[Cites 0, Cited by 2395]
[Entire Act]
Union of India - Section
Section 3 in The Companies Act, 1956
3. Notes on clauses explaining in detail the provisions of the Bill. - Gazette of India, 23-12-1999, Pt. II - Section 2, Ext., P. 34 (No. 39).
Act 11 of 2003.- The latest developments and innovations in Corporate laws required that the Companies Act, 1956 and other related laws concerning winding up of companies should be remodelled in line with the international practices in this field. Government constituted a Committee consisting of experts under the chairmanship of Justice V. Balakrishna Eradi, retired Supreme Court Judge to examine the law relating to insolvency and winding up of companies.2. The Committee examined Companies Act, 1956 and also other laws having a bearing on the subject such as Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), Recovery of Debts due to Banks and Financial Institutions Act, 1993 and Securities Contracts (Regulation) Act, 1956; it also considered laws on corporate insolvency prevailing in industrially advanced countries. The Committee held wide ranging hearings and consultations on the subject.3. On the basis of the recommendations of the Committee the present Bill has been prepared with the main objective of facilitating or expending revival/rehabilitation of sick companies and protection of workers interests and where necessary, winding up of companies. The salient features of the Bill are as follows :(i) A National Company Law Tribunal will be set up. The powers and jurisdiction presently being exercised by various bodies viz., Company Law Board or Board for Industrial and Financial Reconstruction or Appellate Authority for Industrial and Financial Reconstruction or High Courts will now be consolidated and entrusted to the Tribunal. Thus, multiplicity of litigation before various Courts or quasi-judicial bodies or forums regarding revival or rehabilitation or merger or amalgamation or winding up will be avoided as all these matters will be heard and decided by the proposed National Company Law Tribunal;(ii) All the parties will be bound by the Tribunal's orders and in case of non-availability of a workable proposal for revival or rehabilitation etc, the Tribunal can decide the matter on merits including introduction of its own scheme;(iii) The Tribunal shall work through Benches. There shall be ten special benches which will deal with the matters relating to revival or reconstruction or rehabilitation or winding up of companies;(iv) This will reduce the entire process which is presently taking several years in winding up of the companies to about two years or so;(v) Stripping of assets of sick companies will be avoided;(vi) Since individual affidavits will be filed with National Company Law Tribunal which will have powers of contempt of Court, there will be an in-built seriousness;(vii) There will be a fund known as Rehabilitation and Revival Fund which will be used to make primarily :(a) interim payment of the dues of workmen of the company which has been declared sick or is under liquidation;(b) protection of the assets of sick companies;(c) revival and rehabilitation of sick companies.(viii) `Industrial Undertaking' in terms of sickness does not include :(a) small scale industrial undertakings, as defined in clause (j) of section (3) of the Industrial (Development and Regulation) Act, 1951;(b) Public Sector Undertakings, unless a reference is made by the Central Government and/or State Government, as the case may be.(ix) As a result of this enactment everyone including workers, creditors, investors and the economy as a whole will stand to benefit.4. The Bill seeks to achieve the above objectives.5. The Notes on clauses explain, in detail, provisions of the Bill. - Gazette of India, 30-8-2001, Pt. II - Section 2, Ext., P. 45 (No. 37).[18th January, 1956]An Act to consolidate and amend the law relating to companies and certain other associations.Be it enacted by Parliament in the Sixth Year of the Republic of India as follows:-| The Act has been extended to Goa, Daman and Diu by Regulation 12 of 1962, Section 3 and Schedule; Goa is now a State, see Act 18 of 1987, Section 3 (w.e.f. 30.5.1987); to Dadra and Nagar Haveli by Regulation 6 of 1963, Section 2 and Schedule I and to Pondicherry by Regulation 7 of 1963, Section 3 and Schedule I.Brought into force on 1.4.1956 vide Notification No. S.R.O. 612, dated 8.3.1956, Gazette of India, Extraordinary, Part II, Section 3, p. 473. |