TMI Blog2020 (1) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... trar of Companies, the 'Tata Sons Limited' which was a 'Private Company' has becomes a 'Public Company' by virtue of the provision aforesaid shall continue to be a public company, having not taken any approval from the Central Government and in accordance with the provisions of the said Companies (Amendment) Act, 2000 to become a 'Private Company'. n terms of Section 465 of the Companies Act, 2013, all provisions of the Companies Act, 1956 stand repealed except provisions of Part IX A of the Companies Act, 1956 which applies mutatis mutandis to a Producer Company in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Producer Companies - Section 43A (2A) was inserted in the year 1975 in Companies Act, 1956 as amended in the year 2000 stood repealed by enactment of the Companies Act, 2013. In place of the old provision of Section 43A for 'conversion of the company' and 'conversion of Articles of Association', now Section 18 and Section 14 of the Companies Act, 2013 are applicable. The stand taken by Mr. Sanjay Shorey, Director Prosecution, Ministry of Corporate Affairs, who appeared on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2000. As per sub-section (4) of Section 43A, a 'Private Company' which has become a 'Public Company' by virtue of the aforesaid provisions, is to continue to be a 'Public Company' until it has, with the approval of the Central Government and in accordance with the provisions of the Act, again becomes a 'Private Company'. 4. It was noticed that part of the Companies Act, 1956 was repealed by the Companies Act, 2013, from the date of its notification, except those covered in Part IX A of the Companies Act, 1956. 5. Section 31 of the Companies Act, 1956 which relates to Alteration of Articles by Special Resolution was repealed and substituted by Section 14 of the Companies Act, 2013 which relates to Alteration of Articles , as referred in the Judgment. 6. Taking into consideration the definition of 'Private Company' as defined under Section 2(68) of the Companies Act, 2013 and the definition of 'Public Company' as defined under Section 2(71) of the Companies Act, 2013, following observations were made by this Appellate Tribunal at Paragraphs 181, 186 187 of the Judgment dated 18th December, 2019:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; decision taken during last few years, the Company, its Board of Directors and shareholders which has not exercised its power under Article 75 since inception, will not exercise its power under Article 75 against Appellants and other minority member. Such power can be exercised only in exceptional circumstances and in the interest of the company, but before exercising such power, reasons should be recorded in writing and intimated to the concerned shareholders whose right will be affected. (iv) The decision of the Registrar of Companies changing the Company ('Tata Sons Limited') from 'Public Company' to 'Private Company' is declared illegal and set aside. The Company ('Tata Sons Limited') shall be recorded as 'Public Company'. The 'Registrar of Companies' will make correction in its record showing the Company ('Tata Sons Limited') as 'Public Company'. 7. Mr. Sanjay Shorey, Director Prosecution, Ministry of Corporate Affairs, who appeared on behalf of the Registrar of Companies, Mumbai was asked to clarify the date from which the definition of 'Private Company' as defined under Section 2(68) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Company as 'Public Limited Company'. Apart from this, necessary changes were made in 'the Register of Companies' and 'the Certificate of Incorporation' of 'Tata Sons Limited'. This will be also evident from the specific pleading made at Paragraph 20 of the Interlocutory Application, as follows: ..the Applicant was statutorily obligated to carry out the necessary changes in the Register of Companies, the certificate of incorporation of TSL and the Memorandum of Association of TSL. 12. It is accepted that prior to the letter dated 19th July, 2018, the definition of 'Private Company' as defined under Section 2(68) was amended and the words of one lakh rupees or such higher paid-up share capital omitted by Act 21 of 2015 w.e.f. 29th May, 2015. After such amendment, the definition of 'Private Company' as defined under Section 2(68) reads as follows: 2. Definitions.─ ..(68) private company means a company having a minimum paid-up share capital as may be prescribed, and which by its articles,- (i) restricts the right to transfer its shares; (ii) except in case of One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the approval of the Central Government and in accordance with the provisions of the said Act, again become a 'private company'. This we have noticed in our Judgment at Paragraph 166 wherein Section 43A (2A) has been quoted along with sub-section (4) therein, relevant of which reads as follows: 43A. Private company to become public company in certain cases.─........[(2A) Where a public company referred to in sub-section (2) becomes a private company on or after the commencement of the Companies (Amendment) Act, 2000, such company shall inform the Registrar that it has become a private company and thereupon the Registrar shall substitute the word 'private company' for the word 'public company' in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association within four weeks from the date of application made by the company]. This provision has been referred to by the Registrar of Companies. 43A. Private company to become public company in certain cases.─.... (4) A private company which has become a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such registration had not been done. 21. There being a specific provision of conversions of Companies already registered in terms of Section 18 of the Companies Act, 2013 and alteration of articles in terms of Section 14, the Registrar of Companies cannot rely on Section 43A (2A) that too without relying on Clause (4) therein which relates to requirement of approval of the Central Government. 22. Section 465 of the Companies Act, 2013 relates to repeal of certain enactments and savings and sub-section (1) therein reads as follows: 465. Repeal of certain enactments and savings─ (1) The Companies Act, 1956 (1 of 1956) and the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) (hereafter in this section referred to as the repealed enactments) shall stand repealed: Provided that the provisions of Part IX-A of the Companies Act, 1956 (1 of 1956) shall be applicable mutatis mutandis to a Producer Company in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 18th December, 2019 is rejected. 27. However, in Paragraph 171 of the Judgment dated 18th December, 2019, we find that wrongly un-amended definition of 'Private Company' has been quoted which stood amended w.e.f. 29th May, 2015 i.e. much prior to filing of the petition under Sections 241-242 of the Companies Act, 2013 and the application for change of company from 'Public Company' to 'Private Company', which was filed in July, 2017. It is accordingly ordered to read the definition of 'Private Company' as defined under amended Section 2(68) of the Companies Act, 2013 as quoted in Paragraph 171, as follows: 2. Definitions.─ ..(68) private company means a company having a minimum paid-up share capital as may be prescribed, and which by its articles,- (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
