The Ministry of Corporate Affairs (MCA) has sought time to respond to a public interest litigation (PIL) in Delhi High Court, which alleges that the Registrar of Companies (ROC) discriminates against lawyers by only allowing chartered accounts, company secretaries or cost accountants to certify electronic submissions to the corporate registrar.
The petitioner Legum and Law Awareness Society has challenged the restriction imposed on advocates who are practicing in the field of corporate law, which was heard yesterday.
According to the petition, till 2006 Registrar of Companies (ROC) was accepting the incorporation documents and other information from companies in physical or manual forms.
In that environment lawyers were serving corporate clients on their own, similar to professionals such as chartered accountants and company secretaries. But since the introduction of e-governance in the ROC, all physical forms have been replaced with electronically submitted e-forms, requiring certification by at least one chartered accountant, cost accountant or company secretary.
Since 2006 therefore, advocates were not permitted to certify e-forms and had to retain other professionals to get every form certified before submitting it to the ROC, argued the petition, adding that the Ministry has alienated the advocates from the definition of practicing professionals.
The petioner’s advocate Sandeep Sharma contended in court: “The word corporate lawyer is just an illusion, we can’t even file a small document with the Registrar of Companies. When I had written to them about this anomaly, the ROC responded by saying that the Ministry’s guidelines were responsible for this and I should get in touch with the Ministry of Corporate Affairs.”
In approaching the Delhi High Court, the Petitioner now argues that the use of technology should be for the upliftment and betterment of all the professions and not just for selected ones.
The bench of acting Chief Justice Madan B Lokur and Justice Mukta Gupta had earlier sought responses from the MCA in this regard.
The petition noted that section 33 of The Companies Act 1956 was the main provision governing the incorporation of companies, which clearly empowered an advocate to make a declaration that all the requirements of the Act and the rules thereunder were complied with in respect of the registration of a company and matters precedent and incidental thereto.
This section further provides that the Registrar may accept such a declaration as sufficient evidence of such compliance. It is pertinent to mention that this section does not empower the registrar to call for any certificate from any professional to certify the declaration made by an Advocate.
Luthra and Jaggi partner Navin Raheja commented: “It’s a clear case of discrimination against the Advocates. The Bar Council of India must intervene in the matter to protect the interests of millions of lawyers in the country.”
Further commenting, Society of Indian Law Firms (SILF) president Lalit Bhasin said: “If the lawyers are allowed to certify the documents, it will instill a confidence in the minds of clients. The Chartered Accountants and Company Secretaries are entering in the territory of law practice, it should be discouraged. “
When asked about if he would represent the lawyers’ interest in the matter Bhasin said that SILF had not yet been approached, but if the petitioner needed any help the body would be ready to assist in court.
The PIL prayed to the court to direct the Ministry of Corporate Affairs to include advocates in the list of practicing professionals, enabling them to issue various certificates integrated into e-forms, notified under the Companies Act 1956 and Limited Liability Partnership Act 2008.
Can CAs/CMAs/CSs claim that the High Courts and Supreme Court do not allow them to represent and argue for their clients?
argued without preparation and proper research . lawyer community should have assisted in procuring the services of top notch lawyers of Supreme court. what about art.14 and discrimination that was never considered at all
the judgement is at http:// indiankanoon.org/doc/193399858/
Legum & Law Awareness Society vs Union Of India on 11 August, 2011
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Writ Petition (Civil) No. 1819/2010
% Date of Decision: August 11, 2011
Legum & Law Awareness Society ….Petitioner Through Mr. Sandeep Sharma, Advocate.
VERSUS
Union of India …..Respondent Through Ms. Maneesha Dhir, Ms. Mithu Jain & Ms. Preeti Dalal, Advocates.
CORAM:
HON’BLE THE CHIEF JUSTICE
HON’BLE MR. JUSTICE SANJIV KHANNA
The present writ petition under Article 226 of the
Constitution of India has been filed praying for following reliefs:-
“i) Directing the respondent to include the Advocates/corporate advocates in the list of Practicing Professionals and enable them to issue various certificates integrated into various e-Forms, notified under the Companies Act, 1956 and The Limited Liability Partnership Act, 2008
Or
ii) Directing the Respondent to eliminate the obligatory certification of e-Forms notified under the Companies Act, 1956 and the Limited Liability Partnership Act, 2008 and convert them into their previous format i.e. physical format as above.
WPC 1819/2010 Page 1 of 5 III) Directing the Respondent to amend various e- Forms notified under the Companies Act, 1956 and The Limited Liability Partnership Act, 2008
And/Or
IV) Pass any other order or orders as the Hon’ble court may deem fit and proper in the light of the abovementioned facts and circumstances.”
2. Realising that no direction in nature of mandamus can be issued
to the Legislature to legislate in the manner which has been suggested
in the prayer clause, learned counsel for the petitioner has relied upon
Sections 33 and 459 of the Companies Act, which read as under:-
“33. Registration of Memorandum and Articles.
(1) There shall be presented for registration, to the Registrar of the State in which the registered office of the company is stated by the memorandum to be situate-
(a) the memorandum of the company;
(b) its articles, if any; and
(c) the agreement, if any, which the company proposes to enter into with any individual for appointment as its managing or whole- time director or manager.
(2) A declaration by an advocate of the Supreme Court or of a High Court, an attorney or a pleader entitled to appear before a High Court, or a secretary, or a chartered accountant, in whole- time practice in India who is engaged in the formation of a company, or by a person named in the articles as a director, 2[ manager or secretary of the company, that all the requirements of this Act and the rules thereunder have been complied with in respect of registration and matters precedent and WPC 1819/2010 Page 2 of 5 incidental thereto, shall be filed with the Registrar; and the Registrar may accept such a declaration as sufficient evidence of such compliance.
Explanation : For the purposes of this sub- section, “chartered accountant in whole- time practice in India” means a chartered accountant within the meaning of clause (b) of sub- section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949 ), who is practising in India and who is not in full-time employment.]
(3) If the Registrar is satisfied that all the requirements aforesaid have been complied with by the company and that it is authorised to be registered under this Act, he shall retain and register the memorandum, the articles, if any, and the agreement referred to in clause (c) of sub- section (1), if any.”
………….
459. Provision for legal assistance to liquidator.–The liquidator may, with the sanction of the Tribunal, appoint one or more chartered accountants or company secretaries or cost accountants or legal practitioners entitled to appear before the Tribunal under section 10GD to assist him in the performance of his duties.”
3. Reference is also made to Section 11(1) of the Limited Liability
Partnership Act, 2008 which reads as under:-
“Section 11 – Incorporation document:
(1) For a limited liability partnership to be incorporated,–
(a) two or more persons associated for carrying on a lawful business with a view to profit shall subscribe their names to an incorporation document;
(b) the incorporation document shall be filed in such manner and with such fees, as may be prescribed with the WPC 1819/2010 Page 3 of 5 Registrar of the State in which the registered office of the limited liability partnership is to be situated; and
(c) there shall be filed along with the incorporation document, a statement in the prescribed form, made by either an advocate, or a Company Secretary or a Chartered Accountant or a Cost Accountant, who is engaged in the formation of the limited liability partnership and by any one who subscribed his name to the incorporation document, that all the requirements of this Act and the rules made thereunder have been complied with, in respect of incorporation and matters precedent and incidental thereto.”
4. The respondent, in the counter affidavit, has clarified that full
effect is being given to Section 33 of the Companies Act and Section 11
of the Limited Liability Partnership Act. The said provisions are being
fully complied with. What has been highlighted and pointed out is that
as far as filing of Forms 18 and 32 under the Companies Act are
concerned, these were never filed by Advocates. The said fact is not
denied. With the introduction of e-filing, the said forms have to be
now filed electronically. These forms required declaration and
verification to be made in the prescribed format by the parties. There
is similarly a provision for making declaration and verification in the
prescribed format in respect of limited liability partnerships, which
again are required to be filed electronically. In this regard,
WPC 1819/2010 Page 4 of 5 authentication or certification is required to be made by Company
Secretaries, Chartered Accountants and Costs Accountants.
5. Keeping in view the explanation given by the respondent, we are
not inclined to accept the prayer made by the petitioner. Accordingly,
the writ petition is dismissed. No costs.
SANJIV KHANNA, J.
CHIEF JUSTICE
August 11, 2011