LEGAL TRAIN

Negotiable Instruments (Amendment) Act, 2018. A bill to amend the Negotiable Instruments Act (Hereinafter referred to as “Act”) was recently passed by both the houses of parliament resulting into an amendment to the existing act. This new amendment has been brought into effect in order to pave the way for speedy disposal of cases pending due to unavoidable cheque bounce consequences. The provision of awarding interim compensation by the drawer of the cheque to the complainant has been introduced by bringing in a new section 143A in the Act. The interim compensation would be up to the maximum of 20% of the value of the cheque, as per the discretion of the court, in cases wherein the accused does not plead guilty in summary trial or summons cases. The interim compensation is required to be paid within 60 days of the order. In case of acquittal of accused after trial, the interim compensation has to be returned to the complainant with interest within 60 days from the date of su...

The stamp duty on issue of share certificate will be paid through a detailed procedure prescribed. First of all, the application needs to be filed at the Website of Stock Holding Corporation of India Limited (“ SHCIL ”), i.e. Subsequently, the application will be pending scrutiny of the Department of Revenue (“ DoR ”), Government of India. If there was any delay in filing of the stamp duty then the hearing will be conducted and the applicant or their authorized representative is required to attend in person for specifying the reason for delay and also for following further directions; If no delay was occasioned during filing the application, then it will be scrutinized. Any defect found will be requested to be cured, on website itself; Once cured, the application will be approved, and the challan will be generated. The payment can be made immediately on generation of challan; On payment, the acknowledgment receipt will be generated, that needs to be personally submitted to...

PROCEDURE FOR APPOINTMENT OF A NEW AUDITOR, FROM RESIGNATION BEFORE THEIR TERM EXPIRES. From the perspective of the company, as per Section 139 (8)(i) The procedure for appointment of auditors in case of a casual vacancy, which may arise due to resignation of the auditor, before the expiry of their tenure, is filed up by the Board of Directors within 30 days. It should also be approved by the company at a General Meeting convened within 3 months of the recommendation of the Board and he shall hold office till the conclusion of the next annual general meeting. Procedure: Obtain resignation letter with FORM ADT-3 from resigning auditor; Give notice for holding Board Meeting and calling it for acceptance of resignation of director; Send letter to new auditor seeking consent and certificate from new auditor for eligibility of appointment; Obtain consent letter and certification from auditor. Call Board meeting for filling up casual vacancy filing up the casual vacancy ...

Under the Companies Act, 2013, no punishment is prescribed for non-compliance with Section 173(1) in holding at least four Board Meetings in a year, in such a manner that not more than 120 days shall intervene between two consecutive meetings of the Board. Since, no express provision has been laid down, to be followed in case of such failure, the inclusive and residuary provision of Section 450, Companies Act, 2013 shall be deem to be applicable. Section 450 clearly states that: “ In case of any default or failure for which no express provision is stated elsewhere in the Act, the company, or every officer in default shall be punishable with fine which may extend to ten thousand rupees, and where a contravention is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues”. The detailed procedure for the payment of such punishment, levied under Section 441, is channelized through the...

Under Section 128 of the Indian Contract Act, 1882 (Hereinafter referred to as “Act” ), liability of the Guarantor is co-extensive with the liability of Principal Debtor. The principle of co-extensiveness suggests that the liability of one is subject to the liability of the other. This equips the Creditor with an option of recovering the amount from Guarantors, without first exhausting all available legal remedies against the Principal Debtor. Thus, the proceedings against Guarantor can be initiated parallel with proceeding against the Principal Debtor. The principle of co-extensiveness can also be inferred from Section 134, of the Act, which states that the discharge of Principal Debtor absolves the liability of Guarantor as well. Thus, If a debtor is liable, so is guarantor, but if a debtor is discharged, the liability of guarantor also stands discharged. This doctrine of co-extensiveness has again reiterated by Hon’ble Mahesh Chandra Tripathi, J. recently in the landmark Ju...