REGISTERED NO . DL- 33004/2001
रजिस्ट्री सं० डी० एल०-33004 / 2001
भारत को राजपत्र The Gazette ofIndia
असाधारण
EXTRAORDINARY
भाग II - खण्ड 2
PART II- Section 2
प्राधिकार से प्रकाशित
PUBLISHED BY AUTHORITY
नई दिल्ली, बृहस्पतिवार, नवम्बर 22, 2001/कार्तिक 1, 1923
सं 40] No. 40]
NEW DELHI , THURSDAY, NOVEMBER 22, 2001 / KARTIKA 1 , 1923
इस भाग में भित्र पृष्ठ संख्या दी जाती है जिससे कि यह अलग संकलन के रूप में रखा जा सके ।
Separate paging is given to this Part in order that it may be filled as a separate compilation .
LOK SABНА
The following Bill was introduced in Lok Sabha on 22nd November, 2001 .
BILL NO . 100 OF 2001
A Bill further to amend the Companies Act, 1956 .
BE it enacted by Parliament in the Fifty- second Year of the Republic of India as follows:-
1. (1) This Act may be called the Companies (Third Amendment) Act, 2001 .
(2) It shallbe deemed to have come into force on the 23rd day of October , 2001 .
1 of 1956.
2. In section 77A of the Companies Act , 1956 (hereinafter referred to as the principal
Act) ,-
Short title an commence- ment, Amendment of section 77A.
(a) in sub-section (2) , in clause (b ) , the following shall be inserted , namely:---
'Provided that nothing contained in this clause shall apply in any case
where-
(A) the buy -back is or less than ten per cent . of the total paid- up equity capital and free reserves of the company; and 2
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II-
(B) such buy -back has been authorised by the Board by means of a resolution passed at its meeting:
Provided further that no offer of buy -back shall be made within a period ofthree hundred and sixty - five days reckoned from the date of the preceding offer ofbuy-back , ifany.
Explanation.For the purposes of this clause , the expression " offer of buy-back" means the offer ofsuch buy-back made in pursuance of the resolution ofthe Board referred to in the first proviso; ' ;
(b) in sub -section (4) , for the words " special resolution" , the words " special resolution or a resolution passed by the Board" shall be substituted;
(c) in sub - section (6) , after the words , brackets , letter and figure " special resolution under clause (b) of sub- section (2) " , the words, brackets and letter " or the Board has passed a resolution under the first proviso to clause ( b ) of that sub- section" shall be inserted ;
(a) insub-section (8), for the words " within a period of twenty- four months" , the words " within a period of six months " shall be substituted .
3. In section 292 of the principal Act, in sub - section ( 1) , after clause (a) , the following clause shall be inserted , namely:-
Amendment of section 292 .
"(aa) the power to authorise the buy- back referred to in the first proviso to clause (b ) of sub - section ( 2) of section 77A; " ..
Ord.7 of 2001 .
4. ( 1) The Companies (Amendment) Ordinance, 2001 is hereby repealed.
Repeal and saving.
(2)Notwithstanding such repeal , anything done or any action taken under the principal Act, as amended by the said Ordinance, shall be deemed to have been done or taken under the corresponding provisions of the principal Act, as amended by this Act.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
3
STATEMENT OF OBJECTS AND REASONS
Fora considerable time , the market sentiment has been very weak . Because of the recent developments in the United States of America and other places, the situation has become worse .
2. Section 77A of the Companies Act, 1956 permits a company to purchase its own shares or other specified securities (hereafter referred to as " buy -back" ) subject to the pro- visions contained in that section . The Ministry of Finance (Department of Economic Affairs) has suggested that the provisions for buy-back by companies should be liberalised with a view to improving the market sentiment. Liberalisation has also been supported by the Securities and Exchange Board of India, Financial Institutions and some others .
3. Inview ofthe above , it was decided to liberalise certain provisions of section 77A of the Companies Act, 1956 relating to buy- back and for this purpose , the Companies (Amend- ment) Ordinance, 2001 (Ord. 7 of 2001) was promulgated on the 23rd day ofOctober, 2001 so as to inter alia,-
(a) provide that if the buy - back was to the extent of or less than ten per cent . of thetotal paid- up capital and free reserves of the company and such buy- back had been authorised by means of a resolution passed at its Board meeting, such buy-back shall not require special resolution to be passed by a general meeting as required by clause (b) ofsub-section (2) of section 77A which prohibits a company to purchase its own shares or other specified securities unless a special resolution is passed in general meeting of the company authorising such buy-back;
(b) provide that no offer ofbuy -back referred to in (a) above shall be made within a period of three hundred and sixty - five days reckoned from the date ofthe preceding offer ofbuy-back;
(c) reduce the time limit from twenty - four months specified under sub- section (8) of section 77A ofthe Companies Act, 1956 to six months for issue of the same kind of shares .
4. The Bill seeks to replace the said Ordinance .
ARUN JAITLEY .
NEW DELHI;
The 12th November, 2001 .
G. C. MALHOTRA,
Secretary-General .
PRINTED BY THE MANAGER, GOVERNMENT OF INDIA PRESS (PLU), MINTO ROAD, NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS , DELHI , 2001 .
MGIP ( PLU ) MRND-3639GI- 27-11-2001.