Companies Act 2013 Current Affairs - 2019
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The Union Cabinet has approved the creation of six additional posts in the National Company Law Appellate Tribunal (NCLAT). The proposal involves the creation of three additional posts each for judicial members and technical members in the NCLAT. The creation of additional posts will help meet the mandate provided to NCLAT by the Finance Act 2017, the Companies Act 2013 and the Insolvency and Bankruptcy Code 2016.
National Company Law Appellate Tribunal
National Company Law Appellate Tribunal (NCLAT) was established under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal (NCLT). The current Chairperson of NCLAT is Hon’ble Justice Shri S.J. Mukhopadhaya, former Judge of the Supreme Court.
NCLAT is the Appellate Tribunal for hearing appeals against the orders passed by NCLT under the Insolvency and Bankruptcy Code, 2016 (IBC). NCLAT hears appeals against the orders passed by Insolvency and Bankruptcy Board of India.
NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI) – as per the amendment brought to Section 410 of the Companies Act, 2013 by the Finance Act, 2017.
The government has re-promulgated the Companies (Amendment) Ordinance, 2019 to amend the Companies Act 2013. Even though the Companies (Amendment) Bill, 2018 for this effect was passed in Lok Sabha, it was pending before Rajya Sabha. The ordinance was first issued in November and would have ceased to be operational from January 21. Hence the government has decided to re-promulgate the ordinance.
Features of the Companies (Amendment) Bill, 2018
The Loksabha had passed the Companies (Amendment) Bill, 2018. The bill had important features like re-categorisation of offences, reducing the burden on special courts and bringing down the applicable penalties for small companies, enhancing the jurisdiction of Regional Director for compounding offences, empowers the central government to allow certain companies to have a different financial year instead of being determined by the National Company Law Tribunal among others.
The main objective of the amendment bill was the promotion of ease of doing business along with better corporate compliance.
Promulgation of Ordinance
Article 123 of the Constitution empowers the President to promulgate Ordinances to amend certain laws when either of the two Houses of Parliament is not in session and hence it is not possible to enact laws in the Parliament.
Ordinances must be must be approved by Parliament within six weeks of reassembling or they shall cease to operate.
Similar power to promulgate the ordinance has been provided to the Governor of the state under Article 213.
Ordinances were provided as a stop-gap arrangement and not as an alternative legislation process. The promulgation of the ordinance is subject to judicial review
Tags: Article 123 • Article 213 • better corporate compliance. • Companies (Amendment) Bill 2018 • Companies (Amendment) Ordinance 2019 • Companies Act 2013 • Ease of doing business • Lok Sabha • Ordinance promulgation • Rajya Sabha