 idk sabhathe compaj,ijj:es (am&:ndment) bill, 19: 7 (to be/as introduced in lok sabha) 1 page if, line 25,-for n59a" read "58a" 2 page 5, line 18,-for "provision n re sld "provisions" new delfr· , november'21~972 kartika 30, 1899\sak-a1  bill no 13t c»f 1,,7 the companies (amendment) bill, 1977 a billfurther to amend the companies act, 1956 be it enacted by parliament in the twenty-eighth year of the republic of india as follows:-1 this act may be called the companies (amendment) act, 1977 short title 1 of 1956 z in the companies act, 1956 (hereinafter referred to as the principal 5 act), in section loe, in sub-section (4!j), for the words and figures "chap-5 of 1898 ter xxxv of the code of criminal procedure, 1898", the words and amendment of section loe 2 of 1974 figures "chapter xxvi of the code of criminal procedure, 197:i" shall be substituted 3 in section 58a of the principal act, after sub-section (7), but be-10 fore the ezpl4nclt:ion the following sub-section shall be inserted, namely:-ameadmentof section 5~  is tlell"'  (8) the central government may, if it considers it necessary for avoiding any hardship or for any other just and sufficient reason, by order, issued either prospectively or retrospectively from a date not earlier than the commencement of the companies (amendment) act, 1974, grant extension of time to ii company or class of companies to comply with, or exempt any company or class of companies from, all or any of the provisions of this section either generally or for any specified period subject to such conditions as may be specified in the order: provided that no order under this sub-section shall be issued in relation to a class of companies except after consultation with the reserve bank of india" amendment of iection 10sh 4 in section losh of the principal act, the words, figures, letters and brackets land, any re£erenee in sections loba, l08b and lose to "same s management" shall be construed as a reference to "same management" as defined in clause (g) of section 2 of the monopolies and restrictive trade practices act, 1969' shall be inserte'd at the end s4 of 1969 5 in section 220 of the principal act,-amendment of section 22() (i) in sub-section (1), after the words "balance sheet and the 10 profit and loss account were so laid", the words ", or where the annual general meeting of a company for any year has not been held, there shall be filed with the registrar within thirty days from the latest day on or before which that meeting should have been held in accordance with the provisions of this act," shall be inserted; is (~i) in sub-section (2), after the words "does not adopt the balance sheet", the words ", or, if the annual general meeting of a company for any year has not been held," shall be inserted 6 in section 293 of the principal act, in sub-section (1), in clause (e), for the words "twenty-five thousand rupees", the words "fifty thousand 20 rupees" ,ball be substituted amendment of section 293 7 in section fi20 of the princ~pa1 act, for sub-section (2), the following sub-section shall be substituted and shall be deemed to have been substituted with effect from the 1st day of february, 1975, namely:-amendment of section 620 "(2) a copy of every notjfication proposed to be issued under 25 sub-section (1), sha,llbe laid in dr,aft lx·fore each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or moj:e b~cessive sessions, and if, before the expiry of the session immedia~ly fouowi»,g the session or the successive sessions aforesaid, both houses ~gree in 30 disapproving the issue of the notification or both houses agree in m~ ~y modi1lcation in the notification,the :notui,ca~on shall not be issued or, as the ca,se may };ie, shall be i~ued only in s1jch modified form as may be agreed upon by both the houses" 8 after section 634 of the principal act, the following section shan 3s be inserted, namely:-insertion of new ec:uod 63fa enforcement of orders of company law board u834a any order made ,by ",tile "c'o~ny law :bqqd ~er,  tion 17, section 18, section 19, section 79, section 141 or ~ijon;llf6 may be enf~rced by utat board ill the same manner as if it were a decree ijulde by a court in a suit pending therein, and it shall be 40 lawful for that board to send, in the case of its inabihty to eacute such order, to 'the court within the local limits of whose jurisdictipn,-(g) in tbf! case of an order ag$st a company, the registered " '", qftl,ce of the qqd;l~ "is situ~~, or 4s (b) in ijae ,case of an ord,r 4pinst al)y otjjer i~' the person concemed voluntarily resid~s, or c4rri~ od,"q~~jiis or personally works for gain" t in section 635 of the principal act, after sub-section (3), the following sub-section shall be inserted, namely:-amendment of section 131 5 "(4) where any order made by the company law board under section 17, section ui, section 19, section 79 or section 186 is required to be enforced by a' court, a certified copy of the order shall be produced to' the proper officer of the court required to enforce the order and the provisions (if sub-sections (2) and (3) shall, as, far as may be, apply to every such order in the same manner and tu the same ex-tent as thcyapply to an order made by a court" in the companies act, 1956, section 58a rela~ing to acceptance of, deposits was inserted by the c'ompnniiest (amendment) act, 1974, which came into force on the 1st february, 1975 prior to the coming into force of this section, acceptance of deposits !by companies was regulated by the dirqctions issued by the reserve bank of india under chapter ilib ot the reserve bank of india act, 1004 clause (a) of sub-section (3) of section 58a provideos that every deposit accepted by a company at any tfime before 'the comm~encement of the said amendment act of 1974, ,shall, if it is not renewed by a company in accordance with the provislons of that section, be repaid in accordance with the terms of such deposit clause (c') of that sub-se<-tion provides that any deposit re-ceived by a company in contravention of the aforesaid directions of the reserve bank shall be repaid in full on or ,before 1st april, 1975 subsection (fit) of th2t se<:tion provides for penalty for the contravention of the provisions of the section a review of the cases of contraventions t;hows th:!t som~timcs they are due to circumstances hl'yond th~ control of the compani/esl, namely, strikes, riots, power-cuts, recession, etc sulr rection (7) of section 58a empowers the central government ~o give total exemption to a rompany from the provisions of the section after consulting the" reserve bank of india there is, however, no power to (drant partial relaxation like extension of time in deserving callies fol' the repayment of deposits a study group constituted by the rese~ bank of india under -the chainnanship of shri james s raj reeom~ mended that section 59a of the act may be suitely amended to grant extension of time to comply with or to exempt any company from the llmvisions of that section it is proposed to accept this reconun~  t!inn and amend section 58a suitably in the state of bombay v bandan ram bhandari [arr (1961) sc 186], the question arose as to whether the company and its oftlcers are liable to be prosecuted under the 1913 aot for not laying the balancesneet and the profit and loss account before the company in annual ~neral meetin~ where the annual general meetin~ of the company was not held in that care, the supreme court took the view that a plem;on ('harged with an offence could not rely on his own default as 'l defence to the charge if he was responsible for not calling the annual general meeting, he could not be heard to say in his defence to the charae 'that as the annual general meeting wac; not held, the balance-shee~ antf profit and 101'ls account could not be laid before the company in annnal general meeting a diffe:rent vil:"w has however be£on taken on the noint bv supreme collrt in the case of st"te of andhra prndesh v andhra pradesh provincial potteries lid [air (1973) sc 2429] persons in charge of the management of !lome of -the comoanies rometimes omit to ('onvene the annual (leneral meetinl!' of the companv and by liiuch omi'!sion keep the share"holde~ as well as the creiiitors of the com~ oany in thp dark aibou'1; the rffairs of the ~oml)anv and ;t-i financial c'lndilion further, by such omission they also eva~p the necessity 01 filing - ' the balance-iheet and the protlt and loss account with the registrar of companies when a document is filed with the registrar of companies, it is open to any shareholder or creditor to inspect such document and to obtain a copy thereo~ in the circumstances, it is absolutely essential that even where the annual general meeting of the company has not been held, the balance sheet and profit and loss account should be filed withl the registrar of companies to enable the shareholders and other persons to find out, from inspection of the said documents, the affairs of the company and its financial condition the bill seeks to amend section 220 to achieve the said object under section 293 ~f the companies act, 1956, a company is empowered to make donations for charitable purposes up 'to five per cent of its av'qirage net profits during the preceding three years or up to rsi 25,000, wh,ichever is greater the ceiling of rs 25,000 was fixed long ago and it is felt that in the present context, the said ceiling should be raised to &s 50,000 the bill seeks to amend section 293 section 620 of the companies ad, 19156, empowel"3 the central govern-(lle'nt to modify, by notification, any of the provision of the act in its application to a particular government company or to government compan~e~, in general every notification proposing to make such iiwdification is required to be placed, in draft, before each house of parliament for a period of not less than 30 days while it is in session since the said p~riod of 30 days cannot, sometimes, be completed in one session, it is necessary to amend the section to permit the period of 30 days to be co~ pleted in one socssion of in two or more successive _sions the bfll seeks to amend secuon 620 to achieve the said object other amendments included in the bill are of a consequential or formal nature new dblhi; shanti bhusiian the 14th november, 1977 , ~ '  - (1' of 1956) - - - 'lob, (1) -  - ' 5 of 1898 constitution of board of company law administration (4d) every branch shall be deemed to be a civil court hr the ptir-wiles of section 195 and chapter xxxv, '(if the code of criminal procedure, 1898, and every proceeding before the, b~nch shall be deemed to be a judicial proceeding within the meaning of sections 193 and "228 01 the indian penal code and' for the· purpose of secti(m, 196 of that cqde 45 of 1860 - 54 of 1969  - - oil, - , ' 108ft r~erences in sectmns htba, 108b, lobe add 1080 to sharea or, share 'capital, as the case maybe, shan be eanstrued atj references to shares or share capital, resp~ctrn!ly, of a body~orporata owning any undertaking to which the provisions of part a of chapter iii of the montjpolies and restrj~tive trade practices act, 116'," apply - -  - 220(1), after the balance-sheet ,~d,the i>rofi~ and loss account have been laid before a company at an annual general meeting as aforesaid, there shall be filed with the registrar within thirty days from the date on which the balance-sheet and the profit and loss account were so laid-comtruction of references to "shares" or "share capital" in sections toba to 108d, three copies of balancesheet, etc, to be filed with regntrar, (a) three copies of the balance-sheet and the profit and loss"8o" count, signed by the managing director mawaalng' agen~; ;8ecremllies" and treasurers, manaqer or secretary of the company, or if there be none of these, by a director of the company, together with three copies of all documents which are rcq'_tired by this act to be annexed or attached to such balanc'e-sheetor profit and loss account i provided that in the case o~ a private company, copies of the balancmheet and copies of the profit and 1011 account shall be filed , with the registrar separately: provided further that,-(i) in the case of a private company which is nota subsidiary of a public company, or oi) in the case of a private company of which the entire paid-up share capital is held by one or more bodies corporate incorporated outside india, or (iii) in the case of a company which b~cnmes a public company by virtue of section 43a if the central gnvemmfmt directs that it is not in the public intel'ec:t that any person other than 8 , member of the company shall be entitled to inspect, or obtaid copies of, the profit and loss account of the company, no person other than a member of the company concerned shall be entitled to inspect, or obtain copies of~ the profit and loss account of that company under section 610 (2) if the annual general meeting of a company before which a balance-sheet is laid as aforesaid does not adopt the balance-sheet, a statement of that fact and of the reasons therefor shall be annexed to the balance-sheet and to the copies thereof required to be filed with the registrar  - - - restrictions on powel'lof board 293 (1) the board of directors of a public company, or of a private company which is a subsidiary of a public company, shall not, except with the consent of such public company or subsidiary in general meetidg,-- - - - - (e) contribute, after the commencement of this act, to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed twenty-five thousand rupees, or five per cent of its average net profits as determined in accordance with the provisions of sections 349 and 350 during the three financial years immediately preceding, wlachever is greater power to modify act in relation to government companies 620 (1) - - - - (2) a copy of every notification proposed to be issued under sub-section (1) shall be laid in draft before both houses of parliament for a period of not less than thirty days while they are in session and if within that period, either house disapproves of the issue of the notification or approves of such issue only with modifications, the notification shall not be issued or, as the case may require, shall be issued only with such modifications as may be agreed on by both the houses a biij further to amend the companies act, 1956 (shri sh4nti bhushan, mitler of law, justice and coompony affairs) 