PART II
AMENDMENTS TO THE COMPANIES ACT 1956
(1 of 1956)
AMENDMENTS
1. In section 2, after clause (45A), the following clause
shall be inserted, namely:-
`(45B) "Securities and Exchange Board of India" means the
Securities and Exchange Board of India established under
section 3 of the Securities and Exchange Board of India Act,
1992.'
2. Interpretation of certain words and expressions After
section 2, the following section shall be inserted, namely:-
"2A. Words and expressions used and not defined in this
Act but defined in the Depositories Act, 1996 shall have the
same meanings respectively assigned to them in that Act".
3. In section 41, after sub-section (2), the following sub-
section shall be inserted, namely:-
"(3) Every person holding equity share capital of company
and whose name is entered as beneficial owner in the records
of the depository shall be deemed to be a member of the
concerned company."
4. In section 49, in sub-section (5), after clause (b), the
following clause shall be inserted, namely:-
"(c) from holding investments in the name of a depository
when such investment are in the form of securities held by the
company as a beneficial owner."
5. In section 51, the following proviso shall be inserted,
namely:-
"Provided that where the securities are held in a
depository, the records of the beneficial ownership may be
served by such depository on the company by means of
electronic mode or by delivery of floppies or discs.
6. Section 83 shall be omitted.
7. In section 108, after sub-section (2), the following sub-
section shall be inserted, namely:-
"(3) Nothing contained in this section shall apply to
transfer of security effected by the transferor and the
transferee both of whom are entered as beneficial owners in
the records of a depository."
8. In section 111, after sub-section (13), the following sub-
section shall be inserted, namely:-
`(14) In this section "company" means a private company
and includes a private company which had become a public
company by virtue of section 43A of this Act.'
9. Rectification of register on transfer After section 111,
the following section shall be inserted, namely:-
`111A. (1) In this section, unless the context otherwise
requires, "company" means a company other than a company
referred to in sub-section (14) of section 111 of this Act.
(2) Subject to the provisions of this section, the shares
or debentures and any interest therein of a company shall be
freely transferable.
(3) The Company Law Board may, on an application made by
a depository, company, participant or investors or the
Securities and Exchange Board of India within two months from
the date of transfer of any shares or debentures held by a
depository or from the date on which the instrument of
transfer or the intimation of transmissions was delivered to
the company, as the case may be, after such enquiry as it
thinks fit, direct any company or depository to rectify
register or records if the transfer of the shares or
debentures is in contravention of any of the provisions of the
Securities and Exchange Board of India Act, 1992 or
regulations made thereunder or the Sick Industrial Companies
(Special Provisions) Act, 1985.
(4) The Company Law Board while acting under sub-section
(3), may at its discretion make such interim order as to
suspend the voting rights before making or completing such
enquiry.
(5) The provisions of this section shall not restrict the
right of a holder of shares or debentures, to transfer such
shares or debentures and any person acquiring such shares or
debentures shall be entitled to voting rights unless, the
voting rights have been suspended by an order of the Company
Law Board.
(6) Notwithstanding anything contained in this section,
any further transfer, during the pendency of the application
with the Company Law Board, of shares or debentures shall
entitle the transferee to voting rights unless the voting
rights in respect of such transferee have also been suspended.
(7) The provisions of sub-sections (5), (7), (9), (10)
and (12) of section 111 shall, so far as may be, apply to the
proceedings before the Company Law Board under this section as
they apply to the proceedings under that section'.
10. In section 113, after sub-section (3), the following sub-
section shall be inserted, namely:-
"(4) Notwithstanding anything contained in sub-section
(1), where the securities are dealt with in a depository, the
company shall intimate the details of allotment of securities
to depository immediately on allotment of such securities".
11. In section 150, in sub-section (1), in clause (b), the
words "distinguishing each share by its number" shall be
omitted.
12. In section 152, in sub-section (1), in clause (b), the
words "distinguishing each debenture by its number" shall be
omitted.
13. After section 152, the following section shall be
inserted, namely:-
"152A. Register and index of beneficial owners. - The
register and index of beneficial owners maintained by a
depository under section 11 of the Depositories Act, 1996,
shall be deemed to be an index of members and register and
index of debenture holders, as the case may be, for the
purposes of this Act."
14. In Schedule II, in Part II, in clause C, after sub-clause
9, the following sub-clause shall be inserted, namely:-
"9A. The details of opinion to subscribe for securities
to be dealt with in a depository".
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