Provision in the CA 2013 to file satisfaction of charge when a banker is...

FILING OF FORM CHG-4 (Satisfaction)  without Banker's Digital Signature on the
e-form?

Satisfaction of Charge

When any company borrows any secured loan from any
banks or financial institution and repays the same then it is termed as “Satisfaction
of Charge” Thus as it is mandatory to report ROC regarding borrowing any loans
in form CHG-1 similarly on repayment of loan it is mandatory to report ROC
regarding satisfaction of such charge in form CHG-4.

Due date for Filing Form CHG-4

Form CHG-4 shall be filed within 30
days from the date of satisfaction of charge as per sec 82(1) of the Companies
Act, 2013 and Rule 8(1) of Companies(Registration of Charges) Rules, 2014. Due
date for Form CHG-4 is 30 days.

 

Additional Fees for CHG -4

Period of Delay	Fees Applicable
Up to 30 days	2 times of normal fee
More than 30 days and up to 60 days	4 times of normal fee
More than 60 days and up to 90 days	6 times of normal fee
More than 90 days and up to 180 days	10 times of normal fee
More than 180 days	12 times of normal fee

Condonation
of Delay for Satisfaction of Charge CHG -4

Where any charge form CHG-4 is not filled within
300 days (30 days Plus 270 days as per sec 441 of the Companies Act, 2013) from
the date of satisfaction of charge the Registrar shall not register the same
unless the delay is condoned by the Central Government. Without Condonation of
delay charge cannot be registered with ROC.

FILING OF
FORM CHG-4 without Banker's Digital Signature on the e-form?

Suppose , if a banker has not cooperated and
released NOC certificate for satisfaction of charge , then company has to pay
additional fees within 300 days and beyond 300 days , it has to condone the delay
with RD.

In such case
, what is the remedy available to companies whose bankers are not cooperating
in this regard?

As per Section 82, Company is eligible to file the CH-4
Form and the ROC will then ask the banker to reply within 14 days for any objections
and if no objection is received, the charge will be closed by ROC...

What is the new provision in the Companies Act 2013 to file
satisfaction of charge when a banker is not cooperating?

Amended with
effect from 5^th July 2018

Section 82 OF CA 2013- Company to report
satisfaction of charge

(1) A company shall give intimation to the
Registrar in the prescribed form, of the payment or satisfaction in full of any
charge registered under this Chapter within a period of thirty days from the
date of such payment or satisfaction and the provisions of sub-section(1) of
section 77 shall, as far as may be, apply to an intimation given under this
section.

(2) The Registrar shall, on receipt of intimation
under sub-section (1), cause a notice to be sent to the holder of the charge
calling upon him to show cause within such time not exceeding fourteen days, as
may be specified in such notice, as to why payment or satisfaction in full
should not be recorded as intimated to the Registrar, and if no cause is shown,
by such holder of the charge, the Registrar shall order that a memorandum of
satisfaction shall be entered in the register of charges kept by him under
section 81 and shall inform the company that he has done so:

Provided that the notice referred to in this sub-section
shall not be required to be sent,In case the intimation to the Registrar in
this regard is in the specified form and signed by the holder of charge.

(3) If any cause is shown, the Registrar shall
record a note to that effect in the register of charges and shall inform the
company.

(4) Nothing in this section shall be deemed to
affect the powers of the Registrar to make an entry in the register of charges
under section 83 or otherwise than on receipt of an intimation from the
company.

EVERY COMPANY HAS TO APPOINT A COMPLAINT OFFICER
& TO FRAME EQUAL OPPORTUNITY POLICY FOR TRANSGENDER PERSONS NOW

The Transgender Persons (Protection of Rights) Act,
2019 & Transgender Persons (Protection of Rights) Rules, 2020 which came
into effect from 25th September, 2020

Any Government or private organization or
establishment including in the areas of education, employment, healthcare,
public transportation, participation in public life, sports, leisure and recreation
and opportunity to hold public or private office.

As per the Act and Rules every establishment is
required to take following action:

a) Frame equal opportunity
policy for transgender persons giving required details.

b) Designate a person as Complaint Officer to deal
with complaints under the Act within 30 days of notification of the Rules, i.e.
by 24.10.2020.

c) Provide specified facilities to transgender
persons.

d) Publish equal opportunity policy and display the
same including details of Complaint Officer preferably on its website, failing
which at conspicuous places of its premises.

WHO WILL INHERIT SHARES OR PROPERTIES AFTER THE DEATH OF THE OWNER IS ...

“NCLAT”), on
November 14th, 2019 had held that nomination does not amount to beneficial ownership to an asset and the
nominee holds the asset for and on behalf of the legal heirs of the deceased
n the case of Oswal Greentech v Mr Pankaj Oswal and Ors[1] (“Oswal”) whilst
listening to the question of maintainability of the petition under Section 241-242 of the Companies Act, 2013 (“Act”).

in Shakti Yezdani v.
Jayanand Jayant Salgaonkar,[2] which settled the controversy regarding the
rights of legal heirs as opposed to nominees. The High Court held that the rights of legal heirs supersede
the rights of the nominee of a shareholder. Now, the same has been
reaffirmed in the Oswal case.

Mr. Abhey Kumar
Oswal (“Deceased”) held 5,35,30,960 shares (“Shares”) in Oswal Agro Mills
Limited (“Company”). In 2015, the Deceased filed a nomination in terms of
Section 72 of the Act in favour of Mrs. Aruna Oswal (“Nominee”).

After the Deceased’s
death, the nominee made a request of registration as the holder of the Shares;
and the same was granted to her on 16th April, 2016.

Mr. Pankaj Oswal
(“Legal Heir”) had subsequently filed for a suit of partition in February 2017,
before the Delhi High Court claiming 1/4th of the share in the property.

The suit of
partition, however, was still pending. Further, the Legal Heir instituted a
petition before the National Company Law Tribunal (“NCLT”) alleging acts of
oppression and mismanagement in the affairs of the Company, on the premise that
the Company transmitted
the Shares to the Nominee in contravention of law. However, one of the
pre-requisites for institution of the said proceedings under the Act is that
the shareholder must own at least 10% of the total capital of the Company,
unless a waiver has been given by NCLT

Unfortunately, the
Legal Heir held only 0.03% shares in the Company. However, he claimed that he
was entitled to more than 10% of the total capital on the basis that he was one
of the four heirs on intestacy of the deceased – Thus, the resultant holding
would be 10% of the total capital. The NCLT (on 13th November, 2018) accepted
the contention of the Legal Heir and held that the petition was maintainable.

The matter was then
appealed by the Company and reached the NCLAT. The Company argued that in view
of the nomination filed by the deceased during his lifetime and the
registration of the name of the Nominee after his death, the Legal Heir cannot
claim to be entitled to exercise any rights over the Shares.

Reliance was placed
on Section 72 of the  Companies Act 2013, with the accompanying
rules, according to which the title of the securities vests in the nominee and
the nominee is entitled to all the rights in the securities to the exclusion of
all other persons.

The Company further
relied on the decision of the Delhi High Court in Dayagen Private Limited v. Rajendra Dorian Punj,
wherein the Court held that Section
72 overrides the general law of succession, and vests the nominee with full and
exclusive ownership rights in respect of the shares

Supreme Court’s
ruling in World Wide Agencies
Pvt. Ltd“ that legal representatives of a deceased member represent the
estate of that member whose name is on the register of members. When the member
dies, his estate is
entrusted in the legal representatives. When, therefore, these vesting’s
are illegally or wrongfully affected, the estate through the legal
representatives must be enabled to petition in respect of oppression and
mismanagement and it is as if the estate stands in the shoes of the deceased
member.”

Accordingly, the NCLAT
held that on the death of
the holder of the instrument, the amount / share vests with the legal heirs,
the nominee merely holds
the amount / share till the matter of vesting is decided in favour of the legal
heirs. Thus, a
nominee is merely a caretaker of the deceased’s property until the same is distributed
amongst the legal heirs.

What
we Learn from this Case ?

·      
It is the legal heir
who is the ultimate, rightful owner of the property of a deceased

·      
A nominee (pursuant
to a nomination given by the deceased during his / her lifetime) would act only
as a trustee on behalf of the rightful legal heir(s), and hold such property
until the matter of succession or inheritance is decided and implemented.

·      
It is advisable to
create a will . Here no will has been written by the deceased. If his intention
that the shares had to go to his wife, he should spell it in a will and
register the same. After his death , the wife as a nominee and legal owner in
the will can claim the ownership of the shares. Here Legal heirs will not get
any thing. After her death , the shares may be passed on to her legal heirs.

·       This
is also applicable to bank deposits and bank accounts where nominee has been
appointed , if there is no will, legal heirs will get priority.

·       NCLT
in this case has allowed the appellant to apply for relief against oppression
even though the appellant had just 0.03% shares in the Company as against 10%
stipulated in the section 241 of CA 2013. 

MCA Extensions came on CFSS Scheme Deadline extended up to 31st December...

MCA Extensions came on CFSS Scheme Deadline extended up to 31st December...

Major Amendments in FCRA - Foreign Contribution (Regulation) Act 2020

MAJOR AMENDMENTS IN  FCRA- Foreign Contribution (Regulation) Amendment Bill, 2020

The Parliament through a voice vote
passed the Foreign Contribution (Regulation) Amendment Bill, 2020 in the
Monsoon session held in September 2020.

Foreign Contribution (Regulation)
Amendment Bill, 2020. The bill amends the Foreign Contribution (Regulation) Act
2010, which regulates the use and acceptance of foreign contribution by
individuals and organizations.

1. 
Amendment in Section 3, 7, 8,11,12 of
FCRA -Person prohibited to accept Foreign Contribution- Now Public servants are prohibited
to receive Foreign Contribution and Hospitality.

2. 
Amendment in Section 7- Prohibition
to transfer foreign contribution to other person- 

Earlier with prior approval of Central
Government a person who is registered and granted a certificate or has
obtained prior permission may transfer foreign Contribution to a person who is
registered and granted a certificate or has obtained prior permission.

Now , No person is allowed to transfer
such foreign contribution to any other person

3. 
Amendment in Section 8- Restriction
to utilise foreign contribution for administrative purpose. Earlier for
administrative expenses limit was up to 50% of foreign contribution. This amendment will curtail
administrative expenses of NGOs having foreign contribution to 20%

4. 
Amendment in Section 11-Registration
of certain persons with Central Government-

Central Government,
on the basis of any information or report, and after holding a summary inquiry,
has reason to believe that a person who has been granted prior permission has
contravened any of the provisions of this Act, it may, pending any further
inquiry, direct that such
person shall not utilise the unutilised foreign contribution or receive
the remaining portion of foreign contribution which has not been received or,
as the case may be, any additional foreign contribution, without prior approval of the
Central Government:

5. 
Amendment in Section 12-Grant of
Certificate of registration.

Every person who makes
an application under sub-section (1) shall be required to open FCRA Account in the manner
specified in section 17 and mention details of such account in his
application.".

6. 
Insertion of new Section 12A

Notwithstanding
anything contained in this Act, the Central Government may require that any
person who seeks prior permission or prior approval under section 11, or makes
an application for grant of certificate under section 12, or, as the case may
be, for renewal of certificate under section 16, shall provide as
identification document, the Aadhar
number of all its office bearers or Directors or other key functionaries, by
whatever name called, issued under the Aadhaar (Targeted Delivery of Financial
and Other Subsidies, Benefits and Services) Act, 2016, or a copy of the
Passport or Overseas Citizen of India Card, in case of a foreigner."

Earlier providing
banking details in which foreign contribution shall be received was not
required at the time of submission of application for registration or prior permission.
This
requirement is in furtherance of transparency.

7.Amendment in
Section 13-Suspension of certificate of Registration under FCRA

           Earlier suspension of certificate
was only maximum up to

         180 days. Now Suspension may be for another
period of 180    

          days.

7. 
Insertion of new Section 14A-
Surrender of Certificate of Registration under FCRA

Provision regarding
surrender of certificate was not enumerated in the Act. Now by inserting section
14A central government allowing
a person to surrender registration certificate. Central Government may accept surrender of
certificate after a post inquiry regarding any contravention the act.

8. 
Amendment of section 16- Renewal of
Certificate

By inserting this
proviso, at the time of renewal Central Government shall make inquiry regarding
activity and compliance of the person granted certificate. Earlier provisions
were to make application before six months of expiry of certificate and Central
Government renew with 90 days of application.

9. Substitution of new
section for section 17

Opening of FCRA
Account in the State Bank of India at New Delhi

Under the act
earlier, a registered person has to receive foreign contribution in single
branch of scheduled bank. However it was allowed to open more accounts for
transfer and utilisation of foreign contribution. The amendment act introduces
an FCRA Account to be opened in specified branch of
State Bank of India, New Delhi. However another bank account may be opened to
utilise foreign contribution first received in designated FCRA Account.

THE BOMBAY HIGH COURT PERMITTED APPOINTMENT OF ONE DIRECTOR TO AVAIL B...

CENTRAL GOVERNMENT SAYS THAT A DIRECTOR CUM
PROMOTOR CAN APPOINT A NEW DIRECTOR TO FILE ALL PENDING FORMS UNDER CFSS 2020
SCHEME WHERE ALL THE DIRECTORS HAVE DISQUALIFIED TO MAKE THE COMPANY ACTIVE.

EXTENSION OF CFSS-2020 SCHEME

Mr.Navneet Sahay vs ROC,Mumbai

Verma and another. And many
other petitioners  … Petitioners.

V/s.

Registrar of Companies and
another. … Respondents

The Petitioners are directors who have been
disqualified. Though the facts in each petition may slightly differ, the common
relief sought at this stage by the Petitioners is to permit them to take
benefit of the CFSS Scheme introduced by the Union of India  known as Companies Fresh Start Scheme, 2020 in
respect of their respective companies. The Scheme is to end on 30 September
2020.

As regards interim relief regarding
disqualification is\concerned, we note the order passed by the Division Bench
of this Mumbai High Court on 7 February 2020 in a group of matters of which
Writ Petition (L) No.2828/2019 was also a part. By a speaking order, the Division
Bench has not granted any interim relief in respect of the disqualification.

The Petitioners, because of their disqualification,
cannot apply under the Companies Fresh Start Scheme in respect of their companies.
This Scheme is to end on 30 September 2020. 

They,therefore, seek a direction that they may be
permitted to apply under the Scheme and for the said purpose their DIN should
be activated.

The learned Additional Solicitor General submitted  that for the Company applying under the
Scheme, the DIN of the petitioners does not need to be activated as there is a provision in the Companies
Act 2013 itself which will serve the same purpose. The learned
Additional Solicitor General has drawn our attention to section 167(3) of the
Companies Act, 2013, which reads as under:

167. Vacation of office of director.- (1) ….. ……
…..(2) ….. ….. ….. …..

(3) Where all the directors of a company vacate
their offices under any of the disqualifications specified in subsection(1), the promoter or, in his
absence, the Central  Government shall
appoint the required number of directors who shall hold office till the
directors are appointed by the company in the general meeting.

The learned Additional Solicitor General submitted
that even though the directors of the company vacate their offices, the promoter/s can nominate a
director to act. Relying on this provision, he submits that the promoter/s of the Petitioners-
Companies can nominate a director/s to apply to take benefit of the Scheme.

The petitioners raised a doubt as to the
applicability of Section 167 (3) submitting that if the disqualified directors of the company were also
promoters and if there are no other directors, they may not be entitled
to nominate a director. The learned Additional Solicitor General submitted that
the provision refers to the
promoter and director separately.

He submitted that if a person is acting in the
capacity of director cum
promoter and is disqualified as a director, for the purpose of this
provision, he can continue
to act in the capacity of a promoter to nominate any other person as a director.
The learned counsel for the Petitioner in WP-LD-VC-345/2020 pointed out that
the Petitioner has, in fact, applied undersection 167(3) of the Companies Act
as a promoter and has nominated
his son as director.

Since the position has been clarified by the learned Additional Solicitor General as above, that in the
capacity of promoter the Petitioner/s can nominate any person as
a director and follow section 167(3) of the Act to apply under the
Scheme, it is not necessary for us
to issue any further directions. This course of action is, therefore, available to the Petitioner/s regarding the Scheme

ALLEGATION BY AN ID AGAINST COMPANY AND COMPANY’S COUNTER ALLEGATION AGA...

Mr. Arvind Gupta was an independent director in AKSH OPTIFIBRE LIMITED,
New Delhi.

He resigned from the position of Independent
Director of the Company vide resignation letter dated September 5, 2020 with
immediate effect.

In his resignation letter , he alleged that
promoters were guilty of non-disclosure of RTP dealings thereby siphoning of
public funds. Board / Committee members , KMPs and Auditors involved in
financial fraud by writing off Rs 339 crores from the books of accounts thereby
committing serious frauds.

He alleged that that there were distressing
governance lapses and mischievous secretarial practices shielding promotors
which constituted a major reason for his resignation as ID.

He alleged that there were non-disclosure of RTPs
benefiting promotors . Non-transparent RTP transactions with overseas
subsidiaries namely the AOL FZE (UAE) , Aksh Optifibre Ltd , UAE and overseas
stepdown subsidiaries of Aksh Optifibre conducting businesses with the
promotors.

He further alleged that Promotors RTPs with Africa
One Telecom Ltd and Electrum Telecom group of companies were prejudicial to the
interests of the Shareholders of the Indian company.

In response to the complaint by the ID , it was
submitted by the management that as per the directions of the Stakeholders
Relationship Committee , an independent External Auditor was appointed to check
the records and provide its report on the allegation RTPs by ID.

Pursuant to the extensive audit conducted by
Independent External Auditors , they submitted their report before Stakeholders
Committee Meetings on 3^rd July 2020.

Stakeholders Relationship Committee consisting of 4
IDs on the Board of the company adopted the report of the Independent External
Auditor and concluded that none of the alleged purported related company (total
13)is related to company and or its Directors. Company and its earlier /
current Directors / KMPs are in compliance of law and allegations of related
party allegations are baseless.

It was alleged by the Company that resigned ID
Aravind Gupta entered a consultancy agreement on 13 May 2019 with the Company
to help the Company to recover the dues of Rs 73 Crores from BSNL. As no
payment was received from BSNL as assured by Aravind Gupta , no commission was
paid to him and the abovesaid agreement expired on 31^st May 2019.

Company also alleged that Aravind Gupta had purchased
10,000 shares of Company during 3^rd week of June 2019.

Company also alleged that a proposals was moved in
the Nomination and Remuneration Committed to appoint Mr. Aravind Gupta as
Director and professional consultant at a fee of Rs 10 lac per month.
Fortunately , the proposed resolution was not passed by the Committee.

Aravind Gupta was holding 80000 equity shares of
the company when he was appointed as a ID in the company and in March 2020 , he
bought 110000 shares of the company and as of March 2020 , he held 190000
equity shares of the company.

Members discussed about insider trading regulations
and provisions and expressed concerns on purchase of shares after becoming ID.

Company has noticed that post
the meeting of Stakeholders Relations ship committee which happened on 3 July
2020 , for adoption of External Auditor Report and Expressing concern about
other independent directors of the company by Aravind Gupta , on 4^th
July 2020 , the alleged complaints of Mr Aravind Gupta has been released by media
for the reasons best known to Mr Aravind Gupta and media.

FROM 1^st OCTOBER 2020 ONWARDS , RETIRING
EMPLOYEES WILL GET PENSION FROM EPFO ON THE DAY OF THEIR RETIREMENT

EPFO gives big relief to private employees, will
get benefit of this new facility from 30th September

This is good news for employees working in the
private sector. Now EPFO ​​(Employees Provident Fund Organization) has taken
better initiative to protect the future of these employees. In this scheme,
whichever employee retires on that day, his pension will be ready from the same
day and will be started. This arrangement is considered to be a big change for
employees as it usually takes months for a government or private employee to
get an arranged pension after retiring.

The paperwork goes on for a long time and after the
complicated exercise, the pension order is formed. But now this will not
happen. Now the employee will get the benefit immediately. Employees who retire
on September 30, They will receive all the documents related to their pension
on the same day. 30 is going to be a grand event at the Employees Provident Fund
Organization office in Varanasi, Uttar Pradesh. Employees retiring this month
in 10 districts have been called under this office.

The private sector often retires at 58 years.
However, after this, the salary is received in the next month and other process
is also done later. Due to this, it used to take more than one to two months to
start pension. For this, the employees had to run after the retirement. Now
after this new initiative, all their problems will be eradicated.

This would not require employees working in private
companies to wait for pension.

Calcutta High Court slams CAs who sign a false Report & SEBI fined ID ...

or Estimates or Provisional Figures to help his
client to obtain bank loans or Credit Facilities.

In the latest judgement in Binod Kumar Agarwala vs.
CIT, the Hon’ble Calcutta High Court has signaled a zero-tolerance policy
towards the alleged nefarious practice of CAs.

The High Court slammed the CAs for certifying bogus
loans and misleading lenders, which in turn has led to the colossal NPAs.

The assessee business committed fraud on the bank
and obtained credit facilities by misrepresenting its financial position.

To aid him in the criminal act, a firm of chartered
accountants named ‘Roy Ghosh and Associates’ issued a certified balance sheet
containing bogus figures.

The CA firm boldly issued a disclaimer stating that
the figures “have no relation with the actual figures”.

The High Court seethed with anger at the blatant
temerity of the Chartered Accountant in certifying the bogus balance sheet.

The High Court came down heavily on the practice of
painting a rosy picture as to the financial position of the applicant seeking
credit facilities while at the same time slipping in another balance-sheet and
P&L A/c in the income-tax records indicating a less robust financial
position of the constituent.

The High Court also held that the accounts cannot
be “tailor-made to suit a particular purpose or window-dressed to make it
attractive for bankers to rely thereupon and all the gloss and sheen removed
thereafter when it was the time to pay tax.”

ITAT also noted that Schedule II and Part 1 holds a
chartered accountant Act guilty of professional misconduct if he permits his
name or name of his firm to be used in connection with the audit based on
estimate.

ITAT hauled up for not reporting the CA to the ICAI
by the High Court.

Ultimately, the Hon’ble High Court directed that a
copy of the order be sent to the ICAI for appropriate steps, if thought fit, to
be taken against Roy Ghosh and Associates in accordance with law and upon due
notice to such firm of CAs.

Whether the ICAI has taken any steps pursuant to
the directions of the High Court is not known as of date.

SEBI Slaps fine on a non-executive Independent Director for a fraudulent and deceptive  GDR issue

Sebi said that Beckons at the time of
signing of the pledge agreement, the company was clearly aware that Vintage had
acquired a loan only to subscribe to the GDR issue.

The company had come out with its GDR issue in June 2010 for an amount of
$10.54 million. With respect to the issue, Vintage had
signed a loan agreement with EURAM Bank for payment of $10.54 million.

At the same time, Beckons opened its account
with the bank for the purpose of credit of proceeds of the GDR issue.

It was also found that the GDRs were converted into equity shares and
were sold in the Indian capital market. Cancellation of GDRs started from
September 17, 2010 and continued till March 7, 2011 and all the GDRs were
converted, as per the order.

According to the regulator, the noticee was associated with Beckons as a
non-executive independent director and was present during the board meeting in
February.

At the meeting, a unanimous resolution was passed to open account with
EURAM Bank for receiving subscription money in respect of the GDRs, proposed to
be issued by the company.

"It is particularly evident from the established facts that the
entire proceedings of GDR which was transferred in the EURAM's account of
Beckons served as collateral to the loan taken by Vintage in subscribing GDR
and such amount was ultimately transferred to the Beckons' Indian bank account,
only as and when Vintage repaid the loan to EURAM," the order said.

According to the regulator, the manner in which the entire scheme of
fraudulent and deceptive scheme was planned and executed demonstrates beyond
reasonable doubt the manipulative intent to deliberately withhold critical
information from investors.