"(a) in the case of a winding up by the Tribunal, in Tribunal; and";
(b) in sub-section (2), for the word "Court", the word "Tribunal" shall be substituted.
In section 553 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 555 of the principal Act,--
(a) in sub-sections (6) and (9), for the words "or under the supervision of the Court", the words "the Tribunal" shall be substituted;
(b) for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 556 of the principal Act, for the word "Court" at both the places where it occurs, the word "Tribunal" shall be substituted.
In the heading before section 557 of the principal Act, for the word "Court", the word "Tribunal" shall be substituted.
In section 557 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 558 of the principal Act,--
(a) in sub-section (1), in clause (a), for the word "Court", the words "Court or the Tribunal" shall be substituted;
(b) in sub-section (2),--
(i) for the words "All Courts", the words "All Courts, Tribunals" shall be substituted;
(ii) for the words "such Court", the words "such Court, Tribunal" shall be substituted.
In sections 559, 560, 581 and 582 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 583 of the principal Act,--
(a) in sub-section (1), for the words, brackets and figure "sub-sections (2)", the words, brackets and figure "sub-section (3)" shall be substituted;
(b) sub-section (2) shall be omitted;
(c) in sub-section (3), for the words "or subject to the supervision of Court", the words "by the Tribunal" shall be substituted;
(d) in sub-section (4), for the word "Court", the word "Tribunal" shall be substituted;
(e) in sub-section (5),--
(i) in clauses (a) and (b), for the word "Court", the word "Tribunal" shall be substituted;
(ii) in clause (c), or the words "order of any Court", the wo
In sections 587 to 589 of the principal Act, for the word "Court", wherever it occurs, the word "Tribunal" shall be substituted.
In section 610 of the principal Act, in sub-section (2), for the words "Company Law Board", wherever they occur, the word "Tribunal" shall be substituted.
In section 614 of the principal Act, in sub-section (1), for the words "Company Law Board", the word "Tribunal" shall be substituted.
In section 621 of the principal Act, in sub-section (1), the brackets, words and figures "(other than an offence with respect to which proceedings are instituted under section 545)" shall be omitted.
For section 627A of the principal Act, the following section shall be substituted, namely:--
621A. Composition of certain offences.-- (1) Notwithstanding anything contained in the Cods of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act (whether committed by a company or any officer thereof) not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compounded by the Central Government on payment or credit, by the company or the officer, as the case may be, to the Central Government of such sums as that Government may prescribe:
Provided that the sum prescribed shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded:
&n
The Companies (Second Amendment) Act, 2002, introduced significant changes to the regulatory framework governing companies in India. Among these changes, Section 120 plays a crucial role in addressing compliance and penalties related to company operations.
Section 120 of the Companies (Second Amendment) Act, 2002, pertains to the penalties imposed on companies and their officers for non-compliance with specific provisions of the Companies Act. It outlines the consequences of failing to adhere to the statutory requirements.
In section 626 of the principal Act, for the word "Court", the words "Court or Tribunal" shall be substituted.
In section 627 of the principal Act,--
(a) in sub-section (1), after the words "a Judge of a High Court in Chambers", the words "or Tribunal, as the case may be" shall be inserted;
(b) in sub-section (3), after the words "Judge of the High Court", the words "or Tribunal, as the case may be" shall be inserted.
In section 632 of the principal Act, for the word "Court", the words "Court or Tribunal" shall be substituted.
In section 634A of the principal Act, the following proviso shall be inserted, namely:--
"Provided that the provisions of this section shall not apply on and after the commencement of the Companies (Second Amendment) Act, 2002.".
In section 635 of the principal Act, in sub-section (4), for the words "Company Law Board", the words "Company Law Board or Tribunal" shall be substituted.
In section 635B of the principal Act,--
(a) for the words "Company Law Board" wherever they occur, the word "Tribunal" shall be substituted;
(b) for the word "Court" at both the places where it occurs, the words "Appellate Tribunal" shall be substituted.
For section 637A of the principal Act, the following section shall be substituted, namely:--
"637A. Power of Central Government or Tribunal to accord approval, etc., subject to conditions and to prescribe fees on applications.-- (7) Where the Central Government or Tribunal is required or authorised by any provision of this Act,--
(a) to accord approval, sanction, consent, confirmation or recognition to or in relation to, any matter; or
(b) to give any direction in relation to any matter; or (c) to grant any exemption in relation to any matter,
then, in the absence of anything to the contrary contained in such or any other provision of this Act, the Central Government or Tribunal may accord, give or grant such approval, sanction, consent, confirmatio
In the heading before section 640A of the principal Act, for the words "Court or the Company Law Board", the words "Court or the Tribunal" shall be substituted.
For section 640A of the principal Act, the following section shall be substituted, namely:--
"640A. Exclusion of time required in obtaining copies of order of Court or Tribunal.-- Except as expressly provided in this behalf elsewhere in this Act, where by any provision of this Act, any order of the Court or Tribunal is required to be filed with the Registrar, or a company or any other person within a period specified therein, then, in computing that period, the time taken in drawing up the order and in obtaining a copy thereof shall be excluded.".
For section 643 of the principal Act, the following section shall be substituted, namely:--
643. Power of Central Governments to make rules relating to winding up.-- (1) The Central Government shall, make rules consistent with the Code of Civil Procedure, 1908 (5 of 1908), providing for all matters relating to the winding up of companies, which by this Act, are to be prescribed, and may make rules providing for all such matters, as may be prescribed.
(2) In particular and without prejudice to the generality of the forgoing power, such rule may provide for all or any of the
following matters, namely:--
(i) as to the mode of proceedings to be held for winding up of a company by the Tribunal;
(ii) for the vo
After section 647 of the principal Act, the following section shall be inserted, namely:--
"647A. Transfer of winding up proceedings to Tribunal.-- All proceedings (including proceedings relating to arbitration, compromises, arrangements and reconstruction and winding up of a company) pending before the commencement of the Companies (second Amendment) Act, 2002 before any District Court or High Court, under this Act, or the Insurance Act, 1938 (4 of 1938)or any other law for the time being in force other than under the Banking Regulation Act, 1949 (10 of 1949), shall be transferred to the Tribunal from the date to be notified by the Central Government, in the Official Gazette, and the Tribunal may proceed with the matter either de novo or from the stage it was so transferred:
Provided that where the winding up of a company has commenced,
In Schedule XI to the principal Act, for the words "Company Law Board" wherever they occur, the word "Tribunal" shall be substituted.
The enactment specified in the Schedule to this Act shall be amended in the manner specified therein.
After section 651 of the principal Act, the following section shall be inserted, namely:--
"651A. Reference of winding up of companies in other laws.-- Unless the context otherwise requires,--
(a) any reference to the winding up of a company by a Court or High Court or winding up of a company subject to supervision of a Court or High Court in any other law (except the Banking Regulation Act, 1949 (10 of 1949)) shall, in so far as it relates to winding up of a company, be construed as winding up of a company by the Tribunal in accordance with the provisions of this Act;
(b) any reference to the Company Law Board in any other law, so far as it relates to the Company Law Board, shall be construed as the Tribunal under this Act,
(See section 121)
AMENDMENTS TO THE INSURANCE ACT, 1938
(4 OF 1938)
1. Section 2,--
(a) in clause (5), for "the Indian Companies Act, 1913 (7 of 1913)", substitute "the Companies Act, 1956 (1 of 1956)";
(b) after clause (13B), insert the following:--
'(13BA) "National Company Law Tribunal" means the National Company Law Tribunal constituted under section 10FB of the Companies Act, 1956 (1 of 1956);
(13BB) "the National Company Law Appellate Tribunal" means the National Company Law Appellate Tribunal constituted under sub-section (1) of section 10FR of the Companies Act, 1956 (1 of 1956);'.
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