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IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION
(STATUTORY ORIGINAL JURISDICTION)
Company Matter No. 90 of 2019
In the matter of:
An application under Section 233 of the Companies Act, 1994.
AND
In the matter of:
Md. Uzzal
----- Petitioner. -Versus-
Top Ten Fabrics and Tailors Limited and others
----- Respondents. Mr. Margub Kabir, Advocate
----- For the petitioner. The 15th April, 2019
Present:
Mr. Justice Muhammad Khurshid Alam Sarkar
This is an application under Section 233 of the Companies Act, 1994 for obtaining a declaration from this Court that the resolutions dated 30.12.2018 taken in the EGM of the respondent No. 1 company removing the petitioner from the post of director of the respondent No. 1 company and also the affairs of the company are being conducted and the powers of the respondent No. 2 as Managing Director are being exercised in a manner prejudicial to or in disregard of the interest of the petitioner as well as the respondent No. 1 company and/or exercising the powers of the Managing Director in breach of fiduciary duty with the respondent No. 1 company and, further, to have an order directing the respondent Nos. 5-6 Bank and all other bank and/or financial institutions of the respondent No. 1 company to include the petitioner as mandatory joint authorized signatory to carry out the transaction of the accounts of the respondent No. 1 company along with some other prayers as otherwise more specifically elaborated in the prayer portion of this application.
Mr. Margub Kabir, the learned Advocate for the petitioner taking this Court through the Memorandum and Articles of the company and submits that there is a provision for operataining the bank accounts of the company under the joint signatures of the Managing Director, who happens to be the full brother of this petitioner, with the Chairman or any other director, but the Managing Director of the Company is running the affairs of the company arbitrarily and whimsically without consulting this petitioner, who holds 35% shares of the company. He further draws the attention of this Court to annexure- Q-2, which is the letter issued by the Social Islami Bank Ltd. to the Managing Director of the Company asking to pay of the loan money, and contends that as a shareholder of this company, he is concerned about the bank loan of an amount of Tk. 150,00,00,000.00 (one hundred fifty crore) and, therefore, it is his humble prayer before this Court that until and unless his name is included in the bank account as a signatory, his interest is being seriously prejudiced.
Heard the learned Advocate and perused the Application.
Let the Application be admitted for hearing and be registered according.
Let the usual notices be issued upon the respondents.
Let the notices of the presentation of this application to this Court be published in the “The Daily Sun” and in the “The Daily Amader Somoy” within 2 (two) weeks from date.
The petitioner is directed to file an affidavit-in- compliance within 1 (one) week thereafter i.e. on or before 7th May, 2019.
Further, taking into consideration the submissions of the learned Advocate for the petitioner and perusing the annexed papers, this Court is of the view that if the respondent Nos. 5-6 Banks and all other bank and/or financial institutions of the respondent No. 1 company are directed to include the petitioner as mandatory joint authorized signatory to carry out the transaction of the account of the respondent No. 1 company, then justice will be done for now.
Accordingly, the respondent Nos. 5-6 Bank and all other banks and/or financial institutions of the respondent No. 1 company are hereby directed to include the petitioner as mandatory joint authorized signatory to carry out the transaction of the accounts of the respondent No. 1 company.
The rest of the prayers made by the petitioner as stated in the prayer portion of this application shall be taken into the consideration at the time of hearing the matter, if the Court feels it proper.
The petitioner is further directed to put in requisites forthwith.
Sd/- Illegible
18.04.2019
Postal cost of Tk. 350/- has been deposited on
17.04.19 by challan which is kept in administrative file. Sd/- Illegible 18.04.2019
Mr. Md. Zakir Hossain the learned Advocate has filed a power alongwith enter appearance on behalf of the respondent Nos. 1, 2 and 3 under entry No. 1788 O. S. dated 18.04.19 and the same is kept with record.
Sd/- Illegible 29.04.2019
Mr. Md. Abul Kalam Azad the learned Advocate has filed a power along with enter appearance on behalf of the respondent No. 6 under entry No. 1935 O. S. dated 28.04.19 and the same is kept with record.
Sd/- Illegible 05.05.2019
Notice issued upon the respondents under memo 2476-81 O. S. dated 29.04.19 R/P No. 330, 334, 338, 342, 327, 337 dated 02.05.19 and O/C kept in administrative file.
Sd/- Illegible
05.05.2019
The learned Advocate for the petitioner has filed an affidavit of compliance under entry No. 2013 O. S. dated 02.05.2019 and O/C kept in administrative file.
Sd/- Illegible
IN THE SUPREME COURT OF BANGLADESH APPELLATE DIVISION
Present:
Mr. Justice Syed Muhmud Hossain, Chief Justice Mr. Justice Hasan Foez Siddique
Ms. Justice Zinat Ara
Mr. Justice Md. Nuruzzaman
CIVIL PETITIOON FOR LEAVE TO APPEAL NO. 1273 OF 2019
(From the order dated 15.04.2019 passed by the High Court Division in Company Matter No. 90 of 2019).
Top Ten Fabrics and Tailors Ltd. represented by its Managing Director and another.
----- Petitioners.
-Versus-
Md. Uzzal and others.
----- Respondents. For the Petitioner: Mr. Mahmubey Alam, Senior Advocate (with Mr. Shah
Manjurul Haque, Advocate) instructed by Mr. Mohammad
Ali Azam, Advocate-on-Record. For Respondent No. 1: Mr. A. M. Aminuddin, Senior Advocate instructed by Mr.
Zainul Abedin, Advocate-on- Record.
Respondent Nos. 2-5: Not represented.
Date of hearing: The 14th May, 2019.
ORDER
Heard the learned Counsel of both the parties and perused the (Illegible) of the High Court Division and the other materials on record.
Considering the facts and circumstance of the case, we find no legal infirmity in the impugned order factually and legally calling for interference by this Court.
Accordingly, we find no merit in this petition and the same is dismissed.
The High Court Division is directed to dispose of matter within 03 (three) months from the date of receipt of the order.
Sd/- S. M. Hossain, C.J
Sd/- Hasan Foez Siddique, J Sd/- Zinat Ara, J
Sd/- Md. Nuruzzaman, J
25.06.2019
Present:
Mr. Justice Muhammad Khurshid Alam Sarkar. Mr. Margub Kabir, Advocate
----- For the petitioner.
Mr. Shah Monjurul Hoque, Advocate
----- For the Respondents. By filing this application dated 19.06.2019, the
learned Advocate for the respondent Nos. 1 & 2 prays for modification of the Order dated 15.04.2019 enabling operation of the Bank accounts of respondent No. 1 company under the single signature of the Managing Director.
The learned Advocate for the petitioner opposes
the prayer.
Upon hearing the learned Advocate for both the sides, it appears to this Court that instead of allowing this application if an Order is passed to the effect that the company can take signatures on the cheques from the petitioner through this Court upon satisfying this Court that they need encashment of money, then, at least for now, the company shall not face any difficulties in dealing with its financial transactions.
Accordingly, the petitioner is directed to appear before this Court on 26.06.2019 and the respondent No. 2 is directed to remain present before this court with the cheques together with the affidavit explaining the reasons for encashment of the amount of money mentioned in the cheques.
Let this matter be posted in the daily cause list on 26.06.2019 under the column “For Order” to take signatures on the cheques from the petitioner and, thereafter, the matter may be placed in the daily cause list on 02.07.2017 at 3.00 p.m. 4.00 p.m. for hearing.
Sd/- Illegible 26.06.2019
Present:
Mr. Justice Muhammad Khurshid Alam Sarkar.
Mr. Margub Kabir, Advocate
----- For the petitioner.
Mr. Shah Monjurul Hoque, Advocate
----- For the Respondents. As per Court’s Order dated 25.06.2019, today, the
matter appears in the daily cause list under the column “For Order”.
By filing an affidavit the learned Advocate for the respondent No. 2 produces 15 (fifteen) cheques for obtaining the signatures of the petitioner and as per the Court’s Order dated 25.06.2019, the petitioner signed on all these cheques.
It was observed by this Court that this Court cannot spend its valuable working hours for obtaining signatures of the petitioner for such purpose every time and the parties to this matter should find out some device to take signatures from the petitioner. To this end, Mr. Margub Kabir, the learned Advocate for the petitioner proposes that the respondent No. 2 company may take the signatures of the petitioner sitting in the High Court’s Chamber of learned Advocate of either side.
Henceforth, the learned Advocates for both the sides are directed to arrange the date and time for taking signatures of the petitioner as and when needed.
Sd/- Illegible
20.11.2019
Present:
Mr. Justice Muhammad Khurshid Alam Sarkar. Mr. Margub Kabir, Advocate
----- For the petitioner.
Mr. Shah Monjurul Hoque, Advocate
----- For the Respondents. After hearing the learned Advocates for both the
sides, it appears to this Court that for an effective and fair disposal of this matter, an auditor should be appointed, at first, to find out the real financial position of this respondent No. 1 Company (Top Ten Fabrics and Tailors Limited, 216, Elephant Road (Ground Floor), Dhaka) from its incorporation to date and, accordingly, both the sides have come to an agreement that the audit may be carried out from the incorporation of the company to date.
Upon relying on the joint submissions of the learned Advocate for both the said, this Court is of the view that a reputed audit firm should be appointed to assess the financial position of this company.
Accordingly, Md. Enamul Hasan, FCA, H. M Enam & Co, the C. A Firm, 151/5, Monipuripara (Ground Floor), Tejgaon, Dhaka-1215 (Contacts: 02- 58156643, 01712-205158) is hereby appointed as the auditor to carry out the audit of the company under the name and style of Top Ten Fabrics and Tailors Limited, 216, Elephant Road (Ground Floor), Dhaka from its incorporation to date.
The company shall pay a consolidate fees of Taka 10,00,000/- (ten lac) only to the appointed C/A Firm.
The above named C/A Firm is directed to figure out the (i) assets, (ii) liabilities and (iii) balance of the company. In carrying out the above task, the auditing firm shall be at liberty to look into and touch upon any subjects, which are usually done by any professional auditor.
The audit firm is hereby directed to submit their audit report within 60 (sixty) days i.e. on or before 02.02.2020.
Bench Officer is to contact the above-named C/A Firm at once requesting the Chartered Accountant to collect a copy of this Order from him.
Let the matter be appeared in the daily cause lint on 02.02.2020 under the column “For Order”.
Sd/- Illegible 04.12.2019
Hon’ble court’s order dated 20.11.2019 has been communicated under memo No. 7369-75 O. S. dated 01.12.2019 and O/C kept in the administrative file.
Sd/- Illegible 03.02.2020
Mr. Abdullah Abu Sayeed, Advocate
----- For the Court-Appointed Auditor. Affidavit-in-compliance filed by the learned Advocate Mr. Abdullah Abu Sayed, for the Court- Appointed-Auditor be accepted and kept with the record.
B.O (M. K. A. Sarkar, J)
06.10.2020
Mr. Abdullah Abu Sayeed, Advocate
----- For the Court-Appointed Auditor. Affidavit-in-reply filed by the learned Advocate for
the Court-Appointed-Auditor be accepted and kept with the record.
B.O (M. K. A. Sarkar, J)
The 15th December, 2020 Present:
Justice Muhammad Khurshid Alam Sarkar Mr. Margub Kabir, Advocate
-----For the Petitioner.
Mr. Shah Monjurul Hoque, Advocate
----- For the Respondents. There is a personal difficulty to hear this matter.
Let the file be placed before the Hon’ble Chief Justice to make arrangements for hearing this matter by any other competent bench.
Sd/- Illegible 03.01.2021
Let this matter be heard and disposed of by K. M. Kamrul Kader, J.
Sd/- Illegible 02.02.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
17.02.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
12.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
18.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
27.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
26.12.2021
Mr. Ahmad Naquib Karim, Advocate
----- For the petitioner. Mr. Muhammad Harunur Rashid, Advocate
----- For the respondent Nos. 1 and 2. On the prayer of the learned Advocates for both
the sides, let this matter come up in the list after vacation for hearing.
Sd. Illegible
(K. M. Kamrul Kader, J)
31.05.2022
The preliminary order passed for disposal.
B. O. (K. M. Kamrul Kader, J)
30.06.2022
Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Haque, Advocate
----- For the respondent No. 2.
After elaborate hearing of the learned Advocates for the sides, considering the facts and circumstances, value of the shares, asset and goodwill of the company this Court passed a preliminary order on 31.05.2022 for proper disposal of this matter which reads as follows:
1
to any third party without any order or this court till disposal of this matter.
Let this matter be posted in the daily cause list for further order and submission of affidavit-in-compliance on 07.07.2022 before this Bench.
Communicate at once.
However, Mr. Md. Abbas Uddin, the learned Advocate for the petitioner submits that he has clear instruction from his client not to receive any amount from the respondent No. 2.
Considering this aspect of the matter, the unsigned preliminary order dated 31.05.2022 is hereby recalled.
There is a personal difficulty to hear this matter.
Let the file be placed before the Hon’ble Chief Justice of Bangladesh to make necessary arrangement for hearing of the matter by any other competent Bench.
Sd. Illegible
(K. M. Kamrul Kader, J)
20.07.2022
Let this matter be heard and disposed of by Md. Ashraful kamal, J.
Sd. Illegible
Chief Justice
1
24.07.2022
Mr. Margub Kabir with Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Haque, Advocate
----- For the respondent No. 2. Mr. A. K. M. Badrudduza, Advocate
----- For the respondent No. 4 Mr. Md. Abul Kalam Azad, Advocate
----- For the respondent No. 6 Heard in part.
B. O. (Md. Ashraful Kamal, J)
25.07.2022
Mr. Margub Kabir, Advocate with Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Haque, Advocate with
Mr. Muhammad Harunur Rashid, Advocate
----- For the respondent No. 1 & 2.
Mr. A. K. M. Badrudduza, Advocate
----- For the respondent No. 4 Mr. Md. Abul Kalam Azad, Advocate
----- For the respondent No. 6 Heard in part and adjourned to 27.07.2022.
B. O. (Md. Ashraful Kamal, J)
27.07.2022
Mr. Margub Kabir, Advocate with
Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Haque, Advocate with
Mr. Mehadi Hasan Chowdhury, Advocate
Mr. Muhammad Harunur Rashid, Advocate
----- For the respondent No. 1 & 2. Mr. A. K. M. Badrudduza, Advocate
1
----- For the respondent No. 4 Heard in part and adjourned to 04.08.2022.
B. O. (Md. Ashraful Kamal, J)
04.08.2022
Heard in part and adjourned to 10.08.2022.
B. O. (Md. Ashraful Kamal, J)
11.08.2022
Heard in part.
B. O. (Md. Ashraful Kamal, J)
21.08.2022
The matter is adjourned to 23.08.2022
B. O. (Md. Ashraful Kamal, J)
23.08.2022
Heard in part.
B. O. (Md. Ashraful Kamal, J)
24.08.2022
Hearing concluded and judgment tomorrow.
B. O. (Md. Ashraful Kamal, J)
…l¦aÅf§ZÑ ¢hd¡u ®L¡Çf¡e£ jÉ¡V¡l j¡jm¡ ew-317/2019 Hl B−cn pj§q ¢e−jÀ A¢hLm Ae¤¢mMe q−m¡x
IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION
(STATUTORY ORIGINAL JURISDICTION)
Company Matter No. 317 of 2019
In the matter of:
An application under Section 233 of the Companies Act, 1994.
AND
In the matter of:
Md. Uzzal
----- Petitioner.
-Versus-
Top Ten Mart Limited and others
----- Respondents. Mr. Margub Kabir, Advocate
----- For the petitioner. The 15th December, 2019
Present:
Mr. Justice Muhammad Khurshid Alam Sarkar
This is an application under Section 233 of the Companies Act, 1994 for obtaining a declaration from this Court that the position of the respondent No. 2 as the Managing Director in the respondent No. 1 company is illegal and, further, to have a direction from this Court directing the respondent Nos. 5-7 Banks and all other Bank and/or financial institutions of the respondent No. 1 Company to include the petitioner as mandatory joint authorized signatory to carry out the transaction of the accounts of the respondent No. 1 company along with some other prayers as elaborated in the prayer portion of the application.
Heard the learned Advocate and perused the Application.
Let the Application be admitted for hearing and be registered accordingly.
Let the usual notices be issued upon the respondents.
Let the notices of the presentation of this application to this Court be published in the “The Daily Sun” and in the “The Daily Amader Somoy” within 2 (two) weeks from date.
Taking into consideration the submissions of the learned Advocate for the petitioner, this Court is of the view that if the respondent Nos. 5-7 Banks and all other Bank and/or financial institutions of the respondent No. 1 Company are directed to include the petitioner as
1
mandatory joint authorized signatory to carry out the transaction of the accounts of the respondent No. 1 Company for a limited period, then the justice will be done for now.
Accordingly, the respondent Nos. 5-7 Bank and all other Bank and/or financial institutions of the respondent No. 1 company are directed to include the petitioner as mandatory joint authorized signatory to carry out the transaction of the accounts of the respondent No. 1 company for a period of 03 (three) months.
The rest of the prayer made by the petitioners as stated in the prayer portion of the application shall be taken into the consideration at the time of hearing the matter, if the Court feels it proper.
Let this matter be heard and disposed of analogously with Company Matter No. 90 of 2019.
The petitioner is directed to file an affidavit-in- compliance within 12.01.2020.
The petitioner is further directed to put in requisites forthwith.
Sd/- Illegible 07.01.2020
Postal Cost of Tk. 350/- has been deposited by challan on 23.12.2019 which is kept in the Administrative file.
Sd/- Illegible
09.01.2020
Notice issued upon the respondents through R/P under Memo No. 168-74 O. S- dated 09.01.2020 and O/C kept in the Administrative File.
Sd/- Illegible 09.01.2020
The learned Advocate for the petitioner has filed an affidavit of compliance under entry No. 84 O. S dated 09.01.2020 and the same is kept with record.
Sd/- Illegible
1
23.01.2020
The learned Advocate Mr. Md. Abul Kalam Azad has filed a power along with enter appearance on behalf of the respondent No. 6 under entry No. 361 O. S dated 23.01.2020 and the same is kept with record.
Sd/- Illegible 24.02.2020
Present:
Mr. Justice Muhammad Khurshid Alam Sarkar.
Mr. Margub Kabir, Advocate
----- For the petitioner. After hearing the learned Advocate for the petitioner, it appears to this Court that for an effective and fair disposal of this matter, an auditor should be appointed, at first, to find out the real financial position of this Company (Top Ten Mart Limited, 252, New Elephant Road, Katabon Al-Baraka Tower, New Market, Dhaka- 1205) from its incorporation till date (July to June inclusive) and, accordingly, the learned Advocate for the petitioner submits that the audit may be carried out from the date of its incorporation to date and prays for appointment of an auditor.
Upon relying on the submission of the learned Advocate for the petitioner, this Court is of the view that a reputed audit firm should be appointed to assess the financial position of this company.
Accordingly, Md. Enamul Hasan, FCA, H. M Enam & Co, the C. A Firm, 151/5, Monipuripara (Ground Floor), Tejgaon, Dhaka- 1215 (Contacts: 02- 58156643, 01712-205158) is hereby appointed as the auditor to carry out the audit of the company under the name and style of Top Ten Mart Limited, 252, New Elephant Road, Katabon Al-Baraka Tower, New Market, Dhaka- 1205 from its incorporation to date.
1
The company shall pay a consolidate fees of Taka 5,00,000/- (fave lac) only to the appointed C/S Firm, out of which 50% shall be paid at the time of commencement of the audit-work and the rest of the fees shall be paid after submission of audit report before this Court.
The above named C/A Firm is directed to figure out the (i) assets, (ii) liabilities and (iii) balance of the company. In carrying out the above task, the auditing firm shall be at liberty to look into and touch upon any subjects, which are usually done by any professional auditor.
The respondent No. 1 company is directed contact with the audit firm with 7 (seven) days from the date of receipt of this Order and the audit firm is hereby directed to submit their audit report within 30 (thirty) days from their appointment. Further, the audit firm is directed to approach this Court; if any party does not cooperate him in conducting the audit work and if he is not furnished with any papers/documents by any of the party connected with this case of if he faces any difficulty in conducting the audit work.
After having the report from the auditor regarding audit work, either party shall be at liberty to mention the matter before this Court for hearing.
Office is directed to communicate this Order hence
forth.
Sd/- Illegible 08.03.2020
Hon’ble courts order dated 24.02.2020 has been communicated under Memo No. 1382-83 O. S dated 05.03.2020 and O/C kept in the administrative file.
Sd/- Illegible 12.03.2020
Mr. Margub Kabir, Advocate
----- For the petitioner. Let the direction given by the court earlier on 15.12.2019 is hereby extended for a further period of 06 (six) months.
Sd/- Illegible
19.03.2020
Hon’ble court, order dated 12.03.2020 has been communicated under memo No. 1662-68 O.S dated 18.03.2020 and O/C kept in the administrative file.
Sd/- Illegible 30.06.2020
IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION
(STATUTORY ORIGINAL JURISDICTION)
COMPANY MATTER NO. 317 OF 2019
(The order has been passed in the Virtual Court)
IN THE MATTER OF: Md. Uzzal
----- Petitioner. -Versus-
Top Ten Mart Ltd. and others
----- Respondents.
AND
IN THE MATTER OF:
Md. Syed Hossain, Top Ten Mart Ltd. 252 New Elephant Road, Katabon, Al-Baraka Tower, New Market, Dhaka- 1205.
----- Respondent No. 2 Applicant. Mr. Shah Monjurul Hoque with
Mr. Muhammad Harunur Rashid, Advocate
----- Respondent No. 2 Applicant. Mr. Margub Kabir, Advocate
----- For the Petitioner.
Present:
Justice Muhammad Khurshid Alam Sarkar
By filing this application Md. Syed Hossain, Top Ten Mart Ltd. 252 New Elephant Road, Katabon. Al- Baraka Tower, New Market, Dhaka- 1205 as an applicant seeks to place the facts and figures of the required expenditures for the aforesaid company. It transpires from the annexed papers of the application that the Top Ten Mart Ltd. 252 New Elephant Road, Katabon, Al-Baraka Tower, New Market, Dhaka- 1205 requires near about Tk. 20,00,00,000/- (Taka Twenty Crore) only for the cost/expenditure to run the company and prays for direction upon the petitioner, Md. Uzzal to sign all pending as well as future cheques for carrying out the transaction of the accounts of the respondent No. 1 Company till disposal of the application under section 233 of the Companies Act, 1994.
Mr. Margub Kabir, the learned Advocate for the petitioner, appearing before the Virtual Court opposes the application filed by the Respondent No. 2 applicant.
Upon hearing the learned Advocates for the both sides and from the minute perusal of the annexed papers of the application, it appears to this Court that if a direction is passed upon the petitioner, Md. Uzzal to sign on the cheques of an amount of Taka 5,00,00,000/- (five crores) for carrying out the usual business of the respondent No. 1 company, then justice will be done for now.
Accordingly, the petitioner- Md. Uzzal is hereby directed to sign on the cheques of an amount of Taka 5,00,00,000/- (five crores) of the Bank Account operated and maintained in the name of Top Ten Mart Ltd. being the Bank Account No. 0211 2200 00683 with Al-Arafah
1
Islami Bank Ltd., Mirpur Branch, 3/A, Mirpur City Center, 2nd Floor, Mirpur, Dhaka.
Communicate this Order at once.
Sd/- Illegible
27.08.2020
The learned advocate Muhammad Harunur Rashid has filed an affidavit application under entry No. 1621 dated 13.08.2020 on be half of respondent No. 02 and the same kept with record.
Sd/- Illegible
01.09.2020
Hon’ble courts order dated 30.06.2020 has communicated upon the respondent under memo No. 2516-22 on the dated 25.08.2020 and O/C kept in Administrative file.
Sd/- Illegible 06.10.2020
Mr. Abdullah Abu Sayeed, Advocate
----- For the Court-Appointed-Auditor. Affidavit-in-Compliance filed by the learned Adv.
for the Court-Appointed-Auditor be accepted and kept with the record.
B.O (M. K. A. Sarkar, J) The 15th December, 2020
Present:
Justice Muhammad Khurshid Alam Sarkar
Mr. Margub Kabir, Advocate
-----For the Petitioner.
Mr. Shah Monjurul Hoque, Advocate
----- For the Respondents. There is a personal difficulty to hear this matter.
Let the file be placed before the Hon’ble Chief Justice to make arrangements for hearing this matter by any other competent bench.
Sd/- Illegible
1
03.01.2021
Let this matter be heard and disposed of by K. M. Kamrul Kader, J.
Sd/- Illegible Chief Justice
02.02.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
17.02.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
12.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
12.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondent No. 2.
Mr. A. K. M Badrudduza, Advocate
----- For the Registrar Joint Stock Companies.
1
Heard the learned Advocates for both sides, perused the application and other documentary evidences.
It transpires that for smooth running of the business of the company it will be better to direct the bank authority to honour the cheques which already signed by both the signatories namely Mr. Md. Uzzal and Mr. Md. Syed Hossain.
The Manager, Dutch Bangla Bank Limited, 235/5 Elephant Road Branch, Dhaka is directed to honour the cheques being Cheque No. 0950624 dated 20.01.2021 for an amount of Taka 5.00 (five crore), Cheque No. 0950650 dated 11.10.2020 for an amount of Taka 80 (eighty lac), Cheque No. 0950651 dated 11.10.2020 for an amount of Taka 80 (Eithty lac), Cheque No. 0950652 dated 11.10.2020 for an amount of taka 90 (Ninety lac) and Cheque No. 0950653 dated 11.10.2020 for an amount of Taka 2.50 (Two crore five lac) already signed by the two signatories namely Mr. Md. Uzzal and Mr. Md. Syed Hossain, if the account hold sufficient fund.
Communicate at once.
(K. M. Kamrul Kader, J) 18.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents. Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
27.05.2021
Mr. Margub Kabir, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the respondents.
Heard-in-part.
B. O. (K. M. Kamrul Kader, J)
26.12.2021
Mr. Ahmad Naquib Karim, Advocate
----- For the petitioner. Mr. Muhammad Harunur Rashid, Advocate
----- For the respondent Nos. 1 and 2. On the prayer of the learned Advocates for both
the sides, let this matter come up in the list after vacation for hearing.
Sd. Illegible
(K. M. Kamrul Kader, J)
31.05.2022
The preliminary order passed for disposal.
B. O. (K. M. Kamrul Kader, J)
30.06.2022
Mr. Abbas Uddin, Advocate
----- For the petitioner.
Mr. Shah Monjurul Haque, Advocate
----- For the respondent No. 2. After elaborate hearing of the learned Advocates
for both the sides, considering the facts and circumstances, value of the shares, asset and goodwill of the company this Court passed a preliminary order on 31.05.2022 for proper disposal of this matter which reads as follows:
Let this matter be posted in the daily cause list for further order and submission of affidavit-in-compliance on 07.07.2022 before this Bench.
Communicate at once.
However, Mr. Md. Abbas Uddin, the learned Advocate for the petitioner submits that he has clear instruction from his client not to receive any amount from the respondent No. 2.
Considering this aspect of the matter, the unsigned preliminary order dated 31.05.2022 is hereby recalled.
There is a personal difficulty to hear this matter.
Let the file be placed before the Hon’ble Chief Justice of Bangladesh to make necessary arrangement for hearing of the matter by any other competent Bench.
Sd. Illegible
(K. M. Kamrul Kader, J) 20.07.2022
Let this matter be heard and disposed of by Md. Ashraful kamal, J.
Sd. Illegible
Chief Justice h¡wm¡−c−nl j¡ee£u fÐd¡e ¢hQ¡lf¢a LaѪL ¢hNa Cw−lS£
20.07.2022 a¡¢l−M fÐcš B−cn ®j¡a¡−hL Ef¢l¢õ¢Ma ®L¡Çf¡e£ jÉ¡V¡l ew- 90/2019 Hhw ®L¡Çf¡e£ jÉ¡V¡l ew- 317/2019 Aœ Bc¡m−a öe¡e£l SeÉ L¡kÑa¡¢mL¡ i ¥š² quz
24.07.2022
Mr. Margub Kabir, Advocate with Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate
----- For the Respondent No. 2
Mr. A. K. M. Bodrudduza, Advocate
----- For the Respondent No. 4. Mr. Md. Abul Kalam Azad, Advocate
----- For the Respondent No. 6. Heard in part.
B/O (Md. Ashraful Kamal, J)
25.07.2022
Mr. Margub Kabir, Advocate with Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Hoque, Advocate with
Mr. Mohammad Harunur Rashid, Advocate
----- For the Respondent No. 1 & 2.
Mr. A. K. M. Bodrudduza, Advocate
----- For the Respondent No. 4. Mr. Md. Abul Kalam Azad, Advocate
----- For the Respondent No. 6. Heard in part and adjourned to 27.07.2022.
B/O (Md. Ashraful Kamal, J)
27.07.2022
Mr. Margub Kabir, Advocate with Mr. Abbas Uddin, Advocate
----- For the petitioner. Mr. Shah Monjurul Haque, Advocate with
Mr. Mehadi Hasan Chowdhury, Advocate
Mr. Muhammad Harunur Rashid, Advocate
----- For the respondent No. 1 & 2.
Mr. A. K. M. Badrudduza, Advocate
----- For the respondent No. 4. Mr. Md. Abul Kalam Azad, Advocate
----- For the respondent No. 6 Heard in part and adjourned to 04.08.2022.
B. O. (Md. Ashraful Kamal, J)
04.08.2022
Heard in part and adjourned to 10.08.2022.
B. O. (Md. Ashraful Kamal, J)
11.08.2022
Heard in part.
B. O. (Md. Ashraful Kamal, J)
21.08.2022
The matter is adjourned to 23.08.2022
B. O. (Md. Ashraful Kamal, J)
23.08.2022
Heard in part.
B. O. (Md. Ashraful Kamal, J)
24.08.2022
Hearing concluded and judgment tomorrow.
B. O. (Md. Ashraful Kamal, J)
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“THE COMPANIES ACT, 2013
ARRANGEMENT OF SECTIONS
CHAPTER I
PRELIMINARY
SECTIONS
CHAPTER II
INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO
CHAPTER III
PROSPECTUS AND ALLOTMENT OF SECURITIES
PART I.—Public offer
SECTIONS
PART II.—Private placement
CHAPTER IV
SHARE CAPITAL AND DEBENTURES
CHAPTERV
ACCEPTANCE OF DEPOSITS BY COMPANIES
SECTIONS
CHAPTER VI
REGISTRATION OF CHARGES
CHAPTER VII
MANAGEMENT AND ADMINISTRATION
100. Calling of extraordinary general meeting.
101. Notice of meeting.
102. Statement to be annexed to notice.
103. Quorum for meetings.
104. Chairman of meetings.
105. Proxies.
106. Restriction on voting rights.
107. Voting by show of hands.
108. Voting through electronic means.
109. Demand for poll.
110. Postal ballot.
111. Circulation of members‘ resolution.
112. Representation of President and Governors in meetings.
113. Representation of corporations at meeting of companies and of creditors.
114. Ordinary and special resolutions.
115. Resolutions requiring special notice.
116. Resolutions passed at adjourned meeting.
117. Resolutions and agreements to be filed.
SECTIONS
118. Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.
119. Inspection of minute-books of general meeting.
120. Maintenance and inspection of documents in electronic form.
121. Report on annual general meeting.
122. Applicability of this Chapter to One Person Company.
CHAPTER VIII
DECLARATION AND PAYMENT OF DIVIDEND
123. Declaration of dividend.
124. Unpaid Dividend Account.
125. Investor Education and Protection Fund.
126. Right to dividend, rights shares and bonus shares to be held in abeyance pending registration of transfer of shares.
127. Punishment for failure to distribute dividends.
CHAPTER IX
ACCOUNTS OF COMPANIES
128. Books of account, etc., to be kept by company.
129. Financial statement.
130. Re-opening of accounts on court‘s or Tribunal‘s orders. 131. Voluntary revision of financial statements or Board‘s report. 132. Constitution of National Financial Reporting Authority. 133. Central Government to prescribe accounting standards
134. Financial statement, Board‘s report, etc.
135. Corporate Social Responsibility.
136. Right of member to copies of audited financial statement. 137. Copy of financial statement to be filed with Registrar.
138. Internal Audit.
CHAPTER X
AUDIT AND AUDITORS
139. Appointment of auditors.
140. Removal, resignation of auditor and giving of special notice.
141. Eligibility, qualifications and disqualifications of auditors.
142. Remuneration of auditors.
143. Powers and duties of auditors and auditing standards.
144. Auditor not to render certain services.
145. Auditor to sign audit reports, etc.
146. Auditors to attend general meeting.
147. Punishment for contravention.
148. Central Government to specify audit of items of cost in respect of certain companies.
CHAPTER XI
APPOINTMENT AND QUALIFICATIONS OF DIRECTORS 149. Company to have Board of Directors.
SECTIONS
150. Manner of selection of independent directors and maintenance of data bank of independent directors.
151. Appointment of director elected by small shareholders.
152. Appointment of directors.
153. Application for allotment of Director Identification Number.
154. Allotment of Director Identification Number.
155. Prohibition to obtain more than one Director Identification Number.
156. Director to intimate Director Identification Number.
157. Company to inform Director Identification Number to Registrar.
158. Obligation to indicate Director Identification Number.
159. Punishment for contravention.
160. Right of persons other than retiring directors to stand for directorship.
161. Appointment of additional director, alternate director and nominee director. 162. Appointment of directors to be voted individually.
163. Option to adopt principle of proportional representation for appointment of directors.
164. Disqualifications for appointment of director.
165. Number of directorships.
166. Duties of directors.
167. Vacation of office of director.
168. Resignation of director.
169. Removal of directors.
170. Register of directors and key managerial personnel and their shareholding. 171. Members‘ right to inspect.
172. Punishment.
CHAPTER XII
MEETINGS OF BOARD AND ITS POWERS
173. Meetings of Board.
174. Quorum for meetings of Board.
175. Passing of resolution by circulation.
176. Defects in appointment of directors not to invalidate actions taken.
177. Audit committee.
178. Nomination and Remuneration Committee and Stakeholders Relationship Committee.
179. Powers of Board.
180. Restrictions on powers of Board.
181. Company to contribute to bona fide and charitable funds, etc. 182. Prohibitions and restrictions regarding political contributions.
183. Power of Board and other persons to make contributions to national defence fund, etc.
184. Disclosure of interest by director.
185. Loan to directors, etc.
186. Loan and investment by company.
187. Investments of company to be held in its own name.
188. Related party transactions.
189. Register of contracts or arrangements in which directors are interested.
190. Contract of employment with managing or whole-time directors.
191. Payment to director for loss of office, etc., in connection with transfer of undertaking, property or shares.
192. Restriction on non-cash transactions involving directors. 193. Contract by One Person Company.
194. Prohibition on forward dealings in securities of company by director or key managerial personnel.
195. Prohibition on insider trading of securities.
CHAPTER XIII
APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
SECTIONS
196. Appointment of managing director, whole-time director or manager.
197. Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits.
198. Calculation of profits.
199. Recovery of remuneration in certain cases.
200. Central Government or company to fix limit with regard to remuneration.
201. Forms of, and procedure in relation to, certain applications.
202. Compensation for loss of office of managing or whole-time director or manager. 203. Appointment of key managerial personnel.
204. Secretarial audit for bigger companies.
205. Functions of company secretary.
CHAPTER XIV
INSPECTION, INQUIRY AND INVESTIGATION
206. Power to call for information, inspect books and conduct inquiries.
207. Conduct of inspection and inquiry.
208. Report on inspection made.
209. Search and seizure.
210. Investigation into affairs of company.
211. Establishment of Serious Fraud Investigation Office.
212. Investigation into affairs of company by Serious Fraud Investigation Office. 213. Investigation into company‘s affairs in other cases.
214. Security for payment of costs and expenses of investigation.
215. Firm, body corporate or association not to be appointed as inspector.
216. Investigation of ownership of company.
217. Procedure, powers, etc., of inspectors.
218. Protection of employees during investigation.
219. Power of inspector to conduct investigation into affairs of related companies, etc. 220. Seizure of documents by inspector.
221. Freezing of assets of company on inquiry and investigation.
222. Imposition of restrictions upon securities.
223. Inspector‘s report.
224. Actions to be taken in pursuance of inspector‘s report.
225. Expenses of investigation.
226. Voluntary winding up of company, etc., not to stop investigation proceedings. 227. Legal advisers and bankers not to disclose certain information.
228. Investigation, etc., of foreign companies.
229. Penalty for furnishing false statement, mutilation, destruction of documents.
CHAPTER XV
COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS
230. Power to compromise or make arrangements with creditors and members. 231. Power to Tribunal to enforce compromise or arrangement.
232. Merger and amalgamation of companies.
233. Merger or amalgamation of certain companies.
234. Merger or amalgamation of company with foreign company.
SECTIONS
235. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority.
236. Purchase of minority shareholding.
237. Power of Central Government to provide for amalgamation of companies in public interest.
238. Registration of offer of schemes involving transfer of shares.
239. Preservation of books and papers of amalgamated companies.
240. Liability of officers in respect of offences committed prior to merger, amalgamation, etc.
CHAPTER XVI
PREVENTION OF OPPRESSION AND MISMANAGEMENT
241. Application to Tribunal for relief in cases of oppression, etc.
242. Powers of Tribunal.
243. Consequence of termination or modification of certain agreements.
244. Right to apply under section 241.
245. Class action.
246. Application of certain provisions to proceedings under section 241 or section 245.
CHAPTER XVII
REGISTERED VALUERS 247. Valuation by registered valuers.
CHAPTER XVIII
REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES
248. Power of Registrar to remove name of company from register of companies. 249. Restrictions on making application under section 248 in certain situations. 250. Effect of company notified as dissolved.
251. Fraudulent application for removal of name.
252. Appeal to Tribunal.
CHAPTER XIX
REVIVAL AND REHABILITATION OF SICK COMPANIES
253. Determination of sickness.
254. Application for revival and rehabilitation.
255. Exclusion of certain time in computing period of limitation.
256. Appointment of interim administrator.
257. Committee of creditors.
258. Order of Tribunal.
259. Appointment of administrator.
260. Powers and duties of company administrator.
261. Scheme of revival and rehabilitation.
262. Sanction of scheme.
263. Scheme to be binding.
264. Implementation of scheme.
265. Winding up of company on report of company administrator.
266. Power of Tribunal to assess damages against delinquent directors, etc.
267. Punishment for certain offences.
268. Bar of jurisdiction.
269. Rehabilitation and Insolvency Fund.
CHAPTER XX WINDING UP
SECTIONS
270. Modes of winding up.
PART I.—Winding up by the Tribunal
271. Circumstances in which company may be wound up by Tribunal.
272. Petition for winding up.
273. Powers of Tribunal.
274. Directions for filing statement of affairs.
275. Company Liquidators and their appointments.
276. Removal and replacement of liquidator.
277. Intimation to Company Liquidator, provisional liquidator and Registrar.
278. Effect of winding up order.
279. Stay of suits, etc., on winding up order.
280. Jurisdiction of Tribunal.
281. Submission of report by Company Liquidator.
282. Directions of Tribunal on report of Company Liquidator.
283. Custody of company‘s properties.
284. Promoters, directors, etc., to cooperate with Company Liquidator.
285. Settlement of list of contributories and application of assets.
286. Obligations of directors and managers.
287. Advisory Committee.
288. Submission of periodical reports to Tribunal.
289. Power of Tribunal on application for stay of winding up.
290. Powers and duties of Company Liquidator.
291. Provision for professional assistance to Company Liquidator.
292. Exercise and control of Company Liquidator‘s powers.
293. Books to be kept by Company Liquidator.
294. Audit of Company Liquidator‘s accounts.
295. Payment of debts by contributory and extent of set-off.
296. Power of Tribunal to make calls.
297. Adjustment of rights of contributories.
298. Power to order costs.
299. Power to summon persons suspected of having property of company, etc. 300. Power to order examination of promoters, directors, etc.
301. Arrest of person trying to leave India or abscond.
302. Dissolution of company by Tribunal.
303. Appeals from orders made before commencement of Act.
PART II.—Voluntary winding up
304. Circumstances in which company may be wound up voluntarily.
305. Declaration of solvency in case of proposal to wind up voluntarily. 306. Meeting of creditors.
307. Publication of resolution to wind up voluntarily.
308. Commencement of voluntary winding up.
309. Effect of voluntary winding up.
310. Appointment of Company Liquidator.
311. Power to remove and fill vacancy of Company Liquidator.
312. Notice of appointment of Company Liquidator to be given to Registrar. 313. Cesser of Board‘s powers on appointment of Company Liquidator.
SECTIONS
314. Powers and duties of Company Liquidator in voluntary winding up. 315. Appointment of committees.
316. Company Liquidator to submit report on progress of winding up.
317. Report of Company Liquidator to Tribunal for examination of persons. 318. Final meeting and dissolution of company.
319. Power of Company Liquidator to accept shares, etc., as consideration for sale of property of company.
320. Distribution of property of company.
321. Arrangement when binding on company and creditors.
322. Power to apply to Tribunal to have questions determined, etc.
323. Costs of voluntary winding up.
PART III.—Provisions applicable to every mode of winding up
324. Debts of all descriptions to be admitted to proof.
325. Application of insolvency rules in winding up of insolvent companies.
326. Overriding preferential payments.
327. Preferential payments.
328. Fraudulent preference.
329. Transfers not in good faith to be void.
330. Certain transfers to be void.
331. Liabilities and rights of certain persons fraudulently preferred.
332. Effect of floating charge.
333. Disclaimer of onerous property.
334. Transfers, etc., after commencement of winding up to be void.
335. Certain attachments, executions, etc., in winding up by Tribunal to be void. 336. Offences by officers of companies in liquidation.
337. Penalty for frauds by officers.
338. Liability where proper accounts not kept.
339. Liability for fraudulent conduct of business.
340. Power of Tribunal to assess damages against delinquent directors, etc.
341. Liability under sections 339 and 340 to extend to partners or directors in firms or companies.
342. Prosecution of delinquent officers and members of company.
343. Company Liquidator to exercise certain powers subject to sanction.
344. Statement that company is in liquidation.
345. Books and papers of company to be evidence.
346. Inspection of books and papers by creditors and contributories.
347. Disposal of books and papers of company.
348. Information as to pending liquidations.
349. Official Liquidator to make payments into public account of India.
350. Company Liquidator to deposit monies into scheduled bank.
351. Liquidator not to deposit monies into private banking account.
352. Company Liquidation Dividend and Undistributed Assets Account.
353. Liquidator to make returns, etc.
354. Meetings to ascertain wishes of creditors or contributories.
355. Court, tribunal or person, etc., before whom affidavit may be sworn.
356. Power of Tribunal to declare dissolution of company void.
357. Commencement of winding up by Tribunal.
358. Exclusion of certain time in computing period of limitation.
PART IV.—Official Liquidators
SECTIONS
359. Appointment of Official Liquidator.
360. Powers and functions of Official Liquidator.
361. Summary procedure for liquidation.
362. Sale of assets and recovery of debts due to company. 363. Settlement of claims of creditors by Official Liquidator. 364. Appeal by creditor.
365. Order of dissolution of company.
CHAPTER XXI
PART I.—Companies authorised to Register under this Act 366. Companies capable of being registered.
367. Certificate of registration of existing companies.
368. Vesting of property on registration.
369. Saving of existing liabilities.
370. Continuation of pending legal proceedings.
371. Effect of registration under this Part.
372. Power of Court to stay or restrain proceedings.
373. Suits stayed on winding up order.
374. Obligations of companies registering under this Part.
PART II.—Winding up of unregistered companies 375. Winding up of unregistered companies.
376. Power to wind up foreign companies although dissolved.
377. Provisions of Chapter cumulative.
378. Saving and construction of enactments conferring power to wind up partnership firm, association or company, etc., in certain cases.
CHAPTER XXII
COMPANIES INCORPORATED OUTSIDE INDIA
379. Application of Act to foreign companies.
380. Documents, etc., to be delivered to Registrar by foreign companies. 381. Accounts of foreign company.
382. Display of name, etc., of foreign company.
383. Service on foreign company.
384. Debentures, annual return, registration of charges, books of account and their inspection.
385. Fee for registration of documents.
386. Interpretation.
387. Dating of prospectus and particulars to be contained therein.
388. Provisions as to expert‘s consent and allotment.
389. Registration of prospectus.
390. Offer of India Depository Receipts.
391. Application of sections 34 to 36 and Chapter XX.
392. Punishment for contravention.
393. Company‘s failure to comply with provisions of this Chapter not to affect validity or contracts, etc.
CHAPTER XXIII
GOVERNMENT COMPANIES
SECTIONS
394. Annual reports on Government companies.
395. Annual reports where one or more State Governments are members of companies.
CHAPTER XXIV
REGISTRATION OFFICES AND FEES 396. Registration offices.
397. Admissibility of certain documents as evidence.
398. Provisions relating to filing of applications, documents, inspection, etc., in electronic form.
399. Inspection, production and evidence of documents kept by Registrar.
400. Electronic form to be exclusive, alternative or in addition to physical form. 401. Provision of value added services through electronic form.
402. Application of provisions of Information Technology Act, 2000.
403. Fee for filing, etc.
404. Fees, etc., to be credited into public account.
CHAPTER XXV
COMPANIES TO FURNISH INFORMATION OR STATISTICS
405. Power of Central Government to direct companies to furnish information or statistics.
CHAPTER XXVI
NIDHIS
406. Power to modify Act in its application to Nidhis.
CHAPTER XXVII
NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL
407. Definitions.
408. Constitution of National Company Law Tribunal.
409. Qualification of President and Members of Tribunal.
410. Constitution of Appellate Tribunal.
411. Qualifications of Chairperson and members of Appellate Tribunal.
412. Selection of Members of Tribunal and Appellate Tribunal.
413. Term of office of President, Chairperson and other Members.
414. Salary, allowances and other terms and conditions of service of Members. 415. Acting President and Chairperson of Tribunal or Appellate Tribunal.
416. Resignation of Members.
417. Removal of Members.
418. Staff of Tribunal and Appellate Tribunal.
419. Benches of Tribunal.
420. Orders of Tribunal.
421. Appeal from orders of Tribunal.
422. Expeditious disposal by Tribunal and Appellate Tribunal.
423. Appeal to Supreme Court.
424. Procedure before Tribunal and Appellate Tribunal.
425. Power to punish for contempt.
SECTIONS
426. Delegation of powers.
427. President, Members, officers, etc., to be public servants.
428. Protection of action taken in good faith.
429. Power to seek assistance of Chief Metropolitan Magistrate, etc.
430. Civil court not to have jurisdiction.
431. Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings. 432. Right to legal representation.
433. Limitation.
434. Transfer of certain pending proceedings. CHAPTER XXVIII
SPECIAL COURTS 435. Establishment of Special Courts.
436. Offences triable by Special Courts.
437. Appeal and revision.
438. Application of Code to proceedings before Special Court.
439. Offences to be non-cognizable.
440. Transitional provisions.
441. Compounding of certain offences.
442. Mediation and Conciliation Panel.
443. Power of Central Government to appoint company prosecutors. 444. Appeal against acquittal.
445. Compensation for accusation without reasonable cause.
446. Application of fines.
CHAPTER XXIX
MISCELLANEOUS
447. Punishment for fraud.
448. Punishment for false statement.
449. Punishment for false evidence.
450. Punishment where no specific penalty or punishment is provided. 451. Punishment in case of repeated default.
452. Punishment for wrongful withholding of property.
453. Punishment for improper use of ―Limitedǁ or ―Private Limitedǁ. 454. Adjudication of penalties.
455. Dormant company.
456. Protection of action taken in good faith.
457. Non-disclosure of information in certain cases.
458. Delegation by Central Government of its powers and functions.
459. Power of Central Government of Tribunal to accord approval, etc., subject to conditions and to prescribe fees on applications.
460. Condonation of delay in certain cases.
461. Annual report by Central Government.
462. Power to exempt class or classes of companies from provisions of this Act. 463. Power of court to grant relief in certain cases.
464. Prohibition of association or partnership of persons exceeding certain number. 465. Repeal of certain enactments and savings.
466. Dissolution of Company Law Board and consequential provisions. 467. Power of Central Government to amend Schedules.
468. Power of Central Government to make rules relating to winding up.
SECTIONS
469. Power of Central Government to make rules. 470. Power to remove difficulties.
SCHEDULE I SCHEDULE II SCHEDULE III SCHEDULE IV SCHEDULE V SCHEDULE VI SCHEDULE VII
THE COMPANIES ACT, 2013
ACT NO. 18 OF 2013
[29th August, 2013.] An Act to consolidate and amend the law relating to companies.
BE it enacted by Parliament in the Sixty-fourth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
Companies Act, 2013.
(2) It extends to the whole of India.
(3) This section shall come into force at once and the remaining provisions of this Act
shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
(4) The provisions of this Act shall apply to—
(a) companies incorporated under this Act or under any previous company law;
(b) insurance companies, except in so far as the said provisions are inconsistent
with the provisions of the Insurance Act, 1938 (4 of 1938) or the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);
(c) banking companies, except in so far as the said provisions are inconsistent
with the provisions of the Banking Regulation Act, 1949 (10 of 1949);
(d) companies engaged in the generation or supply of electricity, except in so far
as the said provisions are inconsistent with the provisions of the Electricity Act, 2003 (36 of 2003);
(e) any other company governed by any special Act for the time being in force,
except in so far as the said provisions are inconsistent with the provisions of such special Act; and
(f) such body corporate, incorporated by any Act for the time being in force, as
the Central Government may, by notification, specify in this behalf, subject to such exceptions, modifications or adaptation, as may be specified in the notification.
(1) ―abridged prospect means a memorandum containing such salient features of a prospectus as may be specified by the Securities and Exchange Board by making regulations in this behalf;
(2) ―accounting standards means the standards of accounting or any addendum thereto for companies or class of companies referred to in section 133;
(3) ―alter or ―alteration includes the making of additions, omissions and substitutions;
(4) ―Appellate Tribunal means the National Company Law Appellate Tribunal constituted under section 410;
(5) ―articles means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act;
(6) ―associate company, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. Explanation.—For the purposes of this clause, ―significant influenceǁ means control of at least twenty per cent. of total share capital, or of business decisions under an agreement;
(7) ―auditing standards means the standards of auditing or any addendum thereto for companies or class of companies referred to in sub-section (10) of section 143;
(8) ―authorised capital or ―nominal capitalǁ means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company;
(9) ―banking company means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(10) ―Board of Directors or ―Boardǁ, in relation to a company, means the collective body of the directors of the company;
(11) ―body corporate or ―corporationǁ includes a company incorporated outside India, but does not include—
(i) a co-operative society registered under any law relating to co-operative societies; and
(ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf;
(12) ―book and paper and ―book or paperǁ include books of account, deeds, vouchers, writings, documents, minutes and registers maintained on paper or in electronic form;
(13) ―books of account includes records maintained in respect of—
(i) all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place;
(ii) all sales and purchases of goods and services by the company;
(iii) the assets and liabilities of the company; and
(iv) the items of cost as may be prescribed under section 148 in the case of a company which belongs to any class of companies specified under that section;
(14) ―branch office, in relation to a company, means any establishment described as such by the company;
(15) ―called-up capital means such part of the capital, which has been called for payment;
(16) ―charge means an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage;
(17) ―chartered accountantǁ means a chartered accountant as defined in clause (b) of
sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) who holds a valid certificate of practice under sub-section (1) of section 6 of that Act;
(18) ―Chief Executive Officerǁ means an officer of a company, who has been designated
as such by it;
(19) ―Chief Financial Officerǁ means a person appointed as the Chief Financial Officer
of a company;
(20) ―company means a company incorporated under this Act or under any previous
company law;
(21) ―company limited by guaranteeǁ means a company having the liability of its
members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up;
(22) ―company limited by shares means a company having the liability of its members
limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them;
(23) ―Company Liquidatorǁ, in so far as it relates to the winding up of a company,
means a person appointed by—
(a) the Tribunal in case of winding up by the Tribunal; or
(b) the company or creditors in case of voluntary winding up,
as a Company Liquidator from a panel of professionals maintained by the Central Government under sub-section (2) of section 275;
(24) ―company secretary or ―secretary means a company secretary as defined in clause
(d) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) who is appointed by a company to perform the functions of a company secretary under this Act;
(24) ―company secretary in practiceǁ means a company secretary who is deemed to be in
practice under sub-section (2) of section 2 of the Company Secretaries Act, 1980 (56 of 1980);
(26) ―contributory means a person liable to contribute towards the assets of the
company in the event of its being wound up.
Explanation.—For the purposes of this clause, it is hereby clarified that a person holding fully paid-up shares in a company shall be considered as a contributory but shall have no liabilities of a contributory under the Act whilst retaining rights of such a contributory;
(27) ―control shall include the right to appoint majority of the directors or to control the
management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner;
(28) ―cost accountantǁ means a cost accountant as defined in clause (b) of subsection (1)
of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959);
(29) ―courtǁ means—
(i) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any district court or district courts subordinate to that High Court under sub-clause (ii);
(ii) the district court, in cases where the Central Government has, by notification, empowered any district court to exercise all or any of the jurisdictions conferred upon the High Court, within the scope of its jurisdiction in respect of a company whose registered office is situate in the district;
(iii) the Court of Session having jurisdiction to try any offence under this Act or under any previous company law;
(iv) the Special Court established under section 435;
(v) any Metropolitan Magistrate or a Judicial Magistrate of the First Class having
jurisdiction to try any offence under this Act or under any previous company law;
(30) ―debentureǁ includes debenture stock, bonds or any other instrument of a company
evidencing a debt, whether constituting a charge on the assets of the company or not;
(31) ―depositǁ includes any receipt of money by way of deposit or loan or in any other
form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India;
(32) ―depositoryǁ means a depository as defined in clause (e) of sub-section (1) of
section 2 of the Depositories Act, 1996 (22 of 1996);
(33) ―derivativeǁ means the derivative as defined in clause (ac) of section 2 of the
Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(34) ―directorǁ means a director appointed to the Board of a company;
(35) ―dividendǁ includes any interim dividend;
(36) ―documentǁ includes summons, notice, requisition, order, declaration, form and
register, whether issued, sent or kept in pursuance of this Act or under any other law for the time being in force or otherwise, maintained on paper or in electronic form;
(37) ―employees‘ stock optionǁ means the option given to the directors, officers or
employees of a company or of its holding company or subsidiary company or companies, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price;
(38) ―expertǁ includes an engineer, a valuer, a chartered accountant, a company
secretary, a cost accountant and any other person who has the power or authority to issue a certificate in pursuance of any law for the time being in force;
(39) ―financial institutionǁ includes a scheduled bank, and any other financial institution
defined or notified under the Reserve Bank of India Act, 1934 (2 of 1934);
40) ―financial statementǁ in relation to a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv):
Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement;
(41) ―financial yearǁ, in relation to any company or body corporate, means the period
ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up:
Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year:
Provided further that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause;
(42) ―foreign companyǁ means any company or body corporate incorporated outside
India which—
(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
(b) conducts any business activity in India in any other manner.
(43) ―free reservesǁ means such reserves which, as per the latest audited balance sheet of
a company, are available for distribution as dividend:
Provided that—
(i) any amount representing unrealised gains, notional gains or revaluation of assets, whether shown as a reserve or otherwise, or
(ii) any change in carrying amount of an asset or of a liability recognised in equity, including surplus in profit and loss account on measurement of the asset or the liability at fair value,
shall not be treated as free reserves;
(44) ―Global Depository Receiptǁ means any instrument in the form of a depository
receipt, by whatever name called, created by a foreign depository outside India and authorised by a company making an issue of such depository receipts;
(45) ―Government companyǁ means any company in which not less than fifty-one per
cent. of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company;
(46) ―holding companyǁ, in relation to one or more other companies, means a company
of which such companies are subsidiary companies;
47) ―independent directorǁ means an independent director referred to in sub-section (6)
of section 149;
(48) ―Indian Depository Receiptǁ means any instrument in the form of a depository receipt created by a domestic depository in India and authorised by a company incorporated outside India making an issue of such depository receipts;
(49) ―interested directorǁ means a director who is in any way, whether by himself or
through any of his relatives or firm, body corporate or other association of individuals in which he or any of his relatives is a partner, director or a member, interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into by or on behalf of a company;
(50) ―issued capitalǁ means such capital as the company issues from time to time for
subscription;
(51) ―key managerial personnelǁ, in relation to a company, means—
(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;
(iii) the whole-time director;
(iv) the Chief Financial Officer; and
(v) such other officer as may be prescribed;
(52) ―listed companyǁ means a company which has any of its securities listed on any recognised stock exchange;
(53) ―managerǁ means an individual who, subject to the superintendence, control and
direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, whether under a contract of service or not;
(54) ―managing directorǁ means a director who, by virtue of the articles of a company or
an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.
Explanation.—For the purposes of this clause, the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within the substantial powers of management;
(55) ―memberǁ, in relation to a company, means—
(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members;
(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;
(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository;
(56) ―memorandumǁ means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act;
(57) ―net worthǁ means the aggregate value of the paid-up share capital and all reserves
created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation;
(58) ―notificationǁ means a notification published in the Official Gazette and the
expression ―notifyǁ shall be construed accordingly;
(59) ―officerǁ includes any director, manager or key managerial personnel or any person
in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act;
(60) ―officer who is in defaultǁ, for the purpose of any provision in this Act which
enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:—
(i) whole-time director;
(ii) key managerial personnel;
(iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified;
(iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default;
(v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity;
(vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance;
(vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;
(61) ―Official Liquidatorǁ means an Official Liquidator appointed under sub-section (1) of section 359;
(62) ―One Person Companyǁ means a company which has only one person as a member;
(63) "ordinary or special resolution" means an ordinary resolution, or as the case may be,
special resolution referred to in section 114;
(64) ―paid-up share capitalǁ or ―share capital paid-upǁ means such aggregate amount of
money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called;
(65) ―postal ballotǁ means voting by post or through any electronic mode;
(66) ―prescribedǁ means prescribed by rules made under this Act;
(67) ―previous company lawǁ means any of the laws specified below:—
(i) Acts relating to companies in force before the Indian Companies Act, 1866 (10 of 1866);
(ii) the Indian Companies Act, 1866 (10 of 1866);
(iii) the Indian Companies Act, 1882 (6 of 1882);
(iv) the Indian Companies Act, 1913 (7 of 1913);
(v) the Registration of Transferred Companies Ordinance, 1942 (Ord. 54 of 1942);
(vi) the Companies Act, 1956 (1 of 1956); and
(vii) any law corresponding to any of the aforesaid Acts or the Ordinances and in force—
(A) in the merged territories or in a Part B State (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913 (7 of 1913); or
(B) in the State of Jammu and Kashmir, or any part thereof, before the commencement of
the Jammu and Kashmir (Extension of Laws) Act, 1956 (62 of 1956), in so far as banking, insurance and financial corporations are concerned, and before the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968 (25 of 1968), in so far as other corporations are concerned;
(viii) the Portuguese Commercial Code, in so far as it relates to sociedades anonimas; and (ix) the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961);
(68) ―private companyǁ means a company having a minimum paid-up share capital 1***
as may be prescribed, and which by its articles,—
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company
jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that—
(A) persons who are in the employment of the company; and
(B) persons who, having been formerly in the employment of the company, were
members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and
(iii) prohibits any invitation to the public to subscribe for any securities of the company;
(69) ―promoterǁ means a person—
(a) who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or
(b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or
(c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act:
Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity;
(70) ―prospectusǁ means any document described or issued as a prospectus and includes
a red herring prospectus referred to in section 32 or shelf prospectus referred to in section 31 or any notice, circular, advertisement or other document inviting offers from the public for the subscription or purchase of any securities of body corporate;
(71) ―public companyǁ means a company which—
(a) is not a private company;
(b) has a minimum paid-up share capital 1*** as may be prescribed:
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles ;
(72) ―public financial institutionǁ means—
(i) the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);
(ii) the Infrastructure Development Finance Company Limited, referred to in clause (vi) of sub-section (1) of section 4A of the Companies Act, 1956 (1 of 1956) so repealed under section 465 of this Act;
(iii) specified company referred to in the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
(iv) institutions notified by the Central Government under sub-section (2) of section 4A of the Companies Act, 1956 (1 of 1956) so repealed under section 465 of this Act;
(v) such other institution as may be notified by the Central Government in consultation with the Reserve Bank of India:
Provided that no institution shall be so notified unless—
(A) it has been established or constituted by or under any Central or State Act; or
(B) not less than fifty-one per cent. of the paid-up share capital is held or controlled by
the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments;
(73) ―recognised stock exchangeǁ means a recognised stock exchange as defined in
clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(74) ―register of companiesǁ means the register of companies maintained by the
Registrar on paper or in any electronic mode under this Act;
(75) ―Registrarǁ means a Registrar, an Additional Registrar, a Joint Registrar, a Deputy
Registrar or an Assistant Registrar, having the duty of registering companies and discharging various functions under this Act;
(76) ―related partyǁ, with reference to a company, means—
(i) a director or his relative;
(ii) a key managerial personnel or his relative;
(iii) a firm, in which a director, manager or his relative is a partner;
(iv) a private company in which a director or manager is a member or director;
(v) a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital;
(vi) any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager;
(vii) any person on whose advice, directions or instructions a director or manager is accustomed to act:
Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;
(viii) any company which is—
(A) a holding, subsidiary or an associate company of such company; or
(B) a subsidiary of a holding company to which it is also a subsidiary;
(ix) such other person as may be prescribed;
(77) relative‘‘, with reference to any person, means any one who is related to another, if—
(i) they are members of a Hindu Undivided Family;
(ii) they are husband and wife; or
(iii) one person is related to the other in such manner as may be prescribed;
(78) ―remunerationǁ means any money or its equivalent given or passed to any
person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961 (43 of 1961);
(79) ―Scheduleǁ means a Schedule annexed to this Act;
(80) ―scheduled bankǁ means the scheduled bank as defined in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934);
(81) ―securitiesǁ means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(82) ―Securities and Exchange Boardǁ means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act,1992 (15 of 1992);
(83) ―Serious Fraud Investigation Officeǁ means the office referred to in section 211;
(84) ―shareǁ means a share in the share capital of a company and includes stock;
(85) ‗‗small company‘‘ means a company, other than a public company,—
(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or
(ii) turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
(86) ―subscribed capitalǁ means such part of the capital which is for the time being subscribed by the members of a company;
(87) ―subsidiary companyǁ or ―subsidiaryǁ, in relation to any other company (that is to say the holding company), means a company in which the holding company—
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed. Explanation.—For the purposes of this clause,—
(a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company;
(b) the composition of a company‘s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors;
(c) the expression ―companyǁ includes any body corporate;
(d) ―layerǁ in relation to a holding company means its subsidiary or subsidiaries;
(88) ―sweat equity sharesǁ means such equity shares as are issued by a company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;
(89) ―total voting powerǁ, in relation to any matter, means the total number of votes which may be cast in regard to that matter on a poll at a meeting of a company if all the members thereof or their proxies having a right to vote on that matter are present at the meeting and cast their votes;
(90) ―Tribunalǁ means the National Company Law Tribunal constituted under section 408;
(91) ―turnoverǁ means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year;
(92) ―unlimited companyǁ means a company not having any limit on the liability of its members;
(93) ―voting rightǁ means the right of a member of a company to vote in any meeting of the company or by means of postal ballot;
(94) ―whole-time directorǁ includes a director in the whole-time employment of the company;
(95) words and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) shall have the meanings respectively assigned to them in those Acts.
CHAPTER II
INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO
(a) seven or more persons, where the company to be formed is to be a public company;
(b) two or more persons, where the company to be formed is to be a private company; or
(c) one person, where the company to be formed is to be One Person Company that is to say, a private company,
by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration:
Provided that the memorandum of One Person Company shall indicate the name of the other person, with his prior written consent in the prescribed form, who shall, in the event of the subscriber‘s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company along with its memorandum and articles:
Provided further that such other person may withdraw his consent in such manner as may be prescribed:
Provided also that the member of One Person Company may at any time change the name of such other person by giving notice in such manner as may be prescribed:
Provided also that it shall be the duty of the member of One Person Company to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner as may be prescribed, and the company shall intimate the Registrar any such change within such time and in such manner as may be prescribed:
Provided also that any such change in the name of the person shall not be deemed to be an alteration of the memorandum.
(2) A company formed under sub-section (1) may be either—
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) an unlimited company.
(a) the name of the company with the last word ―Limitedǁ in the case of a public limited company, or the last words ―Private Limitedǁ in the case of a private limited company: Provided that nothing in this clause shall apply to a company registered under section 8;
(b) the State in which the registered office of the company is to be situated;
(c) the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof;
(d) the liability of members of the company, whether limited or unlimited, and also state,—
(i) in the case of a company limited by shares, that liability of its members is limited to the amount unpaid, if any, on the shares held by them; and
(ii) in the case of a company limited by guarantee, the amount up to which each member undertakes to contribute—
(A) to the assets of the company in the event of its being wound-up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company or of such debts and liabilities as may have been contracted before he ceases to be a member, as the case may be; and
(B) to the costs, charges and expenses of winding-up and for adjustment of the rights of the contributories among themselves;
(e) in the case of a company having a share capital,—
(i) the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount and the number of shares which the subscribers to the memorandum agree to subscribe which shall not be less than one share; and
(ii) the number of shares each subscriber to the memorandum intends to take, indicated opposite his name;
(f) in the case of One Person Company, the name of the person who, in the event of death of the subscriber, shall become the member of the company.
(2) The name stated in the memorandum shall not—
(a) be identical with or resemble too nearly to the name of an existing company registered under this Act or any previous company law; or
(b) be such that its use by the company—
(i) will constitute an offence under any law for the time being in force; or
(ii) is undesirable in the opinion of the Central Government.
(3) Without prejudice to the provisions of sub-section (2), a company shall not be registered with a name which contains—
(a) any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central Government or any State Government under any law for the time being in force; or
(b) such word or expression, as may be prescribed,
unless the previous approval of the Central Government has been obtained for the use of any such word or expression.
(4) A person may make an application, in such form and manner and accompanied by such fee, as may be prescribed, to the Registrar for the reservation of a name set out in the application as—
(a) the name of the proposed company; or
(b) the name to which the company proposes to change its name.
(5) (i) Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty days from the date of the application.
(ii) Where after reservation of name under clause (i), it is found that name was applied by furnishing wrong or incorrect information, then,—
(a) if the company has not been incorporated, the reserved name shall be cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to one lakh rupees;
(b) if the company has been incorporated, the Registrar may, after giving the company an opportunity of being heard—
(i) either direct the company to change its name within a period of three months, after passing an ordinary resolution;
(ii) take action for striking off the name of the company from the register of companies;
or
(iii) make a petition for winding up of the company.
(6) The memorandum of a company shall be in respective forms specified in Tables A, B, C, D and E in Schedule I as may be applicable to such company.
(7) Any provision in the memorandum or articles, in the case of a company limited by guarantee and not having a share capital, purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member, shall be void.
(2) The articles shall also contain such matters, as may be prescribed:
Provided that nothing prescribed in this sub-section shall be deemed to prevent a company from including such additional matters in its articles as may be considered necessary for its management.
(3) The articles may contain provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with.
(4) The provisions for entrenchment referred to in sub-section (3) shall only be made either on formation of a company, or by an amendment in the articles agreed to by all the members of the company in the case of a private company and by a special resolution in the case of a public company.
(5) Where the articles contain provisions for entrenchment, whether made on formation or by amendment, the company shall give notice to the Registrar of such provisions in such form and manner as may be prescribed.
(6) The articles of a company shall be in respective forms specified in Tables, F, G, H, I and J in Schedule I as may be applicable to such company.
(7) A company may adopt all or any of the regulations contained in the model articles applicable to such company.
(8) In case of any company, which is registered after the commencement of this Act, in so far as the registered articles of such company do not exclude or modify the regulations contained in the model articles applicable to such company, those regulations shall, so far as applicable, be the regulations of that company in the same manner and to the extent as if they were contained in the duly registered articles of the company.
(9) Nothing in this section shall apply to the articles of a company registered under any previous company law unless amended under this Act.
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company, or in any agreement executed by it, or in any resolution passed by the company in general meeting or by its Board of Directors, whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and
(b) any provision contained in the memorandum, articles, agreement or resolution shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.
(a) the memorandum and articles of the company duly signed by all the
subscribers to the memorandum in such manner as may be prescribed;
(b) a declaration in the prescribed form by an advocate, a chartered accountant,
cost accountant or company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made thereunder in respect of registration and matters precedent or incidental thereto have been complied with;
(c) an affidavit from each of the subscribers to the memorandum and from
persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief;
(d) the address for correspondence till its registered office is established;
(e) the particulars of name, including surname or family name, residential
address, nationality and such other particulars of every subscriber to the memorandum along with proof of identity, as may be prescribed, and in the case of a subscriber being a body corporate, such particulars as may be prescribed;
(f) the particulars of the persons mentioned in the articles as the first directors of
the company, their names, including surnames or family names, the Director Identification Number, residential address, nationality and such other particulars including proof of identity as may be prescribed; and
(g) the particulars of the interests of the persons mentioned in the articles as the
first directors of the company in other firms or bodies corporate along with their consent to act as directors of the company in such form and manner as may be prescribed.
(2) The Registrar on the basis of documents and information filed under sub-section (1)
shall register all the documents and information referred to in that subsection in the register and issue a certificate of incorporation in the prescribed form to the effect that the proposed company is incorporated under this Act.
(3) On and from the date mentioned in the certificate of incorporation issued under sub-
section (2), the Registrar shall allot to the company a corporate identity number, which shall be a distinct identity for the company and which shall also be included in the certificate.
(4) The company shall maintain and preserve at its registered office copies of all
documents and information as originally filed under sub-section (1) till its dissolution under this Act.
(5) If any person furnishes any false or incorrect particulars of any information or
suppresses any material information, of which he is aware in any of the documents filed with the Registrar in relation to the registration of a company, he shall be liable for action under section 447.
(6) Without prejudice to the provisions of sub-section (5) where, at any time after the
incorporation of a company, it is proved that the company has been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company, or by any fraudulent action, the promoters, the persons named as the first directors of the company and the persons making declaration under clause (b) of subsection (1) shall each be liable for action under section 447.
(7) Without prejudice to the provisions of sub-section (6), where a company has been got
incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company or by any fraudulent action, the Tribunal may, on an application made to it, on being satisfied that the situation so warrants,—
(a) pass such orders, as it may think fit, for regulation of the management of the company including changes, if any, in its memorandum and articles, in public interest or in the interest of the company and its members and creditors; or
(b) direct that liability of the members shall be unlimited; or
(c) direct removal of the name of the company from the register of companies; or
(d) pass an order for the winding up of the company; or
(e) pass such other orders as it may deem fit:
Provided that before making any order under this sub-section,—
(i) the company shall be given a reasonable opportunity of being heard in the matter; and
(ii) the Tribunal shall take into consideration the transactions entered into by the company, including the obligations, if any, contracted or payment of any liability.
(a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
(b) intends to apply its profits, if any, or other income in promoting its objects; and
(c) intends to prohibit the payment of any dividend to its members,
the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word ―Limitedǁ, or as the case may be, the words ―Private Limitedǁ , and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section.
(2) The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.
(3) A firm may be a member of the company registered under this section.
(4) (i) A company registered under this section shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government.
(ii) A company registered under this section may convert itself into company of any other kind only after complying with such conditions as may be prescribed.
(5) Where it is proved to the satisfaction of the Central Government that a limited company registered under this Act or under any previous company law has been formed with any of the objects specified in clause (a) of sub-section (1) and with the restrictions and prohibitions as mentioned respectively in clauses (b) and (c) of that sub-section, it may, by licence, allow the company to be registered under this section subject to such conditions as the Central Government deems fit and to change its name by omitting the word ―Limitedǁ, or as the case may be, the words ―Private Limitedǁ from its name and thereupon the Registrar shall, on application, in the prescribed form, register such company under this section and all the provisions of this section shall apply to that company.
(6) The Central Government may, by order, revoke the licence granted to a company registered under this section if the company contravenes any of the requirements of this section or any of the conditions subject to which a licence is issued or the affairs of the company are conducted fraudulently or in a manner violative of the objects of the company or prejudicial to public interest, and without prejudice to any other action against the company under this Act, direct the company to convert its status and change its name to add the word ―Limitedǁ or the words ―Private Limitedǁ, as the case may be, to its name and thereupon the Registrar shall, without prejudice to any action that may be taken under sub-section (7), on application, in the prescribed form, register the company accordingly:
Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard:
Provided further that a copy of every such order shall be given to the Registrar.
(7) Where a licence is revoked under sub-section (6), the Central Government may, by order, if it is satisfied that it is essential in the public interest, direct that the company be wound up under this Act or amalgamated with another company registered under this section: Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard.
(8) Where a licence is revoked under sub-section (6) and where the Central Government is satisfied that it is essential in the public interest that the company registered under this section should be amalgamated with another company registered under this section and having similar objects, then, notwithstanding anything to the contrary contained in this Act, the Central Government may, by order, provide for such amalgamation to form a single company with such constitution, properties, powers, rights, interest, authorities and privileges and with such liabilities, duties and obligations as may be specified in the order.
(9) If on the winding up or dissolution of a company registered under this section, there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred to another company registered under this section and having similar objects, subject to such conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the Rehabilitation and Insolvency Fund formed under section 269.
(10) A company registered under this section shall amalgamate only with another company registered under this section and having similar objects.
(11) If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or with both:
Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.
(2) All monies payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.
(2) The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.
(3) Every company shall—
(a) paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;
1[(b) have its name engraved in legible characters on its seal, if any;]
(c) get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and (d) have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:
Provided that where a company has changed its name or names during the last two years, it shall paint or affix or print, as the case may be, along with its name, the former name or names so changed during the last two years as required under clauses (a) and (c):
Provided further that the words “One Person Company” shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.
(5) Except on the authority of a special resolution passed by a company, the registered office of the company shall not be changed,—
(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act or where it may be situated later by virtue of a special resolution passed by the company; and
(b) in the case of any other company, outside the local limits of any city, town or village where such office is first situated or where it may be situated later by virtue of a special resolution passed by the company:
Provided that no company shall change the place of its registered office from the jurisdiction of one Registrar to the jurisdiction of another Registrar within the same State unless such change is confirmed by the Regional Director on an application made in this behalf by the company in the prescribed manner.
(6) The confirmation referred to in sub-section (5) shall be communicated within a period of thirty days from the date of receipt of application by the Regional Director to the company and the company shall file the confirmation with the Registrar within a period of sixty days of the date of confirmation who shall register the same and certify the registration within a period of thirty days from the date of filing of such confirmation.
(7) The certificate referred to in sub-section (6) shall be conclusive evidence that all the requirements of this Act with respect to change of registered office in pursuance of subsection (5) have been complied with and the change shall take effect from the date of the certificate.
(8) If any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
(2) Any change in the name of a company shall be subject to the provisions of subsections (2) and
(3) of section 4 and shall not have effect except with the approval of the Central Government in writing:
Provided that no such approval shall be necessary where the only change in the name of the company is the deletion therefrom, or addition thereto, of the word ―Privateǁ, consequent on the conversion of any one class of companies to another class in accordance with the provisions of this Act.
(3) When any change in the name of a company is made under sub-section (2), the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name and the change in the name shall be complete and effective only on the issue of such a certificate.
(4) The alteration of the memorandum relating to the place of the registered office from one State to another shall not have any effect unless it is approved by the Central Government on an application in such form and manner as may be prescribed.
(5) The Central Government shall dispose of the application under sub-section (4) within a period of sixty days and before passing its order may satisfy itself that the alteration has the consent of the creditors, debenture-holders and other persons concerned with the company or that the sufficient provision has been made by the company either for the due discharge of all its debts and obligations or that adequate security has been provided for such discharge.
(6) Save as provided in section 64, a company shall, in relation to any alteration of its memorandum, file with the Registrar—
(a) the special resolution passed by the company under sub-section (1);
(b) the approval of the Central Government under sub-section (2), if the alteration involves any change in the name of the company.
(7) Where an alteration of the memorandum results in the transfer of the registered office of a company from one State to another, a certified copy of the order of the Central Government approving the alteration shall be filed by the company with the Registrar of each of the States within such time and in such manner as may be prescribed, who shall register the same, and the Registrar of the State where the registered office is being shifted to, shall issue a fresh certificate of incorporation indicating the alteration.
(8) A company, which has raised money from public through prospectus and still has any unutilised amount out of the money so raised, shall not change its objects for which it raised the money through prospectus unless a special resolution is passed by the company and—
(i) the details, as may be prescribed, in respect of such resolution shall also be published in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated and shall also be placed on the website of the company, if any, indicating therein the justification for such change;
(ii) the dissenting shareholders shall be given an opportunity to exit by the promoters and shareholders having control in accordance with regulations to be specified by the Securities and Exchange Board.
(9) The Registrar shall register any alteration of the memorandum with respect to the objects of the company and certify the registration within a period of thirty days from the date of filing of the special resolution in accordance with clause (a) of sub-section (6) of this section.
(10) No alteration made under this section shall have any effect until it has been registered in accordance with the provisions of this section.
(11) Any alteration of the memorandum, in the case of a company limited by guarantee and not having a share capital, purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member, shall be void.
(a) a private company into a public company; or
(b) a public company into a private company:
Provided that where a company being a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company:
Provided further that any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit.
(2) Every alteration of the articles under this section and a copy of the order of the Tribunal approving the alteration as per sub-section (1) shall be filed with the Registrar, together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.
(3) Any alteration of the articles registered under sub-section (2) shall, subject to the provisions of this Act, be valid as if it were originally in the articles.
(2) If a company makes any default in complying with the provisions of sub-section (1), the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every copy of the memorandum or articles issued without such alteration.
(a) in the opinion of the Central Government, is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose;
(b) on an application by a registered proprietor of a trade mark that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999, made to the Central Government within three years of incorporation or registration or change of name of the company, whether under this Act or any previous company law, in the opinion of the Central Government, is identical with or too nearly resembles to an existing trade mark, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of six months from the issue of such direction, after adopting an ordinary resolution for the purpose.
(2) Where a company changes its name or obtains a new name under sub-section (1), it shall within a period of fifteen days from the date of such change, give notice of the change to the Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation and the memorandum.
(3) If a company makes default in complying with any direction given under sub-section (1), the company shall be punishable with fine of one thousand rupees for every day during which the default continues and every officer who is in default shall be punishable with fine which shall not be less than five thousand rupees but which may extend to one lakh rupees.
(a) the memorandum;
(b) the articles; and
(c) every agreement and every resolution referred to in sub-section (1) of section 117, if and in so far as they have not been embodied in the memorandum or articles.
(2) If a company makes any default in complying with the provisions of this section, the company and every officer of the company who is in default shall be liable for each default, to a penalty of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.
(2) Where the conversion is required to be done under this section, the Registrar shall on an application made by the company, after satisfying himself that the provisions of this Chapter applicable for registration of companies have been complied with, close the former registration of the company and after registering the documents referred to in sub-section (1), issue a certificate of incorporation in the same manner as its first registration.
(3) The registration of a company under this section shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by or on behalf of the company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such registration had not been done.
Provided that nothing in this sub-section shall apply to a case—
(a) where the subsidiary company holds such shares as the legal representative of a deceased member of the holding company; or
(b) where the subsidiary company holds such shares as a trustee; or
(c) where the subsidiary company is a shareholder even before it became a subsidiary company of the holding company:
Provided further that the subsidiary company referred to in the preceding proviso shall have a right to vote at a meeting of the holding company only in respect of the shares held by it as a legal representative or as a trustee, as referred to in clause (a) or clause (b) of the said proviso. (2) The reference in this section to the shares of a holding company which is a company limited by guarantee or an unlimited company, not having a share capital, shall be construed as a reference to the interest of its members, whatever be the form of interest.
Provided that where securities are held with a depository, the records of the beneficial ownership may be served by such depository on the company by means of electronic or other mode. (2) Save as provided in this Act or the rules made thereunder for filing of documents with the Registrar in electronic mode, a document may be served on Registrar or any member by sending it to him by post or by registered post or by speed post or by courier or by delivering at his office or address, or by such electronic or other mode as may be prescribed:
Provided that a member may request for delivery of any document through a particular mode, for which he shall pay such fees as may be determined by the company in its annual general meeting.
Explanation.—For the purposes of this section, the term “courier” means a person or agency which delivers the document and provides proof of its delivery.
(a) a document or proceeding requiring authentication by a company; or
(b) contracts made by or on behalf of a company,
may be signed by any key managerial personnel or an officer of the company duly authorised by the Board in this behalf.
(2) A company may, by writing 1[under its common seal, if any,] authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India: 2[Provided that in case a company does not have a common seal, the authorisation under this sub- section shall be made by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary.]
(3) A deed signed by such an attorney on behalf of the company and under his seal shall bind the company 3***.
CHAPTER III
PROSPECTUS AND ALLOTMENT OF SECURITIES PART I.—Public offer
(a) to public through prospectus (herein referred to as "public offer") by complying with the provisions of this Part; or
(b) through private placement by complying with the provisions of Part II of this Chapter; or
(c) through a rights issue or a bonus issue in accordance with the provisions of this Act and in case of a listed company or a company which intends to get its securities listed also with the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the rules and regulations made thereunder.
(2) A private company may issue securities—
(a) by way of rights issue or bonus issue in accordance with the provisions of this Act; or
(b) through private placement by complying with the provisions of Part II of this Chapter.
Explanation.—For the purposes of this Chapter, "public offer" includes initial public offer or further public offer of securities to the public by a company, or an offer for sale of securities to the public by an existing shareholder, through issue of a prospectus.
(a) in so far as they relate to —
(i) issue and transfer of securities; and
(ii) non-payment of dividend,
by listed companies or those companies which intend to get their securities listed on any recognised stock exchange in India, except as provided under this Act, be administered by the Securities and Exchange Board by making regulations in this behalf;
(b) in any other case, be administered by the Central Government.
Explanation.—For the removal of doubts, it is hereby declared that all powers relating to all other matters relating to prospectus, return of allotment, redemption of preference shares and any other matter specifically provided in this Act, shall be exercised by the Central Government, the Tribunal or the Registrar, as the case may be.
(2) The Securities and Exchange Board shall, in respect of matters specified in subsection (1) and the matters delegated to it under proviso to sub-section (1) of section 458, exercise the powers conferred upon it under sub-sections (1), (2A), (3) and (4) of section 11, sections 11A, 11B and 11D of the Securities and Exchange Board of India Act, 1992 (15 of 1992).
(2) For the purposes of this Act, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, securities was made with a view to the securities being offered for sale to the public if it is shown—
(a) that an offer of the securities or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or
(b) that at the date when the offer was made, the whole consideration to be received by the company in respect of the securities had not been received by it.
(3) Section 26 as applied by this section shall have effect as if —
(i) it required a prospectus to state in addition to the matters required by that section to be stated in a prospectus—
(a) the net amount of the consideration received or to be received by the company in respect of the securities to which the offer relates; and
(b) the time and place at which the contract where under the said securities have been or are to be allotted may be inspected;
(ii) the persons making the offer were persons named in a prospectus as directors of a company.
(4) Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document referred to in sub-section (1) is signed on behalf of the company or firm by two directors of the company or by not less than one-half of the partners in the firm, as the case may be.
(a) state the following information, namely:—
(i) names and addresses of the registered office of the company, company
secretary, Chief Financial Officer, auditors, legal advisers, bankers, trustees, if any, underwriters and such other persons as may be prescribed;
(ii) dates of the opening and closing of the issue, and declaration about the issue
of allotment letters and refunds within the prescribed time;
(iii) a statement by the Board of Directors about the separate bank account where
all monies received out of the issue are to be transferred and disclosure of details of all monies including utilised and unutilised monies out of the previous issue in the prescribed manner;
(iv) details about underwriting of the issue;
(v) consent of the directors, auditors, bankers to the issue, expert‘s opinion, if
any, and of such other persons, as may be prescribed;
(vi) the authority for the issue and the details of the resolution passed therefor;
(vii) procedure and time schedule for allotment and issue of securities;
(viii) capital structure of the company in the prescribed manner;
(ix) main objects of public offer, terms of the present issue and such other particulars as may be prescribed;
(x) main objects and present business of the company and its location, schedule of implementation of the project;
(xi) particulars relating to—
(A) management perception of risk factors specific to the project;
(B) gestation period of the project;
(C) extent of progress made in the project;
(D) deadlines for completion of the project; and
(E) any litigation or legal action pending or taken by a Government Department or a statutory body during the last five years immediately preceding the year of the issue of prospectus against the promoter of the company;
(xii) minimum subscription, amount payable by way of premium, issue of shares otherwise than on cash;
(xiii) details of directors including their appointments and remuneration, and such particulars of the nature and extent of their interests in the company as may be prescribed; and (xiv) disclosures in such manner as may be prescribed about sources of promoter‘s contribution;
(b) set out the following reports for the purposes of the financial information, namely:—
(i) reports by the auditors of the company with respect to its profits and losses and assets and liabilities and such other matters as may be prescribed;
(ii) reports relating to profits and losses for each of the five financial years immediately preceding the financial year of the issue of prospectus including such reports of its subsidiaries and in such manner as may be prescribed:
Provided that in case of a company with respect to which a period of five years has not elapsed from the date of incorporation, the prospectus shall set out in such manner as may be prescribed, the reports relating to profits and losses for each of the financial years immediately preceding the financial year of the issue of prospectus including such reports of its subsidiaries;
(iii) reports made in the prescribed manner by the auditors upon the profits and
losses of the business of the company for each of the five financial years immediately preceding issue and assets and liabilities of its business on the last date to which the accounts of the business were made up, being a date not more than one hundred and eighty days before the issue of the prospectus:
Provided that in case of a company with respect to which a period of five years has not elapsed from the date of incorporation, the prospectus shall set out in the prescribed manner, the reports made by the auditors upon the profits and losses of the business of the company for all financial years from the date of its incorporation, and assets and liabilities of its business on the last date before the issue of prospectus; and
(iv) reports about the business or transaction to which the proceeds of the
securities are to be applied directly or indirectly;
(c) make a declaration about the compliance of the provisions of this Act and a statement
to the effect that nothing in the prospectus is contrary to the provisions of this Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the rules and regulations made thereunder; and
(d) state such other matters and set out such other reports, as may be prescribed.
(2) Nothing in sub-section (1) shall apply—
(a) to the issue to existing members or debenture-holders of a company, of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant has a right to renounce the shares or not under sub-clause (ii) of clause (a) of sub-section (1) of section 62 in favour of any other person; or
(b) to the issue of a prospectus or form of application relating to shares or debentures
which are, or are to be, in all respects uniform with shares or debentures previously issued and for the time being dealt in or quoted on a recognised stock exchange.
(3) Subject to sub-section (2), the provisions of sub-section (1) shall apply to a prospectus or a form of application, whether issued on or with reference to the formation of a company or subsequently.
Explanation.—The date indicated in the prospectus shall be deemed to be the date of its publication.
(4) No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless on or before the date of its publication, there has been delivered to the Registrar for registration, a copy thereof signed by every person who is named therein as a director or proposed director of the company or by his duly authorised attorney.
(5) A prospectus issued under sub-section (1) shall not include a statement purporting to be made by an expert unless the expert is a person who is not, and has not been, engaged or interested in the formation or promotion or management, of the company and has given his written consent to the issue of the prospectus and has not withdrawn such consent before the delivery of a copy of the prospectus to the Registrar for registration and a statement to that effect shall be included in the prospectus.
(6) Every prospectus issued under sub-section (1) shall, on the face of it,—
(a) state that a copy has been delivered for registration to the Registrar as required under sub- section (4); and
(b) specify any documents required by this section to be attached to the copy so delivered or refer to statements included in the prospectus which specify these documents.
(7) The Registrar shall not register a prospectus unless the requirements of this section with respect to its registration are complied with and the prospectus is accompanied by the consent in writing of all the persons named in the prospectus.
(8) No prospectus shall be valid if it is issued more than ninety days after the date on which a copy thereof is delivered to the Registrar under sub-section (4).
(9) If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and every person who is knowingly a party to the issue of such prospectus shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both.
Provided that the details, as may be prescribed, of the notice in respect of such resolution to shareholders, shall also be published in the newspapers (one in English and one in vernacular language) in the city where the registered office of the company is situated indicating clearly the justification for such variation:
Provided further that such company shall not use any amount raised by it through prospectus for buying, trading or otherwise dealing in equity shares of any other listed company.
(2) The dissenting shareholders being those shareholders who have not agreed to the proposal to vary the terms of contracts or objects referred to in the prospectus, shall be given an exit offer by promoters or controlling shareholders at such exit price, and in such manner and conditions as may be specified by the Securities and Exchange Board by making regulations in this behalf.
(2) Any document by which the offer of sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company and all laws and rules made thereunder as to the contents of the prospectus and as to liability in respect of mis-statements in and omission from prospectus or otherwise relating to prospectus shall apply as if this is a prospectus issued by the company.
(3) The members, whether individuals or bodies corporate or both, whose shares are proposed to be offered to the public, shall collectively authorise the company, whose shares are offered for sale to the public, to take all actions in respect of offer of sale for and on their behalf and they shall reimburse the company all expenses incurred by it on this matter.
(a) every company making public offer; and
(b) such other class or classes of public companies as may be prescribed,
shall issue the securities only in dematerialised form by complying with the provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made thereunder.
(2) Any company, other than a company mentioned in sub-section (1), may convert its securities into dematerialised form or issue its securities in physical form in accordance with the provisions of this Act or in dematerialised form in accordance with the provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made thereunder.
(2) A company filing a shelf prospectus shall be required to file an information
memorandum containing all material facts relating to new charges created, changes in the financial position of the company as have occurred between the first offer of securities or the previous offer of securities and the succeeding offer of securities and such other changes as may be prescribed, with the Registrar within the prescribed time, prior to the issue of a second or subsequent offer of securities under the shelf prospectus:
Provided that where a company or any other person has received applications for the allotment of securities along with advance payments of subscription before the making of any such change, the company or other person shall intimate the changes to such applicants and if they express a desire to withdraw their application, the company or other person shall refund all the monies received as subscription within fifteen days thereof.
(3) Where an information memorandum is filed, every time an offer of securities is made
under sub-section (2), such memorandum together with the shelf prospectus shall be deemed to be a prospectus.
Explanation.—For the purposes of this section, the expression "shelf prospectus" means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.
(2) A company proposing to issue a red herring prospectus under sub-section (1) shall file
it with the Registrar at least three days prior to the opening of the subscription list and the offer.
(3) A red herring prospectus shall carry the same obligations as are applicable to a
prospectus and any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the prospectus.
(4) Upon the closing of the offer of securities under this section, the prospectus stating
therein the total capital raised, whether by way of debt or share capital, and the closing price of the securities and any other details as are not included in the red herring prospectus shall be filed with the Registrar and the Securities and Exchange Board.
Explanation.—For the purposes of this section, the expression "red herring prospectus" means a prospectus which does not include complete particulars of the quantum or price of the securities included therein.
Provided that nothing in this sub-section shall apply if it is shown that the form of application was issued—
(a) in connection with a bona fide invitation to a person to enter into an
underwriting agreement with respect to such securities; or
(b) in relation to securities which were not offered to the public.
(2) A copy of the prospectus shall, on a request being made by any person before the closing of the subscription list and the offer, be furnished to him.
(3) If a company makes any default in complying with the provisions of this section, it
shall be liable to a penalty of fifty thousand rupees for each default.
(a) is a director of the company at the time of the issue of the prospectus;
(b) has authorised himself to be named and is named in the prospectus as a director of the company, or has agreed to become such director, either immediately or after an interval of time;
(c) is a promoter of the company;
(d) has authorised the issue of the prospectus; and
(e) is an expert referred to in sub-section (5) of section 26,
shall, without prejudice to any punishment to which any person may be liable under section 36, be liable to pay compensation to every person who has sustained such loss or damage.
(2) No person shall be liable under sub-section (1), if he proves—
(a) that, having consented to become a director of the company, he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent; or
(b) that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue, he forthwith gave a reasonable public notice that it was issued without his knowledge or consent.
(3) Notwithstanding anything contained in this section, where it is proved that a prospectus has been issued with intent to defraud the applicants for the securities of a company or any other person or for any fraudulent purpose, every person referred to in subsection (1) shall be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by any person who subscribed to the securities on the basis of such prospectus.
(a) any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or
(b) any agreement, the purpose or the pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or
(c) any agreement for, or with a view to obtaining credit facilities from any bank or financial institution,
shall be liable for action under section 447.
(a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or
(b) makes or abets making of multiple applications to a company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or
(c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name,
shall be liable for action under section 447.
(2) The provisions of sub-section (1) shall be prominently reproduced in every prospectus issued by a company and in every form of application for securities.
(3) Where a person has been convicted under this section, the Court may also order disgorgement of gain, if any, made by, and seizure and disposal of the securities in possession of, such person.
(4) The amount received through disgorgement or disposal of securities under subsection
(3) shall be credited to the Investor Education and Protection Fund.
(2) The amount payable on application on every security shall not be less than five per cent. of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf.
(3) If the stated minimum amount has not been subscribed and the sum payable on application is not received within a period of thirty days from the date of issue of the prospectus, or such other period as may be specified by the Securities and Exchange Board, the amount received under sub-section (1) shall be returned within such time and manner as may be prescribed.
(4) Whenever a company having a share capital makes any allotment of securities, it shall file with the Registrar a return of allotment in such manner as may be prescribed.
(5) In case of any default under sub-section (3) or sub-section (4), the company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.
(2) Where a prospectus states that an application under sub-section (1) has been made, such prospectus shall also state the name or names of the stock exchange in which the securities shall be dealt with.
(3) All monies received on application from the public for subscription to the securities shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than—
(a) for adjustment against allotment of securities where the securities have been permitted to be dealt with in the stock exchange or stock exchanges specified in the prospectus; or
(b) for the repayment of monies within the time specified by the Securities and Exchange Board, received from applicants in pursuance of the prospectus, where the company is for any other reason unable to allot securities.
(4) Any condition purporting to require or bind any applicant for securities to waive compliance with any of the requirements of this section shall be void.
(5) If a default is made in complying with the provisions of this section, the company
shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both.
(6) A company may pay commission to any person in connection with the subscription to
its securities subject to such conditions as may be prescribed.
PART II.—Private placement
(2) Subject to sub-section (1), the offer of securities or invitation to subscribe securities, shall be made to such number of persons not exceeding fifty or such higher number as may be prescribed, [excluding qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option as per provisions of clause (b) of sub-section (1) of section 62], in a financial year and on such conditions (including the form and manner of private placement) as may be prescribed.
Explanation I.—If a company, listed or unlisted, makes an offer to allot or invites subscription, or allots, or enters into an agreement to allot, securities to more than the prescribed number of persons, whether the payment for the securities has been received or not or whether the company intends to list its securities or not on any recognised stock exchange in or outside India, the same shall be deemed to be an offer to the public and shall accordingly be governed by the provisions of Part I of this Chapter.
Explanation II.—For the purposes of this section, the expression—
(i) "qualified institutional buyer‘‘ means the qualified institutional buyer as defined in the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirments) Regulations, 2009 as amended from time to time.
(ii) "private placement" means any offer of securities or invitation to subscribe securities
to a select group of persons by a company (other than by way of public offer) through issue of a private placement offer letter and which satisfies the conditions specified in this section.
(3) No fresh offer or invitation under this section shall be made unless the allotments with
respect to any offer or invitation made earlier have been completed or that offer or invitation has been withdrawn or abandoned by the company.
(4) Any offer or invitation not in compliance with the provisions of this section shall be
treated as a public offer and all provisions of this Act, and the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Securities and Exchange Board of India Act, 1992 (15 of 1992) shall be required to be complied with.
(5) All monies payable towards subscription of securities under this section shall be paid
through cheque or demand draft or other banking channels but not by cash.
(6) A company making an offer or invitation under this section shall allot its securities
within sixty days from the date of receipt of the application money for such securities and if the company is not able to allot the securities within that period, it shall repay the application money to the subscribers within fifteen days from the date of completion of sixty days and if the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest at the rate of twelve per cent. per annum from the expiry of the sixtieth day:
Provided that monies received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than—
(a) for adjustment against allotment of securities; or
(b) for the repayment of monies where the company is unable to allot securities.
(7) All offers covered under this section shall be made only to such persons whose names are recorded by the company prior to the invitation to subscribe, and that such persons shall receive the offer by name, and that a complete record of such offers shall be kept by the company in such manner as may be prescribed and complete information about such offer shall be filed with the Registrar within a period of thirty days of circulation of relevant private placement offer letter.
(8) No company offering securities under this section shall release any public
advertisements or utilise any media, marketing or distribution channels or agents to inform the public at large about such an offer.
(9) Whenever a company makes any allotment of securities under this section, it shall file
with the Registrar a return of allotment in such manner as may be prescribed, including the complete list of all security-holders, with their full names, addresses, number of securities allotted and such other relevant information as may be prescribed.
(10) If a company makes an offer or accepts monies in contravention of this section, the
company, its promoters and directors shall be liable for a penalty which may extend to the amount involved in the offer or invitation or two crore rupees, whichever is higher, and the company shall also refund all monies to subscribers within a period of thirty days of the order imposing the penalty.
CHAPTER IV
SHARE CAPITAL AND DEBENTURES
(a) equity share capital—
(i) with voting rights; or
(ii) with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed; and
(b) preference share capital:
Provided that nothing contained in this Act shall affect the rights of the preference shareholders who are entitled to participate in the proceeds of winding up before the commencement of this Act.
Explanation.—For the purposes of this section,—
(i) “equity share capital”, with reference to any company limited by shares, means all
share capital which is not preference share capital;
(ii) “preference share capital”, with reference to any company limited by shares, means
that part of the issued share capital of the company which carries or would carry a preferential right with respect to—