Article 123 Current Affairs

Government Promulgates Ordinance to amend Companies Act, 2013

Union Cabinet has approved proposal for promulgation ordinance to amend the Companies Act, 2013. The ordinance had received assent from President Ram Nath Kovind under Article 123 and has been promulgated. The amendments to the Act are aimed to promote ease of doing business as well as ensure better compliance levels.

Key Facts

The ordinance to change Companies Act seeks to declog National Company Law Tribunals (NCLTs) and decriminalise minor offences by companies. The ordinance will transfer 90% of the cases to regional directors under Ministry of Corporate Affairs from NCLTs. Moreover, it will retain status of all non-compoundable offences since they are serious in nature.

Background

Union Government-appointed Committee (headed by Corporate Affairs Secretary Injeti Srinivas) had suggested various changes to Act, including restructuring of corporate offences under companies law and in-house adjudication mechanism to ensure that courts get more time to deal with serious violations.

Apart from restructuring of corporate offences to relieve special courts from adjudicating routine offences, the committee had mooted re-categorisation of 16 out of 81 compoundable offences under the Act. This move was recommended to bring down NCLT’s load as it looks at insolvency and bankruptcy cases as well.

It also recommended disqualification of directors in case they have directorships beyond permissible limits and capping an independent director’s remuneration. It also had suggested that remuneration any independent director gets from company should be capped at 20% of his gross income in year to prevent any material pecuniary relationship, which could impair their independence on the board.

Month: Categories: Business & Economy Current Affairs 2018

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President gives assent to Payment of Wages (Amendment) Ordinance, 2016

President Pranab Mukherjee has given assent to Payment of Wages (Amendment) Ordinance, 2016, to enable industries to pay wages by cheque or credit into the bank accounts of workers.

The ordinance amends the Payment of Wages Act, 1936 to encourage cashless transactions. With this assent the ordinance becomes law as per article 123 of the Constitution.

Key Provisions of Ordinance
  • Allows industries to pay wages to workers earning up to Rs. 18,000 per month, without taking their explicit consent as required under present Act.
  • Empowers the Union and State governments to specify industries or establishments where wage payments can be made mandatory through banks.
  • However, it is not mandatory for employers to make wage payments through the banking system and they can still pay in cash.
Background

The Union Government had decided to take the ordinance route because after demonetisation of the Rs. 500 and Rs. 1,000 banknotes in November 2016 had led to a cash crunch, and employers were finding it tough to pay workers in cash. The Payment of Wages (Amendment) Bill, 2016, introduced in Parliament was also not able get passed during winter session of the Parliament.

Article 123 of Constitution: It gives legislative power to President. He can issue ordinances when Parliament is not in session (i.e. recess) if there is urgent need to have a law on some urgent public matter. The promulgated ordinance has similar effect to an act of parliament. However, every ordinance must be laid and approved by both houses of the parliament within 6 weeks from the reassembling. If not placed and approved by both houses of the parliament after reassembling it lapses or becomes invalid.

Month: Categories: Bills and ActsIndia Current Affairs 2018

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