REGISTERED No. D. 221 जिस्ट्री सं० डी. 221
भारत को राजपत्र The Gazette of India
असाधारण
EXTRAORDINARY
भाग II संण्ड-2
PART II- Section 2
प्राधिकार से प्रकाशित
PUBLISHED BY AUTHORITY
सं ० 52] नई विल्लो, सोमवार, नवम्बर 22 , 1965/ अग्रह। यग 1, 1887
No. 52] NEW DELHI , MONDAY , NOVEMBER 22 , 1965 / AGRAHAYANA 1 , 1887
इस भाग में भिन्न पृष्ठ संख्या वी आती है जिसमें फि राह अलग संकलन के रूप में रखा जा सके ।
Separate paging is given to this Part in order that it may be filed as a separate compilation .
LOK SABНА
The following Bill was introduced in Lok Sabha on November , 1965 :- the 22nd
BILL NO . 76 OF 1965
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 ( Second Amend- Short title ment ) Act , 1965. and com-
mence- 5 (2) It shall come into force on such date as the Central Govern- ment may , by notification in the Official Gazette , appoint . ment.
I of 1956.
2. In section 240 of the Companies Act , 1956 ( hereinafter refer- Amend- red to as the principal Act ) , in sub - section ( 1A ) , after the words ment of " authorised by him in this behalf " , the words " with the previous section 240 . re approval of that Government " shall be inserted .
(1125) [PART THE GAZETTE OF INDIA EXTRAORDINARY
1126
3. In section 370 of the principal Act , in sub - section ( 2 ) ,-
Amend- ment of section 370 .
(a) in clause ( a ) , in sub - clause ( iii ) and sub -clause ( iv ) , the word " or " shall be inserted at the end ;
5 (b) in clause ( b ) , for sub - clause ( iii ) , the following sub- clauses shall be substituted , namely: -
" ( iii ) by a banking company , or an insurance com- pany , in the ordinary course of its business ; or
( iv ) by a private company , unless it is a subsidiary of a public company ; or
( v ) by a company established with the object of financ- 10 ing industrial enterprises . " .
SEC . 2 ] THE GAZETTE OF INDIA EXTRAORDINARY
1127
STATEMENT OF OBJECTS AND REASONS
The Vivian Bose Commission of Inquiry had recommended inter alia that inter - company loans should rank at par with inter- company investments and should be subject to the same restrictions as the latter . This recommendation was sought to be given effect to by amending section 370 of the Companies Act by section 46 of the Companies ( Amendment ) Act, 1965. It has , however , been noticed that the restrictions placed by this amendment would and securities pro- financial institutions , qually apply in respect of guarantees given vided by certain classes of companies viz: insurance companies and private companies simplicitor , and would , therefore , act as a serious hindrance to their normal functioning . Since loans given by such companies have already been exempted from the scope of the restriction , it has been decided to afford similar exemption to guarantees given and securities provided by such companies .
2. Opportunity is also being taken to make a consequential amendment to sub - section ( 1A ) of section 240 on the lines of simi- lar amendments made to clause ( a ) of sub - section ( 1) and clause (a) of sub - section ( 3 ) of that section by the Companies (Amend- ment ) Act , 1965 .
3. The Bill seeks to achieve the above objects .
B. R. BHAGAT .
NEW DELHI ;
The 12th November , 1965 .
S. L. SHAKDHER ,
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 .