NCLT 11012017
NCLT 11012017
NCLT 11012017
CS S DHANAPAL
Sr. Partner
M/s . S Dhanapal & Associates
A Firm of Practising Company Secretaries
S.DHANAPAL
Notified Sections
of
Companies Act, 2013
relating to NCLT
wef 01.06.2016
09.09.2016 &
15.12.2016
S.DHANAPAL
Partner, S Dhanapal & Associates
Sections Date Provisions
Sub-sections (9) to (11) of 01.06.2016 Action by Debenture trustees once the secured
section 71 Assets becomes insufficient
Section 75 01.06.2016 Action against company by defrauding depositors by
non payment
Section 97 01.06.2016 Power to call for AGM in case of failure by the
Company
Section 98 01.06.2016 Power to call for meetings other than AGM
S.DHANAPAL
Partner, S Dhanapal & Associates
Sections Date Provisions
Second proviso to sub- 01.06.2016 Removal / change of auditor before due date and
section (4) and sub- suo moto action by NCLT for removal
section (5) of section 140
Sub-section (4) of section 01.06.2016 Removal of directors – representation & relaxation
169 of provisions in certain cases
Section 213 01.06.2016 Investigation into the affairs of the Company
S.DHANAPAL
Partner, S Dhanapal & Associates
Sections Date Provisions
Section 246 09.09.2016 Application of certain provisions to proceedings
under Section 241 or Section 245
Section 270 to 303 15.12.2016 Winding up provisions
Section 324 and 326 to 15.12.2016 Provisions applicable to every mode of winding up
365 and official liquidators
Proviso to section 370 15.12.2016 Continuation of pending legal proceedings
S.DHANAPAL
Partner, S Dhanapal & Associates
Sections Date Provisions
Sub-section (2) of section 15.12.2016 Application of Sections 34 to 36 and Chapter XX
391
Reference of word 01.06.2016 Order for production of documents by Registrar
Tri unal in su -section
(2) of section 399
Section 415 to 433 01.06.2016 National company law tribunal and appellate
tribunal
Sub-section (1)(a) and (b) 01.06.2016 Transfer of pending proceedings
of section 434
Clause (c) of sub-section 15.12.2016 Transfer of certain pending proceedings
(1) of section 434
Sub-section (2) of section 01.06.2016 Appeal against CLB order
434
Section 441 01.06.2016 Compounding of offences
S.DHANAPAL
Partner, S Dhanapal & Associates
Amalgamation & reduction of Share Capital
Class Action Suits
Oppression & Mismanagement
Re-opening & Revision of Financial Statements
Compounding of Offence
Refusal for Share registration & Rectification of Register of
Members
Insolvency & Bankruptcy Code, 2016
S.DHANAPAL
Partner, S Dhanapal & S.DHANAPAL
Associates
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
The new Act
CA 2013 opens up prescribes CA 2013 brings in
two new elaborate certain changes in
Presently Company dimension to disclosure norms the corporate
(Court) Rules 1959 mergers and and sending restructuring
provides for amalgamations information to all related provisions:
procedure. Under concerned
the new Act, authorities
Tribunal has
released the rules Cross border mergers By adding new
propositions
called
the companies
(compromises, Mergers outside By deviating from
arrangements and judiciary process certain established
judicial propositions
amalgamations)
rules, 2016
By codifying certain
judicial propositions
and common
practices
S.DHANAPAL
Partner, S Dhanapal & Associates
Particulars Companies Act, 1956 Companies Act, 2013
Section 391 230
Authority High Court NCLT
Approval by Members Majority of 3/4th in value Majority of 3/4th in value
/ Creditors
Voting In person / proxy In person / proxy / Postal
Ballot
Disclosures to latest financial position of the Additional disclosure of
Authority company, reduction of share capital if
latest auditors report, any included in the scheme
pendency of any investigation
proceedings etc
Effectiveness of the Shall not be effective unless a No such provision; but
order copy of the order is filed with requires the order to be
the ROC filed with ROC
S.DHANAPAL
Partner, S Dhanapal & Associates
Notice to be served on: Members, Creditors, Central
Government, Income Tax Authorities, RBI, SEBI, ROC, Liquidator,
Stock exchanges, Competition Commission of India, etc
S.DHANAPAL
Partner, S Dhanapal & Associates
1. Copy of draft scheme approved by Board of merging
companies
2. Confirmation for having filed the scheme with ROC
3. Report by directors of the merging companies,
explaining the effect of the scheme on Shareholders,
Key Management Personnel etc., laying out in
particular the share exchange ratio and specifying any
special valuation difficulties
4. Copy of valuation report, if any
5. Copy of Accounts drawn up to a date not preceding the
board meeting date (held for consideration of scheme)
by more than 6 months.
S.DHANAPAL
Partner, S Dhanapal & Associates
Auditors’ certificate Meeting of creditors may
regarding compliance be dispensed with by the
The scheme under
with accounting Tribunal, if at least 90% of
this section to
standards to be creditors (in value) agree to
clearly indicate an
submitted to Tribunal the scheme by way of an
before passing of order appointed date affidavit
from which it shall
be effective
• Scheme to be approved by
- the respective members or class of members at a general meeting holding at least
ninety per cent of the total number of shares, and
- majority representing nine-tenths in value of the creditors or class of creditors of
respective companies
S.DHANAPAL
Partner, S Dhanapal & Associates
Procedure explained – IF SCHEME U/S 233 IS NOT IN PUBLIC INTEREST
CG may make any application to the Tribunal within 60 days to consider the
application under Section 232 if it is of the opinion that such a scheme is not in
public interest or in the interest of the creditors.
A copy of the order under sub-section (6) confirming the scheme shall be
communicated to the Registrar having jurisdiction over the transferee company
and the persons concerned and the Registrar shall register the scheme and issue a
confirmation thereof to the companies and such confirmation shall be
communicated to the Registrars where transferor company or companies were
situated.
S.DHANAPAL
Partner, S Dhanapal & Associates
Section 234 contains for the first time provisions regarding
merger or amalgamation with companies registered in
other countries.
S.DHANAPAL
Partner, S Dhanapal & Associates
Section 235 - Power to acquire shares of shareholders
dissenting from scheme or contract approved by majority.
S.DHANAPAL
Partner, S Dhanapal & Associates
Member(s) /
class of
them
Company Company
having share not having
capital share capital
S.DHANAPAL
Partner, S Dhanapal & Associates
Deposit holders
/ Central
Government
Depositor(s)
Central
or any class
Government
of them
Member(s) singly /
100 / more ; or If it believes that the
jointly holding 10%
affairs conducted in a
10% / more; or of total value of
manner prejudicial to
outstanding
Which ever is less public interest
deposits
S.DHANAPAL
Partner, S Dhanapal & Associates
If affairs of the company are being conducted in a manner prejudicial to the
interests of the company or its members or depositors application can be
made seeking following orders:
to restrain the company from committing an act which is ultra vires the
MOA & AOA
to restrain the company from committing breach of MOA & AOA
to declare a resolution altering the MOA & AOA as void if the resolution
was passed by suppression of material facts or obtained by mis-statement
to the members or depositors
to restrain the company and its directors from acting on such resolution
to restrain the company from doing an act which is contrary to the
provisions of this Act or any other law for the time being in force
to restrain the company from taking action contrary to any resolution
passed by the members
to claim damages or compensation or demand any other suitable action
to seek any other remedy
S.DHANAPAL
Partner, S Dhanapal & Associates
Issue Public Notice & newspaper
advertisement within 7 days
S.DHANAPAL
Partner, S Dhanapal & Associates
The affairs of the Central Government is of
The material change has
the opinion that the affairs
company have been or taken place in the
of the company are being
are being conducted in a management or control of
conducted in a manner
manner the company, whether by
prejudicial to public interest
1. prejudicial to
the public interest 1. An alteration of
BOD;
2. prejudicial or
2. Manager;
oppressive to him
It may itself apply to
or any other 3. In the ownership
tribunal
member(s) of Company’s Shares
S.DHANAPAL
Partner, S Dhanapal & Associates
Member(s) /
class of
them
Company Company
having share not having
capital share capital
S.DHANAPAL
Partner, S Dhanapal & Associates
any member(s) holding not less than 1/10th of the issued
share capital of the company, subject to the condition that
the applicant(s) has paid all calls and other sums due on his
or their shares, shall also have right to apply u/s 241.
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
Particulars Prevention of Oppression & Class Action Suits
Mismanagement u/s 245
u/s 241 to 244
Who can file? Member(s) Member(s)
Depositor(s)
Against Whom? Company & its Statutory Company
Appointees Director(s)
Auditor / firms
Experts
Advisors
Consultants
Any others
Matters for Any current / past activity / to Any current, past or future
which it can be prevent recurrence activity, including to desist
filed from one or more particular
action that have not been
taken
yet.
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
• Central Government
Who • Income Tax Authorities
can • SEBI
• Any other Statutory regulatory body / authority
ask? • Court of Competent jurisdiction
• Tribunal
S.DHANAPAL
Partner, S Dhanapal & Associates
If it appears to the directors of the Company that the financial statement of the
Company or the reports of the Board do not comply with the provisions of
section 129 or section 134, the company can make an application to the Tribunal;
The order copy passed by the Tribunal shall be filed with the
Registrar
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
Any offence punishable under this Act with
fine only are compoundable by –
(a) the Tribunal; or
(b) Regional Director up to a limit of Rs.
5 lakhs
If investigation has been already initiated or
is pending under this Act, then
compounding will not be granted.
S.DHANAPAL
Partner, S Dhanapal & Associates
Offences compoundable Offences not
only with the permission
Compoundable
of Special Court
• With imprisonment or • with imprisonment
fine, or only or
• With imprisonment or • with imprisonment and
fine or both also with fine
S.DHANAPAL
Partner, S Dhanapal & Associates
Every application for the compounding of an offence
shall be made to the Registrar
Power of Power of
NCLT: CLB:
maximum maximum
fine exceed fine exceed
Rs. 500,000 Rs. 50,000
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
UNLISTED COMPANY:
If partly paid up shares are being transferred and the transferee is known to
be financially incapable of paying balance calls.
In case due call money has not been paid by the transferor.
When the transferor is a debtor of the company, and the company has a lien
on such shares.
On other reasons, just and equitable and are in the general interests of the
company.
S.DHANAPAL
Partner, S Dhanapal & Associates
LISTED COMPANY:
S.DHANAPAL
Partner, S Dhanapal & Associates
Appeal •Either dismiss / order
•Within 30 days of receipt
of the instrument, the •Transfer shares within
refusal shall be •Transferee may appeal to 10 days
Tribunal against refusal
intimated with reasons •Rectification of register
within 30 days from the
date of notice or 60 days •Company to pay
from date of submission damages
of instrument
Company to Action of
Intimate Tribunal
S.DHANAPAL
Partner, S Dhanapal & Associates
Application to Tribunal / a competent court outside
India (in case of foreign members) can be made in the
following instances
1. If name of any person, without sufficient cause is
removed / entered;
2. If default / unnecessary delay takes place; etc.
S.DHANAPAL
Partner, S Dhanapal & Associates
Insolvency
& Bankruptcy
Code, 2016
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
It has 255
Received
sections with
assent of the
eleven
President on
schedules for
28th May,
amendment to
2016
various acts
S.DHANAPAL
Partner, S Dhanapal & Associates
November 21, • Insolvency and Bankruptcy Board of India (Insolvency
2016 Professional Agencies) Regulations, 2016
S.DHANAPAL
Partner, S Dhanapal & Associates
• Insolvency and Bankruptcy Board of India
August (Salary, Allowances and other terms and
conditions of service chairperson and
29, 2016 members) Rules, 2016
S.DHANAPAL
Partner, S Dhanapal & Associates
Notification dated Notification dated
Notification dated Notification dated
30.11.2016 effective 09.12.2016 effective
05.08.2016 01.10.2016
from 01.12.2016 from 15.12.2016
• Section 188 to 194 • The head office of • clause (a) to clause • section 33 to section
(both inclusive) came the Insolvency and (d) of section 2 54
into effect Bankruptcy Board of (except with regard
India shall be at New to voluntary
Delhi liquidation or
Bankruptcy)
• section 4 to section
32
• section 60 to section
77
• section 198
• section 231
• section 236 to
section 238
• clause (a) to clause
(f) of sub-section (2)
of section 239
S.DHANAPAL
Partner, S Dhanapal & Associates
Notification dated 19.08.2016 Notification dated 01.11.2016 Notification dated 15.11.2016
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
Financial Creditor Board Operational Creditor
Any person to whom a financial A person to whom an
Insolvency & Bankruptcy
debt is owed and includes a operational debt is owed and
Board of India established
person to whom such debt has includes any person to whom
been legally assigned/ under sub-section(1) of such debt has been legally
transferred Section 188 assigned / transferred
Voting Share
Share of voting rights of a single financial
creditor in the committee of creditors which is
based on the proportion of the financial debt
owed to such financial creditor in relation to
the financial debt owed by the Corporate
debtor
S.DHANAPAL
Partner, S Dhanapal & Associates
• Insolvency Resolution Process
• Information Utilities
• Insolvency Regulator
• Adjudicatory Authorities
S.DHANAPAL
Partner, S Dhanapal & Associates
Initiation by
Creditor or
Debtor
Distribution of Filing of
Assets Application with
NCLT
Liquidation
Appointment of
interim IP
In case of Constitution of
Rejection Creditors
Committee
Resolution &
Approval of
plan
S.DHANAPAL
Partner, S Dhanapal & Associates
APPLICABILITY INITIATOR
Corporate debtors
with minimum
default of Rs.
1,00,000/- 1. Financial Creditor
2. Operation
Creditor
CG may prescribe a 3. Corporate Debtor
higher amount up to
Rs. 1,00,00,000/-
(One Crore)
S.DHANAPAL
Partner, S Dhanapal & Associates
Application in Form 1
S.DHANAPAL
Partner, S Dhanapal & Associates
On occurrence of default, the debtor shall be
delivered a demand notice along with invoice in
form 3 or Form 4
S.DHANAPAL
Partner, S Dhanapal & Associates
NCLT shall admit the NCLT shall dismiss
application if the application if
3. Invoice / notice for payment delivered 3. Invoice / notice for payment is not
by the creditor delivered by the creditor
S.DHANAPAL
Partner, S Dhanapal & Associates
Public Resolution
Moratorium
announcement Professional
Interim Resolution
Institution of suits,
Detailed info shall Professional shall
transferring of
be disclosed be appointed within
assets etc
14 days by NCLT
S.DHANAPAL
Partner, S Dhanapal & Associates
Management of affairs shall vest with IRP
Powers of BOD shall stand suspended &
exercised by IRP
IRP shall have access to all the corporate
documents
Managers & officers shall report to IRP
Financial institutions maintaining accounts
(auditors) shall act on the instructions of IRP
S.DHANAPAL
Partner, S Dhanapal & Associates
Claim:
Collect Info on assets a. A right to payment, whether /
& liabilities – collate not such right is reduced to
judgment, fixed, disputed,
all claims undisputed, legal, equitable,
secured or unsecured;
Constitute Creditors b. Right to remedy for breach of
contract under any law for the
Committee – Monitor time being in force, if such
assets & operations breach gives rise to a right to
payment, whether or not such
right is reduced to judgment,
Take Custody of assets - File fixed, matured, unmatured,
info with Information Utility (a disputed, undisputed,
person registered with the Board secured or unsecured
as Information Utility)
S.DHANAPAL
Partner, S Dhanapal & Associates
Time Limit Co-operation from Personnel
Personnel of the
180 days Corporate Debtor
(promoter, directors, manager,
(from the date of admission) KMP, employee etc.)
+ shall cooperate with the
90 days Interim Resolution
(extension by NCLT- if Professional
approved by 75% votes in
creditors committee meeting) Failing which, IRP can
apply to NCLT for
directions
S.DHANAPAL
Partner, S Dhanapal & Associates
1. To appoint accountant, legal / other professional
2. To enter into / amend contracts / transactions
S.DHANAPAL
Partner, S Dhanapal & Associates
After collation of Claims & determination of
financial position – Financial Creditors
Committee shall be constituted
Insolvency
1. Members of Professional can be
1. Members of
the suspended appointed by any
Committee;
BOD creditor to represent
2. Members of him
2. Partners
suspended BOD
3. One
3. Operational Fees for Insolvency
representative
Creditors & their Professional shall be
of operational born by the creditor
representatives
Creditor himself
S.DHANAPAL
Partner, S Dhanapal & Associates
Preserve & protect assets;
Immediate custody of assets;
Represent & act on behalf of the Corporate
Debtor
Raise interim finances;
Appoint accountant, legal / other professionals;
Maintain an updated list of claims;
Convene & attend all meetings of creditors
committee;
Prepare information memorandum;
Invite prospective lenders, investors etc;
Present all resolution plans at meetings;
File application for avoidance of transactions; etc
S.DHANAPAL
Partner, S Dhanapal & Associates
Creditors Committee Meeting
Resolution Professional can be
With 75% voting shares approval
replaced any time
S.DHANAPAL
Partner, S Dhanapal & Associates
Items that need approval Procedure
Raise interim finance in excess
of limits; Approval in creditors
Create security interest over committee
assets;
Change capital structure; With 75% voting shares
change in ownership interest;
required
Instructions to auditors for
debit transactions in excess of
limits; Any action taken
Undertake related party without approval is
transactions;
VOID & such action
Amend constitutional
documents; shall be reported to the
Delegate authority to any Bankruptcy Board
others;
Dispose any shares;
change in management; etc S.DHANAPAL
Partner, S Dhanapal & Associates
Information Submission of Adjudicating
Memorandum Resolution Plan Authority
S.DHANAPAL
Partner, S Dhanapal & Associates
Who can file When can file Time Limit
S.DHANAPAL
Partner, S Dhanapal & Associates
Particulars Timelines(days)
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
Adjudicating authority does not receive
a resolution plan;
Determination
Verification
of value of
of claims claims
Appeal against
Consolidation
the decision of
of claims within
the liquidator
30 days of
within 14 days
commencement
if any claim is
of liquidation
rejected
S.DHANAPAL
Partner, S Dhanapal & Associates
• Transfer of property / interest to the benefit
of creditor
Preferential
Transaction • Shall not include transactions in ordinary
course of business
S.DHANAPAL
Partner, S Dhanapal & Associates
Application by
Avoid UT Relevant Time
Creditor
Liquidator shall
apply to
Adjudicating
authority
The order of
liquidation shall be
filed within 7 days
with registrar
S.DHANAPAL
Partner, S Dhanapal & Associates
A corporate person can liquidate itself even if there is no
default committed;
S.DHANAPAL
Partner, S Dhanapal & Associates
•Within 7 days the Registrar of Companies & Board shall
be intimated
ROC & Board
S.DHANAPAL
Partner, S Dhanapal & Associates
1 Insolvency Resolution cost and liquidation cost
6 Remaining debts
7 Preference shareholders
S.DHANAPAL
Partner, S Dhanapal & Associates
Particulars Penalty
Fraudulent initiation of proceedings / One Lakh to One Crore
furnishing false info in application
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates
S.DHANAPAL
Partner, S Dhanapal & Associates