How to Register under Goods and Service Tax as Practitioner

GST Also brings a concept of GST Practitioner for those who intend to appear before the GST Authority for any matter. The following article discusses the eligibility criteria, relevant forms, procedure etc.

ELIGIBILITY CRITERIA TO APPLY FOR GST PRACTITIONER

Following are the eligibility criteria to apply for GST Practitioner:

a.     i. The person is a citizen of India.

ii. The person is of a sound mind.

iii. The person is not adjudicated as insolvent.

iv. The person has not been convicted by a competent court for an offence with imprisonment not less than two years

And satisfies any of the following conditions,

b. He is retired officer of Group-B Gazetted officer of any state VAT Department or CBEC or department of Revenue, or

c. A Graduate or Post graduate of commerce, Law, Banking, Business administration, Business Management from any Indian University established by law.

d. Person who has cleared any degree (as mentioned in “c”) examination of foreign university as recongnized by Indian university

e. Chartered Accountant Or Cost and Management Accountant Or Company Secretary

Procedure to get Registered

Step : 1 – Make application in GST PCT-1

Step : 2 – Authorized officer shall after making enquiry about the eligibility, issue the certificate in GST PCT – 2

♦ Online list of GST Practitioner

A list of goods and services tax practitioner enrolled shall be maintained on the Common Portal in FORM GST PCT -5

♦ Online Authority by Registered person

Any registered person may, at his option, authorize a goods and services tax practitioner on the Common Portal in FORM GST PCT -6 or, at any time, withdraw such authorization in FORM GST PCT -7 and the goods and services tax practitioner so authorized shall be allowed to undertake such tasks as indicated in FORM GST PCT -6 during the period of authorization.

♦ Statement furnished by the Tax Practitioner

Where a statement required to be furnished by a registered person has been furnished by the goods and services tax practitioner authorized by him, a confirmation shall be sought from the registered person over email or SMS and the statement furnished by the goods and services tax practitioner shall be made available to the registered person.

♦ Activities on behalf of registered person

A goods and services tax practitioner can undertake any or all of the following activities on behalf of a registered person, if so authorised by the registered person to:

(a) Furnish details of outward and inward supplies;

(b) Furnish monthly, quarterly, annual or final return;

(c) Make deposit for credit into the electronic cash ledger;

(d) File a claim for refund; and

(e) File an application for amendment or cancellation of registration.

♦ Condition for appearance

No person shall be eligible to attend before any authority, as a goods and services tax practitioner, in connection with any proceedings under the Act on behalf of any registered person or un-registered person unless his name has been entered in the list maintained in Form GST PCT-5.

♦ Found Guilty

If any goods and services tax practitioner is found guilty of misconduct in connection with any proceedings under the Act, the authorised officer may, by order, in FORM GST PCT – 3  direct that he shall henceforth be disqualified under section 48, after giving him a notice to show cause in FORM GST PCT – 4 against such disqualification and after giving him a reasonable opportunity of being heard.

Such person can file appeal to the Commissioner against such order for within 30 days.






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How to Register under Goods and Service Tax as Practitioner

GST Also brings a concept of GST Practitioner for those who intend to appear before the GST Authority for any matter. The following article discusses the eligibility criteria, relevant forms, procedure etc.

ELIGIBILITY CRITERIA TO APPLY FOR GST PRACTITIONER

Following are the eligibility criteria to apply for GST Practitioner:

a.     i. The person is a citizen of India.

ii. The person is of a sound mind.

iii. The person is not adjudicated as insolvent.

iv. The person has not been convicted by a competent court for an offence with imprisonment not less than two years

And satisfies any of the following conditions,

b. He is retired officer of Group-B Gazetted officer of any state VAT Department or CBEC or department of Revenue, or

c. A Graduate or Post graduate of commerce, Law, Banking, Business administration, Business Management from any Indian University established by law.

d. Person who has cleared any degree (as mentioned in “c”) examination of foreign university as recongnized by Indian university

e. Chartered Accountant Or Cost and Management Accountant Or Company Secretary

Procedure to get Registered

Step : 1 – Make application in GST PCT-1

Step : 2 – Authorized officer shall after making enquiry about the eligibility, issue the certificate in GST PCT – 2

♦ Online list of GST Practitioner

A list of goods and services tax practitioner enrolled shall be maintained on the Common Portal in FORM GST PCT -5

♦ Online Authority by Registered person

Any registered person may, at his option, authorize a goods and services tax practitioner on the Common Portal in FORM GST PCT -6 or, at any time, withdraw such authorization in FORM GST PCT -7 and the goods and services tax practitioner so authorized shall be allowed to undertake such tasks as indicated in FORM GST PCT -6 during the period of authorization.

♦ Statement furnished by the Tax Practitioner

Where a statement required to be furnished by a registered person has been furnished by the goods and services tax practitioner authorized by him, a confirmation shall be sought from the registered person over email or SMS and the statement furnished by the goods and services tax practitioner shall be made available to the registered person.

♦ Activities on behalf of registered person

A goods and services tax practitioner can undertake any or all of the following activities on behalf of a registered person, if so authorised by the registered person to:

(a) Furnish details of outward and inward supplies;

(b) Furnish monthly, quarterly, annual or final return;

(c) Make deposit for credit into the electronic cash ledger;

(d) File a claim for refund; and

(e) File an application for amendment or cancellation of registration.

♦ Condition for appearance

No person shall be eligible to attend before any authority, as a goods and services tax practitioner, in connection with any proceedings under the Act on behalf of any registered person or un-registered person unless his name has been entered in the list maintained in Form GST PCT-5.

♦ Found Guilty

If any goods and services tax practitioner is found guilty of misconduct in connection with any proceedings under the Act, the authorised officer may, by order, in FORM GST PCT – 3  direct that he shall henceforth be disqualified under section 48, after giving him a notice to show cause in FORM GST PCT – 4 against such disqualification and after giving him a reasonable opportunity of being heard.

Such person can file appeal to the Commissioner against such order for within 30 days.






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Sebi Board Meeting outcome

The SEBI Board met in Mumbai today and took the following decisions:

1. Restructuring in stressed companies 
With a view to facilitate turnaround of listed companies in distress which will benefit their shareholders and lenders, the Board has approved the following proposals:  
Presently, relaxations from preferential issue requirements under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and from open offer obligations under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011  are available for lenders undertaking restructuring of listed companies in distress through Strategic Debt Restructuring (SDR) scheme in terms of the guidelines of RBI. It has been represented to SEBI that where the lenders have acquired shares and propose to divest the same to a new investor, they are facing difficulties as the new investor would need to make a mandatory open offer which would reduce the funds available for investment in the company. Hence, they have requested for exemptions to these investors. Accordingly, it has been decided to extend the aforesaid relaxations to the new investors acquiring shares in distressed companies pursuant to such restructuring schemes. However, such relaxations shall be subject to certain conditions like approval by the shareholders of the companies by special resolution and lock-in of their shareholding for a minimum period of three years. Further, it has also been decided to extend the said relaxations to the lenders under other restructuring schemes undertaken in accordance with guidelines of RBI. 
2.    Resolution plans approved under the Insolvency and Bankruptcy Code, 2016
The Board has also approved the proposal to provide exemption from open offer obligations, under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, for acquisitions pursuant to resolution plans approved by NCLT under the Insolvency and Bankruptcy Code, 2016. 

3. Extension of Lock-in-relaxation to Category II Alternative Investment Funds (AIF)
Presently, in case of an IPO, there are relaxed rules for lock-in provision to Category I AIFs. The Board approved the proposal for extending such relaxation to Category II AIFs also. This would bring about uniformity, ease of doing business and expand the investor base available for capital raising.
4. Consultation paper on Easing of access norms for investment by FPIs
 FPI regime, which commenced from June 01, 2014, has been put in place with the objectives to rationalize various foreign portfolio investment routes, simplify the procedures to attract more foreign funds.  SEBI proposes to carry out appropriate amendment (s) to SEBI (Foreign Portfolio Investors) Regulations, 2014 and issue necessary circular/guidelines etc. issued thereunder, to further ease the access norms for investments by FPIs in Indian securities market. 
Some of the proposed changes are as follows:
1. Expansion of eligible jurisdictions for grant of FPI registration to category I FPIs by including countries having diplomatic tie-ups with India.
2. Simplification of broad based requirements. 
3. Rationalization of fit and proper criteria. 
4. Permitting FPIs operating under the Multiple Investment Managers (MIM)structure and holding FVCI registration to appoint multiple custodians.
Accordingly, the Board considered and approved the proposal for initiation of public consultation process before implementing the aforesaid proposed changes to SEBI (Foreign Portfolio Investors) Regulations, 2014 and necessary circular/guidelines etc. issued thereunder.
5. Offshore Derivative Instruments (ODI)
The Board has decided to levy a “Regulatory Fee” of US$1000 on each ODI subscriber, to be collected and deposited by the ODI issuing FPI of such ODI subscriber, once every three years, starting from April 1, 2017. SEBI shall amend SEBI (FPI) Regulations, 2014 to implement the decision taken by the Board.
The Board has decided to prohibit ODIs from being issued against derivatives, except on those which are used for hedging purposes. SEBI will issue a circular in this regard.
6. Growth and Development of Equity Derivatives Market in India
A paper was presented to the Board on “Growth and Development of Equity Derivatives Market in India”. It was decided to have stakeholder consultation on the need to review the derivatives market framework including product suitability for investors so as to further strengthen the framework in line with the emerging trends and global best practices.

7. SEBI Annual Report 2016-17
The Board considered and approved the SEBI Annual Report 2016-17. In compliance with Section 18(2) of SEBI Act, 1992, the same Annual Report would be submitted to the Central Government.







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Sebi Board Meeting outcome

The SEBI Board met in Mumbai today and took the following decisions:

1. Restructuring in stressed companies 
With a view to facilitate turnaround of listed companies in distress which will benefit their shareholders and lenders, the Board has approved the following proposals:  
Presently, relaxations from preferential issue requirements under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and from open offer obligations under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011  are available for lenders undertaking restructuring of listed companies in distress through Strategic Debt Restructuring (SDR) scheme in terms of the guidelines of RBI. It has been represented to SEBI that where the lenders have acquired shares and propose to divest the same to a new investor, they are facing difficulties as the new investor would need to make a mandatory open offer which would reduce the funds available for investment in the company. Hence, they have requested for exemptions to these investors. Accordingly, it has been decided to extend the aforesaid relaxations to the new investors acquiring shares in distressed companies pursuant to such restructuring schemes. However, such relaxations shall be subject to certain conditions like approval by the shareholders of the companies by special resolution and lock-in of their shareholding for a minimum period of three years. Further, it has also been decided to extend the said relaxations to the lenders under other restructuring schemes undertaken in accordance with guidelines of RBI. 
2.    Resolution plans approved under the Insolvency and Bankruptcy Code, 2016
The Board has also approved the proposal to provide exemption from open offer obligations, under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, for acquisitions pursuant to resolution plans approved by NCLT under the Insolvency and Bankruptcy Code, 2016. 

3. Extension of Lock-in-relaxation to Category II Alternative Investment Funds (AIF)
Presently, in case of an IPO, there are relaxed rules for lock-in provision to Category I AIFs. The Board approved the proposal for extending such relaxation to Category II AIFs also. This would bring about uniformity, ease of doing business and expand the investor base available for capital raising.
4. Consultation paper on Easing of access norms for investment by FPIs
 FPI regime, which commenced from June 01, 2014, has been put in place with the objectives to rationalize various foreign portfolio investment routes, simplify the procedures to attract more foreign funds.  SEBI proposes to carry out appropriate amendment (s) to SEBI (Foreign Portfolio Investors) Regulations, 2014 and issue necessary circular/guidelines etc. issued thereunder, to further ease the access norms for investments by FPIs in Indian securities market. 
Some of the proposed changes are as follows:
1. Expansion of eligible jurisdictions for grant of FPI registration to category I FPIs by including countries having diplomatic tie-ups with India.
2. Simplification of broad based requirements. 
3. Rationalization of fit and proper criteria. 
4. Permitting FPIs operating under the Multiple Investment Managers (MIM)structure and holding FVCI registration to appoint multiple custodians.
Accordingly, the Board considered and approved the proposal for initiation of public consultation process before implementing the aforesaid proposed changes to SEBI (Foreign Portfolio Investors) Regulations, 2014 and necessary circular/guidelines etc. issued thereunder.
5. Offshore Derivative Instruments (ODI)
The Board has decided to levy a “Regulatory Fee” of US$1000 on each ODI subscriber, to be collected and deposited by the ODI issuing FPI of such ODI subscriber, once every three years, starting from April 1, 2017. SEBI shall amend SEBI (FPI) Regulations, 2014 to implement the decision taken by the Board.
The Board has decided to prohibit ODIs from being issued against derivatives, except on those which are used for hedging purposes. SEBI will issue a circular in this regard.
6. Growth and Development of Equity Derivatives Market in India
A paper was presented to the Board on “Growth and Development of Equity Derivatives Market in India”. It was decided to have stakeholder consultation on the need to review the derivatives market framework including product suitability for investors so as to further strengthen the framework in line with the emerging trends and global best practices.

7. SEBI Annual Report 2016-17
The Board considered and approved the SEBI Annual Report 2016-17. In compliance with Section 18(2) of SEBI Act, 1992, the same Annual Report would be submitted to the Central Government.







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DIR-5 to be deployed as an e-form

DIR-5 to be deployed as an e-form
In terms of Rule 11(f) of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Central Government or Regional Director (Northern Region), Noida or any officer authorised by the Regional Director may, upon being satisfied on verification of particulars or documentary proof attached with the application received alongwith fee as specified in Companies (Registration Offices and Fees) Rules, 2014 from any person, cancel or deactivate the DIN in case on an application made in Form DIR-5 by the DIN holder to surrender his or her DIN along with declaration that he has never been appointed as director in any company and the said DIN has never been used for filing of any document with any authority, the Central Government may deactivate such DIN.
The said Form DIR-5 for the application for surrender for Director Identification Number had been an offline form until now.
However, MCA in its recent notice has stated that “DIR-5 (Application for surrender of Director Identification Number) will be deployed as an e-form for filing purposes w.e.f 21st June, 2017. Stakeholders who wish to surrender DINs shall be required to file this e-form instead of it being filed as an attachment to Form RD-1”.







Company Secretary GAURAV SHARMA+919990694230
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DIR-5 to be deployed as an e-form

DIR-5 to be deployed as an e-form
In terms of Rule 11(f) of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Central Government or Regional Director (Northern Region), Noida or any officer authorised by the Regional Director may, upon being satisfied on verification of particulars or documentary proof attached with the application received alongwith fee as specified in Companies (Registration Offices and Fees) Rules, 2014 from any person, cancel or deactivate the DIN in case on an application made in Form DIR-5 by the DIN holder to surrender his or her DIN along with declaration that he has never been appointed as director in any company and the said DIN has never been used for filing of any document with any authority, the Central Government may deactivate such DIN.
The said Form DIR-5 for the application for surrender for Director Identification Number had been an offline form until now.
However, MCA in its recent notice has stated that “DIR-5 (Application for surrender of Director Identification Number) will be deployed as an e-form for filing purposes w.e.f 21st June, 2017. Stakeholders who wish to surrender DINs shall be required to file this e-form instead of it being filed as an attachment to Form RD-1”.







Company Secretary GAURAV SHARMA+919990694230
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Companies Act, 2013 – Sections 230/231 – Compromise or arrangement

  1. This petition was originally preferred by the petitioner under the provisions of section 391 of the Companies Act, 1956 (‘1956 Act’) for sanction and approval of a scheme of arrangement (‘the Scheme’) as contemplated between the equity shareholders and creditors of the petitioner-company before the hon’ble High Court of Delhi at New Delhi. Some of the salient features of the Scheme annexed along with the petition as Annexure 10 are given as hereunder :
    Clause 1 :
    1.1 This scheme of arrangement is prepared and presented under section 391 read with sections 100 to 104 of the Companies act, 1956 and other applicable provisions of the Act by RS LiveMedia (P.) Ltd. (‘the company’), inter alia, entering into a scheme of arrangement with its equity shareholders for purchase of 60,00,000 of its own equity shares of Re.1 each (fully paid-up) by the company for an agreed consideration of Rs. 15,00,00,000 at Rs. 22.50 per share, thus, resulting in the cancellation of the corresponding 60,00,000 equity shares (“the Scheme’ or ‘Scheme’).
    Clause 11 :
    11.2 Upon the coming into effect of this scheme 60,00,000 shares of the company as proposed to be bought back pursuant to the scheme would stand cancelled, and the paid-up capital of the company will be written off by Rs. 60,00,000.
    11.3 The amount of consideration, i.e., the value paid to the shareholders in respect to the buy-back of shares shall be adjusted against the paid-up share capital of the company to the extent of the share capital being reduced.
    11.4 The amount of consideration over and above the par value of the share capital shall be first adjusted against the share premium account of the company and balance, if any, would be adjusted against the credit balance outstanding in the profit and loss account.
  2. Further in clause 6 of the Scheme the effect of the above purchase of shares as contemplated under the Scheme in relation to its capital structure, prior to, and after buy back, has been given which are extracted hereunder :
    Clause 6 :
    The paid-up share capital of the company as on 31st March, 2016 is as under :
    Particulars Amount in Rupees
    Authorised Capital
    6,50,00,000 equity shares of Re.1 each 6,50,00,000
    1,00,00,000 preference shares of Re. 1 each 1,00,00,000
    Total 7,50,00,000
    Issued, subscribed and paid-up capital
    1,00,00,000 equity shares of Re.1 each 1,00,00,000
    Total 1,00,00,000
    Subsequent to 31st March, 2016 the company is in the process of buying back 60,00,000 equity shares. 60,00,000 equity shares of Re. 1 each fully paid-up would be bought back by the company, from the all the shareholders in proportion to their existing shareholding. Pursuant to such buyback, the share capital structure of the company would be as under :
    Shares Amount in rupees
    40,00,000 equity shares of Re. 1 each 40,00,000
    Total 40,00,000
  3. As per the scheme, the “appointed date” shall be the date on which the Board of directors of the company decide to buy-back the shares pursuant to the order of the High court approving the scheme and shall not be less than 30 days of the effective date or any such date as may be decided by court and the “effective date” means the date on which the certified copies of the order(s) of the court sanctioning the scheme approved by the court is filed with the Registrar of Companies, NCT of Delhi and Haryana at New Delhi. Any reference in the scheme of “upon the scheme becoming effective” or “effectiveness of the scheme” shall mean with respect to the “effective date”. In clause 20 of the scheme, the scheme is made conditional upon and subject to the following, namely :
    Clause 20 :
    20.1.1 Approval of the majority
    The approval of, and agreement to the scheme by the requisite majority of the members and creditors of the company if required and as may be directed by the court on the application made for directions under sections 391 of the Act for calling meeting and necessary resolutions being passed under the Act.
    20.1.2 Sanction of the court
    The sanctions and necessary orders under the provisions of section 391 read with sections 100 to 104 of the Act, being obtained by the company from court.
    20.1.3 Filing of court order and scheme with the Registrar of Companies, Delhi and Haryana at New Delhi
    Certified copy of the order of the court sanctioning this Scheme along with the scheme as approved by the court being filed with the Registrar of Companies, National Territory of Delhi and Haryana by the company.
    20.1.4 Approval of the Central Government or any other authority
    The requisite sanction, consent or approval of the government or regulatory authorities which by law may be necessary for the implementation of the scheme.
  4. Clause 17 of the scheme contemplates the filing of an application before the High Court for directions for dispensation or convening of the meeting of the members and creditors of the petitioner with all reasonable despatch, and in pursuance of the same the petitioner herein had moved an application before the hon’ble High Court of Delhi seeking for dispensation with convening the meetings of the equity shareholders, secured and unsecured creditors of the petitioner. The hon’ble High Court of Delhi on the basis of consents having been obtained and produced before it in relation to all the equity shareholders as well as unsecured creditors had dispensed, vide order dated 29th August, 2016, with the meetings as prayed for and in relation to secured creditors since there was none, the necessity of convening or dispensing with the meeting did not arise.
  5. Subsequent to the above, the petitioner as can be discerned from the records had filed and moved the second motion in the instant petition in which the hon’ble High Court of Delhi on 27th September, 2016 had ordered notice to be issued to the Registrar of Companies (‘RoC’) as well as Regional Director and also publication to be carried out in the newspapers ‘Statesman’ English and ‘Jansatta’ Hindi, Delhi edition returnable on 10th February, 2017.
  6. Pending proceedings before the hon’ble High Court of Delhi, by virtue of Notification No.3677(E) dated 7th December, 2016, issued by the Ministry of Corporate Affairs provisions, inter alia, relating to compromise, arrangements and reconstruction as contained in sections 230 to 232 of the Companies Act, 2013 had been notified by the Central Government appointing 15th December, 2016 as the date on which the provisions were to come into force and further in view of Notification No. GSR 1119(E) dated 7th December, 2016 the Central Government prescribed Rules called the Companies (Transfer of Pending Proceedings) Rules, 2016 whereby all proceedings relating to compromise, arrangements and reconstruction amongst others stood transferred to the Benches of the Tribunal exercising territorial jurisdiction, save those proceedings which are reserved for orders. In pursuance of the above notifications, the hon’ble High Court of Delhi has transferred the instant petition and transmitted the records therein by virtue of its order dated 10th February, 2017 to this Tribunal for being listed on 6th March, 2017 and, thus, presently this Tribunal, is, hence, seized of the instant petition for its due consideration and disposal in accordance with the law applicable.
  7. From the records available before us, it is seen that the Office of the Regional Director/RoC have duly filed their observations in relation to the scheme being the subject-matter of the instant petition and a perusal of the report discloses that the authorities have not made any adverse comments including Income-tax Department and Ministry of Information and Broadcasting.
  8. However, at the time of hearing on 21st March, 2017 when the learned counsel for the petitioner took us through the scheme, the salient features of which has been already extracted in preceding paragraph 6 of this order, we confronted the counsel for the petitioner with a poser as to whether the Scheme complies with the provisions of section 230 of the Companies Act, 2013, particularly sub-section (10) of section 230 which is reproduced below for ready reference :
    “No compromise or arrangement in respect of any buy-back of securities under this section shall be sanctioned by the Tribunal unless such buy-back is in accordance with the provisions of section 68.”
  9. A perusal of the above provision clearly demonstrates that where the scheme contemplates buy-back of shares, as also contemplated herein, such compromise or arrangement can be sanctioned by this Tribunal only if it is in compliance with the provisions of section 68 of the 2013 Act. Learned counsel for the petitioner was candid enough to state that it does not fulfil the requirement of sub-section (10) of section 230 but put forth an argument that the petitioner was not required to comply with it inasmuch as the petition came to be originally filed before the hon’ble High Court of Delhi under the then existing provisions of section 391 of the 1956 Act which did not contain a provision similar to the one contained in 2013 Act and since the company petition had come by way of transfer to this Tribunal, the Tribunal has to apply the 1956 Act even though repealed, as a vested right had accrued to the petitioner, and of which it cannot be deprived off. In effect, the argument of the petitioner is that even though section 230 of the 2013 Act has been notified which effectively now governs the field of sanction of scheme of compromise or arrangement, this Tribunal should consider the scheme only under the erstwhile provisions of the 1956 Act and not under the provisions of the 2013 Act in view of the transfer of the proceedings. According to the counsel for the petitioner taking into consideration the provisions of Companies Act, 1956, this Tribunal has the power to sanction the Scheme on the premise that section 68 of the 2013 Act and section 77A of the 1956 Act are pari materia and the hon’ble High Court of Bombay while considering section 391 read with section 394 and section 77A and sections 100 to 104, all sections to pertaining 1956 Act has held that company could purchase its shares prior to introduction of section 77A provided the scheme or arrangement therefor had been sanctioned under sections 100 to 104. Section 100 does not prescribe the manner in which the reduction of capital is to be effected. Nor is there any limitation on the power of court to confirm the reduction except that it must be first satisfied that all the creditors entitled to object to the reduction have consented or have been paid or secured. It is also held that when the shareholders have approved of the terms of offer and of the acceptance by passing the required resolution, it does not fall within the province of the company court to sit in judgment over that commercial wisdom and to interfere with that decision. An order of a court requiring transfer or cancellation has never been subject to the procedural requirement or even the Companies Act. In support of the above contention learned counsel for the petitioner has placed reliance on the judgment of the hon’ble High Court of Bombay in Securities Exchange Board of India and Union of India v. Sterlite Industries (India) Ltd. [2003] 113 Comp Cas 273.
    In the facts and circumstances of this case two crucial issues arise for our consideration :
    1. Whether the petitioner is right in contending that a “vested right” had accrued to it under the 1956 Act which cannot be taken away by the notification of the provisions relating to sanction of compromises and arrangements by this Tribunal under the 2013 Act as in relation to substantive rights the subsequent enactment, namely, 2013 Act can be only prospective and not retrospective.
    2. Whether in relation to transferred cases from hon’ble High Courts relating to sanction of compromise and arrangements the provisions of the 1956 Act should alone be applied as against those of 2013 Act.
  10. Before venturing to answer the above issues, it would be appropriate to consider the general scheme of the 2013 Act and refer in particular to the relevant provisions of the 2013 Act. It would also be necessary to consider the notifications issued by the Ministry of Corporate Affairs for the Central Government, a reference of some of which has already been made in the preceding paragraph of the present order.
  11. The Companies Act, 2013 received the assent of the President of India on 29th August, 2013 and was published in the Gazette of India, Extraordinary, Part II, section 1, No.27 dated 30th August, 2013.
    Section 1(3) of the 2013 Act in relation to the commencement and also relevant for the case on hand is reproduced below :
    “(3) This section shall come into force at once and the remaining provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.”
  12. Thus, it is evident that there is a flexibility available to the Central Government to enforce various sections of the 2013 Act on different dates. Section 1(4)(a) makes the Act applicable to companies incorporated under the Act or under any previous company law. The power of the Central Government to make rules for carrying out the provisions of the Act is contained in section 469 of the Act. Section 434 of the 2013 Act deals with the power of the Central Government to transfer certain pending proceedings from other judicial forums including the High Courts to this Tribunal. Section 470 of the Act clothes the Central Government with the power to remove difficulties in case any difficulty arises in giving effect to the provisions of the Act. Section 465 of the Act provides for repeal and savings of certain enactments by virtue of which Companies Act, 1956 stands repealed, however, the second proviso to sub-section (1) of section 465 saves the applicability of the provisions of Companies Act, 1956 to the proceedings, inter alia, before the court in relation to the jurisdiction, powers, authority and functions as if it has not been repealed until a date is notified by the Central Government under sub-section (1) of section 434 for transfer of all matters, proceedings or cases to the Tribunal. It is also pertinent to note that section 407 to section 433 deals with the various aspects of this Tribunal as well as the Appellate Tribunal including its constitution. The above in a nutshell gives a overview of the provisions relevant to grapple with the issues on hand.
  13. Looking back, it is seen that the implementation of the 2013 Act have been or are being done in a stage by stage manner and in this connection we are focusing only on the different dates of notifications issued, bringing into force the relevant provisions of the 2013 Act in relation to compromise and arrangements :
    Date from which made applicable Notified provisions Relating to
    12th September, 2013 Sections 407 to 414 etc. Constitution of NCLT & NCLAT
    12th September, 2013 Section 469 Power of Central Government to make rules
    12th September, 2013 Section 470 Power to remove difficulties
    1st April, 2014 Section 68 Buy-back of shares
    1st June, 2016 Sections 415 to 433 Benches of Tribunal, Procedure, etc.
    1st June, 2016 Section 434 except clause (c) of sub-section (1) Transfer of proceedings from erstwhile CLB to NCLTs
    15th December, 2016 Section 230 except sub-sections (11) and (12) and Sections 231, 232 Inter alia, relating to compromise, arrangements and amalgamations
  14. Consequent to the notification dated 7th December, 2016 issued by the Central Government and made effective from 15th December, 2016, wherein provisions of sections 230 to 232, save sub-sections (11) and (12) of section 230 having been brought into force, the Central Government had issued two other Notifications as already noticed in the preceding paragraph of the order, namely, SO 3676(E) dated 7th December, 2016 titled “Companies (Removal of Difficulties) Fourth Order, 2016” by virtue of powers contained in section 470 of the Act, whereby section 434(1)(c) of 2013 Act was notified with certain inclusions arising out of Insolvency and Bankruptcy Code, 2016 having been brought into force with effect from 1st December, 2016 as well as transfer of all proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, though not in entirety, pending before the High Court and District Courts. Since section 434 of the 2013 Act as amended by the above said notification will have a significant bearing on issues on hand the entire section as it stands after its amendment vide the above notification is reproduced hereunder for ready reference :
    “434. Transfer of certain pending proceedings.-
    1. On such date as may be notified by the Central Government in this behalf, –
    2. The Central Government may make rules consistent with the provisions of this Act to ensure timely transfer of all matters, proceedings or cases pending before the Company Law Board or the courts, to the Tribunal under this section.”
      • all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956 (1 of 1956), immediately before such date shall stand transferred to the Tribunal and the Tribunal shall dispose of such matters, proceedings or cases in accordance with the provisions of this Act ;
      • any person aggrieved by any decision or order of the Company Law Board made before such date may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order :
        Provided that the High Court may if it is satisfied that the appellant was prevented by sufficient cause from filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty days ; and
      • all proceedings under the Companies Act, 1956 (1 of 1956), including proceedings relating to arbitration, compromise, arrangement and reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the stage before their transfer :
        Provided that only such proceedings relating to the winding up of companies shall be transferred to the Tribunal that are at a stage as may be prescribed by the Central Government :
        Provided further that only such proceedings relating to cases other than winding up, for which orders for allowing or otherwise of the proceedings are not reserved by the High Courts shall be transferred to the Tribunal :
        Provided further that –
        1. all proceedings under the Companies Act, 1956 (1 of 1956) other than the cases relating to winding up of companies that are reserved for orders for allowing or otherwise such proceedings ; or
        2. the proceedings relating to winding up of companies which have not been transferred from the High Courts,
      shall be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959.” (Italics supplied)
  15. A bare reading of clause (c) of sub-section (1) of section 434 would clearly make it evident that only in relation to proceedings relating to winding up of companies which have not been transferred from the High Courts and in relation to all proceedings for which orders have been reserved for allowing or otherwise are to be dealt with in accordance with the provisions of Companies Act, 1956 and the Companies (Court) Rules, 1959. Thus, it is implied from the above that in relation to all proceedings which have been transferred from High Court to this Tribunal, the same has to be dealt with in accordance with the provisions of 2013 Act and not under the 1956 Act.
  16. The above position becomes amply clear in view of section 465 of the 2013 Act concerning repeal and savings. Those provisions which are pertinent to the issue on hand alone are reproduced hereunder :
    “465. (1) The Companies Act, 1956 (1 of 1956) and the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) (hereinafter in this section referred to as the repealed enactments) shall stand repealed :…
    (2) Notwithstanding the repeal under sub-section (l) of the repealed enactments, –
    (a) anything done or any action taken or purported to have been done or taken, including any rule, notification, inspection, order or notice made or issued or any appointment or declaration made or any operation undertaken or any direction given or any proceeding taken or any penalty, punishment, forfeiture or fine imposed under the repealed enactments shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act ;….
    (3) The mention of particular matters in sub-section (2) shall not be held to prejudice the general application of section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal of the repealed enactments as if the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) were also a Central Act.”
  17. It is again manifest from the above reading of section 470 of the 2013 Act that the 1956 Act has been made applicable only until a date is notified by the Central Government under sub-section (1) of section 434 for transfer of all matters, proceedings or cases to the Tribunal and once notification is issued, as in the present instance concerning matters or proceedings or cases relating to arbitration, compromises, arrangements or reconstruction, save the one reserved for orders as detailed above for which 1956 Act continues to apply. The 1956 Act stands repealed in relation to the one which has been transferred and, hence, this Tribunal cannot invoke the said provisions to deal with matters or proceedings or cases relating to arbitration, compromises, arrangements or reconstruction.
  18. It is also pertinent to notice that this Tribunal is a creature of the 2013 Act and cannot travel beyond the contours of the same unless specifically empowered and cannot arrogate to itself powers beyond it. A reading of sub-section (2) of section 470 of the 2013 Act as extracted above also makes it clear that even though anything done or any action taken or purported to have been done or taken can be deemed to have been done or taken under the corresponding provisions of 2013 Act notwithstanding the repeal of the 1956 Act, provided the same is not inconsistent with the provisions of the 2013 Act. In the instant case, as already pointed out, the scheme which contemplates the action of buy-back of shares exceeding the statutory prescribed maximum under section 68 of 2013 Act by the petitioner is inconsistent with the provisions of 2013 Act as compared to the repealed enactment, namely, 1956 Act and, hence, the said action on the part of the petitioner cannot be saved by this Tribunal by upholding the Scheme and sanctioning it. In effect it also makes the decision cited by learned counsel for the petitioner inapplicable to the facts of the case in hand. Hence, looking from any angle this Tribunal is perforced to apply the provisions of 2013 Act in considering the sanction of the scheme and not as espoused by the petitioner for the applicability of the 1956 Act and, hence, issue No. (ii) is thereby answered accordingly.
  19. Having come to the above conclusion in relation to issue No. (ii), the issue of vested right becomes academic but, however, we also deal with the same as we are of the considered view, taking into consideration the very nature of Schemes of Compromise and Arrangement as contemplated under sections 230 to 232 of the 2013 Act or for that matter under the 1956 Act can it be claimed that a vested right arises or in other words has a vested or substantive right accrued to the petitioner under the facts and circumstances of the case. We are unable to accept and in this we are fortified by the observations made in the judgment, namely, Suhas H Pophale v. Oriental Insurance Co. Ltd. and its Estate Officer [2014] 4 SCC 657, wherein the hon’ble Supreme Court in paragraph 53 of the judgement has of vested rights and quoted the same with approval to the following effect :
    …. “Effect on vested rights
    Under common law principles of construction and interpretation the repeal of a statute or the abrogation of a common law principle operates to divest all the rights accruing under the repealed statute or the abrogated common law, and to halt all proceedings not concluded prior to the repeal.
    However, a right which has become vested is not dependent upon the common law or the statute under which it was acquired for its assertion, but has an independent existence. Consequently, the repeal of the statute or the abrogation of the common law from which it originated does not efface a vested right, but it remains enforceable without regard to the repeal.
    In order to become vested, the right must be a contract right, a property right, or a right arising from a transaction in the nature of a contract which has become perfected to the degree that the continued existence of the statute cannot further enhance its acquisition.”
  20. Again when one of us (M M Kumar, President, National Company Law Tribunal) sitting in the Full Bench of the Punjab & Haryana High Court and while authoring the judgment rendered in Parshotam Dass v. State of Haryana AIR 2003 P&H 301 in connection with right of intra-court appeal as provided in section 100A of Civil of Procedure Code, 1908 which was sought to be taken away by virtue of 2002 Amendment Act, has observed in relation to vested right as follows :
    An acquired or vested right would be one which is acquired and enjoyed and it would not include a right which is yet to accrue on some future date. Reference in this regard may be made to cases relating to public services. It is fairly well settled that in cases where a person has already earned promotion, the same cannot be impliedly taken away by subsequent amendment of the statutory rules because it becomes a vested right.
    It is further advantageous to point out that mere existence of a right to appeal on the date of repeal of a statute cannot be considered a vested right or an accrued right. An available right would become vested right only when it is exercised otherwise it would continue to embryological rights.
  21. Applying the above yardstick it cannot be said that a vested right has accrued to the petitioner which is sought to be taken away by repeal and subsequent enactment. The petitioner, by virtue of clause 20 of the scheme as reproduced in the initial paragraphs of the instant order itself has made the Scheme conditional upon certain contingencies and compliances one being the sanction of the High Court, presently by this Tribunal, being fully aware of the contingencies and that the scheme hinges upon the statute and cannot exist independent of it.
  22. Taking into consideration the position of law presently in force, we are unable to sanction the scheme in its present form annexed as Annexure 10 to the petition and for the reasons aforesaid the petition fails and the same is dismissed. No order as to costs.







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