 bill no ,6 of 1,6s the companies (second amendment) bill, 196,5a bill further to amend the companies act, 1956 be it enacted by parliament in the sixteenth year of the republic of india as follows:-1 (1) this act may be called the companies (second amend- short title ment) act, 1965 and commence-5 (2) it shall come into force on such date as the central goverlj- ment ment may, by notification in the official gazette, appoint 2 in section 240 of the companies act, 1956 (hereinafter refer- amendred to as the principal act), in sub-section (1a), after the words ment of "authorised by him in this behalf", the words  "with the previous section 240 id-approval of that government" shall be inserted 3 in section 370 of the principal act, in sub-section (2),-amend- b i (oo) d b-cl ment of (a) in clause (a), 10 su -c ause tn an su ause (iv), section 3'0 the word "or" shall be inserted at the end; ; (b) in clause (b), for sub-clause (iii), the following sub--clauses shall be substituted, namely:-is u (iii) by a banking company, or an insurance 'company, in the ordinary course of its business; or (iv) by a private company, unless it is a subsidiary of a public company; or 20 (v) by a company e5tablished with the object of financing industrial enterprises"  statement of objects and reasonsthe vivian bose commis$ion of inquiry had recommended intet alia th8t inter-company loans should rank at par with intercompany investments and should be subject to the lame restrictions as the latter this recojl~  aldation was sought to be given e1fect to by amending section 370 of the companies act by section 46 of the companies (amendment) act, 1965 it has, however, beep noticed that the restrictions placed by this amendment would equally apply in respect of guarantees given and securities provided by certain classes of companies viz: financial institutions, insurance' companies and private compani£1j simpzicitor, and would, therefore, act as a serious hindrance to their normal functioning   since loans given by such companies have already been ex~mpted from the scope of the restriction, it has been decided to afford similar exemption to guarantees given and securities provided by such companies 2 opportunity is also being taken to make a consequentiaj amendment to sub-section (la) of section 240 on the lines of similar amendments made to clause (a) of sub-section (1) and clause (a) of sub-section (3) of that section by the companies (amendment) act, 1965 3 the bill seeks to achieve the above objects n~· delhi; b ·r bhagat   the'·12th nooember, 1965  annexure extracts )r"rom the companies act, 1956(1 of ]956) - - - - mo (1) - - - - - - - - - - - production of docu-· mentsand (la) the inspector may, with the previous approval of tlae evidence central government, require any body corporate other than a body corporate referred to in sub-section (1) to furnish such information to, or produce such books and papers before, him or any perscn authori6ed by him in this behalf as he may consider necessary if the furnishing of such information or the production of such books and papers is relevant or necessary for the purposes of his investi gation - - - - - 370 (1) - iii iii - - - - - - - loans, etc, to companies hi  d' h f    f th' t' under the (2) not ng contalne in t e oregomg provisions 0 is sec iod same shall apply tomanage-- - - - - - ment, (b) any guarantee given or any security provided-- - - - ' (iii) by a banking company in the ordina~ course of its business - - - - -  bill flinher to amend the companies act, 1956(sh1j jjaii ram bhagat, minister of l~/anning) 