 the  companies  (amendment)  bill,  2006 a billfurther  to amend the companies act,1956be  it enacted by parliament in the fifty-seventh year of the republic of india as follows:—1 (1) this act may be called the companies (amendment) act, 2006short title and commencement5(2)    it shall come into force on such date as the central government may, by notification, appoint and different dates may be appointed for different provisions of this act1 of 19562 in section 253 of the companies act, 1956 (hereinafter referred to as the principalact), the following proviso shall be inserted, namely:—amendment of section 253"provided that no company shall appoint or re-appoint any individual as director of the company unless he has been allotted a director identification number under section 266b"103 after section 266 of the principal act, the following sections  shall be inserted, namely:—| insertion    | of   ||--------------|------|| new sections |      || 266a, 266b,  |      || 266c, 266d,  |      || 266e,        | 266f || and 266g    |      | 'director identification number266a every—(a) individual, intending to be appointed as director of a company; or5application for allotment of director identification number(b) director of a company appointed before the commencement of the companies (amendment) act, 2006,10shall make an application for allotment of director identification number to the central government in such form, and manner (including electronic form) alongwith such fee, as may be prescribed:provided that every director appointed before the commencement of the companies (amendment) act, 2006 shall make, within sixty days of the commencement of the said act, such application to the central government:15provided further that every applicant, who has made an application under  this section  for allotment of director identification number, may be  appointed as a director in a company,  or, hold office as director in a company till such time such applicant has been allotted director identification number 266b the central government shall, within one  month  from  the receipt of theapplication under section 266a, allot  a director identification number to an applicant, in such manner as may be prescribed20allotment of director identification number266c no individual, who had already been allotted a director identification number under section 266b, shall apply, obtain or possess another director identification numberprohibition to obtain more than one director identification number25266d every existing director shall, within one month of the receipt of directoridentification number from the central government, intimate his director identification number to the company or all companies wherein   he is a directorobligation of director tointimatedirector identification number to concerned company or companies30266e (1) every company shall, within one week of the receipt of intimation under section 266d, furnish  the director identification number of all its directors  to the registrar  or any other officer  or authority as may be specified by the central governmentobligation of company to inform director identification number to registrar (2) every intimation under sub-section (1) shall be furnished in such  form  and manner as may be prescribed35obligation to indicate director identification number266f every person or company, while furnishing any return, information or particulars as are required to be furnished under this act, shall quote the director identification number in such return, information or particulars in case such return, information or particulars relate to the director or contain any  reference of any director5266g if any individual or director, referred to in  section  266a  or section 266c or section 266d or a company referred to in section 266e, contravenes any of the provisions of those sections, every such individual or director or the company, as the case may be, who or which,  is in default, shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which the contravention continuespenalty for contravention of provisions of section 266a   or section 266c or section 266d or section 266e10explanation—for the purposes of sections 266a, 266b, 266c, 266d, 266e  and266f, the director identification number means a identification number which the central government may allot to any individual, intending to be appointed as director or to any existing directors of a company, for the purpose of his identification as such"4 after section 610a of the principal  act, the following sections  shall be  inserted, namely :—insertion ofnew sections 610 b,  610c, 610d and 610e15"610 b (1) notwithstanding anything contained in this act, and without prejudice to the provisions contained in section 6 of the information technology act, 2000,  the central government may, by notification in the official gazette, make rules so as to require from such date as may be specified in the rules, that—2021 of 2000provisions relating to filing of applications, documents inspection etc through electronic form25 3035 40 45 50(a) such applications, balance-sheet, prospectus, return, declaration, memorandum of association, articles of association, particulars of charges,  or any other particulars or document as may be required to be filed or delivered under this act or rules made thereunder,  shall  be filed, through the electronic form and authenticated in such manner as may be specified in the rules;(b) such document , notice , any communication or intimation, required to be served or delivered under this act, shall   be served or delivered under this act through the electronic form and authenticated in such manner as may be specified in the rules; (c) such applications, balance-sheet, prospectus, return, register, memorandum of association, articles of association, particulars of charges, or any other document and return filed under this act or rules made thereunder shall be maintained by the registrar in the electronic form and registered or authenticated, as the case may be, in such manner as may be specified in the rules;(d) such  inspections of the memorandum of association, articles of association, register, index, balance-sheet, return or any other document maintained in the electronic form, which is otherwise available for such inspection under this act or rules made thereunder, may be made by any person through the electronic form as may be specified in the rules;(e)   such  fees, charges or other sums payable under this act or rules made thereunder shall be paid through the electronic form and in such manner as may be specified in the rules;(f) the registrar shall,  register change of registered office, alteration of memorandum of association or articles of association, prospectus, issue certificate of incorporation or certificate of commencement of business, register such document, issue such certificate, record notice, receive such communication as may be required to be registered or issued or recorded or received, as the case may be, under this act or rules made thereunder or perform duties or discharge functions or exercise powers under this act or rules made thereunder or do any act which is by this act directed to be performed or discharged or exercised or done by the  registrar, by the electronic form, in such manner as may be specified in the rules(2) the central government may, by notification in the official gazette, frame a scheme to carry out the provisions specified under sub-section (1) through the electronic form:5provided that the central government may appoint different dates in respect of different registrar of companies or regional directors from which such scheme shall come into force610c (1)  the  central  government may, by  notification in the official gazette, direct  that any of the provisions of this  act,  so far as it is required for the purpose of electronic record specified under section 610b in the electronic form,—10 (a)  shall not apply, in relation to the matters specified under clauses (a) to (f) of sub- section (1) of section 610b, as may be specified in the notification; orpower to modify act in relation to electronic records (including the manner andform in whichelectronic records shall be filed)(b)   shall  apply, in relation to the matters specified under clauses (a) to (f)of sub section (1) of section 610b only with such  consequential exceptions, modifications or adoptions as may be specified in the notification:15provided that no such notification which relates to imposition of fines orother pecuniary penalties or demand or payment of fees or contravention of any of the provisions of this act or offence shall be issued under this sub-section2025 (2) a copy of every notification proposed to be issued  under sub-section  (1), shall be laid in draft before 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 more successive sessions, and  if,  before the expiry of the session immediately  following the session  or  the successive sessions aforesaid, both houses  agree  in disapproving the  issue of the notification or both houses  agree  in making  any modification in the notification, the  notification  shall not  be  issued or, as the case may be, shall be issued only  in  such modified form as may be agreed upon by both the houses 610d the central government may provide such value added services through the electronic form and levy such fees as may be prescribed30providing of services through electronic form application of provision of act 21 of 2000610e all the provisions of  the information technology act, 2000  relating  to the electronic records (including the manner and format in which the electronic records shall be filed), in so far as they  are not  inconsistent with  this act, shall apply , or in relation, to the records in electronic form under section 610b" statement  of  objects  and  reasonsin context of the rapid developments witnessed in technology, the ministry of company affairs decided to enable the operations carried out by the ministry and its field offices to be performed more efficiently and effectively through the use of contemporary information technology and computers  it was felt that the earlier efforts at computerisation had not yielded the desired efficiency in operation of the system and an operating system that took into account contemporary technology was necessary therefore, it was decided to implement a comprehensive e-governance system and programme to achieve the above objective2 the ministry of company affairs on the recommendations of department of information technology is implementing an e-governance initiative through a project named as "mca-21"  this project will provide the public, corporate entities and others an easy and secure online access to the corporate information, including filing of documents and public access to the information required to be in the public domain under the statute, at any time and from anywhere this would also result in efficiency in statutory supervision of corporate processes and efficient professional services under the companies act, 1956 (the act) 3 the filing and registration of documents is a statutory requirement under the actat present, the act lays down the procedures for filing of various documents in physical form and the processes associated therewith while, the broad enabling framework for such an initiative is available under the information technology act, 2000 read with companies act, 1956, enabling provisions would still be required to support certain online electronic processes which have since become available due to technological advancement for various detailed procedural requirements under the companies act, 19564 it is, therefore, proposed to insert new sections 610b, 610c, 610d and 610e in the companies act, 1956 so as to make provision for electronic filing system and for payment of fees through electronic form under the said act which are essential for the successful implementation of the mca-21 project  after the proposed amendments to the companies act, 1956 have been enacted, the documents in electronic form duly authenticated with digital signatures shall be accepted under the provisions of that act the proposed electronic system also provides for multiple modes of payment of statutory fees5 the provisions of the companies act, 1956 allow an individual to be a director of up to fifteen companies and such companies can be located in the jurisdiction in any of the registrars of companies there is a need for individual identity of person(s) intending to be directors of companies to be established this would also facilitate effective legal action against the directors of such companies under the law, keeping in view the possibility of fraud by companies and the phenomenon of companies that raise funds from the public and vanish thereafter it is, therefore, proposed to insert new sections 266a, 266b, 266c, 266d, 266e, 266f and 266g in the companies act, 1956 so as to, inter alia, provide for allotment of a unique director identification number to any individual, intending to be appointed as a director in a company or to any existing director of a company, for the purpose of his identification as such, through electronic or other form and to provide for penalty for any violation in this regard6 this bill seeks to achieve the above objectivesnew delhi;prem  chand  guptathe 25 february, 2006 financial  memorandumclause 3 of the bill proposes inter alia  to insert a new section 266b in the companies act, 1956 which empowers the central government to issue director identification number (din) to all applicants within one month from the date of application  din card would involve certain expenses which would be met from the sanctioned budget of the ministrythe bill will not involve any other expenditure of recurring or non-recurring nature memorandum  regarding  delegated  legislationclause 3 of the bill, inter alia, proposes to insert a new section 266a in the companies act, 1956 so as to confer power upon the central government to specify, by the rules made by it, the form in which application shall be made for allotment of director identification number and the manner (including electronic form) in which such application shall be made and the fee which shall be paid along with such application2 clause 3 of the bill, inter alia, proposes to insert a new section 266b, in the companies act, 1956 so as to confer power upon the central government to specify, by the rules made by it, the manner in which it shall allot a director identification number to an applicant3 clause 3 of the bill, inter alia, proposes to insert a new section 266e, in the companies act, 1956 so as to confer power upon the central government to specify by rules made by it, the form and the manner in which the intimation shall be furnished by every company, the director identification number of all its directors  to the registrar  or any other officer  or authority as may be specified by the central government 4 clause 4 of the bill, inter alia, proposes to insert a new section 610b, in the companies act, 1956 so as to confer power upon the central government to specify by rules made by it the form and the manner relating to filing of applications, documents, inspection, etc, through electronic form and the fee to be paid under that section it also confers power upon the central government to specify by rules made by it, the date from which various provisions of the new section 610b shall come into force5 clause 4 of the bill, inter alia, proposes to insert a new section 610c in the companies act, 1956 to confer power upon the central government to direct, by notification in the official gazette,  that any of the provisions of the said  act,  so far as it is required for the purpose of electronic record specified under section 610b in the electronic form, (other than relating to imposition of fines or other pecuniary penalties or demand or payment of fees or contravention of any of the provisions of this act or offence) shall not apply, in relation to the matters specified under clauses   (a) to (f) of sub-section (1) of section 610b, as may be specified in the notification; or shall  apply, in relation to the matters specified under clauses (a) to (f) of sub-section (1) of section 610b only with such  consequential exceptions, modifications or adoptions as may be specified in the notification6 clause 4 of the bill, inter alia, proposes to insert a new section 610d in the companies act, 1956 to confer power upon the central government to provide such value added services through the electronic form and levy such fees as may be specified by rules made by it7 a copy of every notification proposed to be issued  under sub-section  (1) of section610c, shall be laid in draft form for a total period of thirty days before each house of parliament and such notification shall be issued after expiry in  such modified form as may be agreed upon by both the houses or shall not  be  issued if disapproved by both the houses of parliament8 the rules made by the central government shall be laid, as soon as may be after they are made, before each house of parliament9 the matters in respect of which rules may be made are generally matters of procedure and administrative detail and it is not practicable to provide for them in the bill itself the delegation of legislative power involved is of a normal character rajya  sabha———— a billfurther to amend the companies act, 1956————(shri prem chand gupta, minister of company affairs)mgipmrnd—5911rs(s5)—02-03-2006