17 ADMINISTRATION

COMPANY LAW OF
LEARNING OBJECTIVES
After studying this chapter, you will be able to
provisionof: understand the
National Company law Tribunal
National Company Law Appelate Tribunal
Special Courts
Role of the Central
and SEBI Government, Registrar, Regional Directors

The Companies Act, 2013 specifies, the following regulatory

authorities for administration of Company Law:
1 National Company Law Tribunal and National Company Law
Appellate Tribunal.
2. Special Courts
3. Central Government
4. Registrar of Companies
5. Regional Directors
6. Securities Exchange Board of India
NATIONAL COMPANY LAW TRIBUNAL
The Companies Act, 2013 has introduced two tribunals-one is the
National Company Law Tribunal (in short, NCLT) and the other is
National Company Law Appellate Tribunal (in short, NCLAT) to deal
with appeals from orders of the NCLT. The word Tribunal or NCLT for
National CompanyLaw Tribunal;and the expression Appellate Tribunal
or NCLAT for National Company Law Appellate Tribunal have been
used in the book.
The Tribunals were introduced in the Companies Act, 1956 in 2002
by the Companies (Amendment) Act, 2002.
NCLAT was
However, the constitutionality of the NCLT and
India v. R.
Cnalenged before the Supreme Court in Government of
17.1
 Company Law
17.2
11 SCC 1
President Madras Bar Association I(2010)
Gandhi
Supreme Court objected to the formation of Tribunals on the ground
Tribunals. The
of qualifications of the members of the
recognized corrections:Supreme Court
following defects which
the Central
listedThe Government made the necessary changes in the
members of the Tribunals in the liohthe
observations ofmade
qualification theby the Supreme Court and reintroduced the concept

and NCLAT in the Companies Act, 2013. AccordinglyP

of NCLT Notification dated 12-09-2013, consisted
Central Goverment, by
NCLT and NCLAT.
2013 regarding NCLT
The provisions of the Companies Act,
as follows:

Constitution of National Company Law Tribunal (Section 408)

1.
notification, constitute,with effect
The Central Government shall, by Tribunal to be known as
date as may be specified therein, a
from such ting of President and such
the National Company Law Tribunal consis
the Central Government
number of Judicial and Technical members, as notification, to exercise
by it by
may deem necessary, to be appointed
functions as are, or mnay be, conferred
and discharge such powers and
law for the time being in force.
on it by or under this Act or any other
In exercise of the powers conferred by section 408 of the Companies
2013, the Central Government constituted National Company Law
Act,
Tribunal on 1st June, 2016.
Government also notified the
On 21st July, 2016, the Central
which lay down rules for
National Company Law Tribunal Rules, 2016
Tribunal.
the procedure to be followed by the
2. Numnber of Members
such
Under section 408, the Central Government may appoint
deem necessary.
member of Judicial and Technical members as it may
members.
Thus, there is no bar on number of
Tribunal (Section 409)
3. Qualification of President and Members of
a Judge
President. The President shall be a person who is or has been
of a High Court for five years.
as
Judicial Members. A person shallnot be qualified for appointment
a Judicial Member unless he
(a) is, or has been, a judge of a High Court; or
(b) is, or has been, a District Judge for at least five years; or
court.
(c) has, for at least ten years been an advocate of a
Technical Members. A person shall not be qualified for appointment
as a Technical Member, unless he
 Administration of Conpany Law
(a) has, for at least fifteen years been a
17.3
Corporate Law Service or Indian member of the
holding the rank of Legal Service and hasIndian
Government of India; or Secretary Additional
or been
or has been, in
Secretary to the
(b) is, practice as a chartered accountant for at
fifteen years; least
(c) is, or has been, in practice as a cost
fifteen years; or accountant for at least
(d) is, or has been, in practice as a
fifteen years; or Company secretary for at least
(e) is a persOn of proven
snecial knowledge and ability, integrity and standing having
professional experience, of not less
than fifteen years in industrial finance, industrial management,
indusirial reconstruction, investment and accountancy; or
In is. or has been, for at least five years, a
presiding office of a
Labour Court, Tribunal or National Tribunal constituted under
the Industrial Disputes Act, 1947.
In Union of India v. R. Gandhi, President Madras Bar Association
[(2010) 11 SCCexperience
1], it was held that the expresion "technical member",
in the field with which Tribunal relates to.
presupposes
Members of Indian Company Law Service who have worked with
Accounts Branch of officers in other departments who might have
incidentally dealt with some aspect of company law cannot be considered
appointed as technical members.
as "experts" qualified to be of India, writ petition (c)
In Madras Bar Association v. Union that
No. 1072 of 2013, the petition was filed by the petitioner alleging new
2010 judgment, the
notwithstanding various directions given lines
the Companies Act, 2013 are almost on the same there
provisions in
incorporated in the Companies Act, 1956 and therefore,
as well of unconstitutionality.
provisions suffer from the vice agree with the contentions of the
did not
The Supreme Court reasons which were as follows:
petitioner the various
NCLAT has been upheld in 2010 judgment.
(i) The creation of traditionally performed by the
Transferring judicial function, the basic structure of
(ü) not offend
Tribunals does
Courts, to the
the Constitution. transferring the jurisdiction
enact a law (other than
(ii) A legislature can regard to any specificsubject the
exercised by courts in
courts by express provisions of
vested in
those which are Tribunal.
Constitution) to any
 17.4
Company Law
(Section 412)
4. Selection of Members of Tribunal
The President of the Tribunal, shall be appointed after
with the Chief lustice of India.
The Members of the Tribunal shall be appointed on the
consultation
recommendation of á Selcction Committe consisting of
(a) Chicf Justice of India or his nominee-Chairperson:
(b) a senior Judge of the Suprene Court or a Chief Justice of
Court-Member; High
(c) Secretary in the Ministry of Corporate Affairs-Member:
(d) Secretary in the Ministry of Law and Justice-
-Mernber;
Where in a meeting of the selection committee, there is
and
votes on any matter, the chairperson shall have a casting [Link] of
The Secretary, Ministry of Corporate Affairs shall be the
of the Selection Committee. Convener
The Selection Committee shall determine its
procedure for
recommending persons.
No appointment of the Members of the Tribunal or the
Appellate
Tribunal shall be invalid merely by reason of any vacancy or any
defect
in the constitution of the Selection Committee.
5. Termn of office of President, Chairperson and other Members
(Section 413)
The President and every other Member of the
office as such for a term of five years from the Tribunal shall hold
date on which he enters
upon his office, but shall be eligible for
term of five years. re-appointment for another
Age limit. A Member of the
he attains, Tribunal shall hold office as such until
(a) in the case of the
President, the age of sixty-seven years;
(b) in the case of any Member, the
age of sixty-five years.
Eligible Age. A person who has not
not be eligible for appointment as completed fifty years of age shall
6.
Member. trfprat Tiben
Benches of Tribunal (Section
There shall be constituted such 419)/18 -Ahid met or)
A
number of Benches of the Tribunal
as may be specified by the
Central
The Principal Bench of the Government.
shall be presided over by the Tribunal shall be at New Delhi which
The powers of the Tribunal President
of the Tribunal.
of two Members out of shall be exercisable by Benches
other shall be a whom one shall be a Judicial consisting
Technical Member. Member and the
 Administration of Company Lauw
SingleJudge Bench. However, it shall be 17.5
Tribunalauthorised in this
ofthe Judicial Member behalí competent
to function as a
for the
Members
single and Bench
ofa ofsuch class of cases or exercise the powers of the consisting
respect such mallers Tribunal in
reses, as the President may, specify. pertaining to such class
Transfer of case from Single Judge Bench to Bench of
two
any slage
of the hearing of any such
case or matter, it Members. Il at
Member that the case or matter is of such a nature appears to the
that it
by a Bench consisting of two Members, the case or ought to be
heard
be transferred by the President, or, as the case miy be, referred matterto him
may
fortraansfer, to such Bench as the President may deem fit.
smher of Benches fr solving cases under Insolvency and
Code. The CCentral Government shall, by notification, Bankruptcy
establish such
number of benches of the Tribunal, as it may consider
exercisejurisdiction, powers andIauthority of the Adjudicatingnecessary,
Authority
to
conferred on such Tribunal or under Part II of the Insolvency and
Bankruptcy Code, 2016.
Decision by Majority. If the Members of a Bench differ in opinion
on any point or points, it shall be decided according to the majority, if
there is a majority. If the Members are equally divided, they shallstate
the point or points on which they differ, and the case shall be referred
hy he President for hearing on such point or points by ore or more
afthe other Members of the Tribunal and such point or points shall be
decided according io the opinion of the majority of Members who have
heard the case, including those who first heard it.
7. Orders of Tribunal (Section 420)
before
The Tribunal may, after giving the parties to any proceedingthereon
orders
it, a reasonable opportunity of being heard, pass such
as it thinks fit.
from the date of the
The Tribunal may, at any time within two years from the record,
apparent
order, with aview to rectifying any mistake such amendment, if the
make
amend any order passed by it, and shall
mistake is brought toits notice by the parties.
However, no such amendment shallbe made in respect of any order
preferred under this Act.
against which an appeal has been
of every order passed under this
The Tribunal shall send a copy
section to all the parties concerned.
Tribunal (Section 421)
8. Appeal from orders of prefer an
aggrieved by an order of the Tribunal may
Any person
appeal to the Appellate Tribunal. Tribunal from an order made
the Appellate
No appeal shall lie toconsent
by the Tribunal with the of parties.
 Company Law
17.6
Every appeal shall be filed within a period of forty-five days from
Tribunal is made
which a copy of the order of the
the date on
available
to the person aggrieved and shall be in such form, and accompanied by
such fees, as may be prescribed.
However, the Appellate Tribunal may entertain an appeal after the
expiry of the said period of forty-five days from the date aforesaid, but
within a further period notexceeding torty-fivedays, if it is satisfied th
the an
the appellant was prevented by sufficient cause from filing
within that period.
On the receipt of an appeal, the Appellate Tribunal shall, after givine
the parties to the appeal a reasonable opportunity of being heard. pass
such orders thereon as it thinks fit, confirmin8, modity or setting aside
the order appealed against.
The Appellate Tribunal shall send a copy of every order made by
it to the Tribunal and the parties to appeal.
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Constitution of Appellate Tribunal (Section 410)
The Central Government shall, by notification, constitute,with effect
from such date as may be specified therein, an Appellate Tribunal to
be known as the National Company Law Appellate Tribunal consisting
Members
of a chairperson and such number of Judicial and Technical
not exceeding eleven, as the Central Government may deem fit, to be
appointed by it by notification, for hearing appeals against the orders
of the Tribunal or of the National Financial Reporting Authority under
this Act.
The National Company Law Appellate Tribunal (in short, Appellate
Tribunal) has the power to hear appeals against any direction, decision
or order referred to in section 53 N of the Competition Act, 2002 in
accordance with the provisions of that Act.
The Central Government constituted the Appellate Tribunal on Ist
June, 2016.
Qualification of Chairperson and Members of Appellate
Tribunal (Section 411)
The Chairperson shall be a person who is or has been aJudge of
the Supreme Court or the Chief Justice of aHigh Court.
A Judicial Member shall be a person who is or has been a Judge
of a High Court or is a Judicial member of the Tribunal for five years.
A Technical Member shallbe a person of proven ability, integr1ty
and standing having special knowledge and experience, of not less than
twenty-five years, in law, industrial finance, industrial management
 Administration of CompanyLaw 17.7

administration, industrial reconstruction, investment, accountancy,

or
labour matters, or such other disciplines related to management, conduct
ofaffairs, revival, rehabilitation and winding up of companies.
Calection of Members of "Appellate Tribunal (Section 412)
The chairperson and Judicial Members of the Appellate Tribunal
shall be appointed after consultation with the Chief Justice of India.
The Members of the Tribunal and the Technical Members of the
Appellate Tribunal shall be appointed on the recommendation of a
Selection Committee consisting of
(a) Chief Justice of India or his nomineeChairperson;
(b) a senior Judge of the Supreme Court or Chief Justice of High
Court-Member;
(c) Secretary in the Ministry of Corporate Affairs -Member; and
() Secretary in the Ministry of Law and Justice-Member.
Where in ameeing of the Section Committee, there is equality of
votes on any matter, the Chairperson shallhave a casting vote.
The Secretary, Ministry of Corporate Affairs shall be the Convener
of the Selection Committee.

Term of Office of Chairperson and other Members

(Section 413)
The President and every other Member of the Tribunal shall hold
office as such for a term of five years from the date on which he enters
upon his office, but shall be eligible for re-appointment for another
term of five years.
Age limit. A Member of the Tribunal shall hoid office as such until
he attains,
(a) in the case of the President, the age of sixty-seven years;
(b) in the case of any Member, the age of sixty-five years.
Eligible Age. Aperson who has not completed fifty years of age shall
not be eligible for appointment as Member.
Expeditious disposal by Tribunal and Appellate Tribunals
(Section 422)
Every application or petition presented before the Tribunal and
every appealfled before the Appellate Tribunal shall be dealtwith and
disposed off by itas expeditiously as possible and every endeavour shall
De made by the Tribunal or the Appellate Tribunal, as the case may be,
P
Tor the disposal of such application or petition or appeal within three
months from the date of its presentation before the Tribunalor the filing
of the appeal before the Appellate Tribunal.
 Company Law
17.8
application or petition or appeal is not disposed otc
Where any or, as the case may ho
within the period specified above, the Tribunal
Appellate Tribunal, shall record the reasons for not disposine
the
the application or petition or the appeal, as the case may be, within the
period so specified; and the President or the Chairperson, as the case
reasons so recorded, extend
may be, may, after taking into account the ninety davs
the period referred to above by such period not exceeding
as he may consider necessary.
Appealto SupremeCourt (Section423)Appellate Tribunal ma.
Any person aggrieved by any order of the days from the date of
file an appeal to the Supreme Court within sixty
receipt of the order of the Appellate Tribunal to him on any question
of law arising out of such order.
However,the Supreme Court may, if it is satisfied that the appellant
was prevented by sufficient cause from filing the appeal within the said
period, allow it to be filed within a further period not exceeding sixty
days.
PROCEDURE AND POWERS OF THE TRIBUNAL
Sec 24 ’ AND THE APPELLATE TRIBUNAL
1. Power to determine procedure. The Tribunal and the Appellate
Tribunal shall not, while disposing of any proceeding before it or, as
the case may be, an appeal before it, be bound by the procedure laid
down in the Code of Civil Procedure, 1908, but shall be guided by the
principles of natural justice, and, subject to the other provisions of this
Act and of any rules made thereunder, the Tribunal and the Appellate
Tribunal shall have power to regulate their owDprocedure (Section 424).
2. Power of civil court. The Tribunal and the Appellate Tribunal
shall have, for the purposes of discharging their functions under this
Act, the same powers as are vested in acivil court under the Code of
Civil Procedure, 1908 while trying a suit in respect of the following
matters, namely:
(a) summoning and enforcing the attendance of any person and
examining him on oath;
(0) requiríing the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) subject to the provisions of the Indian Evidence Act, 1872,
requisitioning any public record or document or a copy of such
record or document from any office;
(e) issuing commissions for the examination of witnesses or
documents;
 Ad1ministration of Company Law 17.9

dismissing a representation for default or deciding it ex parte;

(e) setting aside any order of dismissal of any representa tion for
default or any order passed by it ex parte; and
(h) any other matter which may be prescribed (Section 424).
3. Orders of Tribunals to be enforced as if it is decree of court. Any
order made by the Tribunal or the Appellate Tribunal may be enforced
Tribunal in the same manner as if it were a decree made by a
bythat suit
Courtin a pending therein (Section 424).
4. Proceedings before the Tribunals shall be deemed judicial
proceedings. AlI proceedings before the Tribunal or the Appellate
Tribunalshall be deemed to bejudicialI proceedings and the Tribunal and
Tribunal shall be deemed to be civil court (Section 424).
the Appellate T
Power to punish for contempt. The Tribunal and the Appellate
Tribunal shall have the same jurisdicticn, powers and authority in
respect of contempt of themselves as the High Court (Section 425).
6. Power to delegate. The Tribunal or the Appellate Tribunal may,
hy order, any of its offhcers or employees or any other person authorised
by it to inquire into any matter connected with any proceeding or, as
manner as
thecase may be, appeal before it and to report to it in such
may be specified in the order (Section 426).
[Link] of the Tribunal. The Tribunal may, after giving the parties
to any proceeding before, it, a reasonable opportunity of being heard,
pass such orders thereon as it thinks fit. TheTribunal may amend, at
a view to
any time within two years from the date of the order with
rectifying any mistake apparent from record, any order passed by it
[Section 420].
8. No Civil Court to have jurisdiction. No civil court shall have
jurisdiction to entertain any suit or proceeding in respect of any matter
which the Tribunal or Appellate Tribunal is empowered to determine
(Section 430].
[Link] to seek assistance of Metropolitan Magistrate. The Tribunal
has the power toseek assistance of Chief Metropolitan Magistrate to take
and cause the
possession of property, books of accounts and documents
authorised by it
same to be entrusted to the Tribunal or other persons
[Section 429].
Tribunal
Matters which are within the jurisdiction of the
be decided by the
The following are some of matters which are to
Tribunal.
1. Confirmation of reduction of capital [Section 66(1)].
up Section
2. Circumstances in which a company may be wound
271]
17.10 Company Law
3. Appointment of official liquidator [Section 275(1)]
4. Passing of order on appeal against refusal to registration of
of securities [Section 58(5)]. transfer
5. Ordering inspection of minutes books [Section 119(4)].
6. Power for deregistration of
representation (Section 7(7).
companies incorporated by false
7. Class action (Section 245)
8. Approval of change of place of registered office from one state to
another (Section 13(4)].
9. Ordering of suspension of voting rights of
the holder of securities
[Section 39(3)]. X
SPECIAL COURTS
Establishment of special courts is new provision introduced in the
Companies Act, 2013.
The objects of specials courts are:
(i) Creation of separate criminal
criminal offences; and
machinery to deal with corporate
(i) Providing speedy trial of corporate
may also be called white collar crimes.
criminal offences which
The following, inter alia, are the provisions
1. Number of Special Courts (Section 435)
regarding special courts:
The Central
trial of offences Government
may, for the
under this Act, establish orpurpose
of providing speedy
designate as many special
courts as may be necessary. Thus, existing criminal
also be designated as Special Courts. judicial set up can
2. Constitution of Special Courts (Section 435)
A Special Court shall consists of
(a) a single judge holding office as Sessions Judge or
Session Judge, in case of offences punishable underAdditional
this Act
withimprisonment of two years Or more; and 1
(b) a Metropolitan Magistrate or Judicial Magistrate of the
Class, in case of other offences. First
The Sessions Judge, Additional Sessions Judge,
Magistrate or Judicial Magistrate mentioned above shall beMetropolitan
appointed
as aJudge of the Special Court by the Central
concurrence of the Chief Government with the
Justice of the High Court within whose
jurisdiction the judge to be appointed is working.
3. Offences Triable by Special Courts (Section
436)
The following offences are triable by the Special Courts:
 Administrationof CompanyLaw 17.11
A Ooffences
punishable under this Act with imprisonment of
2 yeas or more; shall be triable by
the Special Court.
() Where an accuscd is produced before
person Magistrate,
mav order detention of such the Magistrate
and if he considers
dotention unneceSsary, he shall forward the case to the the
Court. Special
When trying an offence under this Act, a
also try an offence other than an offence Special Court may
which the accused may under the Code of under this Act with
Criminal Procedure
be charged at the same trial.
d) Special court may, if it thinks fit, try in a
summary way any
offence under this Act which is punishable with
for a term not exceeding three years: Providedimprisonment
that in the
case of any conviction in a summary trial, no sentence of
imprisonment for aterm exceeding one year shall be passed.
4. Appeal and Revision (Section 437)
All appeals from Special Court shall bemade to the High Court, as
if aSpecial Court, were a Court of Session trying cases within the local
limits of the jurisdiction of the High Court.
5. Powers of Special Court
Special Court has power of Court of Session under the Code of
Criminal Procedure, 1973.
CENTRAL GOVERNMENT
Under the Companies Act, 2013, the role of the Central Government
has been completely revised. Under the Companies Act, 2013, the
Central Government is empowered to make rules in more than 400
instances. The powers of the Central Government to intervene in the
internal affairs of the company have been considerably reduced under
the Companies Act, 2013. Certain powers of the Central Government
have been transferred to National Company Law Tribunal.
The Central Government acts through the Ministry of Corporate
Affairs.
companies,
Inorder to provide prompt and efficient service to the through its
the Ministry of Corporate Affairs accepts documents online
portal called MCA-21.
in the chapter
Note: E-Filing of documents has been explained earlier
"Audit and On-line Filing of Documents".
deal with the power
The following are some of the provisions whichcompany law:
to the Central Government for administration of
17.12 Company Law
1. Delegation by Central Government of its powers and functions
(Section 458)
The Central Government may, by notification, delegate any of its
powers or functions nder this Act, other than the power tomake rules.
to such authority or officer as may be specified in the notification. It
further provides that acopy of the notification shallbe placed before
both Houses of Parliament.
2. Power of Central Government to accord approval, etc., subject to
conditions and to prescribe fees on applications (Section 459)
While according approval, sanction, consent, confirmation etc.
giving directions or granting exemptions the Central Government may
impose such conditions or restrictions as it thinks fit subject to payment
of fee.
3. Condition of delay in certain cases (Section 460)
Whenever an application is to be made to the Central Government
or any document is required to be filed with Registrar within specified
time, the Central Government may,after recording the reasons for delay,
condone the delay.
4. Annual Reports by Central Government (Section 461)
The Central Government shall prepare a gerneral annual report on
the working and administration of the Act and lay before both Houses
of Parliament.
5. Power to exempt a class or classes from provisions of this Act
(Section 462)
The CentralGovernment, by notification, may direct that any
provisions of this Act may apply or may not apply to such class or
classes of companies as specified in the notification in public in terest.
REGISTRAR OF COMPANIES
Section 396 of the Companies Act, 2013 provides that for the purpose
of registration of companies and discharge of various functions under
this Act, the Central Government shall establish such number of offices
at such places as it thinks fit, specifying their jurisdiction. The section
further provides that the Central Government may appoint such number
of Registrars, Additional, Joint, Deputy or Assistant Registrars as it
considers necessary, for the registration of companies and discharge of
various functions under the Act.
Accordingly, the Central Government has appointed Registrar of
Companies for each State and Union Territory. He is assisted by Additional
Registrar, Joint Registra, Deputy Registrar and Assistant Registrars. As
per Section 2(75) "Registrar means a Registrar, an Additional Registrar,
 Administration of Company Law 17.13

Joint Registrar, a Deputy Registrar or an Assistant Registrar

a ofrregistering companies and discharging various functionshaving
duty under
this Act. In the states of Maharashtra and Tamil Nadu, there are two
them
Registrars in each of
The companies are required to file documents and returns to the
Registrar under the Companies Act. The public can also inspect certain
documents and returns.

Duties of Registrar
Duties of registrar includes
the following:
() Acknowledge of documents filed. Acknowledgment of receipt
ofdocuments and returns filed by the comnpanies.
(i) Examination of document. Examination of the documents and
the returns tosee whether they are complete in all respects.
(iii) Maintenance of register of companies. Maintenance of Register
of Companies as per prescribed particulars.
(ip) Allowing inspection of documents. Allowing the public to
inspect documents and returns filed by the companies as per
the provisions of the Act.
Powers of Registrar
() Extension of time for holding AGM [Section 96(1)]. The Registrar
may, for any special reason, extend the time within which any
annual general meeting, other than the first annual general meeting,
shall be held, by a period not exceeding three months.
(ii) Power to call for information, inspect books and conduct inquiries
(Section 206). The Registrar is empowered to call for information,
explanation or documents and to inspect books of account of the
company. Where the Registrar is satisfied that the business of the
company is conducted in a fraudulent manner, he may order an
inquiry. The Central Government can also order inquiry by the
Registrar or by the inspector appointed by it.
(iii) Search and seizure (Section 209). The Registrar has the power for
search and seizure of documents if he has reasonable ground to
believe that the same is likely to be destroyed, mutilated, falsified,
etc. with the permission of special court. However, the Registrar
has toreturn the seized documents within 180 days to the company
from whose custody the documents are seized.
(iv) Removal of name from the Register of Companies (Section 248).
Where the Registrar has reasonable cause to believe that
(a) a conmpany has failed to commence its business within one year
of its incorporation; or
17.14 Company Law
(b) a company is not carrying on any business
business
or
preceding two yearsoperations
aperiod of two immediately
and hae for
applied for the status of dormant company,
he shall send a notice to the company and the
of the notice of
directors. After the
expiry 30 days, the Registrar may, unless
the contrary is shown by the company, strike off its cause to
the Register of Companies. name from
REGIONAL DIRECTORS
The Central Government has appointed 7 Regional
seven places namely, Noida, Ahmedabad, Kolkata, Shillong, Directors
Hyderabad
at
Chennai and Mumbai.
Regional Director at Ahmedabad is in-charge of
Region. North-Western
Regional Director at Chennai is in-charge of Southern Region.
Regional Director at Hyderabad is in-charge of South Eastern Region.
Regional Director at Kolkata is in-charge of Eastern Region.
Regional Director at Mumbai is in-charge of Western Region.
Regional Director at Noida is in-charge of Northern Region.
Regional Director at Shillong is in-charge of Eastern Region.
The following are the functions of the Regional Directors:
(a) to supervise the working of the offices of the Registrars and
Official Liquidators working in their region;
(b) to advise and guide the Registrar on technical and administrative
matters;
(c) to maintain liason with the respective State Governments and
Union Territories regarding the administration of Companies
Act and LLP Act;
(d) to approve or reject, as the case may be, an application for
conversion of public company into a private company;
(e) to confirm change of registered office where there is a change
of registered office from the jurisdiction of one Registrar to
another Registrar within the same State.
 NATIONAL FINANCIAL REPORTING AUTHORITY
(Section 132)
Section 132 of the Act provides as follows:
The Central Government may, by notification, constitute a National
Financial Reporting Authority (in short, NFRA) to provide for matters
relating to accounting and auditing standards under this Act [Section
132(1)].
The NFRA shall perform its functions through such divisions as may
be prescribed [Section 132(1A)).
Functions. As per Section 132(2), the National Financial Reporting
Authority shall
(a) make recommendations to the Central Government on the
formulation and laying down of accounting and auditing
 Company Law
14.8
standards for
policies and adoption companies
by
companies or their auditors, as the case may
r t

ICA

the compliance be:

(b) monitor and enforce with
and auditing standards
in such
manner accountibeng
as may p r e

(c) oversee the

with ensuring
measures
quality

required for
of
compliance
service
with
improvement
of
the
such
standards,
in quality of
sartseasnocdcnaibardteedsd,
professions
p and
Aut
201
such other related matters
(d) perform such
as may be
other functions relating to prescribed: suEESt
and s(a),ervices and Wi

prescribed. clauses Ser

as may be (0) anà ()

Constitutions. The National Financial
Reporting clas
consist of a chairperson, who shall be a person of eminence
expertise in accountancy, auditing, finance or law to
the Central Government and such other mnembers not be
Authoandrity havsihnalgl
consisting of part-time and full-time
[Section 132(3)]
members as appoi
mayexceedi nted by
be ng fifteen
The ternms and conditions and
chairperson and members shall be
the manner of
such as may be appointment of the
prescribed
prescribed
132(3)].
The chairperson and members shall make a declaration to the
(Section
Government in the prescribed form regarding no conflict
of Central
lack of independence in respect of his or their
appointment interest or
132(3)]. [Section
The chairperson and members, who are inn
full-time
with National Financial Reporting Authority shall not be associated wih employment
any audit firm during the course of their
appointment and two years
after ceasing to hold such appointment [Section 132(3)].
Each division of the NFRAshall be presided over by the
or afull-time Member authorised by the Chairperson Chairperson
(Section 132(3A))
As per Section 132(3B) there shall be an executive body of the NFRA
consisting of the Chairperson and full-time Members of such Authority
for efficient discharge of its functions under Section 132(2) (other
than
clause (a) and Section 132(4)]
Powers. As per section 132(4), the National Financial Reporting
Authority (in short, NFRA), shall have power to investigate, either
Suo moto or on reference made to it by the Central Government. the
matters of misconduct conmmitted by anv member or firm of chartered
accountants.
It shall have same Powers as are vested in a civil Court whiletru
a suit in
respect of specified matters.
Where professional or other misconduct is proved, shal! hare
mh
power to make order for the
imposing penaltv and debarring
 S
14.9
thefirmfrom engaging himself or itself from practice as member of
firnm
the
r

Appeal. Any person

Ss of preteranappeal before theaggrieved by any order of the NFRA may
Appellate Tribunal [Section 132(5).
Classes of companies and body cOrporate governed by the
ards
bed;
Authority. As per Rule 3 of the National Financial Authority Rules,
018,th¹ Authority shall have power to monitor and enforce compliance
ated golbounting standards and auditing standards, oversea quality of
gest with
serviceunder -section (2) of Section 132 or undertake investigation
and
under sub-section (4) ofof such section of the auditors of the following
(c) companies and bodies corporate, namely--
Jass of
companies whuch are isted on any stock exchange in India or
lall outside India;
ng () unlisted public companies having paid up capital of not less than
byen turnover of not less Rs. 1,000crores
Rs. 500 crores or having annual
aggregate outstanding loans, debentures and deposits
ed or having, in on 31st March of immediately
of not less than Rs. 500 crores as
preceding financial year;
he
banking companies, companies engaged in
Dn
(c) insurance companies, of electricity,comparnies governed by any
the generation or supply being inforce;
al special Act for the time person, or any class of bodies
body coporate or company or reference made to the
(a) any or persons, on a
nn
corporate or companies in public interest;and
Government
Authority by the Central registered outside India, which
corporate incorporated or company or body
(e) a body company of any in
subsidiary or associateregistered in India as referred to
is a incorporated or or networth of such
corporate income
to (a), it the of the consolidated
aforesaid clauses (a) company exceeds 20%
or body
or associate worth of such company
subsidiary consolidated net clauses (a) to (d).
or referred
referred to in
income case may be,
corporate,as the GOVERNMENT TO PRESCRIBE
ction 133)