Participation of Portfolio Managers in Commodity Derivatives Market in India SEBI/HO/IMD/DF1/CIR/P/2019/066 dated 22nd May 2019issued by SEBI 1. In order to promote institutional participation in the Exchange Traded Commodity Derivatives, SEBI has permitted Category III Alternative Investment Funds to participate in Exchange Traded Commodity Derivatives vide Circular dated June 21, 2017. In furtherance to this objective, and in supersession to Circular SEBI/HO/CDMRD/DMP/P/CIR/2016/100 dated September 27, 2016

Appointment of Shri Madhukar Pandurang Divate, District Judge-I and Additional Sessions Judge, Vasai, District Thane, Maharashtra to the post of Registrar, Securities Appellate Tribunal, Mumbai F. No. 3/3/2018-RE dated 16th May 2019issued by Ministry of Finance The President is pleased to appoint Shri Madhukar Pandurang Divate, District Judge-I and Additional Sessions Judge, Vasai, District Thane, Maharashtra to the post of Registrar, Securities Appellate Tribunal, Mumbai, on deputation basis in level 14 of Pay Matrix (Rs.144200-Rs.218200) for a term of three years

Companies (Appointment and Qualification of Directors) (Second Amendment) Rules, 2019 G.S.R. 368(E)dated 16th May 2019issued by MCA In exercise of the powers conferred by the second proviso to sub-section (1), subsection (4), clause (f) of sub-section (6) of section 149, sub-sections (3) and (4) of section 150, section 151, sub-section (5) of section 152, section 153, section 154, section 157, section 160, sub-section (1) of section 168 and section 170 read with section 469 of the Companies Act, 2013 (18 of 2013),

Clarification for form ADT-1 filed through GNL-2 under the Companies Act, 2013 General Circular No. 06/2019dated 13th May 2019issued by MCA In continuation of General Circular No. 09/2014 dated 25.04.2014, the Ministry of Corporate Affairs has received representation from stakeholders seeking relaxation of fee for filing e--form no. ADT-1, particularly form ADT-1 filed through GNI,--2 during the period from 01.04.2014 to 20.10.2014 for appointment of Auditor for the period from 01.04.2014 to 31.03.2019 due to non-availability of e-form ADT-1 during the said period. 2.

Companies (Incorporation) (Fifth Amendment) Rules, 2019 G.S.R. 357(E)dated 10th May 2019issued by MCA In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Incorporation) Rules, 2014, namely: - 1. Short title and Commencement.- (1) These rules may be called the Companies (Incorporation) (Fifth Amendment) Rules, 2019. (2) They shall come into force on the date of their publication in

Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/16dated 10th May 2019issued by SEBI In exercise of the powers conferred by subsection (1) of section 30 read with sub-section (1) of section 11, clause (ba) and clause (c) of sub-section (2) of section 11 and sub-sections (1) and (1B) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to

Securities and Exchange Board of India (Portfolio Managers) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/17dated 10th May 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 (Portfolio Managers) Regulations, 1993, namely - 1. These Regulations

Securities and Exchange Board of India (Employees' Service) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/15dated 8th May 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 (Employees' Service) Regulations, 2001, namely,- 1.These regulations may be called the Securities and

National Company Law Tribunal (Second Amendment) Rules, 2019 G.S.R. 351(E)dated 8th May 2019issued by MCA In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the National Company Law Tribunal Rules, 2016, namely :- 1. (1) These rules may be called the National Company Law Tribunal (Second Amendment) Rules, 2019. (2) They shall come into force on the date of

Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/13dated 7th May 2019issued by SEBI In exercise of the powers under 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 (Issue and Listing of Debt Securities) Regulations, 2008, namely:- 1.These Regulations may be called the Securities and Exchange Board of India (Issue

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/12dated 7th May 2019issued by SEBI In exercise of the powers conferred by section 11, sub-section (2) of section 11A and section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with section 31 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of

Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/14dated 7th May 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 Securities and Exchange Board of India hereby, makes the following regulations to further amend the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, namely,- 1.These regulations may be called the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations,

Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) (Amendment) Rules, 2019 G.S.R. 343(E)dated 1st May 2019issued by MCA In exercise of the powers conferred by sub-sections (1), (2), (3), (4), (8), (9), (10) and (11) of section 125 and sub-section (6) of section 124, read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, further to amend the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)

Companies (Acceptance of Deposits) (Second Amendment) Rules, 2019 G.S.R. 341(E) dated 30th April 2019issued by MCA In exercise of the powers conferred by section 73 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Acceptance of Deposits) Rules, 2014, namely:- 1. (1) These rules may be called the Companies (Acceptance of Deposits) (Second Amendment) Rules, 2019. (2) They shall come into force on

Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2019 G.S.R. 339(E) dated 30th April 2019issued by MCA In exercise of the powers conferred by the second proviso to sub-section (1), sub-section (4), clause (f) of sub-section (6) of section 149, sub-sections (3) and (4) of section 150, section 151, sub-section (5) of section 152, section 153, section 154, section 157, section 160, sub-section (1) of section 168 and section 170 read with section 469 of the Companies Act, 2013 (18 of

Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/011dated 26th April 2019issued 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

Companies (Registration Offices and Fees) (Second Amendment) Rules, 2019 G.S.R. 329(E) dated 25th April 2019issued by MCA In exercise of the powers conferred by sections 396, 398, 399, 403 and 404 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Registration Offices and Fees) Rules, 2014, namely:— 1. (1) These rules may be called the Companies (Registration Offices and

Companies (Incorporation) (Fourth Amendment) Rules, 2019 G.S.R. 330(E) dated 25th April 2019issued by MCA In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Incorporation) Rules, 2014, namely: - 1. Short title and Commencement.- (1) These rules may be called the Companies (Incorporation) (Fourth Amendment) Rules, 2019. (2) They shall come into force on the date of publication in

Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2019 No. SEBI/LAD-NRO/GN/2019/09 dated 22nd April 2019issued by SEBI In exercise of the powers conferred by section 30 read with sections 11 and 12 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 (Real Estate Investment Trusts) Regulations, 2014, namely,- 1. These regulations may be called the Securities and Exchange

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Third Amendment) Regulations, 2019 G.S.R. 312(E) dated 18th April 2019issued by RBI In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendment to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017

Resolution professional cannot decide the claim of any creditor. Even after approval of resolution plan, after completion of period of moratorium, a person can file a suit or application against a corporate debtor It is settled law that the resolution professional cannot decide the claim of any creditor. Further, notwithstanding the order passed approving resolution plan under section 31, it is open to a person to file a suit or any application against the ‘corporate debtor’ after completion of the period

The committee of creditors is not vested with the powers to change the interim resolution professional without any valid or tenable reasons Where after the Tribunal had suggested that Interim resolution professional (‘IRP’) be continued as resolutions professional (‘RP’) application for change of IRP was filed without furnishing any tenable reasons for change of IRP, it is to be opined that the Legislature gave the Bench power to exercise its discretion in the appointment or change of RP. Had the

Where shares stand pledged as security for a corporate guarantee, the prayer seeking duplicate share certificates is beyond the scope of section 46 or 56 and the certificates cannot be said to have been lost, etc. Where shares are pledged as security for corporate guarantee extended by company in respect of loan taken by another company, the prayer seeking duplicate share certificates is beyond scope of section 46 or 56 as it is not a case where certificates were lost

Where rejection of application for impleadment of appellant by Tribunal has been set aside by the appellate authority, it was not proper for Tribunal not to treat the appellant as impleaded respondent Where appellate authority had set aside Tribunal’s order rejecting the application of the appellant for impleadment in company petition under section 397, it was not proper for the Tribunal not to treat the appellant as impleaded respondent, and the impugned order of the Tribunal was liable to be set

Reference to the National Company Law Tribunal can be made by filing an independent application under section 10 even after 180 days of abatement of the reference under the Sick Industrial Companies Repeal Act, but on payment of requisite fee Clearly the 180 days time period provided in clause (b) of section 4 of the Sick Industrial Companies Repeal Act, 2003 (‘Repeal Act’) relates to reference if made to the National Company Law Tribunal (Adjudicating Authority) to treat application under

For interim orders, it would be necessary to spell out a prima facie case, and to show that the petitioner would suffer irreparable injury and the balance of convenience lies in favour of the petitioner Where the Tribunal has refused to pass interim orders in a petition for relief from oppression and mismanagement observing that the affairs of the company were in custodia legis of the High Court and if the Tribunal passed any orders in relation to assets and books

The Code and the Regulations made thereunder do not prescribe differential treatment between the similarly situated operational creditors or the financial creditors on one or other ground Where the committee of creditors not only failed to safeguard the interest of the stakeholders of the corporate debtor while approving resolution plan of the appellant-Rajputana Properties (P.) Ltd. but also ignored the other resolution plans including that of the Ultratech cement Ltd. which are in consonance with sub-section (2) of section 30

Where main stay of corporate debtor is tea industry, the prospective resolution applicant must have profound expertise and experience Where tea business remained to be mainstay of the corporate debtor and its activities were confined to tea industries, in order to revive the corporate debtor and to make business activity viable, the prospective resolution applicant must have profound expertise and experience in the tea industry. Insolvency and Bankruptcy Code, 2016 – Section 7 – Insolvency resolution process – Corporate debtor’s mainstay being

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

Depositors, specially the small ones, are an exploited lot and should be adequately protected. Promulgation of the Unregulated Deposit Schemes Ordinance, 2019 is the latest step taken by the Government to safeguard the depositors’ interests. Chapter V of the Companies Act, 2013 (‘Act’) contains good number of provisions aimed at protecting the interest of company depositors. However, the Act prescribes other norms also to discipline the deposit taking companies. Provisions other than Chapter V are discussed in this article.

In this article, the author makes an attempt to find out who is the corporate debtor; Is he borrower or corporate guarantor or both. He stresses the point that the ultimate goal of the Code is to facilitate resolution, even if the amounts that are to be recovered from the guarantors are the same. Instead of setting aside insolvency proceedings against any one or more of the guarantors, the Code must allow simultaneous resolution of such multiple guarantors.

This article highlights relation of independent directors with the corporate governance along with the duties they may have towards the stakeholders

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

Board meetings – Minimum notice period for convening Board/general meetings in the case of directors/members residing abroad – In addition to the prescribed period of seven days, a further reasonable period of notice should be given so that the person receiving the notice make up mind and travel plans and be present at the meeting of the Board. If it is not so given the Board meeting may be declared convened without sufficient notice and the decisions taken thereat are

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.