Bill No. 64 B of 1964
THE COMPANIES (SECOND AMENDMENT) BILL, 1964
[ As REPORTED BY THE JOINT COMMITTEE]
(Words side-lined or underlined indicate the amendments suggested
by the Committee; asterisks indicate omissions.)
A
BILL
further to amend the Companies Act, 1956
BE it enacted by Parliament in the Sixteenth Year of the Republic of India as follows:— ^ ^ — ^—
1. (1) This Act may be called the Companies ( * * Amend- ment) Act, 1965.
Short title and com- mence- ment 5 (2) It shall come into force on such date as the Central Govern- ment may, by notification in the Official Gazette, appoint and differ- ent dates may be appointed for different provisions of this Act.
1 of 195(
2. In section 1 of the Companies Act, 1956 (hereinafter referred to as the principal Act), in sub-section (3), the following further
Amend- ment of section 1 i o proviso shall be inserted at the end, namely: —
''Provided further that it shall apply to the State of Naga- land subject to such modifications, if any, as the Central Gov- ernment may, by notification in the Official Gazette, specify.".
86 THE GAZETTE OF INDIA EXTRAORDINARY [PAUT II3. In section 2 of the principal Act,—
(i) in clause (8), alter the word "deeds,", the word "vouch- Amend- ment of section 2.
ers," shall be inserted;
(ii) in clause (30), after the words "manager or secretary", the words "or any person in accordance with whose directions of 5 instructions the Board of directors or any one or more of the directors is or are accustomed to act," shall be inserted.
4. In section 10E of the principal Act, after sub-section (4), the following sub-section shall be inserted, namely: —
Amend- ment of section 10E.
" (4A) The Board, with the previous approval of the Central 10 Government, may, by order in writing, authorize the chairman or any of its other members or its principal officer (whether known as secretary or by any other name) to exercise and dis- charge, subject to such conditions and limitations, if any, as may be specified in the order, such of its powers and functions as it 15 may think fit; and every order made or act done in the exercise of such powers or discharge of such functions shall be deemed to be the order or act, as the case may be, of the Board.".
5. In section 13 of the principal Act, in sub-section (1) ,—
(i) in clause (b), the word "and" shall be omitted; 20 Amend- ment of section 13
(ii) tor clause (c), the following clauses shall be substituted, namely: —
" (c) in the case of a company in existence immediately before the commencement of the Companies (Amendment) Act, 1965, the objects of the company;
5 (d) in the case of a company formed after such com- mencement,—
(i) the main objects of the company to be pursued by the company on its incorporation and objects inciden- tal or ancillary to the attainment of the main objects;
(ii) other objects of the company not included In sub-clause (i); and
(e) in the case of companies (other than trading cor- porations), with objects not confined to one State, the States to whose territories the objects' extend.". _
6. To section 21 of the principal Act, the following proviso shall be added, namely: —
Amend- ment of section 21
'Provided that no such approval shall be required where the only change in the name of a company is the addition
SEC. 2] T IE GAZETTE OF INDIA EXTRAORDINARY 87thereto or, as the c\se may be, the deletion therefrom, of the word "Private", consequent on the conversion in accordance with the provisions of this Act of a public company Into a private com- pany or of a private company into a public company.'.
7. In section 43A. of the principal Act, in sub-section (6), after clause (a), the following clause shall be inserted, namely: —
Amend- ment of section 43A.
" (aa) to a private company in which shares are held by one or more bodies corporate incorporated outside India, which or each of which, if incorporated in India, would be a private 10 company within the meaning of this Act, if the Central Gov- ernment, on an application made to it in this beha1!' by that pri- vate company, by order so directs; or".
8. After section 68 of the principal Act, under the sub-heading "Prospectus", the following section shall be inserted, namely: —
Insertion of new section 68A.
15 "68A. (1) Any person who—
(a) makes in a fictitious name an application to a com- pany for acquiring, or subscribing for, any shares therein, or
Persona- tion for acquisi- tion, etc., of shares.
(b) otherwise induces a company to allot, or register 20 any transfer of, shares therein to him, or any other person in a fictitious name,
shall be punishable with imprisonment for a term which may extend to five years.
(2) The provisions of subjection (1) shall be prominently 25 reproduced in every prospectus issued by the company and in every form of application for shares which is issued by the com- pany to any person.".
9. In section 69 of the principal Act, for sub-section (4), the fol- lowing sub-section shall be substituted, namely: —
Amend- ment of section 69 3° "(4) All moneys received from applicants for shares shall be deposited and kept deposited in a Scheduled Bank—
(a) until the certificate to commence business is obtain- ed under section 149, or
(b) where such certificate has already been obtained, 35 until the entire amount payable on applications for shares in
respect of the minimum subscription hag been received by the company,
88 THE GAZETTE OF INDIA EXTRAORDINARY [PART Hand where such amount * * * has not been received by the company within the time on the expiry of which the moneys received from the applicants for shares are required to be repaid without interest under sub-section (5), all moneys received from applicants for shares shall be returned in accordance with the 5 provisions of that sub-section.
In the event of any contravention of the provisions of this sub-section, every promoter, director or other person who is knowingly responsible for such contravention shall be punishable with fine which may extend to five thousand rupees.". io
10. In section 73 of the principal Act, in sub-section (5), for the Amend- ment of section 73.
words "permission shall not be deemed to be refused", the words "it shall not be deemed that permission has not been granted" shall be substituted.
11. In section 75 of the principal Act,— 15 Amend- ment of section 76.
shall be added, namely:—
(a) to clause (a) of sub-section (1), the following proviso '
"Provided that the company shall not show in such re- turn any shares as having been allotted for cash if cash has not actually been received in respect of such allotment 2° + * • ".
(b) in sub-section (3), for the words "is inadequate, he may extend that period as he thinks fit", the following words shall be substituted, namely: —
"is or was inadequate, he may, on application made in that 25 behalf by the company, whether before or after the expiry of the said period, extend that period as he thinks fit";
(c) in sub-section (4), for the proviso, the following proviso shall be substituted, namely:-—
"Provided that in case of contravention of the proviso to 30 clause (0) of sub-section (1), every such officer, and every promoter of the company who is guilty of the contravention shall be punishable with fine which may extend to five thousand rupees.".
12. In section 76 of the principal Act,— 35
(a) in sub-section (1) —
Amend- ment ol section 76
(i) in claure (Hi), the word "and" occurring at the end shall be omitted;
(ii) in clause (iv), the word "and" shall be inserted at the end; and
40
SEC. 2] THE GAZETTE OF INDIA EXTRAORDINARY 89(in) after clause {iv), the following clause shall be inserted, namely: —
"(v) a copy of the contract for the payment of the commission is delivered to the Registrar at the time 1; of delivery of the prospectus or the statement In lieu of prospectus for registration.";
(b) after sub-section (4), the following sub-section shall be inserted, namely: —
"(4A) For the removal of doubts it is hereby declared [0 that no commission shall be paid under clause (a) of sub- section (I) to any person on shares or debentures which are not offered to the public for subscription:
Provided that where a person has subscribed or agreed to subscribe under clause (a) of sub-section (/) for any j, shares in, or debentures of, the company and before the issue of the prospectus or statement in lieu thereof any other person or persons has or have subscribed for any or all of those shares 01 debentures and that fact together with the aggregate amount of commission payable under this section in respect of such subscription is disclosed in such prospectus or statement, then, the company may pay commission to the first-mentioned person in respect of such subscription.".
13. In section 108 of the principal Act, after sub-section (1), the following sub-sections shall be inserted, namely: —
Amend, ment of section 108 "(1A) Every instrument of transfer of shares—
(a) shall be in the prescribed form obtainable from the prescribed authority who shall stamp or otherwise en- dorse thereon the date on which it is issued, and
(b) shall be delivered to the company,—
(i) in the case of shares dealt in or quoted on a recognised stock exchange within six months from such date,
(ii) in any other case, within two months from that date,
(IB) Any instrument of transfer which is not in conformity 5 with the provisions of subjection (1A) pha^l not be accepted by a company after the expiry of six months of the coming into force of the Companies (Amendment) Act, 19G5.
(1C) The provisions of sub-section (1A) shall not apply to any person depositing any shares with the State Bank of India or any scheduled bank or financial institution approved by the
B07 G of I Ex.—5.
90 THE GAZETTE OF INDIA EXTRAORDINARY [PART ilCompany Law Board by notification in the Official Gazette, by way of security for the repayment of any loan advanced to, or the performance of any obligation undertaken by, such person.
(ID) Notwithstanding anything in sub-section (/A) or sub- section (IB), where in the opinion of the Company Law Board 5 it is necessary so to do to avoid hardship in any case, the Board may on an application made to it in that behalf, extend the periods mentioned in those subjections by such further time as it may deem fit and the Central Government shall cause to be shown in the annual report laid before the Houses of Parliament 10 under section 638 the number of extensions granted hereunder and the period of each such extension.".
14. In section 111 of the principal Act, except in sub-section (4A), for the words "the Central Government" or the words "that Amend- ment of section J 3 1.
Governments, wherever they occur, the words "the Tribunal" shall, 15 in respect of any appeal made after the commencement of this Act, be substituted.! 1
15. In section 149 of the principal Act, after sub-section (2), the "ollowing sub-sections shall be inserted, namely: —
Amend- ment of section 149.
" (2A) Without prejudice to the provisions of sub-sec- 2o tion (1) and sub-section (2) a company having a share capital, whether or not it has issued a prospectus inviting the public to subscribe for its shares, shall not at any time commence any business—
(a) if such company is a company in existence irame- 25 diately before the commencement of the Companies (Amend- ment) Act, 1965, in relation to any of the objects stated in its memorandum in pursuance of clause (c) of sub-section (1) of section 13;
(b) if such company is a company formed after such 30 commencement, in relation to any of the objects stated in Its memorandum in pursuance of sub-clause (ii) of clause (d) of sub-section (1) of the said section,
unless—
(i) the company has approved of the commencement of any such business by a special resolution passed in that behalf by it in general meeting; and
(ii) there has been filed with the Registrar a duly veri- fied declaration by one of the directors or the secretary, in the prescribed form, that clause (i) has been complied with; and if the company commences any sucn business in con- travention of this sub-section, every person who is responsi-
SEC. 2] T5K GAZETTE OF INDIA EXTRAORDINARY 91Me for the contravention shall, without prejudice to any other liability, be punishable with fine which may extend to five hundred rupees for every day during which the contravention continues.
5 Explanation.—& company shall be deemed to commence any business within the meaning of clause (a) if and only if it com- mences any new business which is not germane to the business which it is carrying on at the commencement of the Companies (Amendment) Act, 1965 in relation to any of the objects referred 10 to in the said clause.
(2B) Notwithstanding anything contained in sub-section (2A) where no such special resolution as i3 referred to in that sub-section is passed but the votes cast (whether on a show of hands or, as the case may be, on a poll) in favour of the proposal 15 to commence any business contained in the resolution moved in that general meeting (including the casting vote, if any, of the chairman) by members who, being entitled so to do, vote in per- son, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members so entitled and voting, 20 the Company Law Board may on an application made to it by th^ Board of directors in this behalf allow the company to commence such business as if the proposal had been passed by a special resolution by the company in general meeting.".
18. In section 153B of the principal Act, in sub-section (4),—
Amend-
ment of
sectioa
1SSB.
25 (i) in clause (b), for the words "where the trust money invested in shares in, or debentures of, a company", the words "where the value of the shares in. or debentures of, a company, held in trust" shall be substituted;
(ii) the following Explanation shall be Inserted at the 30 end, namely: —
'Explanation.—The expression "the value of the shares In, or debentures of, a company" in clause (b) means,—
(I) in the case of shares or debentures acquired by way of allotment or transfer for consideration, the 35 cost of acquisition thereof, and
(ii) in any other case, the paid-up value of the shares or debentures.'.
* * * **
17. In section 163 of the principal Act, in sub-section (1), in the 40 proviso, In clause (i), the word "and" shall be inserted at the end and clause (ii) shell be omitted.
Amend- ment of section ltt.
907G of I Ex.—f>
92 THE GAZETTE OF INDIA EXTRAORDINARY [PART UAmend- ment of "ectlon 174.
18. In section 174 of the principal Act, in sub-section (1), for the words "public company, and two members personally present in the case of a private company,", the words, brackets, figures and letter "public company (other than a public company which has become such by virtue of section 4SA), and two members personal- ly present in the case of any other company," shall be substituted.
ftjnend- ment of section 203.
19. In section 203 of the principal Act, in sub-section (6), the words, brackets and figures ', and for the purposes of the said sub- clause (ii), the expression "officer" shall include any person In accordance with whose directions or instructions the Board of directors of the company has been accustomed to act' shall be omitted.
20. In section 209 of the principal Act,—
(a) in sub-section (1)—I
Amend- ment of section 209.
(i) in clause (b), the word "and" occurring at the end shall be omitted;
(ii) in clause (c), the word "and" shall be inserted at the end;
(iii) after clause (c), the following clause shall
20 be inserted, namely:—
" (d) in the case of a company pertaining to any class of companies engaged in production, processing, manufacturing or mining activities, such particulars re- lating to utilisation of material or labour as may be prescribed, if such class of companies is required by the *5 Centra^ Government to include such particulars in the books of account;";
(b) for sub-section (4), the following sub-section shall be substituted, namely: —
" (4) (a) The books of account and other books and 3° papers shall be open to inspection by any director during business hours.
(b) The books of account and other books and papers shall be open to inspection during business hours—
35 (i) by the Registrar,
(ii) by any officer of Government authorised by the Central Government in this behalf:
• * * * * *•
SKC. 2] THE GAZETTE OF INDIA EXTRAORDINARY 93Provided * * * that such inspection m ay be made without giving any previous notice to t he company or a ny officer thereof.
(c) The Registrar or such officer m ay during t he course 5 of inspection—
(i) make or cause to be made copies of the books of account and other books a nd papers,
(ii) place or cause to be placed a ny m a r ks of iden- tification thereon in token of t he inspection having been 10 made.
(
1* (i) to produce to t he Registrar or such officer such books of account and other books a nd papers of t he company as the Registrar or such officer m ay require,
(it) otherwise to give to t he Registrar or such offi- cer all assistance in connection with t he inspection 2O which t he company is reasonably able to give.";
(c) In sub-section (4A), after t he words "preceeding t he c u r r e nt year", wherever they occur, t he words "together with the vouchers relevant to a ny entry in such books of account" shall be inserted;
25 (d) in sub-section (6) ,•—
(i) in clause ( a ), the following shall be inserted at t he end, namely: —
"and all officers and oth'jr employees a nd agents [as denned in sub-section (6) of section 240 b ut excluding bankers and legal advisers] of such managing agent or secretaries and treasurers"; (11) in clause (c), the word " a n d" occurring at t he end shall be omitted;
(iii) in clause ( d ), t he word " a n d" shall be inserted at ,, the end;
(iv) after clause (d), the following clause shall be in- serted, namely: —
"(e) whether or not a company has a managing agent or secretaries and treasurers, every officer and, 0 other employee and agent (defined as aforesaid) of the company.".
$4 *HE GAZETTE OF INDIA EXTRAORDINARY [PAM li21. In section 227 of the principal Act,—
(a) after sub-section (1), the following sub-section shall Amend- ment of section J27,
be inserted, namely:—
"(1A) Without prejudice to the provisions of sub-sec- tion (1), the auditor shall inquire— 3
(a) whether loans and advances made by the com- pany on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members;
io
(b) whether transactions of the company which are represented merely by book entries are not preju- dicial to the interests of the company; ~~"^~"~
(c) where the company is not an investment com- pany within the meaning of section 372 or a banking x" company, whether so much of the assets ofthe com- pany as consist of shares, debentures and other securities have been sold at a price less than that at which they were purchased by the company;
(d) whether loans and advances made by the com- ao pany have been shown as deposits; ——
(e) whether personal expenses have been charged to revenue account;
(f) where it is stated in the books and papers of the company that any shares have been allotted for 25 cash, whether cash has actually been received in res- pect of such allotment, and if no cash has actually been so received, whether the position as stated in the ac- count books and thi balance-sheet is correct, regular and not misleading.";
,o
(b) after sub-section (4), the following sub-section shall be inserted, namely: —
"(4A) The Central Government may, by general or special order, direct that, in the case of such class or des- cription of companies as may be specified in the order, the 35 auditor's report shall also include a statement on such mat- ters as may be specified therein:
Provided that before making any such order the Central Government may consult the Institute of Chartered Account- ants of India constituted under the Chartered Accountants ,Q
SEC. 2] t 9E GAZETTS OF INDIA EXTRAORDINARY 9538 of 1049.
Act, 1949, in regard to the class or description of companies and other ancillary matters proposed to be specified therein unless the Government decides that such consultation is not necessary or expedient in the circumstances of the case.".
3 22. In section 228 of the principal Act, in sub-section (4), for the words "may, by rules made in this behalf, exempt", the words "may make rules providing for the exemption of" shall be substituted.
23. After section 233A of the principal Act, under the sub-head-
ing r>Audit", the following section shall be inserted, namely: —
Amend- ment of section 228. Insertion of new- section 233B. Audit of cost acco- unts in certain cases.
23 of 1939.
38 of 19-tt
10 "233B. (1) Where in the opinion of the Central Govern- ment it is necessary so to do in relation to any company engaged in production, processing, manufacturing or mining activities, the Central Government may, by general or special order, direct that an audit of cost accounts of the company shall be conduct- 15 ed in such manner as may be specified in the order by an audi- tor who shall be either a cost accountant within the meaning of the Cost and Works Accountants Act, 1959, or any such chartered accountant within the meaning of the Chartered Accountants Act, 1949, or * * * other person, as possesses the prescribed
20 qualifications. ™ " ~ " ~ " ~~
(2) An auditor under this section shall be appointed by the company in general meeting and the provisions of section 224 shall apply, as far as may be, in relation to such auditor as they apply in relation to an auditor appointed under that section.
25 (3) An audit conducted by an auditor under this section shall be in addition to an audit conducted by an auditor ap- pointed under section 224.
(4) An auditor shall have the same powers and duties in relation to an audit conducted by him under this section as an 30 auditor of a company has under sub-section (1) of section 227 and such auditor shall make his report to the Company Law Board in such form and within such time as may be prescribed and shall also at the same time forward a copy of the report to the company.".
* * * * **
,, 24. In section 234A of the principal Act,—
~~~ (a) in sub-section (1), after the words "make an applica- tion", the words "to the Tribunal or" shall be inserted;
Amend- ment of section 234A.
(b) in sub-section (2), for the word "Magistrate", the words "Tribunal or Magistrate, as the case may be," shall b"
^0 substituted;
96 THE GAZETTE OF INDIA EXTRAORDINARY [PART H(c) in sub-section (3),—
(i) for the word "Magistrate", the words "Tribunal or Magistrate, as the case may be," shall be substituted;
(li) in the proviso, after the words "extracts from them", the words "or place identification marks on them or any part 5 thereof" shall be inserted; (d) in sub-section (4), after the word "search" and the word "searches", the words "or seizure" and the words "or seizures" shall respectively be inserted.
25. In section 240 of the principal Act,— 10 Amend- ment ol section 240.
(a) in clause (a) of sub-section (1), for the words "to produce to an inspector", the words "to preserve and to produce to an inspector or any person authorised by him in this behalf," shall be substituted;
(b) after sub-section (1), the following sub-sections shall 15 be inserted, namely : —
" (1A) The inspector may, with the previous approval of the Central Government, require any body corporate * * * [other than a body corporate referred to in sub- section (I)] to furnish such information to, or produce such 20 books and papers before, him or any person authorised by him in this behalf as he may consider necessary if the furni- shing of such information or the production of such books and papers is relevant or necessary for the purposes of his investigation.
2,
(IB) The inspector may keep in his custody any books and papers produced under sub-section (1) or sub-section (1A) for six months and thereafter shall return the same to the company, body corporate, firm or individual by whom or on whose behalf the books and papers are produced: -0 Provided that the inspector may call for the books and papers if they are needed again:
Provided further that if certified copies of the books and papers produced under sub-section (1A) are furnished to the inspector, he shall return those books and papers to the body 35 corporate * * * concerned.";
(c) for sub-sections (2), (3), (3A) and (4), the following sub-sections shall be substituted, namely: —
" (2) An inspector may examine on oath—
(a) any of the persons referred to in sub-section
4 (l);and
SEC. 2] T(b) with the previous approval of the Central Government, any other person,
in relation to the affairs of the company, other body cor- porate, managing agent, secretaries and treasurers or esso- 5 ciate, as the case may be; and may administer an oath accordingly and for that purpose may require any of those persons to appear before him personally.
(3) If any person fails without reasonable cause or refuses—
10 (a) to produce to 'an inspector or any person authorised by him in this behalf any book or paper which it is his duty under sub-section (1) or sub- section (1A) to produce; or
(b) to furnish any information which it is his duty lS under sub-section (1A) to furnish; or
(c) to appear before the inspector personally when required to do so under sub-section (2) or to answer any question which is put to him by the inspector in pur- suance of that sub-section; or
zo (d) to sign the notes of any examination referred to in sub-section (5),
he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both, and also with a further 25 fine which may extend to two hundred rupees for every day after the first during which the failure or refusal continues.";
(d) in sub-section (5), the word, brackets and figure "or (4)" shall be omitted.
30 25. In section 240A of the principal Act,—
(a) in sub-section (1), after the words "make an applica-
Amend- ment of section 240A.
tion", the words "to the Tribunal or" shall be inserted;
(b) in sub-section (2), for the word "Magistrate", the words "Tribunal or Magistrate, as the case may be," shall be substi- 35 tuted;
(c) in sub-section (3) —
(i) for the word "Magistrate", the words 'Tribunal or Magistrate, as the case may be," shall be substituted;
98 TIIE GAZETTE OF INDIA EXTRAORDINARY [PART II(ii) the following proviso shall be inserted at the end, namely: —
"Provided that the inspector may, before returning such books and papers as aforesaid, place identification marks on them or any part thereof."; 5
(d) in sub-section (4), after the word "search" and the word "searches", the words "or seizure" and the words "or seizures" shall respectively be inserted.
Amend- ment of section 241,
27. In section 241 of the principal Act, in clause (a) of sub- section (2), after the words "any report", the brackets and words 10 " (other than an interim report)" shall be inserted.
28. After section 250 of the principal Act, the following section
shalTbe inserted, namely : —
Insertion of new section 250A.
"250A. An investigation may be initiated under section 235, 237, 239, 247, 248 or 249 notwithstanding that— 15
(a) an application has been made for en order under section 397 or section 398; or
Voluntary winding up of company, etc., not to stop inves- tigation pro- ceedings.
(b) the company has passed a special resolution for voluntary winding up,
and no investigation so initiated shall be stopped or suspended *° by reason only of the fact that an application referred to in clause (a) has been made or a special resolution referred to in clause (b) has been passed.".
29. In section 252 of the principal Act,—
Amendment of section 352.
(1) in sub-section (1), for the words "public company", the 35 words, brackets, figures and letter "public company (other than a public company which has become such by virtue of section 43A)" shall be substituted;
(ii) in sub-section (2), for the word "private", the word "other" shall be substituted;
30
30. To section 259 of the principal Act, the following proviso shall
be "added, namely : —
Amendment of section 259-
"Provided that where such permissible maximum is twelve or less than twelve, no approval of the Central Government shall be required if the increase in the number of Its directors does 35 not make the total number of its directors more than twelve."-
SEC. 21 THE GAZETTE OF INDIA EXTBAORDINABY 9931. In section 264 of the principal Act,—
Amend- ment of section 264.
(i) in sub-section (1), for the words "other than a person", the words "other than a director retiring by rotation or other- wise or a person" shall be substituted;
^ (ii) for sub-section (2), the following sub-section shall be substituted, namely: —
"(2) A person other than—
(a) a director re-appointed after retirement by rota- tion or immediately on the expiry of his term of office, 10 or
(b) an additional or alternate director, or a person filling a Casual vacancy in the office of a director under section 262, appointed as a director or re-appointed as an additional or alternate director, immediately on the *5 expiry of his term of office, or
(c) a person named as a director of the company under its articles as first registered,
shall not act as a director of the company unless he has within thirty days of his appointment signed and filed with the Registrar his consent in writing to act as such director.".
32. In section 266 of the principal Act, sub-section (4) shall be
omitFed.
Amend-
ment of
section
266.
33. Section 271 of the principal Act shall be omitted.
34. In section 273 of the principal Act, for the word and figures
25 "to~272", the word and figures "and 272" shall be substituted.
Omiuion of lection 271. Amend- ment of section 273.
35. In section 280 of the principal Act, for sub-sections (1) and
(2)"7~the following sub-sections shall be substituted, namely: —
Amend- ment of section 280.
" ( /) Save as otherwise provided in this section, a persor shall not be capable of being appointed, or shall not act as, £ 30 director of a public company or of a private company which is $
subsidiary of a public company, if he has attained the age oi seventy-five years, !~w
9O7 G of I —LS
100 THE GAZETTE OF INDIA EXTRAORDINARY [PART II(2) A director of a public company or of a private company which is a subsidiary of a publTc company, shall vacate his office at the conclusion of the annual general meeting commencing next after he attains the age of seventy-five years:
Provided that a director who has attained the age of seventy- 5
five years before the commencement of the Companies (.* * * Amendment) Act, 1965 and is in office at such commencement shall vacate his office at the conclusion of the first annual general meeting held after such commencement.".
36. Section 281 of the principal Act shall be omitted- 10 Omission of section 281.
37. In section 282 of the principal Act, for the words "sixty-five
year?', the words "seventy-five years" shall be substituted.
Amend- ment of section 282.
Amend- ment of section 286,
38. In section 285 "of the principal Act, for the words beginning with~"three calendar months" and ending with "and the date of the next meeting", the words "three months and at least four such jj meetings shall be held in every year" shall be substituted.
39. After section 294 of the principal Act, the following section
shaTTbe inserted, namely : —
Insertion of new section 294A.
"294A. (1) A company shall not pay or be liable to pay to its sole selling agent any compensation for the loss of hig office 20 in the following cases : —
(a) where the appointment of the sole selling agent ceases to be valid by virtue of sub-section {2A) of section 294;
(b) where the sole selling agent resigns his office in 25 Prohibit tlon of payment of com- pensation to sole selling agents for loss of office in certain cases.
view of the reconstruction of the company or of its amalga- mation with any other body corporate or bodies corporate and is appointed as the sole selling agent of the reconstructed company or of the body corporate resulting from the amal- gamation;
(c) where the sole selling agent resigns his office, other-, wise than on the reconstruction of the company or its amal- gamation as aforesaid;
SEC. 2] THE GAZETTE 6F INDIA EXTRAORDINARY J OI(d) where the sole selling agent has been guilty of fraud or breach of trust in relation to, or of gross negli- gence in, the conduct of his duty as the sole selling agent;
(e) where the sole selling agent has instigated, or has 5 taken part directly or indirectly in bringing about, the ter- mination of the sole selling agency.
(2) The compensation which may be paid by a company to its sole selling agent for loss of office shall not exceed the remuneration which he would have earned if he had been in io office for the unexpired residue of his term, or for three years, whichever is shorter, calculated on the basis of the average remuneration actually earned by him during a period of three years immediately preceding the dale- on which his office ceased or was terminated, or where he held his office for a lesser period 15 than three years, during such period-".
40. In section 303 of the principal Act, in sub-soction (2), the words "or in any of the particulars contained in the register" and the proviso shall be omitted.
Amend- ment of section 308.
* * * * **
20 41. In section 300 of the principal Act,—
(i) in sub-section (1), the following shall be added at the
Amend- ment of section 309.
end, namely: —
"and the remuneration payable to any such director deter- mined as aforesaid shall be inclusive of the remuneration pay- able to such director for services rendered by him in any other capacity:
Provided that any remuneration for services rendered by any such director in any other capacity shall not be so in- cluded if—
(a) the services rendered are of a professional na- ture, and
(b) In the opinion of the Central Government, the director possesses the requisite qualifications for the prac- tice of the profession * * * ";
102 THE GAZETTE OF INDIA EXTRAORDINARY L^ABT U(!ii) for sub-section (4), the following sub-section shall be substituted, namely: —
"(4) A director who is neither in the whole-time em- ployment of the company nor a managing director may be paid remuneration—•
5
either
(a) by way of a monthly payment with the approval of the Central Government;
or
(b) by way of commission if the company by special IO resolution authorises such payment:
Provided that the remuneration paid to such director, or where there is more than one such director, to all of them together, shall not exceed—
(i) one per cent, of the net profits of the company, 15 if the company has a managing or whole-time director, a managing agent or secretaries and treasurers or a mana- ger;
(it) three per cent, of the net profits of the company, in any other case:'
' 20
Provided further that the company in general meeting may, with the approval of the Central Government, authorise the payment of such remuneration at a rate exceeding one per cent, or, as the case may be, three per cent, of its net profits.".
25
42. To section 310 of the principal Act, the following proviso shall
be added, namely: —
Amend- ment of section 310.
"Provided that the approval of the Central Government shall not be required where any such provision or any amendment thereof purports to increase, or has the effect of increasing, the 30 amount of such remuneration only by way of a fee for each meeting of the Board or a committee thereof attended by any such director and the amount of such fee after such increase does not exceed two hundred and fifty rupees.".
43. In section 314 of the principal Act,— 35
(a) in sub-section (1)—i
Amend- ment of section 314.
(i) for the words "previous consent", the word "con- sent" shall be substituted;
SEC, 2] THE GAZETTE OF INDIA EXTRAORDINARY 103(ii) for the proviso, the following proviso shall be substi- tuted, namely: —
"Provided that it shall be sufficient if the special resolution according the consent of the company is pass- " ed at the general meeting of the company held for the first time after the holding of such office or place of profit:
Provided further that where a relative of a director or a firm in which such relative is a partner, is appointed 10 to an office or place of profit under the company or a subsidiary thereof without the knowledge of the director, the consent of the company may be obtained either in the general meeting aforesaid or within three months from the date of the appointment, whichever is later.";
15 (b) for sub-section (2), the following sub-section shall be substituted, namely: —
"(2) If any office or place of profit is held in contraven- tion of the provisions of sub-section (1), the director, partner, relative, firm, private company, managing agent, secretaries 20 and treasurers or the manager, concerned, shall be deemed to have vacated his or its office as such on and from the date next following the date of the general meeting of the com- pany referred to in the first proviso or, as the case may bet the date of the expiry of the period of three months referred 25 to in the second proviso to that sub-section, and shall also be liable to refund to the company any remuneration received or the monetary equivalent of any perquisite or advantage en- joyed by him or it for the period immediately preceding the date aforesaid in respect of such office or place of profit.
3° 44. In section 370 of the principal Act,—
(a) in sub-section {!) —
Amend- ment of section 370.
(i) the words "which is under the same management as the lending company" shall be omitted;
(") the following provisos shall be added at the end, 35 namely: —
"Provided that no special resolution shall be neces- sary in the case of loans made to other bodies corporate not under the same management as the lending company where the aggregate of such loans does not exceed ten
104 THE GAZETTE OF INDIA EXTRAORDINARY [^AET Uper cent, of the aggregate of the subscribed capital of the lending company and its free reserves:
Provided further that the aggregate of the loans * * made to all bodies corporate shall not exceed without the prior approval of the Central Government— 5
I0
(a) thirty per cent, of the aggregate of the subscribed capital of the lending company and its free reserves where all such other bodies corporate are not under the same management as the lending company;
(b) twenty per cent, of the aggregate of the subscribed capital of the lending company and its free reserves where all such other bodies corporate are under the same management as the lending company.
15
Explanation.—If a special resolution has been passed by the lending company authorising the making of loans up to the limit of thirty per cent, of the aggre- gate specified in clause (a), or, as the case may be, of twenty per cent, of the aggregate specified in clause (b), 20 of the second proviso, then, no further special resolution or resolutions shall be deemed to be necessary for the making of any loan or loans within such limit.";
(b) in sub-section (1C), in clause (b), after the words "pro- vided by the landing company", the words "in relation to any 25 such body corporate" shall be inserted;
(c) in sub-section (ID), for the words "every such loan, guarantee or security", the words, brackets, figure and letter "every loan, guarantee or security referred to in sub-section (1C)" shall be substituted;
3°
(d) in sub-section (2), in clause (a), for sub-clause (iii), the following sub-clauses shall be substituted, namely: —
"(Hi) by a banking company, or an insurance company, in the ordinary course of its business;
(iv) by a private company, unless it is a subsidiary of a 35 public company;
(v) by a company established with the object of financing industrial enterprises;";
SEC. 2] THE GAZETTE OF INDIA EXTRAORDINARY 105(e) after sub-section (4), the following sub-section shall be inserted, namely: —
" (5) Where before the commencement of the Companies (Amendment) Act, 1965, any loan, guarantee or security has 5 been made, given or provided by a company which could not have been made, given or provided under this section as amended by that Act, and such loan, guarantee or security is outstanding at such commencement, the company shall, within six months from such commencement, enforce the jo repayment of the loan made or, as the case may be, revoke the guarantee given or the security provided, notwithstand- ing any agreement to the contrary:
Provided that the aforesaid period of six months may be extended by the Company Law Board on an application I5 made to it in that behalf by the company.".
Amend- ment of section 372.
45. In section 372 of the principal Act, in sub-section (13), after the word, brackets and figure "sub-section (2)", the words, brackets and figure "and sub-section (5)" shall be inserted.
46. In section 391 of the principal Act, to sub-section (2), the
20 following proviso shall be added, namely: —
Amend- ment of section 391.
"Provided that no order sanctioning any compromise or ar- rangement shall be made by the Court unless the Court is satisfied that the company or any other person by whom an application has been made under sub-section (1) has disclosed to the Court, 2, by affidavit or otherwise, all material facts relating to the com- pany, such as1 the latest financial position of the company, the latest auditor's report on the accounts of the company, the pen- dency of any investigation proceedings in relation to the company under sections 235 to 251, and the like.".
30 47. In section 394 of the principal Act, to sub-section (1), the
following provisos shall be added, namely: —
Amend- ment of section 304,
"Provided that no compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the amalga- mation of a company, which is being wound up, with any other 3, company or companies, shall be sanctioned by the Court unless the Court has received a report from the Company Law Board
106 THE GAZETTE OF INDIA EXTRAORDINARY [PART Hor tho Registrar that the affairs of the company have not been conducted in a manner prejudicial to the interests of its mem- bers or to public interest:
Provided further that no order for the dissolution of any transferor company under clause (iv) shall be made by the Court 5 unless the Official Liquidator has, on scrutiny of the books and papers of the company, made a report to the Court that the affairs of the company have not been conducted in a manner pre- judicial to the interests of its members or to public interest.". 48. After section 394 of the principal Act, the following section IO shall be inserted, namely:— ~
Insertion of new section 394A.
"394A. The Court shall give notice of every application made to it under section 391 or 394 to the Central Government, and shall take into consideration the representations, if any, made to it by that Government before passing any order under IJ any of these sections.",
Notice to be given to Central Govern- ment for applica- tions under sections 391 and 394.
49. In section 395 of the principal Act,—
Amend- ment of section 393,
(a) in sub-section (3), for the words "the transferor com- pany shall thereupon register the transferee company as the holder of those shares:", the following shall be substituted, 20 namely: —
"the transferor company shall—
(a) thereupon register * * the transferee company as the holder of those shares, and
(b) within one month of the date of such reglstra- 25 tion, inform the dissenting shareholders of the fact of such registration and of the receipt of the amount or other consideration representing the price payable to them by the transferee company:";
(b) after sub-section (4), the following sub-section shall 3° be Inserted, namely: —
"(4A) (a) The following provisions shall apply in rela- tion to every offer of a scheme or contract involving the transfer of shares or any class of shares in the transferor company to the transferee company, namely:— 35
(i) every such offer or every circular containing such offer or every recommendation to the members of the transferor company by its directors to accept such
SEC. 2] T3E GAZETTE OF INDIA EXTRAORDINARY l07offer shall be accompanied by such information as may be prescribed;
(ii) every such offer shall contain a statement by or on behalf of the transferee company, disclosing the 5 o'teps ii has taken to ensure that necessary cash will be available;
(iii) every circular containing, or recommending acceptance of, such offer shall be presented to the Re- gistrar for registration and no such circular shall be io Issued until it is so registered;
(lv) the Registrar may refuse to register any such circular which does not contain the information requir- ed to be given under sub-clause (i) or which sets out such information in a manner likely to give a false 15 impression; and
(v) an appeal shall lie to the Court against an order of the Registrar refusing to register any such circular.
(b) Whoever issues a circular referred to in sub-clause 20 (Hi) of clause (a), which has not been registered, shall be punishable with fine which may extend to five hundred rupees.".
50, In the principal Act, in Chapter V of Part VT, after section
393pthe following section shall be inserted, namely: —
Insertion of new section 396A.
Preserva- tion of books and papers 01 amalga- mated company. 2, "396A. The books and papers of a company which has been amalgamated with, or whose shares have been acquired by, another company under this Chapter shall not be disposed of without the prior permission of the Central Government and before granting'such permission, that Government may appoint a person to examine the books and papers or any of them for the purpose of ascertaining whether they contain any evidence of the commission of an offence in connection with the promotion or formation, or the management of the affairs, of the first- mentioned company or its amalgamation or the acquisition of its shares.".
51. (/) In the principal Act, in Chapter VII of Part VI —
(a) in the heading, for the words "ADVISORY COMMISSION'', the words "ADVISORY COMMITTEE" shall be substituted;
Amend- ment of Chapter VII of Part VI
007 G of I Ex—B.
io8 THE GAZETTE OF INDIA EXTRAORDINARY [PART II(b) for sections 410, 411, 412, 413, 414 and 415, the following section shall be substituted, namely: —
Appoint- ment of Advisory Committee.
"410. For the purpose of advising the Central Govern- ment and the Company Law Board on such matters arising out of the administration of this Act as may be referred to 5 it by that Government or Board, the Central Government may constitute an Advisory Committee consisting of not more than five persons with suitable qualifications.".
(2) All cases pending before the Advisory Commission imme- diately before the commencement of this Act shall stand transferred Io to the Central Government on such commencement and the Central "Jovernment may dispose of such cases in such manner as it deems It.
52. In section 497 of the principal Act,—
Amend- ment of section 497-
(a) in sub-section (3), for the words "Registrar a copy of the 15 account, and shall make a return to him", the words "Registrar and the Official Liquidator a copy each of the account and shall make a return to each of them" shall be substituted;
(b) for sub-sections (5) and (6), the following sub-sections
20 shall be substituted, namely:—
" (5) The Registrar, on receiving the account and either the return mentioned in sub-section (3) or the return men- tioned in sub-section (4), shall forthwith register them.
(6) The Official Liquidator, on receiving the account and either the return mentioned in sub-section (3) or the return 2^ mentioned in sub-section (4), shall, as soon as may be, make, and the liquidator and all officers, past or present, of the company shall give the Official Liquidator all reasonable facilities to make, a scrutiny of the books and papers of the company and if on such scrutiny the Official Liquidator makes 30 a report to the Court that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest, then, from the date of the submission of the report to the Court the company shall be deemed to be dissolved.
35
(6A) If on such scrutiny the Official Liquidator makes a report to the Court that the affairs of the company have been conducted in a manner prejudicial as aforesaid, the Court shall by order direct the Official Liquidator to make a further investigation of the affairs of the company and for that 40 purpose shall invest him with all such powers as the Court may deem fit.
§jcd. 2j TSE GAZETTE OF INDIA EXTRAORDINARY ioy(6B) On the receipt of the report of the Official Liqui- dator on such further investigation the Court m ay either m a ke an order that the company shall stand dissolved with effect from the date to be specified by the Court therein or 5 m a ke such other order as the circumstances of the case brought out in t he report permit.".
53. In section 509 of the principal Act,—
.Vffiencl- ment of section 509.
(a) in sub-section (3), for the words "Registrar a copy of the account, and shall m a ke a r e t u rn to him",, the words "Regis- Io t r ar a nd the Official Liquidator a copy each of t he account and shall m a ke a r e t u rn to each of them", shall be substituted;
(b) for sub-sections (5) and (6), t he following sub-sections shall be substituted, namely: —
"(5) The Registrar, on receiving the account and also, 15 in respect of each such meeting, either the r e t u rn mentioned in sub-section (3) or the r e t u rn mentioned in sub-section (4), shall forthwith register them.
(6) The Official Liquidator, on receiving the account and either the r e t u rn mentioned in sub-section (3) or t he r e t u rn 3O mentioned in sub-section (4), shall, as soon as m ay be, make, and the liquidator and all officers, past or present, of the company shall give the Official Liquidator all reasonable facilities to make, a scrutiny pf the books and papers of t he company and if on such scrutiny the Official Liquidator 2, m a k es a report to the Court that the affairs of the company have not been conducted in a m a n n er prejudicial to the interests of its m e m b e rs or to public interest, then, from t he date of t he submission of the report to the Court the com- p a ny shall be deemed to be dissolved.
(6A) If on such scrutiny the Official Liquidator makes a report to the Court that the affairs of t he company have been conducted in a m a n n er prejudicial as aforesaid, t he Court shall by order direct the Official Liquidator to m a ke a further investigation of the affairs of t he company and for t h at purpose shall invest him with all such powers as t he Court m ay deem fit.
(6B) On the receipt of the report of the Official Liquida- tor on such further investigation the Court m ay either make an order that t he company shall stand dissolved with effect from the date to be specified by the Court therein or m a ke such other order as t he circumstances of t he case brought out in t he report permit.".
I io THE GAZETTE OF INDIA EXTRAORDINARY [PART It54. After section 511 of the principal Act, the following section
shall be inserted, namely: —
Insertion of new section 511 A.
'511A. The provisions of section 454 shall, so far as may be,
apply to every voluntary winding up as they apply to the wind- ing up by the Court except that references to— <
(a) the Court shall be omitted;
Applica- tion ol section 454 to volun- tary wind- Ing up.
(b) the Official Liquidator or the provisional liquida-
tor shall be construed as references to the liquidator; and
(c) the "relevant date" shall be construed aa references
to the date of commencement of the winding up.'. IO
55. In section 593 of the principal Act, in clause (c), the words
"or the particulars contained in the list of the directors and secre- tary" shall be omitted.
Amend- ment oi section 593.
56. For section 635A of the principal Act, the following sections
shall be substituted, namely:—
'5 Substitu- tion of new sec- tions for section 635A.
Protection of acts done in good faith
"635A. No suit, prosecution or other legal proceeding shall lie against the Government or any officer of Government or any other person in respect of anything which is in good faith done or intended to be done in pursuance of this Act or any rules or orders made thereunder, or in respect of the publication by or 2O under the authority of the Government or such officer of any report, paper or proceedings.
635AA. Notwithstanding anything contained in any other law for the time being in force, the Registrar, any officer of Govern- ment or any other person shall not be compelled to disclose to any court, tribunal or other authority whence he got any infor- mation which—
Non-db- closure of informa. tion in certain cases.
(a) has led the Central Government to direct a special audit under section 233A or to order an investigation under 3° section 235, 237, 247, 248 or 249; or
(b) is or has been material or relevant in connection
with such special audit or investigation.".
SEC. i] T&B GAZETTBl OF tiSTDIA EXTRAORDINARY it I57. After section tJ37A of the principal Act, under the sub-head- ing^GroTit 0/ approval, etc., subject to conditions and levy oj fees on applications", the following section shall be inserted, namely: —
Insertion of new section 637B.
"637B. Notwithstanding anything contained in this Act,— Condona- tion of delays in certain cases.
- (a) where any application required to be made to the Central Government under any provision of this Act In respect of any matter is not made within the time specified therein, that Government may, for reasons to be recorded in writing, condone the delay;
10 (fa) where any document required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the Central Government may, for reasons to be recorded in writing, condone the delay.".
58. After section 640A of the principal Act, under the sub-head-
15 ing""Schedules, Forms and Rules", the following section shall be
Inserted, namely: —
Insertion of new section 640B.
"640B. (I) Every application made to the Central Govern-
ment under section 259, 268, 269, 310, 311, 326, 328, 329, 332, 343, 345, 346, 352, 408, or 409 shall be in such form as may be pres-
20 cribed.
Forms of, and proce- dure in relation to, certain applica- tions.
(2) (o) Before any application is made iby a company to the Central Government under any of the sections aforesaid, there shall be issued by or on behalf of the company a general notice to the members thereof, indicating the nature of the
25 application proposed to be made.
(fa) Such notice shall be published at least once in a news- paper in the principal language of the district in which the registered office of the company is situate and circulating in that district, and at least once in English in an English news-
30 paper circulating in that district.
(c) Copies of the notices, together with a certificate by the company as to the due publication thereof, shall be attached to the application.
(d) Nothing in clause (a), (b) or (c) shall apply to a 35 private company which is not the managing agent of a public
company.".
t i2 tttf8 6A2EWfi Of INDIA fcXtftAORDlNARY [^ART It
59. In Schedule IA of the principal Act, serials 23 to 49 (both
inclusive) shall be omitted.
Amend- ment of Schedule IA.
Minor amend- ments.
60. The amendments directed in the Schedule, being amendments relating to matters of minor detail or of a clariflcatory or consequen- tial nature, shall be made in the sections of the principal Act speci- 5 fled therein.
SEC. 2] T^E GAZETTE OF INDIA EXTRAORDINARY 113THE SCHEDULE
(See section 60)
MINOR AMENDMENTS IN THE COMPANIES ACT, 1956
Section 2.—In clause (49A), for "Tribunal constituted", substitute , "Companies Tribunal constituted".
Section 10A.—In sub-section (1), for "constitute a Tribunal", substitute "constitute a Tribunal to be known as the Companies Tribunal".
Section 44.—In clause (b) of sub-section (1), for "fourteen", Io substitute "thirty".
Section 75.—For "one month", in all places, substitute "thirty days".
Section 95.—In sub-section (1), for "one month", substitute "thirty days".
j. Section 97.—In sub-section (1), for "fifteen", substitute "thirty".
Section 107.—In sub-section (5), for "fifteen", substitute "thirty".
Section 125.—For "twenty-one", in all places, substitute "thirty".
Section 127.—In sub-section (1), for "twenty-one", in all places, substitute "thirty".
3O Section 128,—For "twenty-one", substitute "thirty".
Section 137.—In sub-section (1), for "fifteen", substitute "thirty".
Section 138.—In sub-section (1), for "twenty-one", substitute "thirty".
Section 146.—For "twenty-eighth" and "twenty-eight", substitute 25 respectively "thirtieth" and "thirty".
Section 156.—For "Court" and "fourteen", in all places, substitute respectively "Tribunal" and "thirty".
Section 157.—In sub-section (2), for "one month", in both places, substitute "thirty days".
Section 159—In sub-section (1), for "forty-two", substitute "Sixty".
114 THE GAZETTE OF INDIA EXTRAORDINARY [PART U— SEC. 2]Section 160.—In sub-section (1), for "forty-two", substitute "sixty".
Section 192.—In sub-section (1), for "fifteen", substitute "thirty".
Section 193.—For "fourteen", in all places, substitute "thirty".
Section 220.—In sub-section (1), for "at the same time as the 5 copy of the annual return referred to in section 161", substitute "within thirty days from the date on which the balance-sheet and the profit and loss account were so laid".
Section 303.—In sub-section (2), for "twenty-eight", in all places, substitute "thirty".
1
Section 394.—In sub-section (3), for "fourteen", substitute "thirty".
Section 404.—In sub-section (3), for "fifteen", substitute "thirty".
Section 445.—In sub-section (I) and in sub-section (1A), for "one month", substitute "thirty days".
15
Section 481.—In sub-section (2), for "fourteen", substitute "thirty".
Section 509.—In sub-section (6), for "twenty-one", substitute "thirty".
Section 516.—In sub-section (1), for "twenty-one", substitute 20 "thirty".
Section 559.—In sub-section (2), for "twenty-one", substitute "thirty".
Section 592.—In sub-section (1), for "one month", substitute "thirty days".
25
S. L, SHAKDHER,
Secretary.
PRINTED IN INDIA BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO PQAD, NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI. 1 0 65
REGISTERED NO. D. 221
The Gazette of India
EXTRAORDINARY
PART II—Section 2
PUBLISHED BY AUTHORITY
No. 6] NEW DELHI, FRID AY, FEBRUARY 26,1965/pHALGUNA 7,1886
Separate paging is given to this Part in order that it may be filed
as a separate compilation
RAJYA SABHA.
The following Bills were introduced in the Rajya Sabha on the 26th February, 1956: —
I
BILL NO. XXXI OF 1964
A Bill further to amend the Constitution of India.
BE it enacted by Parliament in the Sixteenth Year of the Republic of India as follows: —
1. This Act may be called the Constitution (Amendment) Act,
Short title.
1965.
2. In article 319 of the Constitution,—
Amend- ment of article 319 (i) in clause (b), after the words "under the Government of a State" the words "without the approval of the Governor of the State and the President of India" shall be inserted;
(ii) in clause (c), after the words "under the Government of a State" the words "without the approval of the President of India" shall be inserted.
115
H6 THE GAZETTE OF INDIA EXTRAORDINARY [PART IISTATEMENT OF OBJECTS AND REASONS
Under clause ('fa) of article 319 of the Constitution, the Chairman of a State Public Service Commission, on ceasing to hold office, is eligible for appointment as the Chairman or any other member of the Union Public Service Commission or as the Chairman of any other State Public Service Commission but not for any other em- ployment either under the Government of India or under the Gov- ernment of a State. Under clause (c) of the same article, a member other than the Chairman of the Union Public Service Commission, on ceasing to hold office, is eligible for appointment as the Chairman of the Union Public Service Commission or as the Chairman of a State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State. In the context of present times, it is felt that this provision should be liberalised. In this connection, attention is invited to sub- section (3) of section 265 of the Government of India Act, 1035— which provision article 319 of the Constitution follows largely— under which it was possible for a member of the Federal or of any Provincial Service Commission, other than the Chairman of the Federal Commission and the Chairman of a Provincial Commission, to accept employment under the Crown in India with the approval, in the case of an appointment in connection with the affairs of a Province, of the Governor of the Province in his discretion and, in the case of any other appointment, of the Governor-General in his discretion. The proposed amendment to article 319 seeks to bring the article more or less in line with the said provision of the Gov- ernment of India Act.
Hence the Bill.
J. SIVASHANMUGAM PILLAI-
SEC. 2] THE GAZETTE OF INDIA EXTRAORDINARY 117II
BILL NO. XXVIII OF 1964
A Bill further to amend the Constitution oj India.
BE it enacted by Parliament in the Sixteenth Year of the
Republic of India as follows: —
Short title.
1. This Act may be called the Constitution (Amendment) Act,
1965.
Amend- ment of article 148.
2. In article 148 of the Constitution, in clause (4), for the words "either under the Government of India or under the Government of any State" the words "under the Government of India, or under the Government of any State, or under any private body, in any capacity whatsoever," shall be substituted.
3. In article 319 of the Constitution,—
Amend- ment of article 319.
(i) in clause (a), for the words "either under the Govern- ment of India or under the Government of a State", the words "under the Government of India, or under the Government of a State, or under a private body, in any capacity whatsoever" shall be substituted;
(ii) in clause (b), for the words "either under the Govern- ment of India or under the Government of a State", the words "under the Government of India, or under the Government of a State, or under a private body, in any capacity whatsoever" shall be substituted.
n8 THE GAZETTE OF INDIA EXTRAORDINARY [PART IISTATEMENT OF OBJECTS AND REASONS
Instances oi acceptance of office under a private body by the Comptroller and Auditor-General of India or by the Chairman of the Union Public Service Commission or by the Chairman of the Public Service Commission of a State, after they have ceased to hold such offices, are not uncommon. Under clause (4) of article 148 and under clause (a) of article 319 of the Constitution, the Comptroller and Auditor-General of India and the Chairman of the Union Public Service Commission, respectively, are not eligible for further em- ployment either under the Government of India or under the Gov- ernment of any State after they have ceased to hold their respective offices. Under clause (b) of article 319 of the Constitution, the Chairman of a State Public Service Commission, on ceasing to hold office, is eligible for appointment as the Chairman or any other mem- ber of the Union Public Service Commission, or as the Chairman of any other State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State- It is felt that in the interest of maintenance of the highest standards of integrity and impartiality in these high offices, the ban should also apply to the holding of offices under private bodies, even in an honorary capacity.
Hence this Bill.
J. H. JOSHI.
SEC. 2] THE GAZETTE OF INDIA EXTRAORDINARY I I9III
BILL NO. Ill OF 1965
A Bill further to amend the Constitution of India.
BE it enacted by Parliament in the Sixteenth Year of the
Republic of India as follows: —
Short title.
1. This Act may be called the Constitution (Amendment) Act, 1965,
2. In article 101 of the Constitution, in clause (3),—
(i) in sub-clause (b), after the words "as the case may be," the word "or" shall be inserted; and
Amend- ment o* article 101.
(ii) after sub-clause (b), the following sub-clause shall be inserted, namely: —
" (c) is appointed a member of the Council of Ministers in a State,".
120 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—SEC. 2]STATEMENT OF OBJECTS AND REASONS
Instances are not rare where a member, after being appointed a member of the Council of Ministers in a State, did not cease to attend the House of Parliament of which he had been a member at the time of such appointment. This constitutes a constitutional im- propriety. The Bill seeks to remove this serious lacuna by provid- ing that the seat of a member who is appointed a member of the Council of Ministers in any State shall become vacant on such appointment.
A. D. MAN1.
B. N. BANERJEE,
Secretary.
PRINTED IN INDIA, BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI, 1965