- Whether Companies (Accounting Standards) Rules, 2006 framed under section 642(1), which adopts Accounting Standards (‘AS’) 22 issued by Institute of Chartered Accountants of India, suffers from vice of excessive delegation and same is incongruous/inconsistent with provisions of Act including Schedule VI - Held, no - Whether AS 22 insofar as it relates to deferred taxation is inconsistent with and ultra vires provisions of Companies Act, 1956, Income-tax Act, 1961 and Constitution of India - Held, no - J.K. Industries Ltd. v. UOI (SC)

Oppression and mismanagement

- Whether even in a case where there is no proof of oppression, yet by applying principles which are applicable to partnership, in respect of companies where there are only two shareholders, namely, father and son, or only those family members who could not see eye to eye, orders can be passed under section 402 - Held, yes - Whether, therefore, where there were only two directors, namely, father and son and there was irreconcilable disagreement between two, CLB was justified in holding that there was deadlock situation and in directing son to purchase shares of father at value to be determined by independent valuer - Held, yes - M.S.D.C. Radharamanan v. M.S.D. Chandrasekara Raja (Mad.)

Companies Act, 1956

- Section 211

- Section 402

Foreign Exchange Management Act, 1999

Appellate Tribunal

Appeal to

- Respondents were subjected to penalty for misusing foreign exchange - Along with appeal questioning correctness of adjudication order, respondents filed application for dispensation of pre-deposit of penalty - Appellate Tribunal rejected said application holding that no prima facie case was made out for dispensation of pre-deposit and, accordingly, directed them to deposit penalty - On writ petition, High Court not only held that order directing pre-deposit was unsustainable but also held that adjudication order was also not sustainable, and accordingly, set aside order passed by adjudicating authority and remitted matter for fresh consideration - Whether since preliminary challenge in writ petition was to order relating to pre-deposit, High Court was justified in going into merits and expressing its view and thereafter remitting matter - Held, no - Union of India v. Adani Exports Ltd. (SC)

Foreign Exchange Management Act, 1999

- Section 19

Negotiable Instruments Act, 1881

Penalty

For Dishonour of cheque for insufficiency, etc., of funds in account

- Whether section 138 contemplates 15 days’ notice to drawer of cheque - Held, no - Whether an omnibus notice without specifying as to what was amount due under dishonoured cheque would not subserve requirement of law - Held, yes - Whether where complainant, in notice under section 138, did not call upon respondent to pay amount payable under cheque but demanded entire amount payable by respondent, notice was vague and did not serve statutory requirements of provisos (b) and (c) to section 138 and, therefore, High Court was justified in quashing criminal complaint against respondent - Held, yes - Rahul Builders v. Arihant Fertilizers & Chemical (SC)

Negotiable Instruments Act, 1881

- Section 138

Securities and Exchange Board of India Act, 1992

Rules and regulations to be laid before Parliament

- Whether where statute provides that Rules framed thereunder should be laid on table of Lok Sabha for a certain period which may be comprised of one session or two or more successive sessions, it is not necessary for Rules to be formerly re-laid in next session in order to complete prescribed period - Held, yes - Whether since section 31 permits requisite period of 30 days to be completed in one or more sessions, Rules/Regulations, 1992, after having been initially laid in one session would be deemed to lie in succeeding sessions till specified period was completed and same cannot be declared ultra vires on ground that they were not re-laid in next session in order to complete prescribed period - Held, yes - Whether that apart, provisions of section 31, not being mandatory and being merely directory, Rules/Regulations, 1992 cannot be held to be ultra vires on ground of non-completion of 30 days period after laying of same before both Houses of Parliament - Held, yes - Veneet Agrawal v. Union of India (SC)

Securities and Exchange Board of India Act, 1992

- Section 31

MAGAZINE

features

competition law

surendra u. kanstiya (Company Secretary)

- Mandatory merger notification

company law

r. balakrishnan (Company Secretary & Legal Services Manager of FOSECO India Ltd., Pune)

- Preservation of records - Provisions under the Companies Act, 1956

t.n. pandey (Ex-Chairman, CBDT)

- An inspection under section 209A is no bar to investigation under section 237(b) of the Companies Act, 1956 - The latest view of the Company Law Board

SEBI AND CORPORATE LAWS