Ministry of Corporate Affairs has vide Notification dated 17th July 2014 amended the Rule 3 related to definition of Related Party by amending Companies (Specification of definitions details) Rules, 2014. Vide this amendment Ministry excludes Independent Directors from the definition of Related Parties. Revised rule 3 is as follows:-
3. Related party.- For the purposes of sub-clause (ix) of clause (76) of section 2 of the Act, a director other than an independent director or key managerial personnel of the holding company or his relative with reference to a company, shall be deemed to be a related party.
Full Text of the Notification is as follows :-
Companies (Specification of definitions details) Amendment Rules, 2014.
New Delhi, 17th July, 2014
G.S.R – In exercise of the powers conferred by sub-clause (ix) of clause (76) of section 2, read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely:-
1. (1) These rules may be called the Companies (Specification of definitions details) Amendment Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Specification of definitions details) Rules, 2014, in rule 3, after the words `a director’ the words ‘other than an independent director shall be inserted.
[F. No. 01/13/2013 (Part-1) CL-V]
Amardeep Singh Bhatia
Note: The principal rules were published in the gazette of India, Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R. 238(E), dated the 31st March, 2014.