from the chairman · may, 2015 3 nirc-icsi newsletter from the chairman one day workshops on 25th...

May, 2015 3 NIRC-ICSI Newsletter

From the Chairman

One Day Workshops

On 25th April, 2015 NIRC organised a workshop onthe topic "Board's Report" at ICSI-NIRC Building, CSHemant Paliwal was the guest speaker on the occasionand on 8th May, 2015 NIRC organised another one dayworkshop on the topic "Secretarial Audit" at ICSI-NIRCBuilding. CS Ranjeet Pandey, Council Member, ICSI andCS Atul Mittal, Former Council Member, ICSI were theguest Speakers on the occasion.

PCS Induction Program

On 9th & 10th May, 2015, NIRC organised a PCSInduction Program at NIRC premises. During theprogram the main focus of deliberations was on Basicinfrastructure required to start practice, Recordmaintenance, Professional Development, FinancialAssistance from Corporation bank, Interaction withClients and Billing, Taking basic registrations such asTAN, PAN, etc., Handling Service Tax, Code of Conduct,Company Secretaries (Procedure of Investigations ofProfessional and other Misconduct and Conduct ofCases) Rules, 2007, ICSI Guidelines applicable to PCSand other guidelines, Drafting of Deeds and Documents,Opinion writing, Appearance before Authorities andalso the major areas of practice for Company Secretariesviz. Secretarial Audit, Diligence Report for Banks,Internal Audit of Depository Participants, ComplianceCertificates, Business Responsibility Report, Insuranceetc. Members present found the program very useful.CS Satwinder Singh, Council Member, ICSI, CS S Kumar,Former Principal Director, ICSI, CS Manish Gupta, ViceChairman, NIRC & CS Saurabh Jain, Deputy Director,ICSI were the guest speakers in the program.

I take this opportunity to place on record my sincerethanks & gratitude to guest speakers for all the programsfor sparing their time and sharing their rich experiencewith the participants of the programs.

Students Programs

Management Skills Orientation Programs

On 18th April, 2015, valedictory function of 209th &210th batches of Management Skills OrientationProgram (MSOP) was organised by NIRC at Hotel EROS,New Delhi. CS M S Rathore, VP-Legal, CorporateCommunication & Secretary, Chambal Fertilizers &Chemicals Ltd. was the Chief Guest and CS RupaSarkar, Group Company Secretary, IFCI Ltd. was theGuest of Honour on the occasion.

On 25th April, 2015, NIRC inaugurated 211th batch ofMSOP at Bhilwara and the valedictory function of thesame was organised at Bhilwara on 9th May, 2015 & on27th April, 2015, NIRC inaugurated 212th batch ofMSOP at NIRC premises. Dr. S P Narang, FormerSecretary, The ICSI was the Chief Guest on the occasion.I take this opportunity to thank Dr. Narang for sparingtime and sharing his rich knowledge and experiencewith the participants of the batch.

Professional Development Program (PDP)

On 22nd April, 2015 NIRC organised ProfessionalDevelopment Program for the students at NIRCpremises. Mr. Shyam Kapoor, Corporate Trainer wasthe guest speaker on the topic "PersonalityDevelopment" on the occasion.

Campus Placement

On 17th April, 2015, NIRC in its endeavour to providebest placement opportunities to members organised acampus placement exclusively for Ernst & Young LLP(EY). Members participated in good number. I take thisopportunity to request EY for joining hands with NIRCand initiating the process of recruiting our youngmembers.

On 2nd May, 2015, NIRC in its endeavour to providebest placement opportunities to the students of theInstitute who are searching for training had organisedCampus Placement at NIRC premises. NIRC iscommitted to organise these campus placements veryfrequently and request all of you to kindly support thisendeavour of NIRC.

Forthcoming Programs

NIRC-ICSI is planning to organise various programsduring the month of May & June, 2015. The detailedinformation about these programs is published in thenewsletter for your benefit. The brief details of the sameis as under:

• On 23rd May, 2015 NIRC is organising ICSIConvocation of the Northern Region atManekshaw Centre Auditorium, New Delhi.

• From 25th May, 2015 to 31st May, 2015, theInstitute is celebrating Capital Market Week,during this week on 30th May, 2015 the Instituteis organising Mega Program on Capital Marketat SCOPE Complex, New Delhi and NIRC is Co-hosting the event.

We request you to kindly join these programs in largenumbers and make them successful, as attendance inall these programs work as fuel for generating sparkinside us and boosts our morale to organise more andmore quality professional development programs.

We look forward for your valuable suggestions for thebetterment of the profession. Feel free to interact withme at [email protected]

With warm regards,

CS NPS Chawla

Chairman, NIRC-ICSI

Cell: 9958535300

13.05.2015 [email protected]


Sub Judice is a Latin term that means "UnderJudgment". It denotes that a matter or case isbeing considered by Court or Judge. When twoor more cases are filed between the same partieson the same subject matter, in two or moredifferent Courts, the competent court has powerto "Stay Proceedings" of other Court. Sub judiceis a principle of public policy that seeks to preventmultiplicity of litigations.

Section 10 of the Civil Procedure Code, 1908 dealswith the concept of Res Subjudice. The object ofSection 10 is to prevent Courts of concurrentjurisdiction from simultaneously, trying twoparallel cases, in respect of the same matter inissue. The two fold objective of section is:

1. Avoiding wasting Court resources

2. Avoid conflicting decision

In the case of Escorts Construction EquipmentLtd. v. Action Construction Equipment Ltd(1998), the Apex court held that the condition

requisites to invoke Section 10 of Civil ProcedureCode are:

• Matter in issue in both the suits to besubstantially the same

• Suit to be between the same parties orparties litigating under them

• Previously instituted suit in the same Courtor a different Court, which has jurisdictionto grant the relief asked.

Again, the Hon'ble Supreme Court in the case ofIndian Bank v. Maharashtra State Co-OperationMarketing Federation (1998) held that the objectof prohibition in Section 10 of Civil ProcedureCode, is to:• Prevent Courts of concurrent jurisdiction

from simultaneously trying two parallelcases

• Avoid inconsistent finding on the matterin issue

Thus, the principle of res sub judice has becomean essential feature of the Indian judicial systemand duly followed by all the Courts at all levels.

RES SUBJUDICE

Legal Lingo

ATTENTION MEMBERS/STUDENTS

The details of Members Programs like Seminar, Conferences, etc. and soft copies

of NIRC-ICSI Newsletters & Students' programs viz PDP, MSOP, Students

Activities such as viz Moot Court Competitions, Elocution Competition, Essay

writing, Company Law Quiz and Student Conferences are regularly updated on

the NIRC Portal at ICSI website.

To get updated information, Members & Students are requested to visit our

following website regularly

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

WWW.ICSI.EDU/NIRO


Corporate Membership Scheme

Corporate Membership Scheme of NIRC forProfessional Programs: 2015-16

The Corporate Membership Scheme of NIRC of ICSI is open for the Financial Year 2015-16(April'15 to March'16). Anyone becoming a member under the Scheme shall be entitled to thefollowing benefits:• To attend all the paid programs (Except workshops and residential programs) organized by NIRC free of

charge throughout the year.• The member may depute some other officer only from his/her organization with authorization on letter head

of the company and certifying that the nominated person is from his/her organization.• The individual member/PCS may depute only his partner, employee authorizing in writing to attend the

program certifying that the nominated person is his partner/employee. • More than 20 professional development programs were organized in the year 2014-15 free of cost for Corporate

Members of NIRC-ICSI. In addition to that, if the corpus allows, Corporate Members of NIRC-ICSI are givenadditional benefits as well. The Corporate Members of NIRC-ICSI for the year 2013-2014 were given a set ofICSI publications (almost worth Rs. 1000/-per set) free of charge. The Corporate Members for the year 2014-2015 shall be given some additional benefit soon.

• Corporate Members were invited free of charge for attending the New Year Celebrations and other SocialActivities being organized by NIRC-ICSI.

• Program Credit hours will be given to the members according to the duration of each program.• PDP hours are also given to the students (at the programs decided by NIRC, upon payment of participation

fee).

The fee structure for the corporate membership for financial year 2015-16 is as under:

The Cheque/DD towards the Corporate Membership Fee for the requisite amount be drawn in favour of “NIRC ofthe ICSI” or ONLINE TRANSFER may be made to NIRC-ICSI SAVING BANK ACCOUNT NO: SB-90062010039267,SYNDICATE BANK, EAST PATEL NAGAR, NEW DELHI-110008, RTGS/NEFT IFSC - SYNB0009006 and enrolmentform along with the TRANSACTION ID BE SEND to Regional Director, NIRC of ICSI, Plot no. 4, Prasad NagarInstitutional Area , New Delhi-110005 (Phone: 011-49343007), email id [email protected]. IN CASE ONLINE TRANSFERFACILITY IS AVAILED, THE TRANSACTION ID MUST BE SEND TO NIRO FOR TRACKING THE PAYMENT. Formore details: visit www.icsi.edu/niro or call Mr. Sanjay Nagar, Regional Director (North) - ICSI – 9313339897.

Members are requested to be a Corporate Member of NIRC of ICSI.

Particulars Amount

(Inclusive of Service Tax)

For Members Rs. 9,500/-

For PCS Rs. 8,900/-

For Non-Members Rs. 10,500/-

For Senior Citizens Rs. 7,800/-


Introduction:

Chapter V of Companies Act, 1956 (relates to'Compromises and Arrangements') ,containing Sections 390 to Section 396A,provides for a procedure for a company tomerge into or to acquire another company. Ascheme of arrangement shall, under aforesaidChapter of the Companies Act, 1956 ('theAct'), be formulated by the companies, andapproved by creditors and shareholders. Afterthe scheme is formulated, Court's directionsfor holding creditors and members meetings,is sought for. Once, the meetings areconducted and the scheme is approved by thecreditors and members, the approved schemeis placed before the Court for its sanction. TheCourt, then, issues notice to the concernedRegional Director ('RD'), who shall point outfault, if any, in the scheme, by raisingobjections to the scheme. Such notices are alsoissued to other Government authorities likeIncome Tax Authorities ('IT authorities') toraise any objection to the scheme. If there areno objections raised, the Court sanctions thescheme. However, in case of objections, theCourt hears the parties and then rules on theobjections.

Objections to arrangement scheme:

Chapter V of the Act empowers RD to raiseany kind of objection to the scheme. VariousGovt authorities too shall raise any objectionto the scheme. With respect to IT authorities,Ministry of Corporate Affairs issued a circulardated January 15, 2014 ( 'MCA Circular')which states that if within 15 days of issuanceof notice to Income Tax Department ( 'ITDept'), no response as to their objections onthe sanctioning of the scheme are receivedfrom them, it is presumed that the Income Tax

REGIONAL DIRECTOR'S TAX RELATED OBJECTIONS TO A SCHEME OFARRANGEMENT - SUSTAINABLE?

Department has no objection to the schemebeing sanctioned under aforesaid chapter.

The controversy arises when IT Dept raisesno tax related objections, however, RD in hisreport, raises objections pertaining to tax aswell. The question of debate here is whetherRD can raise such objections, whether RD'spower to object to a scheme of arrangementis so wide that it can raise tax objections too,after no such objection raised by IT Dept.

Can Regional Director raise tax relatedobjection to a scheme of arrangement?

In the recent decision of Bombay High Court(Company Scheme Petition No. 137 of 2014and Company Scheme Petition No. 138 of2014, decided on March 19, 2015), whereinscheme of arrangement of Casby CFS Pvt. Ltd.and Casby Logistics Pvt. Ltd ('the parties') wasconsidered, it was held that RD was not onlyempowered but duty bound to point out anyprovision in the scheme which maycontravene the provisions of any lawincluding the law pertaining to Income Tax.In this case, RD had raised the issue that theparties had violated Section 139(5) of IncomeTax Act ('IT Act') which provides for fling ofrevised return, by choosing a retrospectiveappointed date.

Section 139(5) of IT Act stipulates that arevised Income Tax Return can be filed onlyif following conditions are satisfied: (i) thatthe assessee discovers any omission or wrongstatement in return already filed and (ii) therevised return is filed before the expiry of oneyear from the end of the relevant assessmentyear or before the completion of theassessment, whichever is earlier.

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– CS Sneha Ghuriani*

*Views expressed by the Author are solely her own view and the Firm, NIRC of ICSI does not accept any responsibility.


RD pointed out that by choosing aretrospective appointed date, parties wouldfile the revised return after the stipulatedperiod u/s 139(5) of IT Act, therebycircumventing the law.

Bombay High Court had also observed thereinthat RD had got statutory recognition u/s 394and 394A of the Act to make representationand offer his comments in respect of a scheme.In the words of Bombay High Court, "thelegislature intended that the Regional Directorwill examine a scheme from all aspects andplace his observations and views before theCourt and the Court will consider the samebefore sanctioning the scheme..." Stressing on'public interest', it was further held thereinthat it is in public interest that all aspects of ascheme are duly considered and decidedbefore the scheme is sanctioned. Thus, it washeld that RD has power to raise tax objectionsas well.

Does MCA Circular go against RegionalDirector's power to raise tax objections?

MCA circular dated January 15, 2014stipulated that if, IT Dept, within 15 days ofissuance of notice did not raise any objectionson sanctioning of the scheme, scheme shall bepresumed to be sanctioned by IT Dept.However, the MCA Circular nowhereprohibits RD to not to raise any objection tothe scheme. Since, RD can raise any objectionto the scheme of arrangement, then a circular,that too on procedural aspects of raising anobjection to the scheme, cannot restrictpowers of RD.

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With regard to MCA Circular vis-a-vis RD'spower to raise tax related objections to thescheme, Bombay High Court in theaforementioned case of Casby CFS Pvt. Ltd.held that there was no restriction placed onthe rights and powers of RD. It was observedtherein that, "The Circular merely provides amechanism for the Regional Director to invitethe comments of the Income Tax Departmentand for the Income Tax Department torespond to the same... This however does notprevent the Regional Director from raisingsuch objections or making such observationswith regard to the scheme as he may deem fitincluding objections and observationspertaining to taxation laws."

Conclusion:

Thus, harmoniously interpreting the statuteand the MCA Circular, it becomes clear thatRD is empowered to raise objections to ascheme of arrangement relating to any law.In fact, it is mandatory on RD to point out allthe flaws in the scheme, not limiting to aparticular law or subject. Moreover, since ascheme of arrangement is designed for thebenefit of the stakeholders of a company, it isnecessary that all the defects in it are removedelse it might go against public interest. Evenif a circular specifies any details regardingraising of objections to the scheme, it cannottake away the statutory power of RD to raiseobjections, be it tax related. Ths, RDs carrysignificant responsibility to scrupulouslycheck the scheme and raise all sorts ofobjections, and such a responsibility cannotbe curtailed by any regulatory mechanism.

CHAPTERS OF NIRC-ICSIAgra, Ajmer, Allahabad, Alwar, Amritsar, Bareilly, Bhilwara, Bikaner, Chandigarh, Dehradun,Faridabad, Ghaziabad, Gurgaon, Jaipur, Jalandhar, Jammu, Jodhpur, Kanpur, Karnal-Panipat,Kota, Lucknow, Ludhiana, Meerut, Modinagar, Noida, Shimla, Sonepat, Srinagar, Udaipur,Varanasi & Yamuna Nagar.

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Article

*Views expressed by the Author are solely her own view and the Firm, NIRC of ICSI does not accept any responsibility.

E-VOTING: EASE OF DOING BUSINESS?– CS Sneha Ghuriani*

Introduction:

Companies Act, 2013 ('the Act') brought withitself the provision for electronic voting ('e-voting'). Section 108 of the Act provides forvoting through electronic means and empowersCentral Government to prescribe class ofcompanies and manner in which a member mayexercise his voting rights by such method.

Voting is a statutory right of a shareholder.However, there were times when a shareholderwas unable to attend the meeting and thus, couldnot exercise his right to vote. To combat suchissue, concept of voting by postal ballot wasintroduced. With growing technology, it wasdecided that concept of e-voting should bebrought in.

E-voting relates to a secured procedure ofdisplay of electronic ballots whereby entirevoting is exercised by way of electronic means,and the votes are registered and counted in anelectronic registry in a centralised server withadequate cyber security.

On March 31, 2014, Government of India notified'The Companies (Management andAdministration) Rules, 2014' whereby Rule 20talked about the class of companies which shouldexercise e-voting mechanism and manner of suchmechanism.

Recently, on March 19, 2015, Government issueda notification amending the above e-voting rule,vide, Companies (Management andAdministration) Amendment Rules, 2015 ('theamended rules').

Applicability of e-voting:

A company having its equity shares listed on arecognised stock exchange or a company havingnot less than one thousand members is mandatedto provide facility to its members to exercise

their right to vote in general meetings.However, listed small and medium enterprisesare kept out of such mandate.

Such rules shall be applicable to all the noticesof general meeting sent after the publication ofthe amended rules in official gazette.

Remote e-voting:

The amended rules have introduced the conceptof remote e-voting which "means the facility ofcasting votes by a member using an electronicvoting system from a place other than venue ofa general meeting" . Further the amended rulesalso provide that voting by electronic meanswould include "remote e-voting" and voting atthe general meeting through an electronic votingsystem which may be the same as used forremote e-voting.

Thus, bringing in such concept, Ministry ofCorporate Affairs ('MCA') gives a clarity thate-voting is not just restricted to use of electronicmedium for the purpose of voting within apremises where a general meeting is held, butinvolves all the members who cannot attend themeeting personally, but can and want to exercisetheir right to vote from any other place.

Introducing such concept indicates that theGovernment is trying to ease the method ofdoing business. However, looking at the darkeraspect, it's high cost incurring process to installsuch a facility.

Further, the amended rules stipulate that thefacility for remote e-voting shall remain openfor not less than three days and shall close at5.00 p.m. on the date preceding the date ofgeneral meeting. Thus, an eligible member (i.e.,whose name is there on the register ofshareholders as on the date of closure of books)who wants to opt for such remote e-voting


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method can do that within those days, but shallnot be allowed to vote again when the generalmeeting is held. However, a member who hascasted his vote through remote e-votingtechnique can surely attend the meetingphysically without re-casting or changing hisvote.

At the end of the period of remote e-voting,such facility shall be blocked. However, theamended rules give a leeway to a company thatwants to provide the same electronic votingsystem as used during remote e-voting duringthe general meeting. If it is opted then the saidfacility shall be in operation ti l l all theresolutions are considered and voted upon inthe meeting. However, a point of caution whichis to be noted here is that a member who hasused the facility of remote e-voting should notbe again allowed to use it if he attends themeeting physically.

Scrutiny of the voting procedure:

The Board of Directors shall appoint one or morescrutiniser for the purpose of scrutinising thevoting procedure. Such scrutiniser may beChartered Accountant in practice, CostAccountant in practice, or Company Secretaryin practice or an Advocate or any other personwho is not in employment of the company.

The scrutiniser(s) so appointed shall ascertainthe requisite majority, keep a check on memberswho have already voted through remote-voting.Immediately after conclusion of voting at thegeneral meeting, the scrutiniser shall first countthe votes casted at the meeting, thereafterunblock the votes casted through remote e-voting in the presence of at least two witnessesnot in the employment of the company.Thereafter, scrutiniser shall a report of totalvotes casted in favour or against the resolution,not later than three days of conclusion of themeeting.

Results of voting:

The results shall be declared by the Chairmanwhich must, along with Scrutiniser's report, be

placed on the website of the company and onthe website of the agency immediately.

A resolution proposed to be considered throughe-voting cannot be withdrawn.

Conclusion:

Keeping in view the motto 'ease of doingbusiness', if we consider the option of e-votingas describes above, it is a welcome move.However, do such rules really ease the way oftransacting business or complicate it further, isa question of debate.

While on one hand, one must move with thegrowing technology, implications and recurringof such technology should also be borne in mind.Practically speaking, it will be difficult forcompanies to install such a mechanism and makeit effective and efficient.

Going further, right to vote is the mostimportant right of a member, whereby, he canraise issues / questions on the decisions of theBoard of Directors. General meetings providea platform to the members to speak up, discussand debate over company's decisions. Thus,presence of members to participate in suchdiscussions is quite important and significant.With the coming of e-voting, particularly,remote e-voting, participation of members intodebates and discussions over the resolutionwould decrease, leading to decrease insignificance of having a general meeting.

Thus, what is recommended is, to introducesuch mechanism wherein the members can evenvirtually participate in the meeting, discussingand debating over the resolution, if they areunable to physically attend the meeting.

We hope that in order to further ease doingbusiness in India, such mechanism is brought insoon, so that the basic idea of having a generalmeeting is not lost faraway.


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Dividend:

As per Section 2(35) of Companies Act, 2013 definesthe term as including any interim dividend.

• Dividend is basically the share of profitdistributed among shareholders.

• Ordinary meaning of dividend is a share ofprofits, whether at a fixed rate or otherwise,allocated to holders of shares in a company.

• Dividend can be paid on Equity or preferenceshares both.

• The word "Dividend" has origin from the Latinword "Dividendum". It means a thing to bedivided.

Source for payment of Dividend:

Dividend can be paid out of Followings: Section- 123(1)(a)

• Profit of the current year after providing of thedepreciation; or

• Profit of the previous financial year or years afterproviding for depreciation for previous years; or

• Out of the money provided by Central or StateGovernment for payment of dividend inpursuance of guarantee given by that, if any.

Term 'Profit'- Profit can be either revenue profit orCapital profits or both. Thus, dividend can't be paid byrevaluation of assets, as the surplus has not beenactually realized.Note:

• It is not necessary to distribute whole of profitsamong shareholders.

Transfer portion of profit in reserve:

Before declaration of dividend, a company maytransfer a portion from the profit to the reserves ofthe company. The company is free to decide thepercentage for such transfer to the reserve.

Mandatory transfer to reserve is not required underCompanies Act 2013. Companies are free to transfersuch percentage of its profits for that financial yearas it may consider appropriate to the reserves. {FirstProviso to Section 123(1) of the Companies Act, 2013}.

DIVIDEND UNDER COMPANIES ACT, 2013

The reserve shall, at the discretion of the Board, beapplicable for any purpose to which the profits ofthe company may be properly applied, includingprovision for meeting contingencies or for equalizingdividends. {As per Clause 82 (i) of Model Articles ofCompany Limited by shares as Contained in Table-F of Schedule-I of the 2013 Act}.

THUS TRANSFER OF SPECIFIC AMOUNT TORESERVES IS NOT MANDATORY.

DECLARATION OF DIVIDEND:

Notice of Dividend:

{As per Clause 87 of Model Articles of CompanyLimited by shares as Contained in Table-F ofSchedule-I of the 2013 Act} Notice of dividenddeclared shall be given to the persons entitled toshare in it.

Process for declaration of Dividend:

{As per Clause 80 of Model Articles of CompanyLimited by shares as Contained in Table-F ofSchedule-I of the 2013 Act}

• Company in Board Meeting may decide theamount of dividend which they want torecommend in General Meeting.

• Company will mention the resolution forDividend in the Notice of General Meeting.

• Company will hold the General Meeting:

• Declaration of Dividend is Ordinary Business.

• Ordinary Resolution for declaration of dividendwill be passed in the General Meeting.

• Once dividend is declared, it must be paid within30 days.

Note:

• Dividend declared in General Meeting can'texceed the dividend recommended by the Board.

• Dividend declared in General Meeting by membercan be less than the dividend recommended bythe Board.

• Dividend paid in General Meeting is FinalDividend.

– CS Divesh Goyal*

*Views expressed by the Author are solely his own view and the Firm, NIRC of ICSI does not accept any responsibility.


INTERIM DIVIDEND:

{As per Clause 81 of Model Articles of Company Limitedby shares as Contained in Table-F of Schedule-I of the2013 Act}

• Interim dividend can only be declared by boardof Directors.

• Generally paid in the middle of the year if Boardof directors fined that profitability of the company.

• Board of Directors can declare dividend out ofsurplus in profit and loss account at the beginningof the year or profit during the year.

In case of Company incurred losses in currentfinancial year:

If the company has incurred loss during the currentfinancial year upto the end of the quarterimmediately preceding the date of declaration ofinterim dividend, such interim dividend shall notbe declared at a rate higher than the averagedividends by the company during the immediatelypreceding three financial year- Section 123(3).

Note:

• Interim dividend is really a mod of keepingshareholder happy and keeping good image ofcompany in stock market.

• All legal provisions applicable on final dividendequally apply on interim dividend.

Condition common for Both Final Dividend andInterim Dividend:

• Deposit of Amount of declared dividend inseparate Bank Account.

• Payment of dividend within 30 days ofdeclaration.

• Transfer of unpaid dividend in special account.• Interest for late payment• Transfer of Investor protection Fund after Seven

year.• Penalty for non payment etc.DIVIDEND DECLARES IS A DEBT:

• Dividend declared in the General Meeting is adebt payable by the company to its registeredshareholders.

• Interim dividend declared by the Company inBoard Meeting is a debt payable by the companyto its registered shareholders.

• If, Dividend declared in the General Meeting isfound to be against law same can always berevoked or considered as void.

HOW TO DECIDE THE SHAREHOLDERS TOWHOM DIVIDEND WILL BE GIVEN:

Unlisted Companies (Include unlisted Public andPrivate Limited Company):

• It is not necessary to close register.• There are few transfers in these Companies.• General Meeting can decide the 'Cut off' date or

could be date of General Meeting.ISSUE OF SHARES WITH DIFFERENTIAL RIGHT:

If share with differential right have been issued,dividend will be declared and paid on the basis ofterms of issue. {Regulation 83(iii) of Model AOATable-F of the Act, 2013}.

MODE OF PAYMENT OF DIVIDEND:

There are following Modes of Payment of Dividend:[Section- 123(5)]

• Cash

• Cheque

• Dividend Warrant

• In any electronic Manner.Note:

• Dividend should be paid by cheque or warrantsent through post to the registered address of theshareholder.

• Dividend can't be paid in 'KIND' e.g. in form ofGifts, Goods or Bonus Shares.

• Payment of dividend to another person as perorder of the shareholder is permissible. This isalso providing in {Regulation 85(ii) of ModelArticles Table- F as per the 2013 Act.}

DIVIDEND IN CASE OF JOINT SHAREHOLDER:

• In case of Joint shareholders, the cheque orwarrant of dividend should be sent to the holderfirst named in the register of members.

• If the joint holders direct in writing the cheque ordividend can be send to another person asdirected by the join shareholders { Regulation85(i) of Model Articles Table- F as per the 2013Act.}

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PROHIBITION ON DIVIDEND:

A company which has default under Section 73 and74 related to deposit and repayment of deposit orinterest thereon may not declare dividend.

A company cannot declare dividend if the companyfails to comply with acceptance of deposits andrepayment of deposits accepted prior to thecommencement of this Act. (section 73 & 74 ofCompanies Act 2013.

RIGHT OF MEMBERS PENDING REGISTRATIONOF TRANSFER (SECTION 126):

Where any instrument of transfer of shares has beendelivered to any company for registration and thetransfer of such shares has not been registered bythe company, it shall,-

(a) Transfer the dividend in relation to such sharesto the Unpaid Dividend Account unless the companyis authorized by the registered holder of such sharesin writing to pay such dividend to the transfereespecified in such instrument of transfer; and

(b) Keep in abeyance in relation to such shares, anyoffer of rights shares and any issue of fully paid-upbonus shares.

FREE RESERVE:

Where a company has no adequate profit or anyprofit in a financial year or any accumulated profitto distribute as dividend, it may declare dividendout of reserves in accordance with the rules made bythe government. The company may pay dividendonly from free reserves, not from any other reserves.

No dividend shall be paid from its reserves otherthan free reserves. The term "Free Reserves" isdefined under Section 2 (43) of the Company Act2013. Free reserve means such reserve which, as perthe latest audited balance sheet of a Company, areavailable for distribution of profit.

PUNISHMENT FOR FAILURE TO DISTRIBUTEDIVIDEND (SECTION 127):

Where a dividend has been declared by a companybut has not been paid or the warrant in respectthereof has not been posted within thirty days fromthe date of declaration to any shareholder entitledto the payment of the dividend, every director of thecompany shall, if he is knowingly a party to thedefault, be punishable with imprisonment whichmay extend to two years and with fine which shallnot be less than one thousand rupees for every day

during which such default continues and thecompany shall be liable to pay simple interest at therate of eighteen percent per annum during the periodfor which such default continues.

No offence under this section shall be deemed tohave been committed:-

(a) Where the dividend could not be paid by reasonof the operation of any law;

(b) Where a shareholder has given directions to thecompany regarding the payment of the dividend andthose directions cannot be complied with and thesame has been communicated to him;

(c) Where there is a dispute regarding the right toreceive the dividend;

(d) Where the dividend has been lawfully adjustedby the company against any sum due to it from theshareholder; or

(e) Where, for any other reason, the failure to paythe dividend or to post the warrant within the periodunder this section was not due to any default on thepart of the company.

SOME IMPORTANT POINTS TO BE KEPT IN MIND:

• Declaration of dividend and amount to betransferred to reserve is responsibility of theBoard.

• Bona fide decision of Board in respect of dividendcan't be challenged.

• The dividend should be declared unconditionaland must be paid within 30 days.

• Dividend on equity shares can be distributed onlyafter dividend on preference shares is declared.

• The amount of the dividend, including interimdividend, shall be deposited in a schedule bankin separate account within 5 days from the dateof declaration of such dividend.

FAQ'S

1. Whether Company can declare dividend in EGMinstead of AGM?

Ans: As per regulation 80 of Model Articles Table Fof the 2013, Act, "Company in General Meeting maydeclare dividend". As per the Regulation 80 of AOAit's not mandatory to declare dividend in AGM, ifdividend not declared in AGM then company candeclare dividend in subsequent EGM.

Article


If dividend is declared in AGM, it can't be increasedfurther in subsequent EGM.

2. Whether shares issued during the year areentitled to dividend for full year?

Ans: In case of new shares issued during the year,offer document may provide that dividend is payableon pro rata basis from the date of allotment or a datespecified in offer document. Thus, Old shares willbe entitled for dividend for full year, while newshares will be entitled to dividend only from the dateof allotment on pro rate basis.

It is usually provided that share issued during theyear will be entitled to dividend on pro rata basisi.e. only for part of the year for which new shareswere held.

3. Whether dividend will be payable on call moneypaid in advance?

Ans: Dividend is not payable on call money paid inadvance.

PROVISIONS OF DIVIDEND GIVEN IN ARTICLEOF ASSOCIATION: {TABLE- F OF SCHEDULE - I OFCOMPANIES ACT, 2013}

Dividends and Reserve

80. The company in general meeting may declaredividends, but no dividend shall exceed the

amount recommended by the Board.

81. Subject to the provisions of section 123, the Boardmay from time to time pay to the

members such interim dividends as appear to it tobe justified by the profits of the company.

82. (i) The Board may, before recommending anydividend, set aside out of the profits of the

company such sums as it thinks fit as a reserve orreserves which shall, at the discretion

of the Board, be applicable for any purpose to whichthe profits of the company may be

properly applied, including provision for meetingcontingencies or for equalizing

dividends; and pending such application, may, atthe like discretion, either be employed

in the business of the company or be invested insuch investments (other than shares of the company)as the Board may, from time to time, thinks fit.

(ii) The Board may also carry forward any profitswhich it may consider necessary not to divide,without setting them aside as a reserve.

83. (i) Subject to the rights of persons, if any, entitledto shares with special rights as to dividends, alldividends shall be declared and paid according tothe amounts paid or credited as paid on the sharesin respect whereof the dividend is paid, but if andso long as nothing is paid upon any of the shares inthe company, dividends may be declared and paidaccording to the amounts of the shares.

(ii) No amount paid or credited as paid on a share inadvance of calls shall be treated for the purposes ofthis regulation as paid on the share.

(iii) All dividends shall be apportioned and paidproportionately to the amounts paid

or credited as paid on the shares during any portionor portions of the period in respect of which thedividend is paid; but if any share is issued on termsproviding that it shall rank for dividend as from aparticular date such share shall rank for dividendaccordingly.

84. The Board may deduct from any dividend payableto any member all sums of money, if any, presentlypayable by him to the company on account of callsor otherwise in relation to the shares of the company.

85. (i) Any dividend, interest or other monies payablein cash in respect of shares may

be paid by cheque or warrant sent through the postdirected to the registered address of the holder or, inthe case of joint holders, to the registered address ofthat one of the joint holders who is first named onthe register of members, or to such person and tosuch address as the holder or joint holders may inwriting direct.

(ii) Every such cheque or warrant shall be madepayable to the order of the person to whom it is sent.

86. Any one of two or more joint holders of a sharemay give effective receipts for any dividends,bonuses or other monies payable in respect of suchshare.

87. Notice of any dividend that may have beendeclared shall be given to the persons entitled toshare therein in the manner mentioned in the Act.

88. No dividend shall bear interest against thecompany.

Article


Compliance Checklist

COMPLIANCE CHECKLIST FROM 1ST MAY TO 10TH JUNE, 2015Compliance Checklist

Central Excise Related Compliance

S. No. Activities Sections/Rules/

Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

1. Last Date for payment of Excise

Duty Non SSI units (April) *(in

case of Payment through Internet

banking)

Rule 8 Central Excise

Rules, 2002

05th

May

*06th

May

Central Excise

Authorities

2. Monthly Return of information

relating to Principal Inputs (April,

2015) (Form No. ER-6)

Rule 9A CENVAT Credit

Rules, 2004

10th

May Central Excise

Authorities

3. Filing of Return of Central Excise

and Cenvat Credit for the month of

April, 2015 (Form No. ER-1) (Non

SSI Units)

Rule 12 / Rule

9(7)

Central Excise

Rules, 2002/

CENVAT Credit

Rules, 2004

10th

May

Central Excise

Authorities

4. Monthly Excise return by EOU for

the month of April, 2015 (Form

No. ER-2)

Rule 17(3) Central Excise

Rules, 2002

10th

May

Central Excise

Authorities

5. Last Date for payment of Excise

Duty Non SSI units (May) *(in

case of Payment through Internet

banking)

Rule 8 Central Excise

Rules, 2002

05th

June

*06th

June

Central Excise

Authorities

6. Monthly Return of information

relating to Principal Inputs (May,

2015) (Form No. ER-6)

Rule 9A CENVAT Credit

Rules, 2004

10th

June Central Excise

Authorities

7. Filing of Return of Central Excise

and Cenvat Credit for the month of

May, 2015 (Form No. ER-1) (Non

SSI Units)

Rule 12 / Rule

9(7)

Central Excise

Rules, 2002/

CENVAT Credit

Rules, 2004

10th

June

Central Excise

Authorities

8. Monthly Excise return by EOU for

the month of May, 2015 (Form

No. ER-2)

Rule 17(3) Central Excise

Rules, 2002

10th

June

Central Excise

Authorities

Service Tax Related Compliances


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

9. Pay Service Tax in Challan

GAR – 7, collected for the month

of April 2015 by persons other

than individuals proprietors and

partnership firms. *(in case of

Payment through Internet banking)

Section 68 Read

with Rule 6

Finance Act, 1994

Service Tax Rules,

1994

05th

May

*06th

May

Service Tax

Authorities

10. Pay Service Tax in Challan

GAR – 7, collected for the month

of May 2015 by persons other than

individuals proprietors and

partnership firms. *(in case of

Payment through Internet banking)

Section 68 Read

with Rule 6

Finance Act, 1994

Service Tax Rules,

1994

05th

June

*06th

June

Service Tax

Authorities



Income-tax Related Compliances


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

11. Contractor’s Bill / Advertising /

Professional service Bill - TDS

collected for the previous month

Section 194J (April, 2015)

Section 194C

Section 194J

Income-tax Act,

1961

07th

May Income Tax

Authorities

12. Monthly payment of TCS (April,

2015)

Section 206 Income-tax Act,

1961

07th

May Income Tax

Authorities

13. TDS from Salaries for the previous

month (April 2015)

Section 192

Income-tax Act,

1961

07th

May Income Tax

Authorities

14. Deposit TDS from salaries for the

previous month in Challan No.281

(April)

Section 192

Income-tax Act,

1961

07th

May

Income Tax

Authorities

15. Quarterly Statement of collection

of tax at source (TCS) for the

Quarter Ending March 31.

Section 192

Income-tax Act,

1961

15th

May

Income Tax

Authorities

16. Quarterly TDS return for the

period Jan-March, 2015

Section 195

read with rule

37A

Income-tax Act,

1961

15th

May Income Tax

Authorities

17. Quarterly issuance of certificate of

tax deducted at source (other than

salary) for the quarter ending

March 31.


1961

30th

May

Income Tax

Authorities

18. Quarterly issuance of Certificate

of collection of tax at source

(TCS) for the Quarter Ending

March 31.

Section 192

Income-tax Act,

1961

30th

May

Income Tax

Authorities

19. Certificate of tax deducted at

source (TDS) to employees in

respect of salary paid during the

previous financial year

Section 192

Income-tax Act,

1961

31st May

Income Tax

Authorities

20. Contractor’s Bill / Advertising /

Professional service Bill - TDS

collected for the previous month

Section 194J (May, 2015)

Section 194C

Section 194J

Income-tax Act,

1961

07th

June Income Tax

Authorities

21. Monthly payment of TCS (May,

2015)


1961

07th

June Income Tax

Authorities

22. TDS from Salaries for the previous

month (May 2015)

Section 192

Income-tax Act,

1961

07th

June Income Tax

Authorities

23. Deposit TDS from salaries for the

previous month in Challan No.281

(May)

Section 192

Income-tax Act,

1961

07th

June

Income Tax

Authorities

RBI Related Compliances

S.

No.

Activities Sections/Rules/

Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

24. Monthly return (NBS-6) on

exposure to capital market

Para 13B

NBFC Prudential

Norms (Reserve

Bank) Directions,

1998

07th

May RBI



25. Monthly Return on Important

Financial Parameters

DNBS (RID)

C.C.

No.57/02.05.15/

2005-06 dated

Sep 6, 2005

Circular

07th

May RBI

26. Reporting of actual transactions of

ECB in form ECB-2 within 7

working days (April)

ECB Rules FEMA, 1999 08th

May RBI through

Authorized

Dealer

27. Monthly statement of short term

dynamic liquidity in Form ALM-I

DNBS

(PD).CC.No.15

/02.01/2000-

2001 dated June

27, 2001

Circular 10th

May RBI

28. Monthly return (NBS-6) on

exposure to capital market

Para 13B

NBFC Prudential

Norms (Reserve

Bank) Directions,

1998

07th

June RBI

29. Monthly Return on Important

Financial Parameters

DNBS (RID)

C.C.

No.57/02.05.15/

2005-06 dated

Sep 6, 2005

Circular

07th

June RBI

30. Reporting of actual transactions of

ECB in form ECB-2 within 7

working days (May)

ECB Rules FEMA, 1999 08th

June

RBI through

Authorized

Dealer

31. Monthly statement of short term

dynamic liquidity in Form ALM-I

DNBS

(PD).CC.No.15

/02.01/2000-

2001 dated June

27, 2001

Circular 10th

June RBI

Economic, Industrial & Labour Law Related Compliances


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

32. Monthly payment of Provident

Fund (PF) (Non Corporate)

(a) Paragraph 38

of Employees

Provident Funds

Scheme, 1952

(b) Section 418 of

the Companies

Act, 1956

(a) Employees’

Provident Funds

and Misc.

Provisions Act,

1952 (b)

Exempted Scheme

15th

May Provident Fund

Authorities

Trustees of

Provident Fund

33. File monthly return for

employees leaving / joining

during the month of April

(Form No.5)

Pragraph 20(2)

read with

Paragraph 36(1)

& (2)

The Employees

Pension Scheme,

1995 (For

exempted

establishments

under Employees

Provident Fund

and Misc.

Provisions Act,

1952)

15th

May

Provident Fund

Commissioner

34. i) File monthly Return of

employees entitled for

membership of Insurance

Paragraph 10 The Employees

Deposit Linked

Insurance Scheme,

15th

May Provident Fund

Commissioner



Fund (Form No.2(IF))

ii) File monthly Return for

members of Insurance Fund

leaving service during the

month of April (Form no.

3(IF))

iii) File monthly return of

members joining service

during the month of April

(Form no.F4(PS))

1976 (For

exempted

establishments

under Employees

Provident Fund

and Misc.

Provisions Act,

1952)

35. Payment of ESI contribution for

the previous month

Regulation 31

Employees’ State

Insurance Act,

1948 and

Employees State

Insurance (Gen.)

Regulations, 1950

21st May ESIC

Authorities

36. Monthly return of Provident

Fund for the previous month

(April) Provident funds

Paragraph 38 of

Employees’

Provident Act,

1952

Employees

Provident Funds

and Misc. Scheme,

1952

25th

May Provident Fund

Authorities

37. Monthly return of Provident

Fund for the previous month

with respect to International

Workers.

Paragraph 36 The Employees'

Provident Funds

Scheme, 1952

25th

May

Provident Fund

Authorities

Stock Exchange / Listing Compliance


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

38. Submission of unaudited financial result along with copy of limited review report

Clause 41 Listing Agreement 15th May Stock Exchange

39. Submission of audited financial result.

Clause 41 Listing Agreement 30th May Stock Exchange

Depositories


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

40. Submit monthly statement on

substitution of names of

depositories in the previous

quarter.

Regulation 54(5) SEBI

(Depositories &

Participants)

Regulations, 1996

07th May

Depositories

41. Submit monthly statement on

substitution of names of

depositories in the previous

quarter.

Regulation 54(5) SEBI

(Depositories &

Participants)

Regulations, 1996

07th June

Depositories

MCA / LLP


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

42. Form FC – 4, Annual Return of

Foreign Companies, to be filed

with ROC (Section 92 shall also

apply on all foreign Companies)

Section 384(2) The Companies

Act, 2013

30th

May

ROC

43. Form 11 LLP Annual Return of

Limited Liability Partnership

Rule 25(1)] Limited Liability

Partnership Rules,

2009

30th May

ROC


Note : While every care has been taken in the preparation of this Compliance Check List for theMonth of May, 2015, to ensure its accuracy at the time of publication, NIRC - ICSI assumes noresponsibility for any errors which despite all precautions, may be found therein. Members arerequested to check the latest position with the original sources before acting upon on the informationpublished in this newsletter. Neither this Newsletter nor the information contained herein constitutesa contract or will form the basis of a contract. The material contained in this document does notconstitute/ substitute professional advice that may be required before acting on any matter.


○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

COMPANY SECRETARIES BENEVOLENT FUNDMEMBERS ENROLLED REGIONWISE AS LIFE MEMBERS OF THE COMPANY SECRETARIESBENEVOLENT FUND DURING THE PERIOD 20/03/2015 TO 20/04/2015

S.No. Name Mem. No.

1. SH. PRAKASH BHATTACS 19720

2. MR. KARANVEER JINDALACS 38774

3. SH. MANINDER KUMAR JHAACS 27205

4. MS. RITU ARORAACS 30730

5. MR. MANISH KUMAR GARGACS 26934

6. MRS. SHALU AGGARWALACS 27671

7. MRS. PRIYAMVADA MAURYAACS 29315

8. MR. SATYAM TIWARIACS 30383

9. MR. DEEPAK KUMAR AJMERAACS 36054

10. MS. MEGHA GANDHIACS 30798

11. MR. JASBIR SINGHACS 38801

12. SH. UJJWAL SHARMAACS 23979

13. MS. SUNITA POKHARNAACS 39071

14. MR. PARVEEN KUMAR GOYALACS 35494


NEWS FROM NIRC

News From NIRC

Date Program Chief Guest(s)/Guest of Honour(s)/Speakers/members

Present

6.4.2015 to 4.5.2015

15 days Class Room Series on Secretarial Audit CS Pavan Kumar Vijay ,Past President, ICSI, CS Ranjeet Pandey, Council Member, ICSI, CS Jitesh Gupta, Company Secretary in Practice, CS Atul Mittal, Director, Tax and Regulatory,Delloite Touche Tohamtsu India Pvt. Ltd., CS Harish Kumar, Amarchand & Mangaldas & Suresh A.Shroff & Co., CS S Koley,Company Secretary in Practice, CS Ilam C. Kamboj, A.V.P. - Legal & Company Secretary,Hero MotoCorp Ltd., CS Satwinder Singh, Council Member, ICSI, CS. S. Kumar, Former Principal Director, ICSI, CS G P Sahi, VP (Legal) & Company Secretary, CJ International Hotels Ltd., CS H S Grover, Executive Director (Legal) Varun Beverages Limited, CS S. K. Patawari,Company Secretary, Sun Pharma, CS Rajiv Bajaj,Council Member, ICSI

17.4.2015 Campus Placement for members Officials of Ernst & Young LLP (EY) and Regional Council Members

18.4.2015 Seminar on the topic “Board Evaluation - Purpose and Process”

Chief Guest: Mr. M. Damodaran, IAS(Retd), Former Chairman, SEBI, Guest of Honour: Mr. Prashant Saran, Whole-time Member, SEBI Mr. K L Chugh, Chairman Emeritus, ITC Group, CS R. Krishnan, Founder President, ICSI, Mr. Amarjit Chopra, Past President, ICAI, Mr. Amit Tandon, Former MD, Fitch Rating and Founder, Managing Director at Institutional Investor Advisory Services India Limited & Mr. Rajesh Srivastava, Chairman & Managing Director, Rabo Equity Advisors Pvt. Ltd., were speakers CS Satwinder Singh, CS Ranjeet Pandey, CS Rajiv Bajaj, CS Vineet Chaudhary, CS NPS Chawla, CS Dhananjay Shukla, CS Pradeep Debnath, CS Manish Aggarwal & CS Nitesh Sinha were also present

18.4.2015 Valedictory function for 209th & 210th batch of MSOP

Chief Guest: CS M S Rathore, VP-Legal, Corporate Communication & Secretary, Chambal Fertilizers & Chemicals Ltd., Guest of Honour: CS Rupa Sarkar, Group Company Secretary, IFCI Ltd., CS NPS Chawla, CS Dhanajay Shukla & CS Nitesh Sinha were also present


News From NIRC

Date Program Chief Guest(s)/Guest of

Honour(s)/Speakers/members Present

24.4.2015 Study Session Meeting on Compliance Management & Reporting

CS Bhawna Srivastava, Manager-Legal, Usha International

25.4.2015 Study Session Meeting on Related Party Transactions under Companies Act, 2013

CS Harish Kumar Amarchand & Mangaldas & Suresh A.Shroff & Co.,

25.4.2015 Workshop on “Board’s Report” CS Hemant Paliwal, PCS, HPACS Consulting & CS Ranjeet Pandey

27.4.2015 Inauguration of 212th MSOP Chief Guest: CS (Dr.) S P Narang, Former Secretary, ICSI CS Manish Gupta, CS Dhananjay Shukal, CS Pradeep Debnath & CS Nitesh Sinha were also present

2.5.2015 Campus Placement for Students Officials of Recruiters and Regional Council Members

2.5.2015 Conference on “Labour Laws – A changing Paradigm”

Chief Guest: Mr S K Kaushik, Ex-Presiding Judge, Labour court, Delhi, Guest of Honour: CS Atul H Mehta, President, ICSI Speakers: Mr. Anil Bhat, Managing Partner, Lex and Craft, Mr. Piyush Sharma, Add. Labour Commissioner (Retd.) Delhi, Mr. Saurabh Munjal,Partner, Lex and Craft CS Satwinder Singh, CS NPS Chawla, CS Paradeep Debnath, CS Rajeev Bhambri, CS Saurabh Kalia & CS Nitesh Sinha were also present

8.5.2015 One Day Workshop on “Secretarial Audit” CS Ranjeet Pandey & CS Atul Mittal, CS Manish Gupta & CS Dhananjay Shukla were also present

9-10.5.2015 Two Day PCS Induction Program CS Satwinder Singh, CS S Kumar, CS Manish Gupta & CS Saurabh Jain

15.5.2015 Valedictory of 212th MSOP CS Manish Gupta, CS Dhananjay Shukla & CS Pradeep Debnath were present.


One of the most important doctrines of interpretingconstitution is doctrine of pith and substance. The basicpurpose of this doctrine is to determine under whichhead of power or field i.e. under which list (provided inthe Seventh Schedule of Constitution) a given piece oflegislation falls. This doctrine has been constantlyadopted by the Apex Court to ascertain the validity of aparticular legislation, when it is challenged on thegrounds of legislative competence.

Pith means 'true nature' or 'essence of something' andSubstance means 'the most important or essential partof something'. Thus, doctrine of Pith and Substance saysthat where the question arises of determining whethera particular law relates to a particular subject(mentioned in one List or another), the court looks to thesubstance of the matter. Hence, if the substance fallswithin Union List, then the incidental encroachment bythe law on the State List does not make it invalid.

There are hundreds of judgments that have applied thisdoctrine to ascertain the true nature of a legislation. Oneof the first important judgments of the Supreme Courtthat took recourse to the Doctrine of Pith and Substanceis The State of Bombay And Another vs F.N. Balsara,

AIR 1951 SC 318. The Supreme Court upheld theDoctrine of Pith and Substance in this case and furthersaid that this doctrine is important to ascertain the truenature and character of a legislation for the purpose ofdetermining the List under which it falls.

Thereafter, the Supreme Court in the case of Mt. AtiqaBegam And Anr. v. Abdul Maghni Khan And Ors. AIR2010 SC 2633 held that in order to decide whether theimpugned Act falls under which entry, one has toascertain the true nature and character of the enactmenti.e. its 'pith and substance'. The court further said that"it is the result of this investigation, not the form alonewhich the statute may have assumed under the hand ofthe draughtsman, that will determine within which ofthe Legislative Lists the legislation falls and for thispurpose the legislation must be scrutinized in itsentirety". Till present time, the doctrine of pith andsubstance is regarded as one of the most importantdoctrines whenever a question is raised over legislativecompetence of the Legislature in enacting anylegislation.

Contributed by: Mr. Adarsh Tripathi, Associates,Vaish Associates Advocates

Activities in Media

ADVERTISEMENT FOR “NIRC-ICSI NEWSLETTER” NIRC solicits your kind patronage in the form of advertisement for its Monthly Newsletter

as per the tariff* given below :

Per Issue 6 Issues 12 Issues

(Rs.) (Rs.) (Rs.)

Back cover (Colour) 25,000 1,25,000 2,40,000

Inside Cover (Colour) 20,000 1,00,000 1,90,000

Full Page Inside (Colour) 15,000 80,000 1,50,000

Inside page (Black & White) 10,000 55,000 1,00,000

Inside Half page (Black & White) 6,000 35,000 65,000

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○


"Madam, your husband is a very learned person and I I M Gold Medalist,why do you

want to have divorce from him?"

"Your honour, my husband is intelligent but not wise like other men."

"How do you say that?"

"Sir, he always speaks his mind in the household affairs."

"Sir, as desired by you, I have prepared the complete list of Employees of the

Financial Year 2014-2015."

"Please categorise into two parts of headcount and bodycount."

"Those who are still working with us, being included in the headcount and those fired

under the bodycount."

—CS PARAMJEET SINGH, [email protected]

Members may send their contribution for this column at e-mail [email protected] for publication in theNIRC Newsletter-Insight. Decision of the Editorial Board of Newsletter in this regard will be final.

LIGHTER SIDE OF THE PROFESSION

CAREER AWARENESS PROGRAMS

NIRC has organised 6 Career Awareness Programs & 3 Career Fairs during the

month of Apri l , 2015 in various schools & col leges located in Delhi and

surrounding areas. The students were apprised about the mode of registration in

the course, syllabus, structure of the course and also the avenues available after

completion of the Company Secretaryship Course both in employment and in

practice. Pamphlets of Career in Company Secretaryship Course were distributed

to the students.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Lighter Side of the Profession