Constitution of Working Group on Group Insolvency Office Order File No: IBBI/CIRP/GI/2018-19/001dated 17th January 2019issued by IBBI The Insolvency and Bankruptcy Board of India hereby constitutes a ‘Working Group on Group Insolvency’ as under: Sl. No. Name Position and Organisation Position in the Working Group 1. Mr. U. K. Sinha Former Chairman, Securities and Exchange Board of India Chairperson 2. Ms. Anshula Kant Managing Director, State Bank of India Member 3. Mr. Shardul Shroff Executive Chairman, Shardul Amarchand Mangaldas & Co. Advocate and Solicitors Member 4. Dr. Shubhashis Gangopadhyay Founder and Research Director, India Development Foundation Member 5. Mr. Siby Antony Chairman, Edelweiss Asset Reconstruction

Amendments to Guidelines for public issue of units of REITs SEBI/HO/DDHS/CIR/P/2019/15 dated 15th January 2019issued by SEBI 1. This is in continuation to SEBI circular No. CIR/IMD/DF/136/2016 dated December 19, 2016, which provided the “Guidelines for public issue of units of REITs” (“REIT Guidelines”). 2. With a view to further rationalise and ease the process of public issue of units of REITs, it has been decided to provide for following in the

Uniform membership structure across segments SEBI/HO/MIRSD/DOP/CIR/P/2019/14 dated 11th January 2019issued by SEBI 1. In cash segment, all the Stock Brokers are trading cum self-clearing members whereas in derivatives segment, membership structure is that of Trading Member (TM) and / or Clearing Member (CM). After the introduction of derivatives in the year 2001, most of the Stock Brokers in cash segment had also become TM / CM in derivatives segment. Unification of membership structure across equity cash and derivatives segments of Stock

Prevention of Money-laundering (Restoration of Confiscated Property) (Amendment) Rules, 2019 G.S.R. 23(E) dated 11th January 2019issued by Ministry of Finance In exercise of the powers conferred by sub-section (1) and clause (x) of sub-section (2) of section 73, read with sub-section (8) of section 8 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby makes the following rules further to amend the Prevention of Money-laundering (Restoration of Confiscated Property) Rules, 2016, namely:- 1. Short title and commencement.-(1) These

Cyber Security and Cyber Resilience framework for Mutual Funds / Asset Management Companies (AMCs) SEBI/HO/IMD/DF2/CIR/P/2019/12 dated 10th January 2019issued by SEBI 1. With rapid technological advancement in securities market, there is greater need for maintaining robust cyber security and to have cyber resilience framework to protect integrity of data and guard against breaches of privacy. 2. As part of the operational risk management, the

  Re-Constitution and Re-naming of Advisory Group of National Foundation for Corporate Social Responsibility (NFCSR) as "Governing Council, NFCSR" Order No. 11/02/2018-CSRdated 7th January 2019issued by MCA Pursuant to approval of Hon'ble Minister of Corporate Affairs, the Advisory Group of National Foundation for Corporate Social Responsibility (NFCSR) is hereby re-named as Governing Council, NFCSR and is reconstituted to make NFCSR, a vibrant body of a National Stature Level providing policy inputs and policy advocacy in the areas of Corporate Social Responsibility (CSR).

Re-Constitution of Steering Committee of National Foundation for Corporate Social Responsibility (NFCSR) Order No. 11/02/2018-CSR dated 7th January 2019issued by MCA Pursuant to the approval of Hon'ble Minister of Corporate Affairs, a restructured Steering Committee of National Foundation for Corporate Social Responsibility (NFCSR) is hereby constituted to prepare a roadmap, oversee the functioning and steer the activities of NFCSR for providing policy inputs and policy advocacy in the area of Corporate Social Responsibility (CSR). The NFCSR will continue to be housed

SEBI ( LODR) Regulations - Succession certificate - Transmission of securities held in dematerialized mode shall be dealt in line with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2018.

Shri Ashok Kumar Gupta appointed as the Chairperson of the Competition Commission of India with effect from the 12th November, 2018 S.O. 28(E) dated 2nd January 2019issued by MCA In exercise of the powers conferred by sub-section (1) of section 8 read with sub-section (1) of section 10 of the Competition Act, 2002 (12 of 2003), the Central Government, vide office order No. Comp-05/1/2018- Comp-MCA dated the 09th November, 2018, appointed Shri Ashok Kumar Gupta as the Chairperson of the Competition

Securities and Exchange Board of India (Custodian of Securities) (Amendment) Regulations, 2018 No. SEBI/LAD-NRO/GN/2019/01 dated 1st January 2019issued by SEBI In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996, namely :- 1. These Regulations may be called the Securities and Exchange Board of India (Custodian of Securities)

Re-constitution of the NCLT Benches at New Delhi File No. 10/03/2018-NCLT dated 1st January 2019issued by NCLT In exercise of the powers conferred by Section 419 of the Companies Act, 2013, the Hon'ble President, NCLT hereby re-constitutes the Benches at New Delhi for the purpose of exercising and discharging the functions assigned by the statute (s). This is in partial modification of Order dated 5th July, 2016, 2nd February 2017, 19th May, 2017 & 3.1.2018. The Benches shall comprise of. NCLT,

  Physical settlement of stock derivatives SEBI/HO/MRD/DOPI/CIR/P/2018/161dated 31st December 2018issued by SEBI 1. Please refer to SEBI circular SEBI/HO/MRD/DP/CIR/P/2018/67 dated April 11, 2018 captioned ‘Review of Framework for Stocks in Derivatives Segment’. 2. In furtherance to the aforesaid circular, it has been decided that physical settlement shall be made mandatory for all stock derivatives. 3. Accordingly, stock derivatives which are presently being cash settled shall move to physical settlement in the following manner: (i) Stocks which are being cash settled shall be

Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism SEBI/HO/MRD/DOPI/CIR/P/2018/159 dated 28th December 2018issued by SEBI 1. Comprehensive guidelines on Offer for Sale of Shares through stock exchange mechanism were issued vide circular no CIR/MRD/DP/18/2012 dated July 18, 2012. These guidelines have been modified from time to time based on the representation/suggestion received

Creation of segregated portfolio in mutual fund schemes SEBI/HO/IMD/DF2/CIR/P/2018/160 dated 28th December 2018issued by SEBI A. In order to ensure fair treatment to all investors in case of a credit event and to deal with liquidity risk, it has been decided to permit creation of segregated portfolio of debt and money market instruments by mutual funds schemes. B. For the purpose of this circular, 1. The term ‘segregated portfolio’ shall mean a portfolio, comprising of debt or money market instrument

Change of Name in the Beneficial Owner (BO) Account with Depositories CIR/MRD/DP/158/2018 dated 27th December 2018issued by SEBI 1. This has reference to circular no. CIR/MRD/DP/27/2012 dated November 1, 2012 wherein SEBI has prescribed the documents required in order to simplify the procedure for change of name in Beneficial Owner's (BO) account with Depositories. 2. One of the documents required for change of name in Beneficial Owner's (BO) account with Depositories on account of reasons other than marriage is document

Review of the policy on Foreign Direct Investment (FDI) in e-commerce Press Note No. 2 (2018 Series)dated 26th December 2018issued by DIPP 1.0 In order to provide clarity to FDI policy on e-commerce sector, Para 5.2.15.2 of the Consolidated FDI Policy Circular 2017 will now read as under: 5.2.15.2 E-commerce activities Sector/Activity % of Equity/FDI Cap Entry Route E-commerce activities 100% Automatic 5.2.15.2.1 Subject to provisions of FDI Policy, e-commerce entities would engage only in Business to Business (B2B) e-commerce and not in Business to Consumer (B2C) e- commerce. 5.2.15.2.2 Definitions: i ) E-commerce- E-commerce

Justice Tarun Agarwal, Retired Chief Justice, Meghalaya High Court appointed as Presiding Officer, Securities Appellate Tribunal S.O. 6228(E) dated 20th December 2018issued by Ministry of Finance In exercise of the powers conferred by section 15MA of Securities and Exchange Board of India Act, 1992 (15 of 1992), the Central Government hereby appoints Justice Tarun Agarwal, Retired Chief Justice, Meghalaya High Court to the post of Presiding Officer, Securities Appellate Tribunal in the scale of pay of Rs. 2,50,000/- (Fixed) for a period

Delegation of power to Regional Directors under first proviso to clause (41) of section 2 and second proviso to sub-section (1) of section 14 of the Companies Act, 2013 S.O. 6225 (E) dated 18th December 2018issued by MCA In exercise of the powers conferred by section 458 of the Companies Act, 2013 (18 of 2013), the Central Government hereby delegates to the Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong, the powers and functions vested in it

  Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2018 No. SEBI/LAD-NRO/GN/2018/51 dated 13th December 2018issued by SEBI In exercise of the powers conferred by section 30 read with clause (c) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely – 1. These Regulations may be called the Securities

Extension of the last date of filing of Form NFRA-1 General Circular No. 12/2018 dated 13th December 2018issued by MCA The Ministry of Corporate Affairs has received several representations regarding extension of the last date of filing of Form NFRA-1, which is required to be filed under sub-rule (2) and sub-rule (3) of rule 3 of the National Financial Reporting Authority Rules, 2018. 2. The matter has examined and it is stated that the time limit for filing Form NFRA-1 will be 30

In the case of real estate (commercial and residential) comprising 100 per cent voting share in committee of creditors, sub-section (2) of section 22 and other cognate provisions must be read to mean that a resolution would be deemed to be passed if it is voted by highest number of financial creditors (not necessarily 66 per cent) Threshold voting share for decision of the committee of creditors by sixty six per cent would not be mandatory in the cases of

Where the Adjudicating Authority had expressed its final satisfaction about prima facie case, and existence of debt and default, initiation of corporate resolution process could not be challenged as illegal and void raising untenable grounds Where a subsidiary of the corporate debtor was granted loan by a foreign bank and the holding company had executed a guarantee in favour of the bank, the decree passed by High Court of England being evidence in support of such guarantee and Adjudicating Authority, being

Internal dispute of directors of corporate debtor and pendency of application under sections 241 and 242 of the Companies Act, 2013 before the NCLT for adjudication cannot be construed as a valid defence to triggering of insolvency resolution process Where a financial creditor files a petition under section 7 and by virtue whereof corporate insolvency resolution process is triggered, and moratorium slapped, interim resolution professional appointed and necessary directions given, the triggering of insolvency resolution process cannot be defeated

Where the impugned order is passed by the Tribunal in the capacity of the judicial authority under section 45 of the Arbitration and Conciliation Act, 1996, the appeal under section 421 is not maintainable before the Appellate Tribunal Where the National Company Law Tribunal is empowered to pass orders in different capacities under different provisions of the Act, the appeal in a particular case will lie before the competent forum under the said very Act under

Where existence of pre-existing dispute is established by e-mail in respect of pending criminal proceeding, petition filed by operational creditor is liable to be dismissed Where corporate debtor sent e-mail communication in respect of pending criminal proceeding initiated by operational creditor against the corporate debtor, that established the existence of a pre-existing dispute regarding defects in goods supplied, and hence the petition filed under section 9 by operational creditor for initiation of corporate insolvency resolution process against corporate debtor was liable

Where name of non-operational company is struck off for non-filing of statutory returns, there is no justification to restore its name just to go through the process of winding up or closure Where the name of the non-operational company is struck off by the Registrar of Companies exercising its power under section 248 read with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, giving opportunity to the petitioner-company to file its statutory returns and upon

Where the impugned consent decree falls within the period stipulated in section 531 from the date of commencement of winding up, it constitutes fraudulent preference Winding up proceedings in respect of a sick industrial company are deemed to commence on the date of recommendation of the Board for Industrial and financial Reconstruction (BIFR), that is the date of receipt of the same by the High Court or the date of admission of the winding up proceedings. Where the impugned consent decree

Where definition of ‘corporate person’ under clause (7) of section 3 has not ipso facto excluded NBFC, no contention can be raised that NBFC has been excluded from definition of ‘corporate debtor’ Where the petitioner-non-banking financial company (‘NBFC’) files petition under section 7 alleging that deposit made by it remains unpaid, the respondent cannot contend that having accepted deposits, petitioner-NBFC has become ‘financial service provider’ under clause (7) of section 3 and hence has been excluded from definition of ‘corporate debtor’

Where representatives of directors were asked to go out of the meeting when affairs of corporate debtors were taken for consideration, and where notice of meeting was sent without agenda of meeting, that violated the provision of the Code and the Regulations Where sub-section (4) of sections 24 provides right of participation to the directions in the meeting of committee of creditors, and the Appellate Tribunal also allowed it, but representatives of directors were asked to go out from the meeting

Where appeals were filed against the order of the Company Law Board and the same were disposed of by the High Court and the Supreme Court had considered gamut of facts and passed directions, the appeals would become redundant and liable to be dismissed Where the Company Law Board (Board) passed an order in a petition filed under section 397/398 directing parties to maintain status quo with regard to the shareholding against which appeals were disposed of by the High

Formation of opinion by SEBI that there are grounds for adjudging under Chapter VIA is necessary prerequisite for the Board to exercise its jurisdiction Where the whole-time member of SEBI Board has not even made an endorsement that he is of an opinion that there are grounds for adjudging under Chapter VIA, the question of inferring that he had formed such opinion does not arise. The Board would have no jurisdiction to appoint an adjudicating officer. Securities and Exchange Board of

Where filing of petition under section 34 of the Arbitration and Conciliation Act against an arbitral award establishes pre-existing of dispute which continues till final adjudicatory process, all that has to be seen is whether the said debt can be said to be disputed Where the filing of a petition under section 34 of the Arbitration Conciliation Act against an arbitration award shows that a pre-existing dispute culminating in the first stage of proceeding in an award continues even after the

Amended section 29A is effective from the date of Ordinance which introduced that section as every statute is prima facie prospective Every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. Amended section 29A is effective from the date of passing of Ordinance, that is, 23rd November, 2017. Insolvency and Bankruptcy Code, 2016 – Section 29A – Resolution applicant – Persons not eligible to be – Amended section 29A first introduced

Declining to supplant the mechanism laid down in the Code for corporate insolvency resolution process by substituting them with a mechanism under judicial directions, the Supreme Court, in exercise of its jurisdiction under article 142, issued, amongst others, directions for re-initiation of resolution of insolvency process afresh and renewing the period of 180 days prescribed for completion of resolution process In exercise of the power vested under article 142 of the Constitution, the Supreme Court, having regard to the facts

IBBI has no locus to file appeal in the Appellate Tribunal challenging finding of Adjudicating Authority. It is for resolution professional to find out that a resolution plan is contrary to section 29A Where the Insolvency and Bankruptcy Board of India (IBBI), a regulatory body, has no locus standi, not being an aggrieved person, it cannot challenge the finding given by Adjudicating Authority, preferring an appeal under section 61. From clause (g) of section 196 relating to powers and functions

No civil court can exercise jurisdiction in respect of any matter which a Debt Recovery Tribunal / Debt Recovery Appellate Tribunal alone is empowered to determine No civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter, suit or proceeding in respect of any matter which a Debt Recovery Tribunal or Debt Recovery Appellate Tribunal is empowered by or under the Act to determine and no injunction can be granted by any court or authority

Where resolution process has reached finality and the committee of creditors has rejected the resolution plan, the Adjudicating Authority has no option but to order for initiation of liquidation process Once the resolution process reaches finality and the committee of creditors reject the resolution plan in view of sections 30 and 31, the Adjudicating Authority has no other option but to order for initiation of liquidation process. Insolvency and Bankruptcy Code, 2016 – Sections 10, 30, 31 and 33 –Insolvency resolution

Where there were exceptional circumstances for which waiver could be allowed, the Tribunal had rightly exercised its discretion Where there were conflicting documents, some showing that respondents were members of the company at some point of time, while others showing that they were not members, and the respondents made an application for waiver of conditions precedent for maintaining petition for relief against oppression/mismanagement and the Tribunal exercised discretion to allow waiver in such exceptional circumstances under the proviso to sub-section

Where Tribunal has exercised discretion judicially passing interim orders to protect interest of company, no interference by the Appellate Tribunal is called for Where National Company Law Tribunal has exercised discretion judicially when ad interim order was sought from it to protect the interest of the company till the petition for relief in cases of oppression was decided, the Appellate Tribunal has declined to interfere in the discretion exercised by it. Companies Act, 2013 – Sections 241, 242 and 243

Sending a calendar of events cannot be called as service of notice as to dispense with the duty of sending notice with agenda. Therefore, meetings held without notice for increase of authorised share capital are invalid Whenever any meeting is held either Board meeting or general meeting, duty is cast upon the persons holding meeting to send the respective notice with agenda items as prescribed under the Act. Sending such notice with agenda and documents does not get dispensed by sending

In order to pacify the Home Buyers, the Government has promulgated the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (‘Amendment Act‘) on 6th June, 2018 to implement the recommendations pursuant to the Insolvency Law Reform Committee Report dated 3rd April 2018. One of the objectives of the Amendment Act is to balance the interests of various stakeholders in the Insolvency and Bankruptcy Code, 2016 (‘Code’) including home buyers. This article analyses the issues that emanate from the Amendment Act.

Mr. NR Narayana Murthy, expressed need for clarification from SEBI on the rights and liabilities of promoter of listed companies. In this backdrop, the author has tried to analyse as to who is the ‘promoter’ and what are his roles, duties, responsibilities, rights, etc., under the Companies Act, 2013 and different regulations laid down under the Securities and Exchange Board of India Act, 1992.

In this article, an attempt has been made by the author to explain the scope of remedies available to a debenture holder on account of non-payment of principal or/and interest by a company. In addition, corresponding remedies which are available to a company have been enshrined if a company is unable to make the payment of principal or/and interest to debenture holder.

This article attempts to analyse the decisions of the Competition Commission which have buttressed the validity of the Competition Commission of India (Lesser Penalty) Regulations, 2009.

In this article, the author makes an indepth analysis and suggests a solution to complex situation for preparing two separate secretarial audit reports in listed company and its material unlisted Indian subsidiaries. The author also discusses some allied issues simultaneously, namely, (i) need for audited corporate governance report by a company secretary in practice, (ii) merger of Form MGT-8 with Form MR-3, and (ii) appointment of secretarial auditor at annual general meeting for a fixed term of 3-5 years.

False statement to the Competition Commission regarding combinations M [2018] 144 CLA (Mag.) 33 Surendra U Kanstiya* The Competition Commission of India has a wonderful practice of approving the combination notices in a prompt manner. It is often observed that the information furnished by the parties, while filing the notice, are not complete. As a result the Commission has to call for further information which results into the unnecessary delays. The Commission is empowered to impose penalties on the erring entities for furnishing

Once a financial creditor has initiated corporate insolvency resolution process against corporate debtor and enforces the security interest against the personal guarantor of the corporate debtor, the question arises whether the moratium approved by the committee or creditors and the Adjudicating authority will also be applicable on the personal guarantor. This article examines this question in the light of the order of the Appellate Tribunal in the case of State Bank of India v. Ramakrishna.

In this article, author analyses complexity and nitty-gritty of compliances of provisions contained in newly substituted section 90 of the Companies Act, 2013.

In this article, the author has made an attempt to encapsulate the various requirements related to issue of global depository receipt.

In this article, the author highlights the process, duties and rights of the Insolvency Professional and covers up to completion of liquidation with decided case law.

This article is intended to highlight impact and fallout of the Amendment Ordinance.

In this critical study, the author highlights changes in law governing winding up petition under the Companies Act, 1956 and corporate insolvency resolutions/liquidation under the Insolvency and Bankruptcy Code, 2016. He also examines critical issues that have come up before the National Company Law Appellate Tribunal.

In this Article, the author deliberate upon whether the accumulated profits of the company has to be declared and distributed as the interim dividend or whether the law provides for limitations in declaration of such dividend to the shareholders in the event of inadequacy of profits in the year of declaration of dividend.

Institute of Company Secretaries of India (ICSI) has notified the revised ‘Secretarial Standard on Board Meetings’ (SS 1) and ‘Secretarial Standard on General Meetings’ (SS 2) to come into force with effect from 1st October, 2017, just after a gap of a little more than a couple of years. The existing SS 1 and SS 2 had come into force on 1st July, 2015. In this article, the author critically examines these revised Secretarial Standards.

In this article, the author answers in negative the question as to whether disqualification under sub-section (2) of section 164 would result into vacation of directorship in all companies in which a person is a director.

This article deliberates on the question as to whether independent directors can be held liable for the failure of the company to pay out the declared divided.

This article is intended to highlight judgment of the Supreme Court in the case of Innoventive Industries Ltd. v. ICICI Bank [2017] 140 CLA 39 upholding order of the National Company Law Appellate Tribunal that Insolvency Code shall have effect notwithstanding the provisions of any other law for the time being in force. The Supreme Court settled the law whenever there is conflict between the State law and Central law, it is the Central law which would prevail over the

The recent move of the Indian policymakers of abolition of the Foreign Investment Promotion Board in an attempt to boost capital influx is, undoubtedly, the end of an era and the new model of scrutinising the foreign investment proposals has already come into being. This article endeavours to trace the evolution of the inter-ministerial Board till its demise, and thereby critically analyze the new model, in the form of Standard Operating Procedure, so as to conclude as to whether this

In this article, the author explains the expressions ‘dispute’ and ‘existence of dispute’ defined in clause (6) of section 5 and clause (a) of sub-section (2) of section 8 of the Insolvency and Bankruptcy Code, 2016 respectively, in the context of initiation of corporate insolvency resolution process by the operational creditor under section 9 of that Code.

In this article, the author highlights aspect of corporate social responsibility under the Companies Act, 2013 and the Income-tax, 1961.

Executive director - Can he, on attaining the age of 70 years, continue its office without the appointment being made afresh – A person who has not attained the age of seventy years could be appointed as executive director of a company by its Board which appointment has been subsequently approved by the company in general meeting by ordinary resolution. However, he could continue as its executive director on hid attaining the age od seventy yeas only after the appointment

Director – Vacation of office under sub-section (2) of section 167 – When does it take effect – Vacation would be instantaneous on the occurrence of the specified event.

Independent director – Status on being appointed as an occupier of company of which he is a director – Would he lose his status as an independent director – Independent director cannot be appointed as an occupier of the factory owned by the company.

Board of directors – Its status where an interim resolution professional (‘IRP’) has been appointed under section 17(1) of the Insolvency and Bankruptcy Code, 2016 – On the appointment of an IRP to a company, its directors would not cease to hold the office of the director of the company ; but they would be guided in the discharge of their duties by the IRP.

E-voting on resolutions placed before a general meeting – Should preference shareholders not be taken into account for computing 1000 shareholders – In computing 1000 shareholders mandatory application of section 108 read with rule 20(2) of the Companies (Management and Administration) Rules, 2014 would trigger in regard to resolutions before a general meeting.

Auditor in office – Prohibited services which he cannot undertakes during the tenure of his appointment – Since the tenure of his appointment would partly fall in an earlier financial year in which annual general meeting is held and partly in subsequent financial year, it is during this tenure of appointment the auditor is prohibited from undertaking the services spelt out in section 144.

Bonus shares – Allotment to holders of partly paid up shares having no right to get bonus shares – Would partly paid-up share cover partly paid-up preference shareholders – As preference shareholders are not entitled to bonus shares, it would be immaterial whether those shares are paid-up or partly paid-up. Therefore, bonus shares would not affect rights of preference shareholders and their existence would not hamper in allotting shares.

Securities premium – Can it be written off against accumulated losses – For the purposes of reduction of securities premium, the same is equivalent to share capital and that reduction of share capital could be undertaken for any purpose including for wiping off of accumulated losses and reduction of securities premium could be undertaken by a company for wiping off of accumulated losses.

Independent director – Re–appointment of – Should special resolution be passed before making the reappointment – The power to reappoint an independent director already in office has not been conferred on the company in general meeting while the power to determine his eligibility to be reappointed has been conferred on the company in general meeting. Therefore, special resolution has to be passed by the company in general meeting before the reappointment is made.

Compromise or arrangement – Approval of members by voting in person or by proxy or postal ballot – Can member vote through proxy in a meeting convened by NCLT to obtain its approval to scheme under section 230 – Member can vote through proxy if he has decided not to vote by post or in any electronic mode but to vote in a meeting.

Board of directors – Can it act on the basis of enabling powers spelt out in the Act in the absence of powers in the articles of association of a company – Board of directors cannot exercise a power on the ground that it is an enabling power in the Act, unless there is a suitable provision in the articles of association.

Equity shares – Preferential allotment to the holding company of a listed company – Does it attract section 188 – Even though the subject matter of the resolution relating to preferential allotment is shares, they are not ‘goods’ in the eye of law and as such the provisions of section 188 would have no application to a resolution for the allotment of shares preferentially to the promoters.

Section 8 company – Consolidation of financials with financials of its holding company – Is company required to prepare consolidated financial along with the subsidiary. As no economic benefit would accrue to the holding company, it need not prepare consolidated financial statement along with the subsidiary, which is a section 8 company and it will be sufficient if the holding company comply with Schedule III to the Act and specify the reasons for not consolidating the accounts of its subsidiary

Shares in a public company – Free transferability of shares – Does sub-section (2) of section 58 impose restriction on the right of shareholder to deal with his shares in terms of consensual agreement – Free transferability does not impose any restriction on the right of a shareholder.

Compromise or arrangement – Could amendment be made to scheme in a court convened meeting for purpose of ascertaining wishes of those entitled to attend the meeting – An amendment could be moved, considered and voted upon, if the amendment is to correct a grammatical or factual error and not for changing the basic purpose or character of the scheme.

Arrangement – Order sanctioning scheme of arrangement by two different High Courts – Are they liable to stamp duty under respective State stamp duty laws – In view of the Supreme Court judgment in Hindustan Lever Ltd. v. State of Maharshtra [2003] 57 CLA 256 (SC) orders sanctioning scheme of arrangement by two different High Courts, even though the subject matter is the same, where the companies who are parties to the scheme are situate in two different States, would

Transfer of shares – Refusal to register – Jurisdiction of National Company Law Tribunal to direct registration of transfer of shares on the ground of breach of contractual obligations – As sub-section (4) of section 58 enlarges the powers of a company to refuse registration of transfer of shares on the ground other than those mentioned in sub-section (3) of section 111A of the 1956 Act, the Board of directors could refuse registration for the reason that it would lead

Financial statement – Mandatory requirement to prepare consolidated financial statement by a company along with its subsidiary incorporated under section 8 – Since no economic benefit or resource would accrue to the holding company from its subsidiary, it is not mandatory for the holding company to prepare consolidated financial statement along with its subsidiary which is section 8 company.

Reference to arbitration – Dispute between shareholder and company – Can a shareholder seek to refer to arbitration a dispute between him and a company in the light of arbitration clause in an incidental ancillary object in the memorandum of association – Shareholder cannot use arbitration clause for disputes arising out of his holding shares in the company.

Transfer/transmission of shares – Submission of self attested PAN card for registration of – Is it mandatory – Since every person is not mandatorily required to obtain a permanent account number and to possess a PAN card, a mandatory requirement cannot be fastened on a person, not required to possess a PAN card, to furnish a self-attested copy of the same to effectuate his transaction in securities.