• Company Law Board Regulations, 1991: Bare Act

  • CHAPTER I : PRELIMINARY

    1. Short title, commencement and interpretation.- (1) These regulations may be called the Company Law Board Regulations, 1991.

    (2) They shall come into force on the date1 of their publication in the Official Gazette.

    (3) The General Clauses Act, 18972, applies to the interpretation of these regulations, as it applies to the interpretation of a Central Act.

    2. Definitions.- (1) In these Regulations, unless the context otherwise requires,-

    (a) "Act" means the Companies Act, 1956;

    (b) "Annexure" means an Annexure to these Regulations;

    (c) "Application" means an application by which an interlocutory proceeding is commenced before a Bench;

    (d) "Authorised representative" means a person authorised in writing by a party under sub-regulation (2) of regulation 19 to function before a Bench as the representative of such party;

    (e) "Bench" means a bench of the Board and includes the Principal Bench Additional Principal Bench and a member sitting singly;

    (f) "Bench Officer" means an officer notified by the Board for the purpose of-

    (i) receiving, examining and processing of applications; and

    (ii) performing such other functions as may be entrusted to him by or under these Regulations;

    (g) "Board" means the Board of Company Law Administration, constituted under section 10E of the Act;

    (h) "Certified" means, in relation to a copy, certified as provided in section 76 of the Indian Evidence Act, 1872;

    (i) "Chairman" means Chairman of the Board;

    (j) "company" includes a non-banking financial company as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 and a foreign company;

    (k) "Filed" means filed in the office of the Bench;

    (l) "Form" means a form specified in Annexure II;

    (m) "Member" means a Member (whether judicial or technical,) of the Board and includes the Chairman and Vice Chairman;

    (n) "The Monopolies Act" means the Monopolies and Restrictive Trade Practices Act, 1969;

    (o) "Office of the Bench" means the office of the Bench Officer:,

    (p) "Party" means a person who files an application or petition before a Bench, the respondent, the Registrar of Companies or the Regional Director and includes any person who has a right under the Act or the Reserve Bank of India Act, 1934 to make suggestions or objections;

    (q) "Petition" means an application, appeal or complaint in pursuance of which any proceeding, not being an interlocutory proceeding, is commenced by the Bench;

    (r) "Reference" means a reference within the meaning of regulations 35, 40 and 42 of these Regulations;

    (s) "Regional Director" means a person appointed by the Central Government as a Regional Director for the purposes of the Act;

    (t) "Registrar" means Registrar of Companies appointed under the Act;

    (u) "Sealed" means sealed with the seal of the ‘Board’ or ‘Bench’;

    (v) "Secretary" means Secretary to the Board and includes "Under- Secretary" to the Board and any other officer, by whatever name called, to whom powers and duties of Secretary may be entrusted under regulation 31;

    (w) "Section" means a section of the Act;

    (y) "Vice Chairman" means Vice Chairman of the Board.

    (2) Words or expressions occurring in these Regulations and not defined in sub-regulation (1) shall bear the same meaning as in the Act.

    CHAPTER II : GENERAL

    3. Composition of Benches of the Board.- (1) Subject to regulation 4, every Bench of the Board formed under sub-section (4B) of section 10E may consist of one or more members.

    (2) The order of the Chairman forming any Bench shall specify therein the powers which shall be exercised and functions which shall be discharged by the Bench.

    (3) The Chairman shall, in relation to each Bench formed specify the member of the Bench before whom every matter requiring decision of the Board (not being a matter affecting the final disposal of the petition) shall be placed for orders and in the absence of the member so specified every such matter shall be placed before any other member of the Bench who is present.

    4. Power of the Chairman to specify matters which may be dealt with by a Bench.- (1) It shall be lawful for the Chairman to provide that matters falling under sections 235, 237, 247, 248, 250, 388B, 408 and 409 and matters falling under Chapter VI of Part VI of the Act and under section 2A of the Monopolies Act shall be dealt with by a Bench consisting of not less than two members including the Chairman or the Vice Chairman (which shall be known as the Principal Bench

    (1A) It shall also be lawful for the chairman to provide that matters falling under sections235 and 237 of the Act and matters falling under Chapter VI of part VI of the Act in so far as they relate to Southern region shall be dealt with by a Bench consisting of not less than two members (which shall be known as Additional Principal Bench.)

    (2) The Principal Bench shall be at New Delhi but the Principal Bench may sit at such places in India and at such time as may be most convenient in exercise of its powers and functions in India.

    2A.The Additional Principal Bench shall be at chennai but it may sit at such places in the Southern Region as may be more convenient in exercise of its powers and functions.)

    (3) It shall be lawful for the Chairman to provide for matters falling under section 111, 111A and 269 of the Act shall be dealt with by a Bench consisting of not less than two members.

    (4) All other matters including interlocutory and miscellaneous applications connected with the matters falling under sub-regulations (1), (1A) and (3) of this regulation may be heard and decided by a Bench consisting of a single member: Provided that notwithstanding anything contained in Regulation 7, it shall be lawful for the Chairman to transfer any matters pending before any Regional Bench or the additional principal bench to the Principal Bench, for reasons to be recorded in writing.

    7. Jurisdiction of the Bench.- (1) All proceedings, other than the proceedings before the Principal Bench under regulation 4, shall be instituted before the Bench within whose jurisdiction the registered office of the company is situated.

    (2) The regions where the Benches shall ordinarily have their sittings are the Northern Region, the Southern Region, including Additional Principal Bench the Eastern Region and the Western Region, the States and Union territories falling within each of such regions being states and Union territories as provided in Annexure I to these Regulations.

    (3) The Benches shall ordinarily have their sittings at Calcutta (Eastern Region), Bombay (Western Region), Madras (Southern Region) including Additional Principal Bench and New Delhi (Northern Region):

    Provided that the Bench may, at its discretion, hold its sittings in any other city or town falling within the region or at any other place outside the region with the consent of the parties.

    13. General heading to be in Form No. 1 in Annexure II.- The general heading in all proceedings, whether original or interlocutory, and of advertisements and notices, shall be as in Form No. 1 in Annexure II.

    14. Procedure for filing petition.- (1) Subject to the provisions of regulations 35 and 37, a petition to the Bench shall be prepared in Form No. 1 in Annexure II and presented by the petitioner in person or through authorised representative to the office of the Bench or be sent by registered post with acknowledgement due addressed to the Secretary or Bench Officer of the Bench concerned as the case may be.

    (2) The petitioner shall serve a copy of the petition, reference or application on the respondent or respondents, as the case may be, and produce evidence of such service.

    (3) The petitioner shall serve a copy of the reference or petition other than a petition under sections 49, 79, 80A, 111, 111A, 113, 118, 144, 163, 188, 196, 219, 225, 284, 304 and 307 of the Act upon the concerned Registrar of Companies having jurisdiction over the company and shall attach to and present with his petition, reference, an acknowledgement from the office of the Registrar of Companies receiving a copy of the petition or reference so served:

    Provided that, in the case of a petition under section 17 by a company licensed under section 25 of the Act, the copy of the petition shall also be served upon the Regional Director:

    Provided further that, in case of a petition or complaint under sections 235, 237, 250, 397, 398, 408 and 409 of the Act, a copy thereof shall also be served upon the Central Government.

    (4)(a) Notwithstanding anything contained in sub-regulations (1) to (2), the Bench may permit more than one person to join together and file a single petition if it is satisfied, having regard to the cause of action and the nature of relief prayed for, that they have a common interest in the matter.

    (b) Such permission shall be granted where the joining of the petitioners by a single petition is specifically permitted by the Act.

    (5) Every petition other than an application under sub-section (9) of section 58A of the Act or under sub-section (2) of section 45QA of the Reserve Bank of India Act, 1934, shall be accompanied by an affidavit verifying the same and shall be drawn upon the first person and shall state the full name, age, occupation and complete residential address of the deponent and shall be signed by the deponent and sworn before the person specified in section 558 of the Act.

    (6) Where the deponent is not personally known to the person before whom the affidavit under sub-regulation (5) is sworn, he shall be identified by a person who is known to the person before whom the affidavit is sworn.

    (7) Every affidavit under sub-regulation (5) shall clearly and separately indicate the statements which are true to the-

    (a) knowledge of the deponent;

    (b) information received by the deponent;

    (c) belief of the deponent; and

    (d) information based on legal advice.

    (8) Where the statement referred to in sub-regulation (7) is stated to be true to the information received by the deponent, the affidavit shall also include the name and complete residential address of the person from whom the information has been received by the deponent and whether the deponent believes that information to be true.

    16. Contents of petition.- Every petition, other than an application filed under regulation 37 shall set forth the name of the Company, with its status, date of incorporation, the address of its registered office, authorised capital, paid-up capital with division of different classes of shares and terms of issue, if any, in the case of preference shares, main objects in brief, for which the company was formed, present business activities of’ the company, and shall also set forth concisely under distinct heads the grounds for such petition and the nature of relief(s) prayed for.

    17. Contents of interlocutory application.- An application filed subsequent to the filing of the petition applying for any interim order or direction shall, as far as possible, be in Form No. 2 in Annexure II and shall be accompanied by an affidavit verifying the application in the manner laid down in regulation 14:

    Provided that it shall not be necessary to present a separate application to seek an interim relief or direction, except for condonation of delay in filling the petition, if, in the original petition, the same is prayed for.

    20. Plural remedies.- A petition shall be based upon a single cause of action and may seek one or more reliefs provided that they are consequential to one another.

    21. Service of notice and process issued by the Bench.- (1) Any notice or process to be issued by the Bench may be served by any of the following modes directed by the Bench:

    (i) service by the party itself;

    (ii) by hand delivery (dasti) through a messenger of the Office of the Bench;

    (iii) under certificate of posting;

    (iv) by registered post with acknowledgement due if so required by an order of the Bench;

    (v) where the Central Government is a party, through the Secretary of the concerned Ministry or Department or through Branch Secretariat of the Ministry of Law or through Standing Counsel of the Central Government

    ; (vi) where the State Government is a party, through the Chief Secretary or the Standing Counsel of the State Government.

    (2) Where a notice is required to be served on a company, it shall be served in the manner specified in section 51 or, in the case of a foreign company, in the manner specified in section 596, and may also be served in such other manner as the Secretary or the Bench Officer may direct.

    (3) Save as otherwise provided in sub-regulation (2), notices and other documents, which are required to be served on any person, other than a company, shall be served by delivering or tendering a copy thereof to such person or his authorised representative, where he appears by such representative or by prepaid registered post, acknowledgement due, addressed to the last-known address of such person.

    (4) Where a notice is served by the registered post, the Secretary or Bench Officer may, if the acknowledgement is not received, determine the question as to the sufficiency of the service of the notice.

    (5) Where the notice sent by registered post is returned by the post office with the remarks "refused", the notice may be presumed to have been duly served.

    (6) Every notice, of the petition or reference issued by the Bench shall, unless otherwise ordered, be accompanied by a copy of the petition or reference, as the case may be.

    (7) Notwithstanding anything contained in sub-regulations (1) to (6), where, for any reason whatsoever, it is not reasonably practicable to serve notice of petition on all the respondents, the notice may be served by public advertisement., as the Bench may in each case direct.

    (8) The Bench shall, in such cases, determine who shall bear the cost of the public advertisement.

    22. Filing of reply and other documents by the respondents.- (1) Each respondent intending to contest the petition shall file, in triplicate, the reply to the petition and the documents relied upon with the office of the Bench within such period as may be fixed by the Bench but not exceeding fifteen days of service of petition upon him.

    (2) In the reply filed under sub-regulation (1), the respondent shall specifically admit, deny, or explain the facts stated by the petitioner in his petition and may also state such additional facts as may be found necessary for the just decision of the case. The reply so filed shall be signed and verified in the manner as provided in regulation 14.

    (3) The documents referred to in sub-regulation (1) shall also be filed along with the reply and the same shall be marked as Annexures R1, R2, R3 and so on.

    (4) The respondents shall also serve a copy of the reply along with the documents mentioned in sub-regulation (1) duly attested to be true copies on the petitioner or his authorised representative, if any, and file proof of such service with the office of the Bench.

    (5) The Bench may if so satisfied, allow filing of the reply after the expiry of the prescribed period, on sufficient cause being, shown.

    23. Filing of counter-reply by the petitioner.- Where the respondent states such additional facts as may be necessary for the just decision of the case under sub-regulation (2) of regulation 22, the Bench may allow the petitioner to file a counter-reply to the reply filed by the respondent. The procedure laid down in regulation 22 shall apply, mutatis mutandis, to the filing of such counter-reply.

    24. Power of the Bench to call for further information/ evidence.- The Bench may, before passing orders on the petition required the parties or any one or more of them, to produce such further documentary or other evidence as the Bench may consider necessary-

    (a) for the purpose of satisfying itself as to the truth of the allegations made in the petition; or

    (b) for ascertaining any information which, in the opinion of the Bench, is necessary for the purpose of enabling it to pass orders on the petition.

    25. Hearing of petition.- The Bench may, if sufficient cause is shown at any stage of the proceeding, grant time to the parties or any of them and adjourn the hearing of the petition or the application. The Bench may make such order as it thinks fit with respect to the costs occasioned by such adjournment.

    26. Procedure to be followed where any party does not appear.- (1) Where, on the date fixed for hearing of the petition or any application or on any other date to which such hearing may be adjourned, the petitioner or the applicant as the case may be, does not appear when the petition or the application is called for hearing, the Bench may, in its discretion, either dismiss the petition or the application for default or hear and decide the same ex parte.

    (2) Where a petition or application has been dismissed for default and the petitioner or the applicant files an application within thirty days from the date of dismissal and satisfies the Bench that there was sufficient cause for his non-appearance when the petition or the application was called for hearing, the Bench may pass an order setting aside the order dismissing the petition or the application and restore the same:

    Provided, however, where the case was disposed of on merits, the decision shall not be recalled.

    (3) Where, on the date fixed for hearing or any other date to which such hearing may be adjourned, the petitioner appears but the respondent does not appear when the petition is called for hearing, the Bench, may, in its discretion, adjourn the hearing or hear and decide the petition ex parte.

    (4) Where the petition has been heard ex parte against the respondent or respondents, such respondent or respondents may apply to the Bench within thirty days for an order to set aside and if the respondent or respondents satisfy the Bench that the notice was not duly served on him or them or that he or they were prevented by any sufficient cause from appearing when the petition was called for hearing, the Bench may make an order setting aside the ex parte order against him or them on such terms as it thinks fit and shall appoint a date for proceeding with the petition:

    Provided that where the ex parte order is of such nature that it cannot be set aside as against one respondent only, it may be set aside as against all or any of the other respondents also:

    Provided further that in cases covered by sub-regulation (7) of regulation 21, the Bench shall not set aside the ex parte order merely on the ground that a shareholder or a creditor did not have the notice of the petition.

    31. Power and functions of the Secretary.- (1) The Secretary shall be the Principal Officer of the Board and shall exercise his powers and perform his duties under the control of the Chairman.

    (2) The Board, in discharge of its functions under the Act, may take such assistance from the Secretary, as it may deem fit, and the Secretary, shall be bound to assist the Board.

    (3) In particular and without prejudice to the generality of the provisions of this rule, the Secretary shall have the following powers and perform the following duties, namely,-

    (a) The Secretary shall have the custody of the records of the Principal Bench.

    (b) The Secretary shall receive all petitions, applications or references pertaining to the Principal Bench.

    (c) The Secretary shall assist the Principal Bench in the proceedings relating to the powers exercised by the Principal Bench.

    (d) The Secretary shall have the power to call for information/records and to inspect or cause to be inspected the records of other Benches.

    (e) The Secretary shall authenticate the orders passed by the Principal Bench.

    (f) The Secretary shall ensure compliance of the orders passed by the Principal Bench and other Benches.

    (g) The official seal of the Board shall be in the custody and control of the Secretary.

    (h) The Secretary shall have the right to collect from the Central Government or other offices, companies and firms, or any other persons such information as may be considered useful for the purpose of efficient discharge of the functions of the Board under the Act and place the said information before the Board.

    33. Registers of petitions and applications.- (1) There shall be kept in the office of the Bench two separate registers, one for the petitions and the other for the applications filed before the Bench.

    (2) In every register, referred to in sub-regulation (1), there shall be entered the following particulars, namely-

    (a) the serial number of the petition or application and in addition, in the case of an application the serial number of the petition to which it relates;

    (b) the date of presentation or receipt of the petition or application;

    (c) the name of the company to which the matter relates;

    (d) the name and address of the petitioner or applicant;

    (e) the names and addresses of the other parties to the petition or application and the names and addresses of the authorised representatives of the parties, if any;

    (f) the provision of law under which the petition or application is made;

    (g) the nature of the reliefs which have been sought;

    (h) the date of disposal of the petition or application;

    (i) the nature of the order made by the Bench;

    (j) the date when the formal order is drawn up and communicated to the parties;

    (k) remarks, if any.

    (3) Separate registers shall be opened for each year and each register of petitions shall be preserved permanently and each register of application shall be preserved for a period of eight years.

    34. Fees.- (1) In respect of the several matters mentioned in Annexure III, there shall be paid fees for every petition as prescribed:

    Provided that no fee shall be payable or shall be liable to be collected on a petition filed or reference made by the Registrar of Companies, Regional Director or by any officer on behalf of the Central Government:

    Provided further that no fee shall be payable or shall be liable to be collected in respect of any matter in respect of which proceedings are initiated by the Board on its own motion.

    (2) Fee as may be prescribed shall be levied and collected on every interlocutory application: Provided that no fee shall be payable or shall be liable to be collected on an application filed by the Registrar of Companies, Regional Director or by any officer on behalf of the Central Government.

    (3) In respect of a petition or application filed before the Principal Bench or the Northern, Eastern, Southern Addtional Principal Bench and Western Regional Benches of the Board, fees payable under these regulations shall be paid by means of a bank draft drawn in favour of the Pay and Accounts Officer, Department of Company Affairs, New Delhi/Calcutta/Madras/ Bombay, as the case may be.

    35. Reference to Company Law Board.- Any reference to the Board by the Registrar of Companies under section 621A of the Act or any reference to the Board by the Central Government under sections 250, 269, 388B and 408 of the Act or any reference by a company under clause (c) of sub-section (4) of section 22A of the Securities Act shall be made by way of an application in Form No. 3, and shall be accompanied by documents mentioned in Annexure III.

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