We all faced the problem while interpreting the provisions where the word-forming the provisions are not defined in the Act or rules and regulations, schedules etc., made under the Act. In such a situation, the most pertinent question is which statute we should refer to define that word.
It is important to note that in the case of the Companies Act, 2013, Clause 95 of Section 2 of the Companies Act, 2013 and Sub-Rule 2 of The Companies (Specification of Definitions Details) Rules, 2014 explicitly provide the Act which we can refer to derive the meaning of the word not defined under the Companies Act, 2013 and rules made thereunder.
As per Clause (95) of Section 2 of the Companies Act, 2013, “words and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) shall have the meanings respectively assigned to them in those Acts.”
Act here does not only mean Companies Act, 2013 but includes rules, regulations, schedule, annexures etc., made under or part of it. So, if a word or expression is not defined in the Companies Act, 2013, then we have to go to the following acts;
1. Securities Contracts (Regulation) Act, 1956
2. SEBI Act, 1992
3. Depositories Act, 1996.
The best example of such a word is Securities; the Companies Act 2013 does not define the word, but it is extremely important. We import the meaning of the word Securities from the Securities Contract (Regulation) Act, 1956.
The Companies (Specification of Definitions Details) Rules, 2014 also provides that “The words and expressions used in these rules but not defined and defined in the Act or in
1. the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or
2. the Securities and Exchange Board of India Act, 1992 (15 of 1992) or
3. the Depositories Act, 1996 (22 of 1996) or
4. the Information Technology Act, 2000 (21 of 2000) or rules and regulations made thereunder shall have the meanings respectively assigned to them under the Act or those Acts.”
So while assigning the meaning to the word, we have to first study the above acts, and only if we are unable to find the meaning of such word in the following Acts; then only we can move towards the other Acts, such as the “General Clause Act”.
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