Introduction
Section 458 of the Companies Act, 2013 (hereinafter referred to as “Act, 2013”) empowers the Central Government to delegate its powers and functions to the Regional Director or the Registrar of Companies wherever required. In exercise of its powers under Section 458, the Central Government vide notification S.O. 4090(E) dated 19th December 2016, has delegated the powers and functions vested in it under certain sections of the Act, 2013 to the Regional Directors based at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong.
This is subject to the condition that the Central Government may revoke such delegation of powers or may itself exercise the powers under the said sections, if in its opinion such a course of action is necessary in the public interest.
The notifications issued by the Ministry of Corporate Affairs (‘MCA’), , dated 10th Ju 2012 and 21st May 2014 shall accordingly be superseded. The effective date of notification S.O. 4090(E) dated 19th December 2016 is 19th December 2016 when the said notification got published in the Official Gazette.
The sections for which the Central Government has delegated its powers and/ or functions have been listed below:-
| Serial No. | Section No. | Particulars of power of Central Government | Remarks |
| 1. | 8(4)(i) | A company registered under this section shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government. | A Section 8 Company will need previous approval of the Regional Director before making alterations in its memorandum or articles. The license is however currently granted by the Registrar of Companies.Power to grant license of Section 8 company by Registrar of Companies comes vide MCA Notification dated 21st May, 2014.
Under the present Notification dated 19th December, 2016, only the alteration in memorandum or articles of Section 8 company will be permitted for the prior approval of the Regional Director. (Previously, vide MCA notification dated 21st May, 2014; the previous approval of Regional Director was required in order to make alteration of memorandum for conversion of Section 8 company to another kind of company. If the memorandum of Section 8 company was to be altered for any other reason, then the previous approval of Registrar of Companies was required.) However, the license of incorporation of Section 8 company will still be granted by Registrar of Companies. |
| 2. | 8(6) | The Central Government may, by order, revoke the licence granted to a company registered under this section if the company contravenes any of the requirements of this section or any of the conditions subject to which a licence is issued or the affairs of the company are conducted fraudulently or in a manner violative of the objects of the company or prejudicial to public interest, and without prejudice to any other action against the company under this Act, direct the company to convert its status and change its name to add the word “Limited” or the words “Private Limited”, as the case may be, to its name and thereupon the Registrar shall, without prejudice to any action that may be taken under sub-section (7), on application, in the prescribed form, register the company accordingly:
Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard: Provided further that a copy of every such order shall be given to the Registrar. |
The license of a Section 8 Company will be revoked by the Regional Director if the company contravenes any of the requirements of Section 8 of the Act, 2013.
Further, Regional Director has the power to direct the company to convert its status and change its name to add the word “Limited” or the words “Private Limited”, as the case may be, to its name. After the order of Regional Director, the Registrar will register the Company accordingly. The grant of license is however made by the Registrar of Companies. Power to grant license of Section 8 company by Registrar of Companies comes vide MCA Notification dated 21st May, 2014. The license of incorporation of Section 8 company will still be granted by the Registrar of Companies. |
| 3. | Section 13(4) | The alteration of the memorandum relating to the place of the registered office from one State to another shall not have any effect unless it is approved by the Central Government on an application in such form and manner as may be prescribed. | In order to shift the registered office from one state to another, an approval from the Regional Director is required. The same is in line with the current powers to the Regional Director. |
| 4. | Section 13(5) | The Central Government shall dispose of the application under sub-section (4) within a period of sixty days and before passing its order may satisfy itself that the alteration has the consent of the creditors, debenture-holders and other persons concerned with the company or that the sufficient provision has been made by the company either for the due discharge of all its debts and obligations or that adequate security has been provided for such discharge. | Though the time limit for disposal of application for such shifting has been prescribed to be 60 days, practically it takes much longer than thatin spite of obtaining the requisite NoCs. This is only due to administrative delays which need to be improved upon at the offices of the Regional Directors. |
| 5. | Section 16 | Rectification of name of company-
If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,— (a) in the opinion of the Central Government, is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose; (b) on an application by a registered proprietor of a trade mark that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999, made to the Central Government within three years of incorporation or registration or change of name of the company, whether under this Act or any previous company law, in the opinion of the Central Government, is identical with or too nearly resembles to an existing trade mark, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of six months from the issue of such direction, after adopting an ordinary resolution for the purpose. |
Regional Director has the power to order a company to rectify its name in case the name of the company is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under the Act, 2013 or any previous company law.
Regional Director has the power to order rectification of name of the company, if an application by a registered proprietor of a trade mark is made to him that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999. |
| 6. | Section 87 | Rectification by Central Government in register of charges–
87. (1) The Central Government on being satisfied that— (i) (a) the omission to file with the Registrar the particulars of any charge created by a company or any charge subject to which any property has been acquired by a company or any modification of such charge; or (b) the omission to register any charge within the time required under this Chapter or the omission to give intimation to the Registrar of the payment or the satisfaction of a charge, within the time required under this Chapter; or (c) the omission or mis-statement of any particular with respect to any such charge or modification or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83, was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company; or (ii) on any other grounds, it is just and equitable to grant relief, it may on the application of the company or any person interested and on such terms and conditions as it may seem to the Central Government just and expedient, direct that the time for the filing of the particulars or for the registration of the charge or for the giving of intimation of payment or satisfaction shall be extended or, as the case may require, that the omission or mis-statement shall be rectified. |
The Regional Director has the power to grant extension of time for filing of the particulars or for the registration of the charge or for the giving of intimation of payment or satisfaction of charges so that the omission of the same can be rectified.
The same is in line with the current powers of the Regional Director. |
| 7. | 111(3) | The company shall not be bound to circulate any statement as required by clause (b) of sub-section (1), if on the application either of the company or of any other person who claims to be aggrieved, the Central Government, by order, declares that the rights conferred by this section are being abused to secure needless publicity for defamatory matter. | Regional Director may pass an order on an application made either by the company or any other aggrieved person and direct the company not to circulate the members resolution if he is satisfied that such right granted by Section 111 of Act, 2013, is abused to receive needless publicity for defamatory matter.
The same is in line with the current powers to the Regional Director. |
| 8. | 140(1) | The auditor appointed under section 139 may be removed from his office before the expiry of his term only by a special resolution of the company, after obtaining the previous approval of the Central Government in that behalf in the prescribed manner:
Provided that before taking any action under this sub-section, the auditor concerned shall be given a reasonable opportunity of being heard. |
An auditor may be removed from his office before expiry of his term after obtaining previous approval of Regional Director.
Before granting approval for removal of auditor, Regional Director shall ensure whether a reasonable opportunity of being heard is given to the concerned auditor. The same is in line with the current powers to the Regional Director. |
| 9. | 230(5) (Yet to be enforced) | A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the income-tax authorities, the
Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, the Official Liquidator, the Competition Commission of India established under sub-section (1) of section 7 of the Competition Act, 2002 (12 of 2003), if necessary, and such other sectoral regulators or authorities which are likely to be affected by the compromise or arrangement and shall require that representations, if any, to be made by them shall be made within a period of thirty days from the date of receipt of such notice, failing which, it shall be presumed that they have no representations to make on the proposals. |
When a meeting of creditors or class of creditors and members or class of members or the debenture-holders of the company is organised pursuant to an order of Tribunal with regard to compromise or make an arrangement with creditors and members; the notice of meeting along all other relevant documents shall be sent to Regional Director.
Regional Director shall make representations on the proposed compromise or arrangement within a period of thirty days from the date of receipt of notice of the meeting. |
| 10. | 233(2) (Yet to be enforced) | The transferee company shall file a copy of the scheme so approved in the manner as may be prescribed, with the Central Government, Registrar and the Official Liquidator where the registered office of the company is situated. | In case of merger or amalgamation of two or more small companies or between a holding company and its wholly-owned subsidiary company or such other class or classes of companies as may be prescribed, the transferee company shall file a copy of the scheme to the Regional Director. |
| 11. | 233(3) (Yet to be enforced) | On the receipt of the scheme, if the Registrar or the Official Liquidator has no objections or suggestions to the scheme, the Central Government shall register the same and issue a confirmation thereof to the companies. | The scheme of merger or amalgamation shall be registered by Regional Director in case the Registrar or the Official Liquidator has no objections or suggestions to the scheme.
Regional Director shall issue a confirmation of registration of scheme once it the same is registered by him. |
| 12. | 233(4) (Yet to be enforced) | If the Registrar or Official Liquidator has any objections or suggestions, he may communicate the same in writing to the Central Government within a period of thirty days:
Provided that if no such communication is made, it shall be presumed that he has no objection to the scheme. |
Any objections or suggestions on the scheme of merger or amalgamation shall be communicated in writing to Regional Director by Registrar or Official Liquidator within a period of thirty days.
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| 13. | 233(5) (Yet to be enforced) | If the Central Government after receiving the objections or suggestions or for any reason is of the opinion that such a scheme is not in public interest or in the interest of the creditors, it may file an application before the Tribunal within a period of sixty days of the receipt of the scheme under sub-section (2) stating its objections and requesting that the Tribunal may consider the scheme under section 232. | Regional Director shall file an application before the Tribunal in case he is of the opinion that the proposed scheme is not in public interest or in the interest of the creditors within a period of sixty days of the receipt of the scheme stating its objections and requesting that the Tribunal may consider the scheme under section 232. |
| 14. | 233(6) (Yet to be enforced) | On receipt of an application from the Central Government or from any person, if the Tribunal, for reasons to be recorded in writing, is of the opinion that the scheme should be considered as per the procedure laid down in section 232, the Tribunal may direct accordingly or it may confirm the scheme by passing such order as it deems fit:
Provided that if the Central Government does not have any objection to the scheme or it does not file any application under this section before the Tribunal, it shall be deemed that it has no objection to the scheme. |
Tribunal on receipt of an application from Regional Director is of the opinion that the scheme should be considered as per the procedure laid down in section 232, the Tribunal may confirm such scheme by passing such order as it deems fit.
In case no application is received by the tribunal from Regional Director, it shall be presumed that the Central Government has no objection to the scheme. |
| 15. | First proviso to 272(4)[In notification erroneously written as first proviso to Section 272(3)] (Yet to be enforced) | Provided that the Registrar shall not present a petition on the ground that the company is unable to pay its debts unless it appears to him either from the financial condition of the company as disclosed in its balance sheet or from the report of an inspector appointed under section 210 that the company is unable to pay its debts: | Registrar of Companies has the power to present a petition for winding up of company on the ground that the company is unable to pay its debts when he is satisfied either from the financial condition of the company as disclosed in its balance sheet or from the report of an inspector that the company is unable to pay its debts. |
| 16. | Second proviso to 272(3)[In notification erroneously written as first proviso to Section 272(3)] (Yet to be enforced) | Provided further that the Registrar shall obtain the previous sanction of the Central Government to the presentation of a petition: | Before filing petition of winding up of company, the Registrar will require the prior sanction of Regional Director. |
| 17. | 348(1) (Yet to be enforced) | 348. (1) If the winding up of a company is not concluded within one year after its commencement, the Company Liquidator shall, unless he is exempted from so doing either wholly or in part by the Central Government, within two months of the expiry of such year and thereafter until the winding up is concluded, at intervals of not more than one year or at such shorter intervals, if any, as may be prescribed, file a statement in such form containing such particulars as may be prescribed, duly audited, by a person qualified to act as auditor of the company, with respect to the proceedings in, and position of, the liquidation,—
(a) in the case of a winding up by the Tribunal, with the Tribunal; and (b) in the case of a voluntary winding up, with the Registrar: Provided that no such audit as is referred to in this sub-section shall be necessary where the provisions of section 294 apply. |
The information as to pending liquidations when the winding up of a company is not concluded within one year after its commencement, the Company Liquidator shall, unless he is exempted from so doing either wholly or in part by Regional Director shall file a statement duly audited by an auditor of the company stating the proceedings and position of liquidation to tribunal in the case of a winding up by the Tribunal or Registrar in the case of a voluntary winding up. |
| 18. | 361 (Yet to be enforced) | Summary procedure for liquidation-
361. (1) Where the company to be wound up under this Chapter, — (i) has assets of book value not exceeding one crore rupees; and (ii) belongs to such class or classes of companies as may be prescribed, the Central Government may order it to be wound up by summary procedure provided under this Part. (2) Where an order under sub-section (1) is made, the Central Government shall appoint the Official Liquidator as the liquidator of the company. |
In case of winding up of company whose book value of assets is less than one crore rupees or such company belongs to such class or classes of companies as may be prescribed, the Regional Director may pass an order that such company be wound up by summary procedure as specified under Section 361 of the Act, 2013. |
| 19. | 362 (Yet to be enforced) | Sale of assets and recovery of debts due to Company-
362. (1) The Official Liquidator shall expeditiously dispose of all the assets whether movable or immovable within sixty days of his appointment. (2) The Official Liquidator shall serve a notice within thirty days of his appointment calling upon the debtors of the company or the contributories, as the case may be, to deposit within thirty days with him the amount payable to the company. (3) Where any debtor does not deposit the amount under sub-section (2), the Central Government may, on an application made to it by the Official Liquidator, pass such orders as it thinks fit. |
In case of winding up of company mentioned under Section 361 of Act, 2013, the official liquidator appointed by Regional Director shall serve a notice within thirty days of his appointment calling upon the debtors of the company or the contributories, as the case may be, to deposit within thirty days with him the amount payable to the company.
If any debtor does not deposit the amount due to him, then Regional Director shall on an application made to him by the Official Liquidator, pass such orders as it thinks fit. |
| 20. | 364 (Yet to be enforced) | Appeal by creditor-
364. (1) Any creditor aggrieved by the decision of the Official Liquidator under section 363 may file an appeal before the Central Government within thirty days of such decision. (2) The Central Government may after calling the report from the Official Liquidator either dismiss the appeal or modify the decision of the Official Liquidator. (3) The Official Liquidator shall make payment to the creditors whose claims have been accepted. (4) The Central Government may, at any stage during settlement of claims, if considers necessary, refer the matter to the Tribunal for necessary orders. |
An aggrieved creditor may file an appeal before Regional Director within thirty days of decision taken by Official Liquidator.
Regional Director may after calling the report from the Official Liquidator either dismiss the appeal or modify the decision of the Official Liquidator. |
| 21. | 365 (Yet to be enforced) | Order of dissolution of company-
365. (1) The Official Liquidator shall, if he is satisfied that the company is finally wound up, submit a final report to— (i) the Central Government, in case no reference was made to the Tribunal under subsection (4) of section 364; and (ii) in any other case, the Central Government and the Tribunal. (2) The Central Government, or as the case may be, the Tribunal on receipt of such report shall order that the company be dissolved. (3) Where an order is made under sub-section (2), the Registrar shall strike off the name of the company from the register of companies and publish a notification to this effect. |
Regional Director or Tribunal (in case reference was made under 364(4) of Act, 2013,) on receipt of final report of Official Liquidator, shall order dissolution of company. |
| 22. | clause (i) of the proviso to 399(1) | Inspection, production and evidence of documents kept by Registrar
Provided that the rights conferred by this sub-section shall be exercisable— (i) in relation to documents delivered to the Registrar with a prospectus in pursuance of section 26, only during the fourteen days beginning with the date of publication of the prospectus; and at other times, only with the permission of the Central Government; and |
When any person requires inspection of any documents delivered to the Registrar with a prospectus, at any other time other than during 14 days beginning with the date of publication of the prospectus, then such person is required to obtain the permission of the Regional Director. |
| 23. | 442 |
Mediation and Conciliation Panel- 442. (1) The Central Government shall maintain a panel of experts to be called as the Mediation and Conciliation Panel consisting of such number of experts having such qualifications as may be prescribed for mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal under this Act. |
Regional Director will be responsible for maintaining a panel of experts to be called as the ‘Mediation and Conciliation Panel’ for mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal under this Act. |
Conclusion
The delegation of powers by Central Government is done in order to ensure smooth functioning of business. The administrative responsibilities can be decentralised in order achieve specialisation of work and remove bottlenecks from the system.
The Central Government has been also empowered under Section 458 to revoke such delegation of powers or to exercise the powers itself if it is of the opinion that it is for the betterment of the public and stakeholders at large.
In the aforementioned table few sections of the Act, 2013 has not yet been enforced. We need to wait for the notification enforcing such sections. As soon as such sections are enforced the powers of Central Government will be delegated to the Regional Director, until then the powers and functions will be vested upon the Central Government.
(Author is associated as an Executive with Vinod Kothari & Company)
