COMPANY LAW BOARD REGULATIONS 1991

THE COMPANY LAW BOARD

The CLB was a quasi-judicial body that exercised jurisdiction over matters stipulated in the old Companies Act of 1956, especially with respect to dispute resolutions. It had its Principal Bench in New Delhi, and regional benches in New Delhi, Kolkata, Mumbai and Chennai. The CLB Regulations of 1991 laid down the procedures for filing of petitions, counter affidavits, calling for information, taking evidence, etc. in addition to matters such as composition of the Board, powers of the Secretary and Registrar, etc. The CLB has now been replaced by the National Company Law Tribunal and the Appellate Tribunal, and all matters and disputes relating to the new Companies Act (2013) now lie within the jurisdiction of the NCLT and the NCLAT.

SOME MAJOR PROVISIONS OF THE CLB REGULATIONS, 1991

Ø  The Bench consists of a Chairman, who in turn has the power to decide on the number of members and the matters to be heard in the Principal/Regional Benches.

Ø  The Annexures to the Act specify the geographical jurisdiction of the Regional Benches, and the language and sitting hours of the Bench.

Ø  The Regulations mandate that every petition must be in writing, also prescribes the format.

Ø  The petition has to be made on the Form annexed with the Regulation, and must be presented at the Bench. A copy has to be sent to the respondents as well, before being submitted to the Bench.

Ø  The petition must be accompanied by an Affidavit as per the provisions, and if all documents are in order and without defect, the same would be accepted by the Registrar at the Office. In case of defect, a chance to rectify may be given to the applicant.

Ø  The petition must contain details of the company such as the name of the company, date of incorporation, address of its registered office, authorized capital, details of shares, etc. and must state in details the grounds for the petition, and the relief sought.

Ø  If an interlocutory application is filed, it has to be in Form II of Annexure II of the Regulations.

Ø  The application must be accompanied with an index page, a brief synopsis and a brief of date of events.

Ø  The party may appear in person or through an authorized representative or lawyer. The Regulations stipulate in detail, the manner of serving notice to the other party.

Ø  The Respondents must file a reply to the Bench, indicating the admission, denial or explanation of the plaintiff’s averments. The petitioner may file a counter reply to the facts stated by the respondent. The Bench may also seek further information from either of the parties.

Ø  The Regulations detail that the Petition may be dismissed/ decided ex parte if either party fail to appear on the designated date; and also that such Order may be set aside if the defaulting party shows sufficient cause before the Bench within the given time.

Ø  The Order of the Bench is to be in writing, and the decision must be based on majority of opinion.

Ø  The Secretary is the principal officer of the Board, and has powers such as custody of the records of the Principal Bench, custody of the Official seal of the Board, right to collect information, etc.

Ø   The Bench Officer also has powers and duties like receiving petitions and applications, dispose matters relating to service of notices, etc.

Ø  The Bench is deemed to be a Court for the purposes of prosecution and punishment for wilful disobedience of Orders.

THE CURRENT POSITION

The Ministry of Corporate Affairs has replaced the CLB with the NCLT and NCLAT with effect from 1-6-2016, under the new Companies Act of 2013. 11 (eleven) Benches of the NCLT have been constituted by the Central Government, two in New Delhi, and one each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai. The NCLT and the NCLAT are bound by their own Rules and Regulations.

STATUTORY REFERENCES (INDIAN KANOON)

Ø  Companies Act, 1956 (old)

Ø  Companies Act, 2013 (present)