The Companies (Removal Of Difficulties) Seventh Order – dated 4th Sept 2014
(To be published in the Gazette of India, Extraordinary, Part II, section 3, subsection (ii)1
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ORDER
New Delhi, 4th September, 2014
S.O. Whereas the Companies Act, 2013 (18 of 2013) (hereinafter referred to as the said Act) received the assent of the President on the 29th August, 2013 and section 143 of the Act, which provides for the powers and duties of the auditors and auditing standards, came into force with effect from 1st April, 2014;
And whereas sub-sections (5) and (7) of section 139 of the said Act provide for power of the Comptroller and Auditor-General of India to appoint an auditor duly qualified to be appointed as an auditor in a Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments;
And whereas sub-section (5) of section 143 of the said Act which provides for power of the Comptroller and Auditor-General of India to conduct supplementary audit does not specifically cover companies ‘owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments’;
And whereas difficulties have arisen in implementation of the provisions of sub-section (5) of section 143 for companies referred to in sub-sections (5) and (7) of section 139 of the said Act;
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 470 of the Companies Act, 2013 the Central Government hereby makes the following Order to remove the aforesaid difficulties, namely :-
1. Short title and commencement.—
(1) This order may be called the Companies (Removal of Difficulties) Seventh Order, 2014.
(2) It shall come into force on the date of its publication in the Official Gazette.
2. In section 143 of the Companies Act, 2013 in sub-section (5), for the portion beginning with the words ” In the case of a Government company” and ending with the words “required to be audited and”, the following shall be substituted, namely : –
“In the case of a Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, the Comptroller and Auditor-General of India shall appoint the auditor under sub-section (5) or sub-section (7) of section 139 and direct such auditor the manner in which the accounts of the company are required to be audited and”.
[F. No 1/33/2013-CL.VJ]
AMARDEEP SINGH BHATIA,
JOIN’T SECRETARY
Contd.
Further, on a quick reflection, the other crucial words, -OWNED or CONTROLLED , too may be recalled to be so deficient as amenable to varying interpretation,leading to like controversies; reference is to issues which surfaced in the wake of Vodafone and certain other topical cases, and the ensuing long drawn litigation.
IMPROMPTU
“In the case of a Government company or any other company owned or controlled, DIRECTLY OR INDIRECTLY, by the Central Government, or by any State Government or Governments, OR PARTLY BY the Central Government and PARTLY BY ONE OR MORE State Governments,..”
On the first blush, one is left with a serious doubt whether the substituted provision, in terms, is adequate to remove in a wholesome manner, rather take care of all possible or conceivable difficulties bound to be faced with. Such a doubt arises if due regard be had to the inherent clumsiness/lack of clarity surrounding the words in BOLD FONT and the wisdom gathered through past experience and disputes centered on such words conventionally used in certain other statutes; for instance, the law or income-tax.
Over to, besides law pundits at large, the concerned authorities, for an in-depth application of mind / prudent deliberation, sooner than later.