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The Companies Act, 1956

Title : The Companies Act, 1956

Year : 1956



(1) The Central Government may, by order notified in the Official Gazette, reduce the amount of any fee, charge or other sum specified in any provision contained in this Act, as payable in respect of any matter, either to the Central Government or to any Registrar, any Additional, Joint, Deputy, or Assistant Registrar or any other officer of the Central Government, and thereupon such provision shall, during the period for which the order is in force, have effect as if the reduced fee had been substituted for the fee specified in such provision.

(2) Any order notified under sub-section (1) may, by a like order, be cancelled or varied at any time by the Central Government.

(3) Nothing in this section shall be deemed to affect the power of the Central Government under section 641 to alter any of the fees specified in Schedule X.



(1) If a company, having made default in complying with any provision of this Act which requires it to file or register with, or deliver or sent to, the Registrar any return, account or other document, or to give notice to hi m of any matter, fails to make good the default within fourteen days after the service of a notice on the company requiring it to do so, the1*[Tribunal] may, on an application made to it by any member or creditor of the company or by the Registrar, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order.

(2) Any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of the company responsible for the default.

(3) Nothing in this section shall be taken to prejudice the operation of any provisions in this or any other Act imposing penalties on a company or its officers in respect of any such default as aforesaid.

614A -2* Power of court trying offences under the Act to direct the filing of documents with Registrar

(1) Any court trying an offence for a default in compliance with any provision of this Act which requires a company or its officers to file or register with, or deliver or send to the Registrar, any return, account or other document, may at the time of sentencing, acquitting or discharging the accused, direct by order, if it thinks fit to do so, any officer or other employee of the company to file or register with, deliver or send to, the Registrar on payment of the fee including the additional fee required to be paid under section 611, such return, account or other document within such time as may be specified in the order.

(2) Any officer or other employee of the company who fails to comply with an order of the court under sub-section (1) shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both.

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1. Substituted by Act 31 of 1988, Section 67, for "court" (w.e.f. 31-5-1991) and again substituted by Act 11 of 2003, Section 118 for "Company Law Board".

2. Inserted by Act 65 of 1960, Section 196 (w.e.f. 28-12-1960).

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(1) The Central Government may, by order, require companies generally, or any class of companies, or any company, to furnish such information or statistics with regard to their or its constitution or working, and within such time, as may be specified in the order.

(2) (a) Every order under sub-section ( 1 ) addressed to companies generally or to any class of companies, shall be published in the Official Gazette, and in such other manner, if any, as the Central Government may think fit.

(b) The date of publication of the order in the Official Gazette shall be deemed to be the date on which the demand for information or statistics is made on such companies or class of companies, as the case may be.

(3) Every order under sub-section (1) addressed to an individual company shall be served on it in the manner laid down in section 51 .

(4) For the purpose of satisfying itself that any information or statistics furnished by a company in pursuance of any order under sub-section (1) is correct and complete, the Central Government may require such company -

(a) To produce such records or documents in its possession or under its control for inspection, before such officer and at such time as may be specified by the Central Government; or

(b) To furnish such further information as may be specified by the Central Government and within such time as may be fixed by it.

(5) The Central Government may also, by order, direct an inquiry to be made by any person or persons named in the order -

(a) For the purpose of obtaining any information or statistics which a company has failed to furnish as required of it by an order under sub-section ( 1 ); or

(b) For the purpose of satisfying itself that any information or statistics furnished by a company in pursuance of an order made under sub-section ( 1 ) is correct and complete; and insofar as such information or statistics may be found to be incorrect or incomplete, for the purpose of obtaining such information or statistics as may be necessary to make the information or statistics furnished correct and complete,and a person or persons so appointed shall, for the purposes of such inquiry, have such powers as may be prescribed.

(6) If any company fails to comply with an order made under sub-section ( 1 ) or ( 4 ), or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company, and every officer thereof who is in default, shall be punishable with imprisonment which may extend to three months, or with fine which may extend to1[ten thousand rupees], or with both.

(7) An order requiring any information or statistics to be furnished by a company may also be addressed to any person who is, or has at any time been, an officer or employee of the company, and all the provisions of this section, so far as may be, shall apply in relation to such person as they apply in relation to the company:-

Provided that no such person shall be punishable under sub-section (6), unless the court is satisfied that he was in a position to comply with the order and made wilful default in doing so.

(8) Where a body corporate incorporated outside India and having established an office within India, carries on business in India, all references to a company in this section shall be deemed to include references to the body corporate in relation, and only in relation, to such business.

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1. Substituted by Act 53 of 2000, Section 218, for "one thousand rupees" (w.e.f. 13-12-2000).

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Application of Act to companies governed by special Acts
The provisions of this Act shall apply-

(a) To insurance companies, except insofar as the said provisions are inconsistent with the provisions of the Insurance Act, 1938 (4 of 1938);

(b) To banking companies, except insofar as the said provisions are inconsistent with the provisions of theBanking Companies Act, 1949 (10 of 1949);

(c) To companies engaged in the generation or supply of electricity, except insofar as the said provisions are inconsistent with the provisions of 1*[the Indian Electricity Act, 1910 (9 of 1910), or] the Electricity Supply Act,1948 (54 of 1948);

(d) To any other company governed by any special Act for the time being in force, except insofar as the said provisions are inconsistent with the provisions of such special Act;

2*[(e) to such body corporate, incorporated by any Act for the time being in force, as the Central Government may, by notification in the Official Gazette, specify in this behalf, subject to such exceptions, modifications of adaptations, as may be specified in the notification.]

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1. Inserted by Act 65 of 1960, Section 197 (w.e.f. 28-12-1960).

2. Inserted by Act 41 of 1974, Section 34 (w.e.f. 1-2-1975).

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For the purposes of1*[this Act] Government company means any company in which not less than fifty-one per cent of the 2*[paid up share capital] is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments 3*[and includes a company which is a subsidiary of a Government company as thus defined].

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1. Substituted by Act 65 of 1960, Section 198, for "sections 618, 619 and 620" (w.e.f. 28-12-1960).

2. Substituted by Act 65 of 1960, Section 198, for "share capital" (w.e.f. 28-12-1960).

3. Added by Act 65 of 1960, Section 198 (w.e.f. 28-12-1960).
 
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[Repealed by the Companies (Amendment) Act, 2000 (53 of 2000), Section 219 (w.e.f. 13-12-2000).]



(1) In the case of a Government company, the following provisions shall apply, notwithstanding anything contained in sections 224 to 233.

(2) The auditor of a Government company shall be appointed or re-appointed by 1 [***] the Comptroller and Auditor-General of India:-

2*[Provided that the limits specified in sub-sections (1B) and (1C) of section 224 shall apply in relation to the appointment or re-appointment of an auditor under this sub-section.]

(3) The Comptroller and Auditor-General of India shall have power-

(a) To direct the manner in which the company's accounts shall be audited by the auditor appointed in pursuance of sub-section (2) and to give such auditor instructions in regard to any matter relating to the performance ofhis functions as such;

(b) To conduct a supplementary or test audit of the company's accounts by such person or persons as he may authorise in this behalf; and for the purposes of such audit, to require information or additional information to be furnished to any person or persons so authorised, on such matters, by such person or persons, and in such form as the Comptroller and Auditor-General may, by general or special order, direct.

(4) The auditor aforesaid shall submit a copy of his audit report to the Comptroller and Auditor-General of India who shall have the right to comment upon or supplement, the audit report in such manner as he may think fit.

(5) Any such comments upon, or supplement to the audit report shall be placed before the annual general meeting of the company at the same time and in the same manner as the audit report.

619A -3* Annual reports on Government companies

(1) Where the Central Government is a member of a Government company, the Central Government shall cause an annual report on the working and affairs of that company to be-

(a) Prepared within three months of its annual general meeting before which the audit report is placed under sub-section (5) of section 619; and

(b) As soon as may be after such preparation, laid before both Houses of Parliament together with a copy of the audit report and any comments upon, or supplement to, the audit report, made by the Comptroller and Auditor-General of India.

(2) Where in addition to the Central Government, any State Government is also a member of a Government company, that State Government shall cause a copy of the annual report prepared under sub-section (1) to be laid before the House or both Houses of the State Legislature together with a copy of the audit report and the comments or supplement referred to in sub-section (1).

(3) Where the Central Government is not a member of a Government company, every State Government which is amember of that company, or where only one State Government is a member of the company, that State Government shall cause an annual report on the working and affairs of the company to be-

(a) Prepared within the time specified in sub-section (1); and

(b) As soon as may be after such preparation, laid before the House or both Houses of the State Legislature with a copy of the audit report and comments or supplement referred to in sub-section (1).]

4*[(4) The provisions of this section shall, so far as may be, apply to a Government company in liquidation as they apply to other Government company.]

619B - 5*Provisions of section 619 to apply to certain companies

The provisions of section 619 shall apply to a company in which not less than fifty-one per cent of the paid-up share capital is held by one or more of the following or any combination thereof, as if it were a Government company, namely:-

(a) The Central Government and one or more Government companies;

(b) Any State Government or Governments and one or more Government companies;

(c) The Central Government, one or more State Governments and one or more Government companies;

(d) The Central Government and one or more corporations owned or controlled by the Central Government;

(e) The Central Government, one or more State Governments and one or more corporations owned or controlled by the Central Government;

(f) One or more corporations owned or controlled by the Central Government or the State Government;

(g) More man one Government company.]

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1. The words "the Central Government on the advice of" omitted by Act 53 of 2000, Section 220 (w.e.f. 13-12-2000).

2. Inserted by Act 41 of 1974, Section 35 (w.e.f. 1-2-1975).

3. Inserted by Act 65 of 1960, Section 200 (w.e.f. 28-12-1960).

4. Inserted by Act 31 of 1988, Section 58 (w.e.f. 15-6-1988).

5. Inserted by Act 41 of 1974, Section 36 (w.e.f. 1-2-1975).

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(1) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act (other than sections 618, 619 and 1 [619A]) specified in the notification:-

(a) Shall not apply to any Government company; or

(b) Shall apply to any Government company, only with such exceptions, modifications and adaptations, as may be specified in the notification.

2*[(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be shall be issued only in such modified form as may be agreed upon by both the Houses.]

620A - Power to modify Act in its application to Nidhis, etc.

3*[Modification of Act in its application to Nidhis and Mutual Benefit Societies

(1) In this section, "Nidhi" or "Mutual Benefit Society" means a company which the Central Government may, by 4*[notification] in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be.

(2) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act specified in the notification-

(a) Shall not apply to any Nidhi or Mutual Benefit Society, or

(b) Shall apply to any Nidhi or Mutual Benefit Society with such exceptions, modifications and adaptations as may be specified in the notification.

(3) A copy of every notification issued under sub-section (1) shall be laid as soon as may be after it is issued, before each House of Parliament.]

620B - 5* Special provision as to companies in Goa, Daman and Diu

The Central Government may, by notification in the Official Gazette, direct that for such period or periods with effect from the 26th January, 1963 , or any subsequent date, any of the provisions of this Act specified in the notification shall not apply, or shall apply only with such exceptions and modifications or adaptations as may be specified in the notification, to -

(a) Any existing company in the Union Territory of Goa, Daman and Diu;

(b) Any company registered in the said Union territory under this Act on or after the 26 th January, 1963 .

620C - 6* Special provision as to companies in Jammu and Kashmir

The Central Government may by notification in the Official Gazette, direct that with effect from the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968 or any subsequent date, any of the provisions of this Act specified in the notification shall not apply, or shall apply only with such exceptions and modifications oradaptations as may be specified in the notification, to-

(a) Any existing company in the State of Jammu and Kashmir;

(b) Any company registered in that State under this Act after the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968.

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1. Substituted by Act 52 of 1964, Section 3 Schedule II, for "639" (w.e.f. 29-12-1964).

2. Substituted by Act 46 of 1977, Section 7 (w.r.e.f. 1-2-1975).

3. Inserted by Act 65 of 1960, Section 201 (w.e.f. 28-12-1960).

4. Notification No. GSR262(E) dated 31.03.2014.

S. No.    Name of the company and address of its registered office

1.    M/s. Navanithi Benefit Fund Limited
9-3/186, Main Bazaar Uthamapalayam, Madurai District, Tamil Nadu-626 533.

2.    M/s. Tiruninravur Mutual Benefit Fund Limited
12, Third Street, Vatsalapuram, Tiruninraver, R.S. Chiugleput, Tamil Nadu-602 024.

5. Inserted by Reg. 2 of 1963, Section 9.

6. Inserted by Act 25 of 1968, Section 2 and Schedule, w.e.f. 15-8-1968.

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(1) No court shall take cognizance of any offence against this Act 1* which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf:-

Provided
that nothing in this sub-section shall apply to a prosecution by a company of any of its officers:

2*[Provided further that the court may take cognizance of offence relating to issue and transfer of securities and non-payment of dividend on a complaint in writing by a person authorised by the Securities Exchange Board of India.]

3*[(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898)4 , where the complainant under sub-section (1) is the Registrar or a person authorised by the Central Government, the personal attendance of the complainant before the court trying the offence shall not be necessary unless the court for reasons to be recorded in writing requires his personal attendance at the trial.]

(2) Sub-section (1) shall not apply to any action taken by the liquidator of a company in respect of any offence alleged to have been committed in respect of any of the matters included in Part VII (sections 425 to 560) or in any other provision of this Act relating to the winding up of companies.

(3) A liquidator of a company shall not be deemed to be an officer of the company, within the meaning of sub-section (1).

621A -5* Composition of certain offences

(1) Notwithstanding anything contained in the Cods of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act (whether committed by a company or any officer thereof) not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compounded by the Central Government on payment or credit, by the company or the officer, as the case may be, to the Central Government of such sums as that Government may prescribe:

Provided that the sum prescribed shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded:

Provided further that in prescribing the sum required to be paid or credited for the compounding of an offence under this sub-section, the sum, if any, paid by way of additional fee under sub-section (2) of section 611 shall be taken into account.

(2) Nothing in sub-section (1) shall apply to an offence committed by a company or its officer within a period of three years from the date on which a similar offence committed by it or him was compounded under this section.

Explanation
.- For the purposes of this section, any second or subsequent offence committed after the expiry of a period of three years from the date on which the offence was previously compounded, shall be deemed to be a first offence.

(3) (a) Every application for the compounding of an offence shall be made to the Registrar who shall forward the same, together with his comments thereon to the Central Government.

(b) Where any offence is compounded under this section, whether before or after the institution of any prosecution, an intimation thereof shall be given by the company to the Registrar within seven days from the date on which the offence is so compounded.

(c) Where any offence is compounded before the institution of any prosecution, no prosecution shall be instituted in relation to such offence, either by the Registrar or by any shareholder of the company or by any person authorised by the Central Government against the offender in relation to whom the offence is so compounded.

(d) Where the composition of any offence is made after the institution of any prosecution, such compositionshall be brought by the Registrar in writing, to the notice of the Court in which the prosecution is pending and on such notice of the composition of the offence being given, the company or its officer in relation to whom the offence is so compounded shall be discharged.

(4) The Central Government while dealing with a proposal for the compounding of an offence for a default in compliance with any provision of this Act which requires a company or its officer to file or register with, or deliver or send to, the Registrar any return, account or other document, may, direct, by order, if it or he thinks fit to do so, any officer or other employee of the company to file or register with, or on payment of the fee, and the additional fee, required to be paid under section 611, such return, account or other document within such time as may be specified in the order.

(5) Any officer or other employee of the company who fails to comply with any order made by the Central Government under sub-section (4) shall be punishable with imprisonment for a term which may extend to six months, or with fine not exceeding (fifty thousand rupees) or with both.

(6) Notwithstanding anything contained in the Code of Criminal procedure, 1973,-

(a)Any offence which is punishable under this act with imprisonment or with fine, or with both, shall be compoundable with the permission of the Court, in accordance with the procedure laid down in that Act for compounding of offences;

(b)Any offence which is punishable under this Act with imprisonment only or with imprisonment and also with fine shall not be compoundable.

(7) No offence specified in this section shall be compounded except under and in accordance with the provisions of this section.]

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1. The words "(other than an offence with respect to which proceedings are instituted under section 545)" omitted by Act 1 of 2003, Section 119.

2. Inserted by Act 53 of 2000, Section 221 (w.e.f. 13-12-2000).

3. Inserted by Act 65 of 1960, Section 202 (w.e.f. 28-12-1960).

4. See now the Code of Criminal Procedure, 1973 (2 of 1974).

5. Section 621A inserted by Act 31 of 1988, Section 59 (w.e.f. 15-7-1988) and Substituted by Act 11 of 2003, Section 120 (See Annexe).

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Last updated on September, 2016

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