MCA: 

1. MCA has constituted an Expert panel for the profession of Cost Accountancy. Keeping in mind the grievances of the members of the Institute of Cost Accountants of India about the scope of the (Cost Records and Audit) Rules 2014, and their implications for the profession of Cost Accountancy, MCA has decided to constitute an Expert Committee to examine issues relating to maintenance of Cost Records. The Committee may submit its report within a period of three months from its first meeting. Adviser (Cost) will render necessary secretarial and logistics support. We hope that in the days to come the profession of Cost Accountant get their due recognitions.

2. MCA amends Rule 27 sub rule (1) regarding Compulsory maintenance of registers and records in electronic Form. MCA has issued Companies (Management and Administration) Second Amendment Rules, 2014 dated 24.07.2014 giving a sense of big relief to the companies w.r.t. Compulsory maintenance of registers and records in electronic form under Companies Act, 2013.  Now this provision has been made optional for maintaining the registers and records in electronic form by the virtue of amendment in Rule 27 sub rule (1) and explanation as the word “shall”, the word “may” shall be substituted. After this, now the companies can either choose to maintain the registers and records in electronic form or not.

MCA:  

1. MCA notifies the class of companies for the purposes of the second proviso to sub-section (1) of section 203 of the Companies Act, 2013, that all public companies having Paid-up Share Capital of Rs. 100 Crores or more and Annual Turnover of Rs. 1,000 Crores or more which are engaged in multiple businesses and have appointed Chief Executive Officer for each such business shall be the class of companies for that purposes. For the purposes of this notification, the paid-up share capital and the annual turnover shall be decided on the basis of the latest audited balance sheet.

2. MCA notifies the Companies (Management And Administration) Second Amendment Rules, 2014 and shall come into force on the date of their publication in the Official Gazette. Following changes have been made in the said rules :

(i)  in Rule 9, after sub-rule (3), the following proviso shall be inserted, namely:- “Provided that nothing contained in this rule shall apply in relation to a trust which is created, to set up a Mutual Fund or Venture Capital Fund or such other fund as may be approved by the Securities and Exchange Board of India”.

(ii)  in Rule 13,- a). the words “either value or volume of the share” shall be omitted; and b). the Explanation shall be omitted.

(iii)  in Rule 23, in sub-rule (1), for the words “not less than five lakh rupees”, the words “not more than five lakh rupees” shall be substituted;

(iv) in Rule 27, in sub-rule (1) and in the Explanation, for the word “shall”, the word “may” shall be substituted. MCA gives discretion to Cos to maintain records in electronic form.

Whether Section 117C of the Act empowers CLB to entertain applications from any debenture holder to redeem debentures ???

Application under (Section 117C- Liability of company to create security and debenture redemption reserve) Company Law Board Held that – The provisions of Section 117C(4) are applicable to all debentures whether issued prior or after the introduction of the Amendment Act, 2000, i.e., 13.12.2000 and pending redemption – provisions of Section 117C(4) being analogous to Section 58A(9) and 45QA(2) are beneficial provisions intended to protect the interest of debenture holders. (Ref: COMPANY LAW BOARD KOLKATA BENCH C. P. No. 423(117C)/KB/2011 Shri Vijay Kumar Jalan &Anr. (Applicants) V/s M/s. Bharat Hydropower Corporation Limited (Respondent).

FACTS OF THE CASE

• The application under Section 117C of the Companies Act, 1956 (the Act), filed by Shri Vijay Kumar Jalan and Smt. Kavita Devi Jalan (Joint holders)(herein Applicants) holding 1,000 Convertible Debentures in M/s. Bharat Hydro Power Corporation Limited (here in Respondents)
• On 03.04.1995, the company issued 1,000 Convertible Debentures of Rs 200/- each to the applicants, carrying interest @ 14% per annum from the date of allotment till the date of repayment.
• The debentures shall at the option of the debenture holder be convertible into equity shares of the company for which the Board shall intimate the date fixed by it for such conversion of debenture and shall notify such date at least 15 days in advance by way of written notes addressed to the debenture holder within 2 years from the date of allotment.
• The debenture holder shall have the right to seek redemption thereafter at any time and in that case, interest as stipulated in the covenants and conditions, shall be payable.
• The respondent company neither notified the date of conversion  of debentures to equity shares nor to the debenture holder nor redeemed the debentures of the applicants.
• The applicants made necessary application for redemption of such debentures along with interest @ 14% per annum by sending the original Debenture Certificate No.0112 alone with the application which was duly acknowledged to have been received on 11.03 1996.
• The applicants had issued another letter dated 21.04.1997 to the company requesting for redemption of the debentures along with interest thereon and incidentally, such request was made after 2 years from the date of allotment, i.e., beyond the lock in-period for such redemption without any response from the company.
• The applicants further issued reminder letters dated 09.09 1998, 06.04.1999 and 18.05.2010 to the company, but the company did not respond to such letters nor did make any payments to the applicants on account of redemption of such debentures.
• The applicants had received three TDS certificates in Form No.164 from the company for the financial year ending 31.03 1997, 11.03 1998 and 31.03.1999 declaring amount paid/credited on account to interest on debentures of Rs 28,000/- each for the above years and 10% TDS amounting to a 2,800/ was deducted on such interest paid of a 28,000/- for each year and deposited to Central government.
• The respondent company has acknowledged the due on account of debenture holder till 31.03.1999 against which interest has been shown to have been paid to such debenture holders, but in reality, the applicants have not received any interest on such debentures till date as per the averments made in the application by both of them.
• The applicants, through their Advocate, issued a letter dated 19.07.2010 to the company requesting redemption of 1000 Convertible Debentures of Rs 200/ each along with interest @ 14% per annum.
• In spite of receipt of such letter the company had neither given any reply to the said letter nor made any payment to the applicants on account of redemption of debentures held by them
• The applicants have moved this application under 5ection 117C (4) of the Companies Act, 1956, praying for direction to the respondent company to make repayment of the aforesaid deposits with interest.
• Finally, the respondent company has challenged the application on the ground that it has been affirmed only by applicant No 1 and not by applicant No.2 even though the applicants are joint debenture holders.
• The respondent company has also challenged the claim of applicant being barred by Limitation Act, 1963 since there 15 no correspondence on their behalf after 04/06/1999, being the date of last IDS certificate for the period ending 31/03/1999 wherein the debt of the appellants has been last acknowledged.
• The respondent company has also contended that section 117C of the Act applies to debentures which are not governed by Companies (Acceptance of Deposits) Rules, 1975 and the present application is beyond the scope of jurisdiction of this Bench.

JUDGMENT

CLB after considering pleadings and submissions, both oral and written made on behalf of the company gave the following judgment on 20/03/2014.

• That it appears that the respondent company is hell bent on refusing the right of the applicants to get relief under section 117C of the Act on frivolous grounds either by resorting to Limitation act or faulty application affirmed by one of the applicants or on eligibly of the application for redemption of impugned debentures.
• That as per section 117(4) of the Act, CLB may, on the application made in Form 4 of the Company Law Board Regulations, 1991 of any or all the holders of debentures shall after hearing the parties concerned direct by order, the company to redeem the debentures forthwith by principal and interest due thereon. Thus, any of the holders of such debentures is entitled to make the application and therefore the contention of the respondent in this regard is not tenable and rejected.
• The respondent company has also challenged the claim of applicant being barred by Limitation Act, 1963. However on the basis of  fact the applicants had claimed for redemption of debentures  after expiry of 2 years lock-in-period from the date of allotment being 03.04.1995 in the applicants vide letter dated 21.04.1997 requested the respondent company to redeem the debentures along with interest according to terms and conditions of issue of such debentures subsequently, reminder letters dated 09/09/199, 06/04/1999 and 18/05/2010 were issued to the company but the respondent company has not acted on the said claim. Thus, the contention of the respondent company that the case of the applicants is barred by limitation is not tenable and hence rejected.
• That finally as regard the issue as to whether Section 117C of the Act empowers CLB to entertain applications from any debenture holder to redeem debentures, it has been held that the provisions of section 117C(4) are applicable to all debentures whether issued prior or after the introduction of the Amendment Act, 2000, i.e., 13.12.2000 and pending redemption in this regard clause (d) of Circular No.9/2002-No.6/3/2001 CL.V dated 18.04.2002 of Department of Company Affairs.
• Further, it has been held in the said direction of CLB that the provisions of section 117C(4) being analogous to section 58A(9) and 45QA(2) are beneficial provisions intended to protect the interest of debenture holders. Such a provision, in CLB view, should be exercised in favor of aggrieved investors. The above view taken by CLB cannot be lost sight of and the interest of the aggrieved debenture holders deserves to be protected by invoking the provisions of Section 117C(4).

The above application filed by the applicants under 117 of the Act was considered and the respondent company was directed to redeem the debentures covered by the application by payment of the principle amount along with the interest within 3 months of the issue of this order.

MCA

1. MCA has come out with a much awaited circular on the validity of the resolutions passed during financial year 2ol3-14 under the relevant provisions of the Companies Act, 1956 (Old Act) which are/were at different stages of implementation after coming into force of corresponding provisions of the new Companies Act, 2013 (New Act). It is clarified that resolutions approved or passed by companies under relevant applicable provisions of the Old Act during the period from 1^st September, 2O13 to 31st March, 2014, can be implemented, in accordance with provisions of the Old Act, notwithstanding the repeal of the relevant provision subject to the conditions (a) that the implementation of the resolution actually commenced before 1″t April, 2014 and (b) that this transitional arrangement will be available upto expiry of one year from the passing of the resolution or six months from the commencement of the corresponding provision in New Act whichever is later.

2. Versions of the forms CHG-1, CHG-4, FC-2, FC-4, Form 20B, Form 2LLP, Form 67, INC-22, INC-23, INC-24, MR-2, MSC-1, SH-8, INC-28 are likely to change w.e.f today i.e 25th July 2014. Only new version of these eForms will be acceptable, stakeholders are requested to plan accordingly and ensure that you have downloaded the latest version for filing and uploading the latest version only. Form-wise date of last version change is available at on the website of MCA, to view & download, the list of all such Forms, ClickHere.