Ministry of Finance and Company Affairs
(Department of Company Affairs)
NOTIFICATION
New Delhi, the 1st, April, 2003
G.S.R 275 (E).- In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 642 read with sub-section (3) of section 81of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Public Companies (Terms of Issue of Debentures and Raising of Loans with Option to Convert such Debentures or Loans into Shares) Rules, 1977, namely :-
1. Short title and commencement.- (1) These Rules may be called the Public Companies (Terms of Issue of Debentures and Raising of Loans with Option to Convert such Debentures or Loans into Shares) Amendment Rules, 2003.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the public Companies (Terms of Issue of Debentures and Raising of Loans with Option to Convert such Debentures or Loans into Shares) Rules, 1977, –
(i) in rules 2 after sub-rule (b), the following shall be inserted, namely :-
(c) “scheduled bank” means a bank included in the Second Schedule to the Reserve Bank of India Act, 1934, but does not include co-operative banks, regional rural banks and foreign banks;
(ii) in rule 3, in sub-rule (b), after the words “a public financial institution”, the words “or a scheduled bank”, shall be inserted;
(iii) in rule 3, in sub-rule (d), after the words “financial institutions”, the words “or scheduled banks, as the case may be”, shall be inserted;
(iv) in rule 3, at the end, the following proviso shall be inserted, namely :-
“Provided that a public financial institution or a scheduled bank shall not convert all or any part of such debentures or loans unless,-
(a) the company that has issued the debentures or raised the loan has defaulted in the repayment/redemption of, or payment of interest on, such loans or debentures; and
(b) such scheduled bank or public financial institution has given the company notice of its intention to convert such loans or debentures at least 30 days prior to the intended date of conversion.”
[F. No.1/9/2002-CL.V]
RAJIV MEHRISHI
Joint Secretary
Foot Note:- The Principal Rules were published vide notification GSR 602 dated 2.5.1977 and subsequently amended by :-
1. G.S.R. 623 dated 8.5.1978
2. G.S.R.1489 dated 25.11.1978
