Snapshot of MCA Circulars - Jan to May 2014

The Ministry of Corporate Affairs has issued several Circulars on Companies Act 2013 and Rules thereof. The following is the consolidated list of Circulars from January to May 2014 issued by the MCA. The following is just a summary of the subject matter of the Circular.  For those Circulars which are not required to be explained as on date, the same lines contained in the MCA website are kept as it is. The rest I have managed to put the subject in crisp.

The link of the Circular number lead to the respective page in MCA website for more information on the same. 

S.No	Circular No.	Date	Essence of the Circular
1	General Circular No. 1/2014	15/01/2014	Regional directors should invite for the comments of IT Department before producing a Report on a Scheme of Amalgamation / Arrangement. RDs should take into account the comments/ inputs provided by the Income Tax Department and other sectoral Regulators if any while filing their  Report u/s 394A of the Companies Act, 1956.
2	General Circular No. 2/2014	11/02/2014	No Company or LLP shall have the word “National” in it unless the same is a Govt. Company or unless any Govt Company holds a stake in it. No Company shall use the word “bank” in its name without obtaining NOC from RBI No Company shall use the word “Stock exchange ” “Exchange” in its name without obtaining NOC from SEBI
3	General Circular No. 3/2014	14/02/2014	Clarification on Section 372 A of the Companies Act 1956 –  Provisions of 372A shall be applicable to guarantee given by the holding company for the loans of the subsidiary company, till the date of effect of Section 186 of the Companies Act 2013
4	General Circular No. 4/2014	25/03/2014	Resolutions passed under section 293 of the Companies Act, 1956 prior to12.09.2013 with reference to borrowings (subject to the limits prescribed) and / or creation of security on assets of the company will be regarded as sufficient compliance section 180 of the Companies Act, 2013 for aperiod of one year from the date of notification of section 180 of the Act.
5	General Circular No. 05/2014	28/03/2014	Court Fee required to be paid at the time of obtaining Certified Copies of documents filed with ROCs. Court Fee shall be added to the MCA fee and the same shall be filed online. Corresponding Court Fee stamp is  affixed on the document on its dispatch.
6	General Circular No. 06/2014	29/03/2014	Roll out plan of various forms under the Companies Act, 2013 and continuance of forms under the provisions of Companies Act, 1956
7	Table of Fees	01/04/2014	Table of Fees
8	General Circular No. 07/2014	01/04/2014	This Circular gives an elaborate table of sections of 2013 Act that are notified and the corresponding provisions in 1956 Act.
9	General Circular No. 08/2014	04/04/2014	Provisions of Companies Act 2013 relating to Financial Statements, Auditors Report and Directors Report shall Apply from Financial year commencing from 31.03.2014
10	General Circular No. 09/2014	25/04/2014	Availability of E-forms/non-e-forms under the companies act 2013
11	General Circular No. 10/2014	07/05/2014	This Circular lays down the procedure to be followed by the Regional Directors , E Governance Cell etc in dealing with Certification of documents by professionals containing false, misleading information or omission of material facts.
12	General Circular No. 11/2014	07/05/2014	One time opportunity for extension of period of Reservation of Name.
13	General Circular No. 12/2014	22/05/2014	Mandatory submission of PAN details by Foreign nationals are applicable only for those foreign nationals, who are required to mandatorily posess PAN as per Income Tax Act 1961. In case of other foreign nationals, who need not posess PAN as stated above, it will be sufficient to furnish their Passport number along with an undertaking in the format prescribed in this Circular
14	General Circular No. 13/2014	23/05/2014	Extension of validity period for names reserved as on 31st March, 2014

Snapshot of MCA Notifications JAN - JUN 2014

The Ministry of Corporate Affairs has issued several Notifications on Companies Act 1956 and Rules thereof. The following is the consolidated list of Notifications from January to June 2014 issued by the MCA. The following is just a summary of the subject matter of the notification.  For those Notifications, which are not required to be known, the same lines contained in the MCA website are kept as it is. The rest I have managed to put the subject in crisp.

The link of the Notification number lead to the respective page in MCA website for more information on the same.

S.No	Notification No.	Date	Essence of the Notification
1	G.S.R.130(E)	27.02.2014	Schedule VII of the Companies Act 2013 amended. Areas in which CSR projects can be undertaken, stands modified by this Notification
2	G.S.R.261(E)	31.03.2014	The words ‘‘promoting preventive health care’’ in the above Notification shall read ‘‘promoting health care including preventive health care”
3	S.O.582(E)	27.02.2014	Section 135 of the Companies Act and Schedule VII (Provisions relating to Corporate Social Responsibility) became effective since 01.04.2014
4	S.O 902(E)	27.03.2014	Notification giving effect to provisions of Sections of Companies Act 2013 from 01.04.2014
5	S.O(E)	27.03.2014	Nomenclature of various forms prescribed under the provisions of Companies Act, 2013. Forms under the new Act are named in an Alphanumeric manner.
6	Amendment to Schedule II	31.03.2014	Amendments in Schedule V Part A in Paragraph 3 and part C in Paragraph 5 are amended by this Notification. The heading “Notes ” appearing after Part C of Para 5 stands omitted
7	S.O.1352(E)	21.05.2014	Under Section 458 of the Companies Act 2013, The Central Government delegates its Powers to the Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong, with respect to the following sections – 8 (4)(i), 8(6) - Formation of Companies with charitable objects etc 13 (4) & (5), -Alteration of Memorandum 16, - Rectification of Company name 87, - Rectification by Central Government in register of charges  111 (3), - Circulation of member's resolution 140 (1), - Removal / Resignation of Auditors and  giving of special notice. 399(1)(i) - Inspection, Production and evidence of documents kept by Registrar.
8	S.O.1354(E)	21.05.2014	The Central Government delegates its powers to the Regional Director, Joint Director, Deputy Director or Assistant Director posted in the office of Regional Director at Noida in respect of the following sections – 153 and 154 (Allotment of Director Identification Number)
9	S.O.1353(E)	21.05.2014	Under Section 458 of the Companies Act 2013, The Central Government delegates its Powers to the Registrar of Companies, with respect to the following sections –  4(2), - Incorporation of Companies 8 (1), 8(4)(i)[except conversion into another kind of Company], 8 (5), - Formation of Companies with charitable objects etc 13 (2)- Alteration of Memorandum
10	S.O.1459(E)	06.06.2014	Section 74 of the Companies Act 2013 (Repayment of Deposits accepted before the Commencement of the Act) became effective from 06.06.2014
11	S.O.1524(E)	13.06.2014	Establishment of Office of Official Liquidator for the state of Telengana
12	S.O.1525(E)	13.06.2014	Establishment of Office of Registrar of Companies for the state of Telengana

Dishonour of Cheques- Law and practice

Law relating to Dishonour of Cheques is gaining more significance in the recent times, with the ever increasing usage of Negotiable instruments both at the individual and the corporate level. Section 138 of the Negotiable Instruments Act 1881, deals with law relating to Dishonour of Cheques.

Issue of cheque:

According to Section 138 of the N.I Act, a precondition to be satisfied is that, the cheque must be issued in pursuance of discharge of a debt. Such discharge may be whole or in part, but cheques issued for any other purpose will not form part of Section 138

Presentation of the cheque:

The said cheque must be presented in the bank within 6 (Six months) from the date on which  it was drawn or within the date of validity of the cheque, whichever is earlier. Now RBI has reduced the validity period of Cheques to 3 months.

Issue of notice to the drawer:

Once the the bank intimates the payee on the cheque bounce, the payee shall Send a notice in writing to the borrower intimating the same within 30 days from the receipt of the communication from the bnotic For constituting an offence under the Act, the defaulter should have failed to pay the sum within 15 days after the receipt of such notice.

Upon non payment:

A criminal Complaint should be made within 1 month from the date of expiry of the said 15 days before Metropolitan Magistrate or Judicial Magistrate not below the rank of JM-1.

Nature of the offence : Compoundable

Some judicial pronouncements:

1. Pendency of Criminal matter would not be an impediment to proceed with civil suit -State of Rajasthan vs. Kalyan Sundaram Cement Industries Ltd (1996) 86 CC 433

2. Prosecution under Section 420 of IPC and Section 138 of the Negotiate Instruments Act is not hit by Article 20(2) of the Constitution. Prosecution under Section 138 is not a constitutional bar to prosecute under section 420 of IPC.-    Anto (KS) v. UOI (1993) 76 CC 105 (ker), Trisuns Chemical Industry V. Rajesh Agarwal (1999) 8 SCC 686, Meenakshi Sundharam Textile Limited V. Gokul Chand Rakhabchand (2002) (2) Crimes 432, Rajat Mittal v. State (2002) 108 cc 55 (Del)

3. There are 5 facts to be considered for Jurisdiction under section 138 - Drawing of Cheque / Presentation of Cheque / Returning of Cheque unpaid / Giving notice in writing / failure to make payment. Complainant can choose anyone of the 5 places for invoking Jurisdiction - Bhaskaran K vs. Sankaran Vaidhyan Balance 1994 (4) Crimes 212 (SC), ( 2000) 99 CC 268 (SC).

However the above Judgment was overruled recently on 01.08.2014, by the Supreme court in Dasrath Rupsing rathod Vs. State of maharashtra and another where the Jurisdiction under Section 138 of the NI Act is conferred only to place where the cause of action arises. Therefore the place of the bank where the Cheque is presented and the same is dishonored is the place where the complaint has to be filed.