General Circular
No. 32/2014, No.1/25/ 13-CL-V, dated 23rd July, 2014.
Clarification on
transitional period for resolutions passed under the Companies Act, 1956
It
has been brought to the notice of the Government that many companies have
passed resolutions during financial year 2013-14 under the relevant provisions
of the Companies Act, 1956 (Old Act) which are/were at different stages of
implementation after coming into force of corresponding provisions of the new
Companies Act, 2013 (New Act). Ministry has received suggestions that while
section 6 of the General Clauses Act, 1897 protects the validity of such
resolutions, it will be advisable if a suitable communication is also issued in
the matter by the Ministry by way of abundant caution.
2. The matter has
been examined in the light of similar issues clarified earlier. It is clarified
that resolutions approved or passed by companies under relevant applicable
provisions of the Old Act during the period from 1st September, 2013 to 31st
March, 2014, can be implemented, in accordance with provisions of the Old Act,
notwithstanding the repeal of the relevant provision subject to the conditions (a) that the implementation of the
resolution actually commenced before 1st April, 2014 and (b) that this transitional arrangement will be available upto
expiry of one year from the passing of the resolution or six months from the
commencement of the corresponding provision in New Act whichever is later. It
is also clarified that any amendment of the resolution must be in accordance
with the relevant provision of the New Act.
This
issues with the approval of the competent authority.
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