New portal for e-filing income tax returns: Benefits, improvements, and implications

By ​ Nevin Clinton, 

    The Income Tax Department announced through a statement a few days back that a new e-filing portal ( will be launched on June 7. The new portal replaces the existing one ( and the IT department has promised taxpayer-friendliness, better software, interactive questions, and an overall seamless experience. As the authority that frames policy for the department, the Central Board of Direct Taxes (CBDT) will govern this e-filing process. "We are as excited about the new portal as our users! We are at the final stages in the roll-out of the new portal and it will be available shortly. We appreciate your patience as we work towards making it operational soon," the IT department tweeted.

Apart from the new portal, a new tax payment system is also set to be launched on the 18th of June 2021 and a mobile app subsequently. The new system has certain changes in the Income Tax Return (ITR) Forms for the Assessment Year 2020-21 as well as in the dividend regime. Till the 18th of June 2021, taxpayers can get themselves familiarised with the new system on the portal amid this ‘huge transition’ in e-filing. 

What are the changes brought in by the new portal?

The new portal has multiple payment options such as net banking, UPI, credit card, and RTGS/NEFT to ensure ease of payment. Along with a more modern experience and immediate processing of Income Tax Returns to issue quick refunds, the new system is set to be a positive change with various promising improvements. For example, free-of-cost ITR software has been brought in for Forms 1, 2, and 4. For the rest of the forms as well, the facility is expected to be extended very soon. 

While the procedure for filing returns remains more or less the same as before, there is an important feature that has been included in the form of pre-filling of data. Details can be updated concerning salary, property, business, and the like in the portal which would then be used to pre-fill the ITRs. Necessary changes, if any, can then be made manually. This pre-filling option will be made available only after Tax Deducted at Source (TDS) statement and Statement of Financial Transaction (SFT) are uploaded with the due date having been fixed already at June 30, 2021. 

Certain other changes have been brought in for user-friendliness

    There have also been changes brought in to increase logistical ease. All interactions, uploads, and actions can be accessed by the user in a single dashboard. For ‘prompt response to queries’, taxpayers can make use of the new call center. Other features such as FAQs, user manuals, video explanations, and a chatbot can also be made use of. Also, tax professionals can be added through functionalities and responses can be submitted to notices in faceless scrutiny or appeals. Secure and multiple login options have also been introduced to make the app and the site completely user-friendly.

The new portal – a step in the right direction?

    As far as the statements of the Income Tax Department are concerned, the new e-filing portal seems like a step in the right direction. In today’s digital world, making things as simple to understand as possible is the need of the hour and that is exactly what this move seeks to achieve. It now depends on how swiftly and effectively all the changes are implemented. Certain features will be made available only later and considering the time delay in rolling out the portal, it remains to be seen if the new changes will be brought in quickly to ensure taxpayers get accustomed to them. 

Having said that, the new portal is a beneficial move irrespective of how the implementation will be since there are a plethora of inclusions of features to make things taxpayer-friendly while there is no notable exclusion as such from the procedure that was in place previously.

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Audits- What are they and their importance in a business

By Simran 

When one thinks of the word Audit, they imagine agents or officials arriving unannounced with calculators in hand ready to go through boxes of invoices, receipts, and notes, well that's certainly is one type of audit but it's not the only kind. Most of the audits that the big firms do have nothing to do with tax day and none of them are unannounced. Companies which trade publicly are required to validate financial positions with an audit, on the other hand privately held companies even though they are not legally required often performs audit at the request of banks, investors and other stakeholders to ensure that their cash flows, balance sheets, profit, and loss statements aren't misstated. But what exactly are Audits? How are they important? What are its types? Read on to know all about it.

International Organization of Supreme Audit Institutions define Audit as :
"Evaluation or examination of systems, operations, and activities of a specific entity, to ascertain they are executed or they function within the framework of a certain budget, objectives, rules, and requirements."

In simpler terms, we can say that the word "AUDIT" means to evaluate. They are often executed by Auditors.  An Auditor is a person or a firm appointed by a company to execute an Audit, that is to examine the accuracy of recorded business transactions. However, Employees or the head of a particular department in a Company can also execute an audit internally. The whole idea of an Audit is to check that no fraud or misrepresentation is conducted financially in the books of accounts.

In India, Chartered Accountants from ICAI or THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA  does independent audits of any organization.

Audits have become an important term used in Accounting. It examines and verifies a Company's Financial records.

Ways how Audits are important:

  1. It helps in preventing as well as detecting frauds and mistakes.
  2. It helps in maintaining the books of accounts
  3. It satisfies owners of how their business operates and also how its various departments function.
  4. It creates confidence among stakeholders, creditors, banks, etc.
  5. It allows verifying potential risks and helps improve a company's internal controls and systems.


There are three main types of Audits.

  • Internal Audits

These types of Audits are performed internally by employees of the company or organization. They are usually done for the use of stakeholders and management.
They help improve decision makings and the functioning of various departments of the company. Also, they help ensure that compliance with laws and regulations are maintained timely and fair and no mistake or fraud is done in financial statements.

  • External Audits

These types of Audits are performed by external organisation or firms. It gives a Company an unbiased opinion which an internal audit might not be able to. They determine and check if any error or mistake is done with the financial records of the Company. They help stakeholders, investors, banks make decisions with Externally audited firms confidently as they are made sure that their money is in safe hands and away from frauds.

  • Government Audit

These types of Audits are done to ensure that the financial statements of a company are prepared accurately and the amount of taxable income is not misrepresented. Misrepresenting a taxable income, whether intentionally or unintentionally amounts to tax fraud. These audits keep companies safe from frauds which might have become a huge liability for the company in the future both legally and financially.

Today almost every company considers Audits and executes them eventually after a fixed time either internally or externally to ensure and evaluate where money is coming from, where it's going, and what's it doing each step of the way. There are many channels in a company where money can flow through. The bigger the organization, the more accounts there are to follow.
Audits have come a long way from saving Companies from frauds to providing risks taking potential in companies. They not only save a company but also helps them grow.

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Essentials of a Consultancy Agreement

By Karan Shukla,                                                      

Consultancy Agreement is one of the most widely used agreements by businesses and organisations, read on to find out how to effectively draft a consultancy agreement.

What is Consultancy?
Consultancy, if put in layman's terms, is providing professional advice on an issue and lending expertise, in exchange for a fee. The consultant could be of any field or sector. To further explain consultancy one can take a look at this example-
A is a call centre professional and works night shifts. However, he wants to open a cab business after seeing the demand for cabs in his office. He thinks he has a business idea and could also arrange for the capital. The only problem is that he does not know how to plan a business. This is where a consultancy steps in.
What is a consultancy agreement?
A consultancy agreement can be defined as-
“ A set of rules, regulations, and conditions, framed as per the needs of both the consultancy/consultant and the service recipient/client, which define the term, extent and manner of the operations between both the parties.”
Depending upon the nature of agreement between the two parties, the consultancy could be holding various positions of the extent of their services. It could be an advisory position or an operational position or any position as the client may deem fit. Like all other transactions, the nature of consultancy services also requires an agreement between the two parties. This agreement has slowly evolved in form and now has a basic structure or ‘essentials’ which have to be included into the agreement.
Essentials of a consultancy agreement
These are some of the essential points which need to be included in an agreement of consultancy-
·         Term of work
The agreement must clearly define the term in which the parties will work together. The term of work must be clearly stated and ambiguous time periods as it could pose problems for the future. It is better to use an exact expression of a time period such as ‘5 months’ or ‘6 weeks’ instead of ‘till the construction is complete’.
·         Nature of work
A consultancy agreement’s main job is always to facilitate the working of the client with the help of expert opinion or operations. However, due to the intricate nature of the line of work, there could be disagreements about the nature of work and therefore the nature of work must be clearly defined in the agreement. The nature of the work could be advisory, operational, decisive or observational to suit the needs of the client and the field of the consultancy.
·         Establishment of relationship
A consultancy agreement is a set of rules, regulations, and conditions for the parties to operate within a framework. But only ‘on a profession to profession tag’ does not define the establishment of a relationship between two parties. It could be much more than that. There is an exchange of experience, advice, and connections between the two parties. Further, an agreement serves many other purposes. For example, the agreement could be used for tax purposes to establish that the consultant is an independent contractor and not an employee of the client.
·         Intellectual property (Confidentiality clause, Non-competition clause, non-solicitation clause)

Due to the intertwining of the work between the consultant and the client, the misuse of shared resources is a very common dispute in a consultancy agreement. The clauses of confidentiality, non-competition and no solicitation in an agreement makes sure that both the parties respect the Intellectual Property rights of the other party and deters the parties to use the shared resources for their own benefits or for the benefits of a third party.
·         Payment clause (Compensation clause)
All business transactions have a consideration amount, which is to be paid in exchange for the services being offered. The consultancy agreement too must clearly define the terms of compensation to either of the two parties so as to minimise the chances of a dispute. The agreement should mention how much the consultant is paid, how often the consultant is paid and how will the consultant charge for their services to the client.
·         Legally binding (Indemnifies the contracting parties)
An agreement legally binds the contracting parties into a set of rules and regulations, mutually discussed and agreed upon by both parties. This legal binding indemnifies the parties to each other, i.e the parties would have to compensate each other for losses if any one of them fails to meet the conditions expressed in the agreement. If a failure regarding the same happens, the parties are free to file indemnifying suits to claim damages.
·         Alternate Dispute Resolution methods
In the modern world of expensive litigation, most contracting parties pitch in an ‘alternate dispute resolution clause’ in their agreements so as to provide for alternate methods of dispute resolutions, in case one arises. The ADR clause must include the seat of arbitration and the laws which will be applicable in case the parties route for the same.
·         Non Modification clause
This clause acts as a safeguard to the intentional changing of the terms of a contract. The consultancy agreement and the terms it defines should be non modifiable. If any case arises and it is unavoidable to modify the terms of work, it should be by the consent of both parties and must not be unilateral.
·         Signature
At the end of the agreement, both parties must sign and write down the date the agreement was signed. This completes the document and conducts legal verification. This clause confirms that both parties have understood the agreement and the terms contained therein. Therefore, after the parties sign, the parties cannot refuse to comply with the rules stipulated therein.

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By:Simran kaur

Trademarks and service marks are two different kinds of intellectual properties. Most Businesses use a unique identification that makes them stand out. These identifications are known as a trademark or a service mark.


A Trademark is a word, name, symbol, sound, or device,  or any combination which is used and intends to identify and distinguish goods/products of a company with those of others. Trademarks are usually used by businesses who are involved with a variety of products to make their products standout and have a unique identification so that people can identify such products as being made by them.
Some famous examples of Trademark are:

  • Coco Chanel is a perfect example of a name that is a trademark.
  • The McDonald’s golden arch is a classic example of a symbol trademark.
  • The Microsoft Windows startup sound.


A Service mark on the other hand identifies a name, logo, device or combination thereof that identifies the services of a business. It works the same way as a trademark.It distinguishes the services a company provides with that of others. It represents the type of service a company Provides.
Some Examples of Service Marks are:

  • The term “visa” is considered as a service mark as it identifies the Visa card services.
  • FedEx, a registered courier delivery service provider is also termed as a service mark.
  • Walmart is also a service mark which provides retail business services.


Registering for trademarks or service marks prevents other businesses from using a business’s company, product, and service names, brand slogan, logos and other distinguishing brand designs in any way possible.



A trademark represents a product produced by a business while a service mark represents a service offered by the business.A single business can register for both of them to brand themselves.

The difference between a service mark and a trademark seems pretty straightforward, but the two options do lead to some confusion for business owners. If you offer both goods and services, you may not know which to use. Many businesses that provide services and goods use both trademarks and service marks.


While building a brand, it’s important to differentiate yourself from your competition. Registering for a trademark/service mark depending upon the type of company one own prevents another company to use one’s company name or logo and also prevents confusion with  customers with whom they’re doing business.It also creates a unique identity and provides a company a name with which it can be known.


The line between a trademark and a service mark is often so thin that many companies simply end up having both. For example, Google lists its brand as both a trademark and a service mark. Thus, in order to protect a company’s brand name one must register for a trademark/service mark in order to keep its identity distinct and unique from that of others.


How to Protect a Trademark Internationally ?

By Karan Shukla, Team,

How does the concept of trademark works internationally? This is one question that many of the businessmen having businesses in more than one country asks. Read on to find out more.

What is a trademark?

The Cornell University defines Trademark as

A trademark is any word, name, symbol, or design, or any combination thereof, used in commerce to identify and distinguish the goods of one manufacturer or seller from those of another and to indicate the source of the goods.

Trademark is a symbol, often bearing distinctive imagery and quality, which denotes a business or company, as it’s legal mark. This imagery could be in the form or as a mix of images, texts, numbers, colours; the point being it’s distinctiveness. Use of trademarks can be dated back to the times of the Indus Valley Civilization, where traders used ‘terracotta seals’ to mark their products, so as to make it easy for them to differentiate between each others’ goods. The trademark found it’s way to the world with the vast extent of merchant navy in the early 18th century 1 and was slowly embossed within the colonies.

Trademarks internationally

The opening up of International Markets and the liberalisation of International Trade made it all the more important to register a trademark internationally. According to the World Intellectual Property Organization (WIPTO), more than 4 million new trademarks2 are registered all around the world, every year. Emerging markets such as India and China contribute to over 50 percent of them. A large number of trademarks present internationally makes it very difficult for an enterprise to enquire about every single trademark infringement. It is impossible to single out an infringement, especially if the country is not native to the owners of the trademark or if the trademark is not very widely known.
Every single infringement of a trademark, however minute it may be, is a direct attack on a brand’s goodwill and it’s market presence. Even if the brand can not single out every trademark infringement, it can still stamp it’s legal authority by getting a trademark registered. A registered trademark becomes legally binding and thus serves as a caveat, deterring it’s misuse and/or infringement.

International Trademark and WIPTO

The World Intellectual Property Organisation is a specialized agency of the United Nations. It was formed so as to provide for the protection of Intellectual Property Rights across the World. It was under the umbrella of the WIPTO that the Madrid Protocol was formulated in 1989. 
The Madrid Protocol3 formulated the process of obtaining a Trademark in over 90 countries, at once. The system makes it possible to protect a mark in a large number of countries by obtaining an international registration that has effect in each of the designated Contracting Parties.  The Madrid system is a convenient and hands-on solution for registering trademarks worldwide. The applicant can just file a single set of application and get the mark registered in upto 124 states around the world. It makes it convenient to modify, expand or renew a global trademark portfolio through a single centralized system4.

Ways to register a trademark globally

•    Single individual registration method

The applicant for the trademark must visit the registration offices, either by himself or through an attorney, in all the states, he wishes to register his trademark. This is usually done by big brands, who have a lot of presence of teams for the same purpose and cannot afford to lose brand identity. The process is usually the same in all countries. It usually includes an application to the registrar or notary, getting a mark approved and the payment of registration charges.

•    Madrid System

The Madrid system is an international solution for the registration and management of trademarks worldwide. Under this system, the applicants can submit a single application to protect their mark in the states who have ratified the Madrid Agreement, (currently 113 in number). The applicant can apply for international trademark protection by filing an MM2 form, readily available on WIPO website5. After the due process, the applicant has to submit a copy of the same to their local Registrar/Notary. There is a processing fee for registering a trademark with the WIPO, but it’s considerably less than filing individual applications within each country. 

Legal Protection after registration

A trademark registration –

1.    Provides Prima facie evidence of ownership and validity
2.    Provides Legal protection in a country
3.    Deters others from using the same or almost same mark
4.    Provides Legal grounds for a suit of infringement of trademark to be brought in case of a dispute
5.    Is a caveat against misuse or defamation of a brand name or trademark

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1.    18th century marked the start of merchant relations between the West and the East and started a trade war between many European Nations.
2.    52 thousand of these new trademarks are registered under the WIPO
3.    The Madrid System for the International Registration of Marks is governed by the Madrid Agreement, concluded in 1891.
4.    Sometimes contracting states refuse to register the mark under the Madrid System.



Trademark vs Brand – Significance in the modern markets

By Bhanita Das, Team,

The significance of a Brand name and a trademark has increased manifolds in the current highly competitive markets, nationally and internationally. Let’s look at a comparative overview of both.

In our day-to-day life we often hear the term Trademark and Brand, both seem to be similar but they have their significant distinction. Brand and Trademark both are valuable assets of a company.


Brand is a name that is basically given by the manufacturer to the product or services they produce from its own of their specific company. For example: Puma, Biba, Apple, ZARA etc. It helps to create its identity and helps to make a strong market among the people. One of the best examples is the COLGATE, people are so used to this brand that they forgot that Colgate is a brand instead of toothpaste; often heard people saying other brand toothpaste also to be Colgate.


Trademark is basically a symbol or word which is legally registered to use as a representative of a company or product. In simple words, we can say it is a symbol that denotes a specific product and also legally differentiates from other products. The symbol should be unique in nature. It is a type of intellectual property consisting of design, signs, words, or expressions.

Both the term sounds to be similar in nature but there are some differentiations between them. So let’s have a look at it. 


Brand helps the buyer to identify the product which they like and dislike.

Brand helps to identify the marketer as well as helps in reducing the time needed for purchasing the product and services.

For a seller, branding helps to reduce price comparison and helps the firm to introduce a new product.

It helps to facilitate promotion of the goods and services.


Trademark is important for a startup for its security, by trademarking a company can secure its product and services being used by another company.

Trademark is permanent which needs to be renewed periodically.

Trademark is a company’s greatest asset that acts as a catalyst for increasing the value of a startup.


1.     A legal brand is not a legal name of a company, it is just a name selected by the company but a trademark is legally bound to represent a business by its services or goods.

2.     Not all brands are trademarks but all trademarks are brands.

3.     A brand consists of several elements which include image, character identity, personality, essence, culture reputation; and these combines to define the value of a brand                  whereas a  trademark is used to protect a various aspect of a brand such as Brand name, Signatures, Color Schemes, Packaging, Unique labeling etc.

4.     Brand name is associated with culture, personality, vision, and reputation whereas a trademark is associated with the description, packaging, color schemes.

5.     Brand can only be protected to state-level but a trademark protects the company’s product identity by establishing that the mark has not been used before.

6.     Brand can be created or named by any manufacturer but a trademark can only be used after it is registered.

7.     Brand can be used by different producers & sellers but trademarks can only be used by the producer who has got it registered.

8.     The fundamental concept of the brand is that it is the easy way to remember the product, whereas the trademark is a source of origin of any product or service.


Thus, the above-mentioned terms i.e. Brand and Trademark both are valuable assets of a company. Although both the terms sometimes act as a synonym yet they are very different from each other. A brand is a name that relates to products and services offered by a company whereas a Trademark is a legally registered trade or brand name or logo or slogan that basically identifies a company to its product or services. A good brand helps in suggesting the product benefits and its usage as well as the trademark gives us the right to use our business name nationwide in connection and also allows us to file a suit in case of a dispute.


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Digital Signature – validity in India

By Achyutha Bharadwaj, Team,

At this time of lockdowns and restrictions, as traditional ways of executing documents is getting more and more difficult, the significance of digital signature increases. Is digital signature recognized under Indian Law? Can all documents be executed using digital signatures? Read on to find the answers.

Almost every business entity has been digitized, people are shopping online more often than in malls, this creates a question in the mind whether signing of cheques and other official documents can be done online as well. The answer is yes. With so many start-ups coming up, the technological and commerce industry is growing rapidly and this raises the need to make it convenient for individuals, companies, etc. to fulfill and execute contracts with just the use of their fingertips. This has been made possible by the Information Technology Act, 2000 (“IT Act”) along with a couple of other legislations, in the form of digital or electronic signatures (e-signatures). A digital signature is simply an alternative way for a user/subscriber to authenticate any electronic record, through either an e-signature or any other authentic electronic technique. 

Digital signatures, which are viewed as a subset of electronic signatures, are liked for certain business/organisational exchanges, for example, e-documenting with the Ministry of Corporate Affairs, and merchandise and administration charge filings. The Second Schedule of the IT Act has incorporated a method for electronic authentication through the electronic signatures and it also helps determine Aadhar e-KYC (Know your Customer) authentications as an electronic authentication method and strategy. A lot of banks and financial institutions are using online methods for verification of the customer – e-signatures become very necessary in order to authenticate the entire transaction and the process itself, as it is extremely necessary to affirm  the personality of an individual or check the accuracy of the data. 

The IT Act permits the utilization of an electronic or digital signature for 

  • recording any structure, application or archive with any administration authority; 
  • issue of any permit, license or endorsement by the public authority; and
  • receipt or instalment of cash in a specific way, in electronic structure. 

Following conditions should be met for  an electronic signature to be considered reliable:

  • It must be unique to signatory;
  • While putting the signature, the signatory must have control over the data used to generate the electronic signature;
  • Alteration to the affixed electronic signature, or to the document to which the signature is affixed, should be detectable;
  • An audit trail of steps taken during the signing process should be available
  • The signer certificates must be issued by a certifying authority (CA) recognized by the Controller of Certifying Authorities appointed under the IT Act (Second Schedule).

The public authority may make rules endorsing the way where electronic records and electronic signatures are acknowledged for these reasons. For example, Rule 7 of the Companies (Registration Offices and Fees) Rules, 2014 indicates that each application, fiscal summary, outline, return, affirmation, reminder, articles, specifics of charges, or some other points of interest or report or any notification, will be documented in PC coherent electronic structure in pdf. Further, Rule 8 specifies that an e-structure should be verified utilizing Digital Signature; and the Central Board of Direct Taxes have told strategy for documenting e-TDS/e-TCS and different structures utilizing digital signatures.
Although digital signatures are widely accepted in India through governing laws, the following documents must be signed with a traditional signature, physically:

  • A power-of-attorney.
  • A trust.
  • A negotiable instrument (other than a cheque) 
  • Any contract for sale or conveyance of immovable property or any interest in such property.
  • A will.

Thus, it is clear that although e-signatures can be extremely helpful to quicken the process of verification, it cannot be used in all places as it can be seen above. This is, of course, due to identity thefts, forging documents, or notarization which can only be completed by an enrolled public accountant under their signature and seal. Therefore, legislations must make ways for smooth verification through digital signatures in all forms of transactions/business by ensuring that there is complete authenticity in the same. 

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Fast track insolvency procedure

By Achyutha Bharadwaj, Team,

Closure of a business in an efficient, timebound manner and with less burden on the owners is the aim of the Fast Track Insolvency Process under the Insolvency and Bankruptcy Code. Read on to know more and for any issues related to the closure of your business, connect with


When a company/business debtor (Corporate Debtor) is unable to continue daily operations in a business, he/she files for insolvency, which further results in formation of plans to repay the creditors, employees, workmen, etc. The maximum number of days needed to complete the resolution procedure under the Insolvency and Bankruptcy Code, 2016 is 270 days. This is not very practical for business/companies which have a smaller line of business, as the creditors involved in a small-business enterprise is low compared to that of a bigger company. Faster settlement would lure buyers to small businesses and start-ups, the majority of which do not last long. Thus, in order to eliminate the unnecessary delay induced by a small-scale company's insolvency the Government introduced a quicker option to complete the Corporate Insolvency Resolution Process (CIRP), i.e., Fast-track Insolvency Procedure under the Sections 55-58 of the IBC, 2016 read with the Insolvency and Bankruptcy Board of India (Fast track Insolvency Resolution Process for Corporate Persons) Regulations, 2017.

Sections 55 to 58 of the Code of 2016 were added to resolve the issue of undue delay in insolvency proceedings involving small businesses; the fast-track insolvency procedure takes 90 days to complete from the insolvency filing date. The time period for settlement can be extended only once by the Adjudicating Authority upto a period of 45 days, if it thinks fit, subject to support by voting share of at least 75% of the Committee of Creditors.



The following is the procedure to be followed under the Insolvency and Bankruptcy Code, read with the Insolvency and Bankruptcy Board of India (Fast track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 –



Sl. No.




Appointment of Resolution Professional 

Only an Insolvency Professional (IP) who has no relationship with the corporate debtor is qualified to be appointed as a resolution professional. In order to be appointed as a resolution professional, the insolvency professional must be self-sufficient/independent. At the time of his nomination, the insolvency professional must declare his independence at the time of appointment.



Public Announcement 

After being named as an interim resolution professional, the insolvency professional must make a public statement within three days of his appointment. The public notice must be distributed in one English and one regional language newspaper that is commonly distributed in the location of the corporate debtor’s registered office and principal office. A corporate debtor’s website and the board’s website would both have the same official announcement.



Claims – Submission, Verification and Proof of claims 


The interim resolution professional shall provide 10 days to provide proof of claim. Operational creditors, financial creditors, workmen, employees, and other creditors must provide evidence of their statements in the specified forms, along with any additional documentation or clarifications.
When applications are submitted, the resolution professional must validate them within seven days of the claim submission deadline. After that, the resolution professional will create a list of creditors.



Formation of a committee of Creditors 

The resolution professional would assemble a group of creditors made up of the corporate debtor’s financial and operational creditors, which shall be known as the Committee of Creditors (CoC). The CoC will constitute only operational creditors if the corporate debtor has no financial debt or if the financial creditors are an associated party (related party) of the corporate debtor.



Meeting of the committee of creditors 

Within seven days of filing the paper, the resolution professional must call the first meeting of the newly formed committee of creditors. Following that, the committee will meet at any time if and when it is required. After receiving a vote of 33 percent voting share, the resolution professional will call a meeting of the committee at the request of committee members. The meeting notice must be sent at least seven days before the scheduled meeting date. The meeting notice must be in writing and sent to members either by hand, by speed post, or online.



Conduct of the fast-track process 

Under Section 26-29 of the Regulations, the Resolution Professional, within seven days of his appointment, must select a registered valuer to determine the liquidation value of the corporate debtor. After personally checking the inventory and fixed assets of corporate debtors, the registered valuer shall apply an indicative liquidation value.



Formation, approval and submission of the Resolution Plan 

The resolution plan must include the steps that must be taken to put it into action. The resolution plan must be written with the requisite mandatory material in mind. 

Under the time frame, the resolution applicant must apply the drafted resolution plan to the resolution professional. The resolution professional would then present the shortlisted resolution plans to the Committee of Creditors, for approval. The committee has the authority to approve any resolution proposal, with or without changes, as it sees fit.

The resolution applicant must apply the authorized resolution plan, along with all appropriate certifications, to the adjudicating authority. On receipt of the resolution plan, the adjudicating authority must issue an order approving or refusing the resolution plan.







However, the fast-track process does have a few setbacks, for example, failure to complete the Fast-track procedure within 90 days (or with an extension of 45 days, depending on the approval of the Adjudicating Authority) will lead to initiation of liquidation process, which is disadvantageous to the corporate debtor, i.e., it destroys organizational capital and renders resources idle till reallocation to alternate uses. Another challenge regarding the procedure is whether 90 days is sufficient for the entire CIRP to be completed as the efficiency of the same depends on the resolution plans, approval by the CoC, etc. 

The Fast-Track Corporate Insolvency Resolution Process is a great initiative to target a particular segment of corporate debtors against which creditors or the corporate debtor himself may begin insolvency proceedings. The time limit is often set in such a way that less complex cases can be solved in a short amount of time, allowing adjudicating officials to devote more time to more complex cases.

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  1. Sections 55 to 58 of the Insolvency and Bankruptcy Code, 2016 and 
  2. Insolvency and Bankruptcy Board of India (Fast track Insolvency Resolution Process for Corporate Persons) Regulations, 2017.

IBC Amendment and IBBI Regulations on Pre-Packaged Insolvency Resolution Process come as boon to MSMEs.

By: Adil Zawahir, Team,

The pandemic and the restrictions have unequivocally created challenges in starting a business, running a business moreover in closing a business. Here is an overview on the new scheme introduced by the government to easy closure of MSMEs. Need any assistance in the closure of your business, then contact us at

The Central Government, on April 4 2021, by way of an Ordinance titled ‘Insolvency and Bankruptcy Code (Amendment) Ordinance 2021’, amended the Insolvency and Bankruptcy Code 2016 (IBC) to introduce the concept of Pre-Packaged Insolvency Process (PPIP). The Ordinance inserts a new chapter (III-A) to the IBC and provides for making an application for initiating PPIP with regards to a micro, small or medium enterprise (MSME) in light of the impact that the pandemic has had on businesses, financial markets and economies all over the world. The Ordinance is a welcome step towards the resolution of insolvent MSMEs. The objective of the Ordinance states that the PPIP for MSMEs has been introduced to provide them with an efficient alternative insolvency resolution process that will achieve value maximization in a quicker and cost-effective manner while causing the least disruption to the business.

Due to the simpler corporate structure of the MSMEs, Corporate Insolvency Resolution Process (CIRP) for reorganization is considered a tedious task which when dragged out leads to disruption in business. To overcome this problem, the PPIP mechanism has been introduced which will function as a hybrid framework blending both formal and informal processes within the basic mechanism of the IBC.

On 9th April 2021, the Insolvency and Bankruptcy Board of India notified the PPIP regulations for MSMEs. The regulations detail the forms that stakeholders are required to use, and the manner of carrying out various tasks as part of the pre-pack resolution process. It also provides details about various aspects, including eligibility criteria to act as a resolution professional, identification and selection of authorised representative, competition between the base resolution plan and the best resolution plan. 

The process can be initiated by the corporate debtor (CD) who will have to serve notices of a meeting to all unrelated financial creditors five days in advance, in order to seek their approval. The regulations prescribe at least 66% approval from the creditors. The Creditors will then have seven days to raise their objections to the notice of claims submitted to the resolution professional by the CD.

The resolution professional must necessarily be independent of the CD. This means the resolution professional and all partners and directors of the insolvency professional entity, of which they are a partner or director, have to be independent of the corporate debtor. If the concerned insolvency professional entity or any of its partners or directors represent any of the stakeholders, the person will be ineligible for being appointed as a resolution professional.

Another highlight of the PPIP is that it enables the management of affairs of the corporate debtor to continue to be in the hands of the Board of Directors or partners of the CD. This is in stark contrast to the CIRP, where the resolution professional is handed the reigns along with the assistance of the financial creditors. Creditors still have the option to initiate bankruptcy proceedings against the MSMEs under the CIRP.

After approval from the unrelated creditors, the CD will proceed with filing an application before the National Company Law Tribunal (NCLT) to initiate the PPIP, after taking a mandate from the directors and shareholders. The plans must be submitted within 90 days and the NCLT must approve of such plans within 30 days. The whole process will be completed within 120 days as opposed to the 270 day time period prescribed for the CIRP. Once the application is admitted by NCLT, the CD will itself first provide a Base Resolution Plan and if such plan is unsatisfactory, the resolution professional will publish an invitation for resolution plans within 21 days of the commencement of formal proceedings.

The Pre-Packaged Insolvency Resolution Process makes the debtor the only person capable of triggering the bankruptcy process. This scheme will yield faster resolution than the CIRP and will also reduce litigation, triggered by defaulting promoters, while simultaneously cutting costs. The process is also expected to run smoother due to the requirement of 66% approval from unrelated creditors. If the NCLT infrastructure is improved by the government, this ordinance is a welcome step in the corporate world as it will genuinely lift the weight off the shoulders of MSMEs.

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Transfer and Transmission of Shares Under Companies Act, 2013

Transfer and Transmission of Shares Under Companies  Act, 2013




                                                Pradeep K Mittal,

                                                B.Com, LLB, FCS,

                                                PKMG Law Chambers,

                             Central Council Member, the Institute of Company

                             Secretaries of India, New Delhi.

                             E Mail:


Section 56: Transfer and Transmission of Securities (Corresponding to Section 108,109,110,113,109B)


Section. 56. (1) A company shall not register a transfer of securities of the company, or the interest of a member in the company in the case of a company having no share capital, other than the transfer between persons both of whose names are entered as holders of beneficial interest in the records of a depository, unless a proper instrument of transfer, in such form as Transfer and transmission of securities.




2.      Under the old Act, there was no mechanism to permit  transfer of interest in a company having no share capital but, however, that was transferable in accordance with the provisions of Transfer of Property Act. Under new Act, 2013, such transfer of interest in such company is permissible through execution of share transfer instrument and delivery of the same to the company within 60 days of such execution.


3.      The Section now deals with “securities” which is a very wider term – old Section 108 provided for only (a) shares and (b) debentures. The Section 2 (81) of Companies Act, 2013 says securities means the securities as defined in Clause (h) of Section 2 of Securities (Contracts & Regulation) Act, 1956. The Section 2(h) reads as under:-


Section 2(h): Securities include shares, scrips, stocks, bonds, debentures, debenture stocks or other marketable securities of a like nature in or of any incorporated company or body corporate.


4.      Now, under new Act, 2013, irrespective of nature of companies, the share transfer deeds shall have to be lodged with the company within 60 days and the company shall carry out transfer of shares subject to any indemnity as may be required to be furnished by the transferee to the company.


5.      Rule 11 (1) of the Companies (Share Capital & Debentures ) Rules, 2014  (as notified) provides that the purpose of Section 56(1), an instrument of transfer of securities held in physical form shall be in Form SH-4.


Provided that where the instrument of transfer has been lost or the instrument of transfer has not been delivered within the prescribed period, the company may register the transfer on such terms as to indemnity as the Board may think fit.


(2) Nothing in sub-section (1) shall prejudice the power of the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted.


(3) Where an application is made by the transferor alone and relates to partly paid shares, the transfer shall not be registered, unless the company gives the notice of the application, in such manner as may be prescribed, to the transferee and the transferee gives no objection to the transfer within two weeks from the receipt of notice.







6.      In case application for transfer of shares has been filed by a transferor alone for a partly paid up shares, then company shall give notice to the transferee  and upon receipt of No Objection from transferee, in the manner so prescribed, shall effect transfer of shares.



6.1    The Hon’ble Supreme Court in the case of Mannalal Khetan & ors. Vs. Kedar Nath Khetan & ors. (MANU/SC/0060/1976 : AIR 1977 SC 536) and Dale and Carrington Investments (P.) Ltd. & anr. vs. P.K. Prathapan & ors. 004) 122 Comp. Cas. 161 (SC) have consistently held that Section 108 was mandatory in nature. In the event of any infraction or non-compliance of the provisions of Section 108, the transfer of shares shall be void.   The Company Law Board in the case of  Bhola Waman Khalkar Vs. Laxman Waman Khalkar MANU/CL/0046/2013 that the transfer of  shares is void in the absence of consideration and non-compliance of Section 108 of Companies Act, 1956.



(4) Every company shall, unless prohibited by any provision of law or any order of Court, Tribunal or other authority, deliver the certificates of all securities allotted, transferred or transmitted—


(a) within a period of two months from the date of           incorporation, in the case of subscribers to the    memorandum;


WHAT IS NEW:  Now, share certificates are required to be issued within two months from the date of incorporation.  Earlier, it was seen share certificates were rarely issued upon incorporation.


(b) within a period of two months from the date of           allotment, in the case of any allotment of any of its   shares;


(c) within a period of one month from the date of   receipt by the company of the instrument of transfer under sub-section (1) or, as the case may be, of the           intimation of transmission under sub-section (2), in         the case of a transfer or transmission of securities;


(d) within a period of six months from the date of allotment in the case of any allotment of debenture:


WHAT IS NEW:  In case of allotment of shares, time has been reduced from 3 months to 2 month for issue of share certificates, from 2 month to 1 months for transfer or transmission of shares and from 6 months to 3 months in case of allotment of debentures.


Provided that where the securities are dealt with in a depository, the company shall intimate the details of allotment of securities to depository immediately on           allotment of such securities.


(5) The transfer of any security or other interest of a deceased person in a company made by his legal representative shall, even if the legal representative is not a holder thereof, be valid as if he had been the holder at the time of the execution of the instrument of transfer.


WHAT IS NEW: Now, the legal representatives of deceased shareholder are entitled to transfer of shares –  despite the fact that the shares have not been transmitted in his name. However, the Hon’ble Supreme Court in the case of Worldwide Agencies (P) Ltd Vs. Margaratt Desor & others AIR 1990 SC 737 has held that the “legal representative” of the deceased member is  entitled to file petition under Section 397 and 398 of the Companies Act, 1956 – although his name does not appear on the Register of Member.


(6) Where any default is made in complying with the provisions of sub-sections (1) to (5), the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.


WHAT IS NEW:  The quantum of fine has been substantially increased – both on company and its officer in default. The fine shall not be less than Rs.25,000 but it may exceed upto Rs. 5 lacs.


(7) Without prejudice to any liability under the Depositories Act, 1996, where any depository or depository participant, with an intention to defraud a person, has transferred shares, it shall be liable under section 447.




The Sub-Section  (7) has been inserted in the new Companies Act, 2013 and this sub-section fastens a very strict liability in the event of fraudulent transfer of shares either by the depository or depository participant, he shall be liable for imprisonment for a period  not less than six month but it may extend to ten years and shall also be liable for the amount involved in the fraud but it may extend to three times the amount involved in fraud.


Section 57: Punishment of impersonation of shareholder (Corresponding Section 116)


57. If any person deceitfully personates as an owner of any security or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtains or attempts to obtain any such security or interest or any such share warrant or coupon, or receives or attempts to receive any money due to any such owner, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.


Section 58 : Refusal to Register securities. Appeal against such refusal (Corresponding to Section 111,111A)


58. (1) If a private company limited by shares refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any securities or interest of a member in the company, it shall within a period of thirty days from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferor and the transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.


(2) Without prejudice to sub-section (1), the securities or other interest of any member in a public company shall be freely transferable:


Provided that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract.



In case, there is a agreement between two persons in relation to transfer of shares, such agreement shall be binding – previously whenever there was a Joint Venture Agreement or Shareholders’ Agreement between the Indian Entity and Foreign Entity restricting transfer of shares, then the Articles of Association were required to be amended in line with the provisions of Shareholders Agreement or Joint Venture Agreement.


NOTE:      It has been held by the Bombay High Court in the case of Spindel Fabric Sussen Vs. Sussen Textile Bearmingham  1989(2) CLA 202 and also in Rolta India Limited Vs. Venire India Ltd 2000(100) Company Cases 19 (Bom) has held that private agreement between shareholders, unless incorporated in the Articles of Association, are not binding on the company.



(3) The transferee may appeal to the Tribunal against the refusal within a period of thirty days from the date of receipt of the notice or in case no notice has been sent by the company, within a period of sixty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, was delivered to the company.


(4) If a public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, is delivered to the company, the transferee may, within a period of sixty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal.


(5) The Tribunal, while dealing with an appeal made under sub-section (3) or subsection 4), may, after hearing the parties, either dismiss the appeal, or by order—


(a) direct that the transfer or transmission shall be registered by the company and the company shall comply with such order within a period of ten days of the receipt of the order; or


(b) direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved.


(6) If a person contravenes the order of the Tribunal under this section, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.




a):     Now Section 58 will cover all types of securities, including shares and debentures.


b):     In case any public limited refuses to transfer any securities or there is a neglect even to send a notice of refusal, then the person shall have to file a petition before the NCLT within a period of three month from the date of lodgment of request for transfer/transmission or within two months from the date of refusal.  In case of private company, it is 30 days from the date of refusal or if no refusal has been received, then 60 days from the date of  lodgment.


c):     In case, there is a agreement between two persons in relation to transfer of shares, such agreement shall be binding – previously whenever there was a Joint Venture Agreement or Shareholders’ Agreement between the Indian Entity and Foreign Entity restricting transfer of shares, then the Articles of Association was required to be amended.


d):     In case of a public company or private company, the intimation of refusal of transfer or transmission, shall have to be given within a period of thirty days as against 60 days previously prescribed.


e):     The power of filing of an appeal in case of refusal to transfer or transmit shares, only transferee/transmitee is entitled to file an appeal before NCLT – under Companies Act, 1956, all the persons namely (i) transferor (ii) transferee (iii) or person giving intimation about the transmission of shares were entitled to file.


f):     If any person commit contravention of orders passed by NCLT on appeal before it, such person shall be liable to imprisonment which shall not be less than one month and which may exceed to three years and fine which shall not be less than one Rs. lac and which may exceed to three months.





One of the very important and substantial issue is in relation to the  period prescribed for time filing an appeal before the NCLT.  Whether the appeal would not be entertained in case there is a delay in filing the same before NCLT.  Some of the very important judgments delivered by the CLB are given for ready reference:-


The Division Bench of Company Law Board in the case of BN Nigam Vs. Hindustan Lever Limited MANU/CL/0036/2002 CLB DB, has observed (i) both on the issue when the petition is filed under wrong section and (ii) where the petition has been filed after long delay, as under:-


We have heard the learned counsels for the parties and have perused the pleadings. On behalf of the respondent, two preliminary objections were raised at the outset, namely, that the petition filed under  Section 111  was not maintainable as the said section did not apply in case of the respondent which was a public Ltd. company. Secondly, the petition was barred by limitation as the cause of action arose in August/September, 1996 but the petition was filed after about 3 years. So far as the first objection is concerned, on the oral prayer made by the learned counsel for the petitioner we have treated this petition as filed under Section 111A. As regards the second objection since the petitioner was alleging that his shares have been transferred fraudulently on the basis of forged signature and fraudulent attestation of the same and, thus, was void ab initio, in our view in such a case the period of limitation cannot be strictly applied. We have, therefore, proceeded to hear this petition on merits.


The CLB in another case of Hindustan Lever Limited (MANU/CL/0067/2012), while dealing with the scope of rectification of register of members, has observed as under:-


There is a catena of judgments of various High Courts and the Supreme Court with regard to the scope of inquiry under Section 111 (4) read with Section 111 (7)  which were exactly incorporated from the erstwhile Section 155 of the Act. The CLB has jurisdiction to decide even questions of allotment/non-allotment/forfeiture which have a bearing on the register of members.


Further, it was argued that oven though the petitioner has not specifically mentioned that the petition is under section 111A, yet it can be treated as a petition under section 111A instead of Section 111  of the Act. Reliance was placed on the case law in B.N. Nigam v. Hindustan Lever Ltd. (2002) 49 CLA 85 (CLR) and Multimedia Frontiers Ltd. v. Software frontiers Ltd. MANU/CL/0039/2006 : (2006) 75 CLA 317 (CLB) to treat this petition under section 111A of the Act as quoting a wrong section shall not be a ground for rejecting the petition.




The Company Law Board, in the above case, has held that the CLB, in a petition under Section 111/111A of the Companies Actg, 1956 (now Section 58 and 59 of Companies Act, 2013), can examine the issue of allotment and non-allotment of shares or transfer of shares and non-share of shares.


Section: 59: Rectification of Registrar of Members (Corresponding Section 111,111A)


59. (1) If the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in the register, is, without sufficient cause, omitted therefrom, or if a default is made, or unnecessary delay takes place in entering in the register, the fact of any person having become or ceased to be a member, the person aggrieved, or any member of the company, or the company may appeal in such form as may be prescribed, to the Tribunal, or to a competent court outside India, specified by the Central Government by notification, in respect of foreign members or debenture holders residing outside India, for rectification of the register.


(2) The Tribunal may, after hearing the parties to the appeal under sub-section (1) by order, either dismiss the appeal or direct that the transfer or transmission shall be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages, if any, sustained by the party aggrieved.


(3) The provisions of this section shall not restrict the right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal.


(4) Where the transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992 or this Act or any other law for the time being in force, the Tribunal may, on an application made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned. Refusal of Registration and appeal Against refusal. Rectification of register of members.


(5) If any default is made in complying with the order of the Tribunal under this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both.




a):The Section 59 shall include all securities which obviously include shares and debentures.


b): In case of company, the penalty of minimum of Rs.1 lac which may be increased to Rs. 5 lacs – Every officer of the Company shall be liable to imprisonment which may extend to one year or fine which shall not be less than Rs.1 lacs and which may go upto Rs. 3 lacs.  For company, the maximum fine is Rs.5 lacs and officer in default, the maximum is Rs. 3 lacs.  


                          IMPORTANT JUDGMENTS:




(1):  The Delhi High Court in the case of Raj Kumar  Devraj Vs. Jai Mal Hotels (P) Ltd MANU/DE/6312/2012, while dealing with the issue of rectification of Register of Member, has observed as under:-


The Apex Court in the case of Ammonia Supplies Corporation has held that in matters of rectification, it is the company Court alone which will have jurisdiction; all the issues peripheral to rectification would come within the domain of the company court; it would be the court of exclusive jurisdiction in so far as the rectification is concerned. It is only where fraud or forgery in holding the shares or fraud or forgery qua the title to the said shares is alleged and prima facie established only then the said issue will go beyond the jurisdiction of the Company Judge and would have to be decided by a civil forum. It is the nature of the allegations made in each case which will answer the question as to whether the rectification is permissible by the Company Law Board under  Section 111 of the Companies Act or not.



The Hon’ble Company Law Board in the case of Calcutta Security Printers v. Calcutta Phototype Co. [2003] 52 CLA 171 (CLB)/ [2002] 171 CC 104 – The limitation period that runs from the date of the knowledge could not be a matter of argument. A liberal opinion had to be taken on the issue of limitation, where a prima facie case of fraud was made out.



The Bombay High Court in the case of Finolex Cables Ltd Vs. Anil Ramchand Chhabria (2000-26 SCL 233 has observed as under:-


Section 111 is a very comprehensive section, dealing with rights remedies and jurisdiction. It is applicable to both public and private limited companies. Remedy provided in Section 111A(3) is in addition to the remedy provided in Section 111 (4). It is, therefore, held that the remedies of an appeal and rectification are available to all kinds of shares held in a public company under the proviso to Section 111A(2) and 111A(3) read with Sub-section (7) of Section 111A of the Act which would make applicable the provisions of Section 111 (1), (2) and (4) by virtue of Section 111 (5) of the Act. While following this proposition of 1aw, the CLB held in S. Kanthimathy v. Woodlands Estates Ltd. MANU/CL/0067/2007 : [2008] 83 SCL 491 (CLB – Chennai) that a combined reading of Sections 111(5) and 111A(7) would show that transmission of shares by operation of law is also governed by Section 111A.


Dealing with the question of limitation, the Hon’ble Company Law Board, in a recent judgment, in the case of Dilip M Tumbo Vs. Sociedade De Fomento industries (P) Ltd MANU/CL/0055/2012 has observed as under:-


The CLB is a quasi-judicial authority exercising equitable jurisdiction guided by the principles of natural justice in the exercise of its powers and discharge of its functions under the Act and shall act in its discretion. The CLB has all the trappings of a Court. The CLB has its own Regulations. The CPC does not apply, the principles do. The provisions of the Limitation Act are not applicable to the proceedings before the CLB. But delay and latches do apply. On the plea of application of the Limitation Act to the proceedings before the CLB it has been consistently held by the CLB that the Limitation Act as applied by the Civil Court is not applicable to the proceedings before the CLB, a quasi-judicial authority and not a Court in the strict sense of the term, however, this does not preclude CLB from rejecting/dismissing petition on account of delay/latches in appropriate cases.



In respondent to the preliminary objection by the respondent-company about the petition being barred by limitation, the petitioners rely on two ruling passed by the CLB as reported at Bhuwaneshwar Nath Nigam v. Hindustan Levers Ltd. [2002] 49 CLA 85 (CLB): [2002] 111 Comp Cas 590 where it has been held that in case of allegation that shares were fraudulently transferred under forged signature and attestation, strict time limit not be enforced. The Bench held that since the petitioners was alleging that his shares had been transferred fraudulently on the basis of forged signatures and fraudulent attestation of the same and, thus, the transfer was void ab-initio, in such a case the period of limitation could not be strictly applied. In another case Calcutta Security Printers Ltd. v. Calcutta Photo Type Co. Ltd. [2003] 52 CLA 171 (CLB): [2002] 112 Comp Cas 434, the Bench observed that when forgery is alleged, question of limitation to be viewed liberally. The CLB has held that it is a settled law that where a prima facie case of fraud has been made out against the defendant, the onus of proving that the alleged forgery was not in fact so rests on the defendant.


In view of the difficulties faced in Section 111/111A of the Companies Act, 1956, to some extent, the amendment have been made in Section 58 A.