Amendments relevant for May 2007 examination of ICAI

As per previous announcements, following amendments to various Acts made in year 2002 will be relevant for May, 2007 examination of ICAI.

PE-II examination – Companies (Second Amendment) Act, 2002 – sections 2 and 6 [These pertain to NCLT and definitions related to sick industrial company. Note that section numbers 2 and 6 are those of Companies (second Amendment) Act 2002 and not of the main Companies Act].

Final CA Examination – (a) Companies Amendment Act, 2002 (This pertains to Producer Company) (b) Competition Act, 2002 [Only those sections which are made effective on 31-3-2003 and 19-6-2003. These sections pertain to Competition Commission and definitions].

No questions on MRTP and SICA – It has been clarified that no questions will be asked on MRTP and SICA in November 2004 examination of CA final. However, questions on these may be asked in ICSI (Inter and Final) examination.

In view of this clarification, this write-up gives gist of changes which are relevant for CA examination in respect of Companies (Second Amendment) Act and Competition Act.

Changes made in Negotiable Instruments Act and provisions in respect of Producer Company (as contained in Companies (Amendment) Act have already been incorporated in 2004 edition of my books and hence not given here.

Companies (Second Amendment Act) 2002

Though the Act has been passed, only section 2 (definition section) and section 6 (in respect of NCLT and NCLAT) have been brought into effect. [Note – These section numbers are of Amendment Act and not of the Companies Act]. These amendments are relevant for PE-II examination of ICAI to be held in May 2005.

The definitions mainly relate to sick industrial companies and NCLT. Practically, provisions of sick industrial company are relevant for sections 424A to 424L, as these sections pertain to revival and rehabilitation of sick industrial companies. However, the definitions relating to sick industrial company are explained below, as these definitions have been brought into force and are relevant for May 2005 PE-II examination of ICAI.

National Company Law Tribunal and Appellate Tribunal

National Company Law Tribunal (NCLT) is being constituted to look after work hitherto being done by Company Courts and Company Law Board (CLB).

Background of Tribunal - So far, all powers relating to reduction of capital, merger/amalgamations and winding up are with High Court, usually termed as ‘Company Court’.

Power in respect of rectification of register, complaints regarding refusal to transfer/transmit securities, rectification of register of members, oppression and mismanagement was handled by Company Law Board (CLB). CLB was a quasi judicial authority similar to the new Tribunal (NCLT). However, appeal against decision of CLB was required to be made to High Court.

It was observed that due to heavy pendency of work in various High Courts, the matters were getting delayed. Winding up matters were looked after by ‘Official Liquidator’ who was already over-burdened with work. There are some cases where winding up has continued for 15 to 25 years and still matters are not yet finally over.

Business decisions are required to be fast. Delay in business matters, particularly relating to issues like merger/amalgamation, winding up, oppression, mismanagement etc. result in tremendous waste of national resources. Hence, a need was felt to have a specialized body to look after these matters of great business interest and concern so that quick and fast decisions are arrived at.

Changes made in present provisions - Following is the summary of changes made -

Abolition of CLB - Company Law Board (CLB) as constituted u/s 10E shall stand dissolved after formation of NCLT. [section 10FA]. All matters pending before CLB shall stand transferred to NCLT. [section 10FA(3)]. Section 10FA(2) makes provisions regarding vacation of office of members of CLB, transfer of employees etc. In case of orders passed by CLB before dissolution, appeal can be filed with High Court as per existing section 10F. Orders passed by CLB prior to dissolution can be enforced through Court as per provisions of section 635(4), even after dissolution.

Constitution of Tribunal - The Central Government shall, by notification in the Official Gazette, con­stitute a Tribunal to be known as the National Company Law Tribu­nal [NCLT] [section 10FB]. - - ‘Tribunal’ means National Company Law Tribunal constituted u/s 10FB(1) [section 2(49A)].

The Tribunal shall consist of a President and such number of judicial and Technical Members not exceeding sixty-two, to be appointed by that Government, by notification in the Official Gazette. [section 10FC].

Appointment of President and Members - Prescribed qualification of President and members are as follows -

President of Tribunal - A person who has been, or is qualified to be, a Judge of a High Court shall be appointed by Central Government, as the President of the Tribunal, in consultation with the Chief Justice of India or his nominee. [section 10FD(1)]. - - The President will be considered as Judicial Member [Explanation to section 10FD(3)]. He will be appointed for three years at a time. He can be reappointed. He can work upto age of 67 years.

Judicial member - A person can be appointed as Judicial Member, if he (a) has, for at least fifteen years, held a judicial office in the territory of India; or (b) has, for at least ten years been an advocate of a High Court, or has partly held judicial office and has been partly in practice as an advocate for a total period of fifteen years; or (c) has held for at least fifteen years a Group ‘A’ post or an equivalent post under the Central Government or a State Gov­ernment [including at least three years of service as a Member of the Indian Company Law Service (Legal Branch) in Senior Adminis­trative Grade in that service]; or (d) has held for at least fifteen years a Group ‘A’ post or an equivalent post under the Central Government (including at least three years of service as a Member of the Indian Legal Service in Grade I of that service). [section 10FD(2)] - - A person can be appointed as Judicial member for three years at a time. He can be reappointed. He can work upto age of 65 years. Member appointed from service cadre can retain his lien with his parent cadre. [section 10FE].

Technical member - A person can be appointed as Technical Member if he (a) has held for at least fifteen years a Group ‘A’ post or an equivalent post under the Central Government or a State Gov­ernment [including at least three years of service as a Member of the Indian Company Law Service (Accounts Branch) in Senior Administrative Grade in that Service]; (b) is, or has been, a Joint Secretary to the Government of India under the Central Staffing Scheme, or any other post under the Central Government or a State Government carrying a scale of pay which is not less than that of a Joint Secretary to the Government of India for at least five years and has adequate knowledge of, and experience in, dealing with problems relating to company law; or (c) is, or has been, for at least fifteen years in practice as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949); or (d) is, or has been, for at least fifteen years in practice as a cost accountant under the Costs and Works Accountants Act, 1959 (23 of 1959); or (e) is, or has been, for at least fifteen years working experience as a Secretary in whole-time practice as defined in clause (45A) of section 2 of this Act and is a member of the Institute of the Companies Secretaries of India constituted under the Company Secretaries Act, 1980 (56 of 1980); (f) is a person of ability, integrity and standing having special knowledge of, and professional experience of not less than twenty years in, science, technology, economics, banking, industry, law, matters relating to labour, industrial finance, industrial management, industrial reconstruction, administration, investment, accountancy, marketing or any other matter, the special knowledge of, or professional experience in, which would be in the opinion of the Central Government useful to the Tribu­nal, or; (g) is, or has been, a Presiding Officer of a Labour Court, Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947 (14 of 1947); or (h) is a person having special knowledge of, and experience of not less than fifteen years in, the matters relating to la­bour. [section 10FD(3)].

A person will be appointed as Technical member for three years at a time. He can be reappointed. He can work upto age of 65 years. Member appointed from service cadre can retain his lien with his parent cadre. [section 10FE].

Technical member specialized in labour matters - The Technical Members are of two types - (a) Having experience in Company Law and related matters i.e. those appointed under clauses (a) to (f) above and (b) Having experience in labour matters, i.e. those appointed under clause (g) or (h) above.  - - This distinction is for purpose of hearing matters relating to rehabilitation sick industrial company and winding up, as in those cases, both categories of technical members must be on the bench hearing winding up petition. The technical member who is specialized in labour matters can be only member of special bench hearing matters relating to rehabilitation of sick industrial company and winding up petition. He cannot be member of any other bench.

Member Administra­tion -  One of the technical or judicial member will be designated as Member Administration by Central Government. He shall exercise financial and administrative powers as may be vested in him under the rules which may be made by the Central Government. The Member Administration can delegate his authority to other officers of Tribunal. [section 10FF].

Benches of Tribunal - Powers of the Tribunal will be exercised by Benches, constituted by the President of the Tribunal. The Bench shall comprise of one Judicial Member and another Technical Member having special knowledge in company law matters i.e. those referred to in Section 10FD(3)(a) to 10FD(3)(f). - - In other words, technical member appointed in view of his special knowledge in labour matters, i.e. those referred to in Section 10FD(3)(g) and 10FD(3)(h), cannot be appointed member of any bench, except special bench hearing matters relating to sick industrial company and winding up. [section 10FL(1)]. - - The President will be considered as Judicial Member for this purpose.  - - Number of Benches will be as constituted by Central Government by a notification. [section 10FL(4)].

Single member bench - President can by general or special order, authorize some members to function as a Single Member Bench and exercise the jurisdiction, powers and authority of the Tribu­nal in respect of such class of cases or such matters pertaining to such class of cases, as may be decided by President  [proviso to section 10FL(1)]. If the Member hearing the matter at any time is of the opinion that the case or matter is of such a nature that it ought to be heard by a Bench two Members, he may refer the matter to President for transfer to two member bench. [proviso to section 10FL(1)].

Special Bench to hear sick company and winding up matters - President of the Tribunal shall, for the disposal of any case relating to rehabilitation, restructuring or winding up of the companies, constitute one or more Special Benches consisting of three or more Members, each of whom shall necessarily be a Judicial Member, a Technical Member appointed under any of the clauses (a) to (f) of sub-section (3) of section 10FD, and a Member appointed under clause (g) or clause (h) of sub-section (3) of section 10FD.  - -  After winding up order is passed, further proceedings can be conducted by a single member bench. [section 10FL(2)]. - - Thus, the special bench must consist of at least three members - one judicial member, one technical member having special knowledge in company law matters and one technical member having special knowledge in labour law matters.

Principal Bench can transfer proceedings from one bench to other - In addition to the other Benches, there shall be a Principal Bench at New Delhi presided over by the President of the Tribu­nal. [section 10FL(5)]. - - The Principal Bench of the Tribunal shall have powers of transfer of proceedings from any Bench to another Bench of the Tribunal in the event of inability of any Bench from hearing any such proceedings for any reason. Such transfer of any proceedings shall be made after recording the reasons for so doing in writing [section 10FL(6)],

Decision of Tribunal by majority - If the Members of a Bench differ in opinion on any point or points, it shall be decided according to the majority, - - If the Members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Tribunal for hearing on such point or points by one or more of the other Members of the Tribunal, Such point or points of difference shall be decided according to the opinion of the majority of Members of the Tribunal who have heard the case, including those who first heard it. [section 10FL(3)].

Orders of Tribunal - The Tribunal will pass orders after hearing the parties. [section 10FM(1)]. Copy of order shall be sent to all the parties concerned. [section 10FM(3)]

Specific Powers of Tribunal - Tribunal and Appellate Tribunal have been given various powers. These are discussed later. In addition, Tribunal has been given following specific powers. [These are not specified in case of Appellate Tribunal]

Rectification of mistake - The Tribunal may, at any time within two years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it u/s 10FM(1). Tribunal shall make such amendment if the mistake is brought to its notice by the parties. [section 10FM(2)]. - - Interestingly, such power is not specifically given to Appellate Tribunal, though it is a superior body. However, it does not make much difference, as powers of review are any way available to it u/s 10FZA(2)(f).

Delegation of powers to manage industrial company - The Tribunal may, by general or special order, delegate, subject to such conditions and limita­tions as may be specified in the order, to any Member or officer or other employee of the Tribunal or other person autho­rised by the Tribunal to manage any industrial company or indus­trial undertaking or any operating agency, such powers and duties under this Act as it may deem necessary. [section 10FO]. - - - No such powers are given to Appellate Tribunal, probably because, the orders will be executed only by Tribunal, after order is passed by Appellate Tribunal.

Power to seek assistance of Magistrate to take over assets of sick industrial company  - Tribunal or operating agency authorized by it can take assistance of Chief Metropolitan Magistrate or the District Magistrate to take into custody property belonging to sick industrial company. The Magistrate is bound to provide assistance. He can use reasonable force to take possession, if required.  [section 10FP]. The statutory provisions are as follows - -  The Tribunal or any operating agen­cy, on being directed by the Tribunal may, in order to take into custody or under its control all property, effects and actionable claims to which a sick industrial company is or appears to be entitled, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any proper­ty, books of account or any other document of such sick industri­al company, be situate or be found, to take possession thereof, and the Chief Metropolitan Magistrate or the District Magistrate, as the case may be shall, on such request being made to him - (a) take possession of such property, books of account or other documents; and (b) cause the same to be entrusted to the Tribunal or the operating agency. [section 10FP(1)]. For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the Dis­trict Magistrate may take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be neces­sary. [section 10FP(2)]. No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority on any ground whatsoever. [section 10FP(3)]. - - No such powers are given to Appellate Tribunal, probably because, the orders will be executed only by Tribunal, after order is passed by Appellate Tribunal.

National Company Law Appellate Tribunal - Appeal against order of Tribunal (NCLT) will lie with National Company Law Appellate Tribunal (NCLAT) formed u/s 10FR(1). - - ‘Appellate Tribunal’ means National Company Law Appellate Tribunal constitution u/s 10FR(1) [section 2(1B)].

Appeal has to be filed within 45 days from date of receipt of order. Appeal cannot be filed against consent order.

Appeal from order of Tribunal - Any person aggrieved by an order or decision of the Tribunal may prefer an appeal to the Appellate Tribunal. [section 10FQ(1)]. However, no appeal shall lie to the Appellate Tribunal from an order or decision made by the Tribunal with the consent of parties. [section 10FQ(2)]. Appeal shall be filed within a period of forty-five days from the date on which a copy of the order of decision made by the Tribunal is received by the appel­lant. Appellate Tribunal may can condone delay in filing appeal if it is satisfied that the appellant was prevent­ed by sufficient cause from not filing the appeal in time. [section 10FQ(2)]. - - Appeal shall be in such form and accompanied by such fee as may be prescribed.

On receipt of an appeal, the Appellate Tribunal shall, after giving parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. [section 10FQ(4)]. Copy of every order made by it to the Tribunal and parties to the appeal. [section 10FQ(5)].  Appeal should be heard expeditiously and endeavor shall be made by it to dispose of the appeal finally within six months from the date of the receipt of the appeal. [section 10FQ(6)].

Constitution of Appellate Tribunal - The Central Gov­ernment shall, by notification, consti­tute an Appellate Tribunal to be called the “National Company Law Appel­late Tribunal”, consisting of a Chairperson and not more than two members, to be appointed by that Government, for hearing appeals against the orders of the Tribunal under this Act. [section 10FR(1)]. 

The Chairperson of the Appellate Tribunal shall be a person who has been, a Judge of the Supreme Court or the Chief Justice of a High Court. [section 10FR(2)]. - - A Member of the Appellate Tribunal shall be a person of ability, integrity and standing having special knowledge of, and professional experience of not less than twenty-five years in, science, technology, economics, banking, industry, law, matters relating to labour, industrial finance, industrial management, industrial reconstruction, administration, investment, accountan­cy, marketing or any other matter, the special knowledge of, or professional experience in which, would be in the opinion of the Central Government useful to the Appellate Tribunal. [section 10FR(3)]. - - Thus, members of Appellate Tribunal (except Chairperson) need not be from judicial discipline.

The Chairperson and members will be appointed for three years at a time. They can be re-appointed, but age limit is 70 years in case of Chairperson and 67 years in case of members of Appellate Tribunal. [section 10FT].

Can NCLAT function with no member or one member ? - Since the words used are ‘not more than two members’, it appears that Appellate tribunal can function even if no member is appointed, as long as Chairperson has been appointed. The Appellate Tribunal can function even if only one member is appointed. However, in such case, in case of difference of opinion, there will be a stalemate.

No provision of benches of Appellate Tribunal - There is no provision for forming benches of Appellate Tribunal. It appears that all members of Appellate Tribunal will constitute a bench. However, section 10FS(1) provides that in case of vacancy in post of Chairperson, senior-most member will act as Chairperson. Central Government can also nominate a person to act as Chairman in absence of Chairman. [section 10FS(2)]. If, for reason other than temporary absence, any vacancy occurs in the office of the Chairperson or a Member, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Appellate Tribunal from the stage at which the vacancy is filled. [section 10FS(3)]. -  - Thus, it appears that if post of Chairperson or any member falls vacant, other members can continue the functions of Appellate Tribunal. In case of part heard matters, they may have to give fresh hearing or wait till another member/chairperson is appointed.

Power to punish for contempt.—The Appellate Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of itself as the High Court has. The Appellate Tribunal may exercise, for this purpose powers under the provisions of the Contempt of Courts Act, 1971. The powers shall be exercised subject to modifications that— (a) the reference therein to a High Court shall be con­strued as including a reference to the Appellate Tribunal (b) the reference to Advocate-General in section 15 of the said Act shall be construed as a reference to such law officers as the Central Government may specify in this behalf. [section 10G]. [Such power is not available to Tribunal (NCLT).

Limitation - The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to an appeal made to the Appellate Tribunal. [section 10GE]. - - The provision of limitation has been made in respect of Appellate Tribunal and not in respect of Tribunal (NCLT). The reason for such distinction is not clear. Can it be that a superior authority is bound by limitation but an authority subordinate to it is not bound by the limitation ?

Provisions common to NCLT and NCLAT - There are some provisions which apply both to Tribunal (NCLT) and Appellate Tribunal (NCLAT).

Salary, allowances conditions of serv­ice of Chairperson, President and other members - Salary and allowances and other terms and conditions of service of the President and other members of the Tribunal will be prescribed by Rules. Such terms cannot be varied to their disadvantage after their appointment. [section 10FG]. Similar provisions in respect of Appellate Tribunal are made vide section 10FW.

Vacancy in post of President, Chairperson - If there is any vacancy is the office of President, Senior Most member will act as President till appointment of new President. [section 10FH(1)]. If President is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member will function as President. Alternatively, Central Government can, by notification, authorize one of the Members of the Tribunal to discharge the functions of the Presi­dent until the date on which the President resumes his duties. [section 10FH(2].  - - Similar provision in respect of Chairperson and members of Appellate Tribunal have been made vide section 10FS(1) and 10FS(2). - - However, in case of Appellate Tribunal, there is no provision to form benches. Hence, all members of Appellate Tribunal will have to sit as a bench.

Matter to continue from the stage vacancy of member/President is filled - If, for reason other than temporary absence, any vacancy occurs in the office of the President or a Member, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Tribunal from the stage at which the vacancy is filled. [section 10FH(3)]. - - Though the section is not happily drafted, what it means that if one of the members of bench resigns/retires/dies, the hearing can continue from the stage it was heard by earlier bench and re-hearing of whole matter is not necessary when one of the member of bench changes. [The provision could have been more clearly and explicitly worded]. - - Similar provision has been made in respect of Chairperson and Members of Appellate Tribunal vide section 10FS(3).

Resignation of Chairperson, President and Member - The President or a Member of the Tribunal can resign by giving three month notice in writing under his hand addressed to the Central Government. Central Government can relieve him earlier or till his successor is appointed, whichever is earlier, but m\not after three months. [section 10FI]. Similar provision in respect of Chairperson and Members of Appellate Tribunal has been made vide section 10FU.

Removal and suspension of Chairperson, President or Member - Provisions for removal of President or a member are as follows -

Reasons for which removal is permissible - The Central Government may, in consultation with the Chief Justice of India; remove from office the President or any Member of the Tribunal, who - (a) has been adjudged an insolvent; or (b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or (c) has become physically or mentally incapable of acting as such President or Member of the Tribunal; or (d) has acquired such financial or other interest as is likely to affect prejudicially his functions as such President or Member of the Tribunal; or (e) has so abused his position as to render his continuance in office prejudicial to the public interest. - -  Such President or a Member can be removed on any of the grounds specified in clauses (b) to (e) only after giving him reasonable opportunity of being heard in respect of those charges. [section 10FJ(1)].

Enquiry before Removal for misbehaviour or incapacity  - The President or a Member of the Tribunal can be re­moved from his office on ground of misbeaviour or incapacity only after an inquiry is made by a Judge of the Supreme Court. During enquiry, President or a Member will be informed of the charges against him and a reasonable opportunity of being heard in respect of those charges will be given. [section 10FJ(2)]. President/Member can be suspended during enquiry. [section 10FJ(3)]. Procedure for enquiry may be regulated by making rules by Central Government. [section 10FJ(4)].

Removal and suspension of Chairperson and Members of Appel­late Tribunal - The provisions are contained in section 10FV. The provisions are similar to provisions for removal of President and members of Tribunal, as contained in section 10FJ, discussed above.

Officers and employees of Tribunal and Appellate Tribunal - The Central Gov­ernment shall provide the Tribunal with such officers and other employees as it may deem fit. The officers and other employees of the Tribunal shall dis­charge their functions under the general superintendence of the Member Administration. The salaries and allowances and other terms and conditions of service of the officers and other employees of the Tribunal shall be prescribed by Rules. [section 10FK]. Similar provision has been made in respect of Appellate Tribunal, with only difference that the officers and employees of Appellate Tribunal shall function under general superintendence of Chairperson of Tribunal. [section 10GA].

Selection Committee - The Chairperson and Members of the Appellate Tribunal and President and Members of the Tribunal shall be appointed by the Central Government on the recommenda­tions of a Selection Committee consisting of Chief Justice of India as Chairperson and Secretaries of four specified ministries as members. [section 10FX(1)]. The Joint Secretary-in-charge of the Ministry or Department of the Central Government dealing with Companies Act shall be the Convener of the Selection Committee. [section 10FX(2)]. Central Government will inform about vacancies in advance. [section 10FX(3)]. Selection Committee will recommend a panel of three names for every vacancy. [section 10FX(4)]. The selection committee will check whether the proposed person has interest which is likely to prejudice his function as member, President or Chairperson. [section 10FX(5)]. No appointment of the Chairperson and Members of the Appel­late Tribunal and President and Members of the Tribunal shall be invalidated merely by reason of any vacancy or any defect in the constitution of the Selection Committee. [section 10FX(6)].

Chairperson, members, President and employees to be public servants.—The Chairperson, Members, officers and other employees of the Appellate Tribunal and the President, Members, officers and other employees of the Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860). [section 10FY].

Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall lie against the Appellate Tribunal or its Chairperson, Member, officer or other employee or against the Tribunal, its President, Member, officer or other employee or operating agency or liquidator or any other person authorised by the Appellate Tribunal or the Tribunal in the discharge of any function under this Act for any loss or damage caused or likely to be caused by any action which is in good faith done or intended to be done in pursuance of this Act. [section 10FZ].

Procedure and powers of Tribunal and Appellate Tribunal - Provisions in respect of procedure and powers which are common to both Tribunal and Appellate Tribunal are discussed below.

Self regulation, subject to principles of natural justice - The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down in the Code of Civil Proce­dure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules made by the Central Government, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure. [section 10FZA(1)]

Powers of Tribunal and Appellate Tribunal - The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, i.e.  * summoning and enforcing the attendance of any person and examining him on oath * requiring the discovery and production of documents * receiving evidence on affidavits * subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office * issuing commissions for the examination of witnesses or documents * reviewing its decisions * dismissing a representation for default or deciding it ex parte; * setting aside any order of dismissal of any representa­tion for default or any order passed by it ex parte * any other matter which may be prescribed by the Central Government.

Ex parte order - The Tribunal/Appellate Tribunal can pass ex parte order and can also recall order passes ex parte. - - Though not specified, such recall can be made only in the interest of justice and not as a matter of course.

Provisions in respect of granting sanction, permission etc. - When it is specified that application for permission, consent, approval, confirmation or recognition should be made to NCLT, it should be submitted to NCLT along with prescribed fees. [section 637A(2)]. - - When NCLT (Tribunal) grants an approval, consent, confirmation or recognition, it can grant such approval, sanction, consent etc. subject to such conditions, limitations, restrictions etc. as may be imposed.  In case of contravention of any such condition, limitation or restriction, the approval, sanction, consent, confirmation, recognition, direction or exemption may be withdrawn [section 637A(1)].

Time taken for getting copy of order to be excluded – Where any order of Court or Tribunal is required to be filed with Registrar, company or any other person within prescribed period, time taken for drawing up the order and obtaining its copy shall be excluded while computing that period. – section 640A.

Enforcement of order - Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send in case of its inability to execute such order, to the court within the local limits of whose jurisdiction - (a) in the case of an order against a company, the regis­tered office of the company is situate; or (b) in the case of an order against any other person, the person concerned voluntarily resides or carries on business or personally works for gain. [section 10FZA(3)].

Proceedings are judicial proceedings - All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860) and the Tribunal and the Appellate Tribunal shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings.—No act or proceeding of the Tribunal or the Appellate Tribunal shall be questioned or shall be invalid merely on the ground of existence of any vacancy or defect in the estab­lishment of the Tribunal or the Appellate Tribunal, as the case may be. [section 10GC]

Right to legal representation.—The applicant or the appel­lant may either appear in person or authorise one or more char­tered accountants or company secretaries or cost accountants or legal practitioners or any officer to present his or its case before the Tribunal or the Appellate Tribunal, as the case may be. [section 10GD]. - - Thus, a legal practitioner i.e. advocate, vakil or attorney or a practicing CA, ICWA or CS can appear as legal representative of applicant or appellant. [section 10GD].

Power to review.—The Tribunal shall have power to review its own orders. [section 10FN]. Similar power is available to Appellate Tribunal vide section 10FZA(2)(f).

Appeal to Supreme Court - Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communica­tion of the decision or order of the Appellate Tribunal to him on any question of law arising out of such decision or order. The Supreme Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. [section 10GF].

Appeal is required to be filed within 60 days, extendable by further 60 days. Appeal to Supreme Court lies only on question of law. As far as facts are concerned, decision of Appellate Tribunal (NCLAT) is final. Of course, Special Leave Petition (SLP) can be made any time as those powers of Supreme Court cannot be curtailed by any legislation.

Bar to jurisdiction of Civil Court - No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribu­nal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be grant­ed by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force. [section 10GB].

Definitions relating to sick industrial company

Definitions in section 2 relating to sick industrial company have been brought into effect on 31-3-2003. These are relevant for PE-II examination. These are discussed below.

Revival of sick industrial companies - Provisions in respect of revival and rehabilitation of sick industrial company were made in Sick Industrial Companies (Special Provisions) Act, 1985 [SICA]. The experience was not satisfactory and hence these provisions have been merged in Companies Act vide Companies (Second Amendment) Act, 2002.

Powers of BIFR [Board of Industrial and Financial Reconstruction] will be exercised by NCLT (National Company Law Tribunal). Appeal against order of NCLT will be before National Company Law Appellate Tribunal [NCLAT] instead of Appellate Authority for Industrial and Financial Reconstruction [AAIFR].

Only definitions have been brought into force – Only definitions relating to sick industrial companies have been brought into force w.e.f. 31-3-2003. Practically, provisions of sick industrial company are relevant for sections 424A to 424L, as these sections pertain to revival and rehabilitation of sick industrial companies. However, only definitions are also discussed and explained below, as these provisions have been brought into force.

Overview of the provisions - A sick company is required to make a reference to Tribunal, along with its scheme for revival and panel auditor’s certificate giving reasons for sickness. Tribunal will decide whether the company can revive on its own or preparation of a scheme is necessary. If it is of the opinion that preparation of ‘scheme of rehabilitation’ is necessary, it will ask an ‘Operating Agency’ [Bank or Financial Institution or some expert body] to prepare a scheme. If the scheme involves providing financial assistance/concessions/reliefs, consent of concerned Bank/Financial Institution/Government will have to be obtained. If Tribunal approves, the scheme will be approved. If Tribunal is of the opinion that the company is not likely to revive, it will order winding up of the company.

Relevant definitions brought into effect

Sick Industrial Company -   “Sick industrial company” means an industrial company which has - (i) the accumulated losses in any financial year equal to fifty per cent or more of its average net worth during four years immediately preceding such financial year; or (ii) failed to repay its debts within any three consecutive quarters on demand made in writing for its repayment by a creditor or creditors of such company [section 2(46AA)]. - - The term used is ‘creditor’ and hence if any creditor (secured or unsecured) is not paid for 9 months despite demand made by him, the company will be a ‘sick industrial company’.

This definition uses the terms ‘industrial company’ and ‘net worth’ which are also defined under the Act.

Industrial company - An “industrial company” means a company which owns one or more industrial undertakings. [section 2(19AA)]. [Same definition in section 3(1)(e) of SICA].

Industrial undertaking - An “industrial undertaking” means any undertaking, pertaining to any industry carried on in one or more factories or units by any company, as defined in section 3(aa) of the Indus­tries (Development and Regulation) Act, 1951 (65 of 1951) but does not include a small-scale industrial undertaking as defined in section 3(j) of that section. [section 2(19AB)]. - - The definition is faulty, as section 3(aa) of IDRA Act defines ‘ancillary industrial undertaking’, while the term ‘industrial undertaking’ is really defined in section 3(d) of IDRA. Thus, strictly legally, the provisions will apply only to ancillary industrial undertaking. This cannot be the intention and may be corrected in due course [Definition u/s 3(1)(f) of SICA was correctly drafted and it included all industrial undertakings excluding ancillary undertakings and SSI units].

Thus, 'industrial undertaking' means the actual factory while 'industrial company' means the Company which owns it. Company means Company as per Companies Act. Thus, if an industrial undertaking is owned by cooperative society or trust, it will not be covered under the provisions.

As per section 3(c) of IDRA, a company is 'industrial company' if it has one or more factories. 'Factory' means where more than 50 workers are employed. In Sarin International P Ltd. v AAIFR (1997)89 Comp Cas 842 = 26 CLA 272 (Del HC DB), it was held that, if at the time of making reference, number of workers were more than 50, the reference cannot be struck off on the ground that the unit is closed and number of workers has reduced to less than 50. - - The words 'company' and 'undertaking' are not synonymous. A sick company may have more than one industrial undertakings - Upper India Couper Paper Mills Co. Ltd. v. AAIFR - (1992) 75 Comp. Cas. 653 (Del HC DB).

Net worth - “Net worth” means the sum total of the paid-up capital and free reserves after deducting the provisions or expenses as may be prescribed.  Explanation.—For the purposes of this clause, “free reserves” means all reserves created out of the profits and share premium account but does not include reserves created out of revaluation of assets, write back of depreciation provisions and amalgamation. [section 2(29A)]. - - This definition is significant improvement over definition under SICA. In definition vide section 3(1)(ga) of SICA, the words ‘after deducting provisions and expenses as may be prescribed’ were not there. So far, companies were not deducting preliminary expenses or development expenses while calculating ‘Net Worth’. Similarly, provisions were not made even if they were required as per Accounting Standards. Now these loopholes have been hopefully plugged.  - - If such expenses shown in balance sheet as ‘Assets’ and provisions (which are required but not made in accounts) are deducted, ‘Net Worth’ will reduce considerably, and company may become ‘sick’ sooner.

Under revised definition, a company will be ‘sick industrial company’ much sooner. This will be more so because while calculating ‘Net worth’ prescribed expenses and provisions will have to be deducted.

Operating Agency - “Operating agency” means any group of experts consisting of persons having special knowledge of business or industry in which the sick industrial company is engaged and includes public financial institution, State level institution, scheduled bank or any other person as may be specified as the operating agency by the Tribunal. [section 2(31A)]. - - This definition is similar to earlier definition u/s 3(1)(i) of SICA, except that the words ‘any group of experts consisting of persons having special knowledge of business or industry in which the sick industrial company is engaged’ have been added. Thus, an agency other than Bank/FI can be appointed as ‘Operating Agency’.

State Level Institution - “State level institution” means any of the following institutions, namely - (a) the State Financial Corporations established under section 3 or section 3A and institutions notified under section 46 of the State Financial Corporation Act, 1951 (63 of 1951); (b) the State Industrial Development Corporations regis­tered under this Act. [section 2(46AB)].

Functions of operating agency - The functions of operating agency are : (a) conduct enquiry on reference received, as per section 424B(2) (b) prepare scheme for rehabilitation as per sections 424C(3) and 424D(1) (c) apply to Tribunal for review of its order - section 424C(4)(b) (d) recommend to Tribunal various steps to be taken to implement the scheme and remove the difficulty - section 424D(14) (e) Implement the rehabilitation scheme, if ordered by Tribunal - section 424D(15) (f) Any officer of operating agency can be appointed as liquidator in case of winding up of the industrial company - section 424F(3), (g) to prepare detailed inventory and lists of any industrial company if ordered by the Tribunal. [section 424H]

Tribunal - ‘Tribunal’ means National Company Law Tribunal constituted u/s 10FB(1) [section 2(49A)].

Appellate Tribunal - ‘Appellate Tribunal’ means National Company Law Appellate Tribunal constitution u/s 10FR(1) [section 2(1B)]. 

Relevant provisions in Competition Act, 2002

Only some sections of Competition Act have been brought into effect on 31-3-2003 and 19-6-2003. Only these will be relevant for examination of ICAI. A write up on those sections is given below.

Purpose of the Competition Act

As per Preamble to the Act, the Act is to provide, keeping in view of the economic development of the country, for the establishment of a Commission to pre­vent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto.

Thus, main purpose of Act is to ensure free and fair competition in market.

Overall scheme - The Act is designed for following purposes - (a) Prohibition of anti-competitive agreements (b) Prohibition of abuse of dominant position and (c) Regulation of combinations. A quasi-judicial authority named ‘Competition Commission of India’ will be constituted. The Commission will consist of judicial as well as non-judicial persons to give Competition Commission of India (CCI) an overall perspective. On receipt of complaint or reference, CCI can issue order to Director General to investigate. His report will then be considered by CCI. The CCI will hear the concerned parties and then pass necessary orders. CCI will sit in benches. Each bench will consist of at least one judicial person of rank of Judge of High Court. CCI is empowered to recommend division of dominant enterprises. It can order de-merger in case of merger/amalgamation that adversely affects competition. Suitable powers are given to Commission and penalties are prescribed to ensure that orders of Commission are obeyed. Jurisdiction of Civil Court is barred and only appeal to Supreme Court only if substantial question of law are involved.

Important definitions under Competition Act

6.3 Section 2 of the Competition Act contains various definitions. This section has been made effective. Important definitions are given below.

Enterprise - “Enterprise” means a person or a department of the Gov­ernment, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in invest­ment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space.

For the purposes of this clause, - (a) “activity” includes profession or occupation (b) “article” includes a new article and “service” includes a new service (c) “unit” or “division”, in relation to an enterprise, includes - * a plant or factory established for the production, storage, supply, distribution, acquisition or control of any article or goods * any branch or office established for the provision of any service. [section 2(g)].

Goods - “Goods” means goods as defined in the Sale of Goods Act, 1930 (8 of 1930) and includes - (A) products manufactured, processed or mined (B) debentures, stocks and shares after allotment (C) in relation to goods supplied, distributed or con­trolled in India, goods imported into India. [section 2(h)].

Shares - “Shares” means shares in the share capital of a company carrying voting rights and includes - (i) any security which entitles the holder to receive shares with voting rights (ii) stock except where a distinction between stock and share is expressed or implied. [section 2(u)].

Service - “Service” means service of any description which is made available to potential users and includes the provision of services in connection with business of any industrial or commercial matters such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, re­pair, conveying of news or information and advertising. [section 2(t)].

Person - “Person” includes - (i) an individual (ii) a Hindu undivided family (iii) a company (iv) a firm (v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India (vi) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) (vii) any body corporate incorporated by or under the laws of a country outside India (viii) a cooperative society registered under any law relating to co-operative societies (ix) a local authority (x) every artificial juridical person, not falling within any of the preceding sub-clauses. [section 2(k)]. - - Thus, even foreign company or foreign corporation is covered under definition of ‘person’.

Agreement - “Agreement” includes any arrangement or understanding or action in concert, — (i) whether or not, such arrangement, understanding or action is formal or in writing; or (ii) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings  [section 2(b)]. Thus, oral or written, formal or informal understanding is ‘agreement’ even if it is not intended to be enforced by legal proceedings.

Trade - “Trade” means any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and includes the provision of any services. [section 2(w)].

Cartel - “Cartel” includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to con­trol the production, distribution, sale or price of, or, trade in goods or provision of services. [section 2(ba)].

Price - “Price”, in relation to the sale of any goods or to the performance of any services, includes every valuable consideration, whether direct or indirect, or deferred, and includes any consideration which in effect relates to the sale of any goods or to the performance of any services although ostensi­bly relating to any other matter or thing. [section 2(n)].

Practice - “Practice” includes any practice relating to the carry­ing on of any trade by a person or an enterprise. [section 2(l)].

Consumer - “Consumer” means any person who - (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, whether such purchase of goods is for resale or for any commercial purpose or for personal use; (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use. [section 2(e)]. - - Note that for purpose of Consumer Protection Act, person purchasing goods/availing of services for commercial purposes will not be ‘consumer’, but he will be ‘consumer’ under Competition Act.

Relevant Market - “Relevant market” means the market which may be determined by the commission with reference to the relevant product market or the relevant geographic market or with refer­ence to both the markets. [section 2(q)].

Relevant geographic market - “Relevant geographic market” means a market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogenous and can be distinguished from the condi­tions prevailing in the neighbouring areas. [section 2(r)].

Relevant product market - “Relevant product market” means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use. [section 2(s)]

Turnover - “Turnover” includes value of sale of goods or services. [section 2(x)]

Acquisition - “Acquisition” means, directly or indirectly, acquiring or agreeing to acquire — (i) shares, voting rights or assets of any enterprise; or (ii) control over management or control over assets of any enterprise [section 2(a)].

Control - “Control” includes controlling the affairs or manage­ment by— (i) one or more enterprises, either jointly or singly, over another enterprise or group (ii) one or more groups, either jointly or singly, over another group or enterprise [Explanation (a) to section 5].

Group - “Group” means two or more enterprises which, directly or indirectly, are in a position to - (i) exercise twenty-six per cent or more of the voting rights in the other enterprise; or (ii) appoint more than fifty per cent of the members of the board of directors in the other enterprise; or (iii) control the management or affairs of the other enterprise. [Explanation (b) to section 5].

Public Financial Institution - “Public financial institution” means a public financial institution specified under section 4A of the Companies Act, 1956 (1 of 1956) and includes a State Financial, Industrial or Investment Corporation. [section 2(o)]

Competition Commission of India

With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Commission to be called the “Competition Commission of India”. [section 7(1)].  The Commission shall be a body corporate by the name afore­said having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued. [section 7(2)]. The head office of the Commission shall be at such place as the Central Government may decide from time to time. [section 7(3)]. The Commission may establish offices at other places in India. [section 7(4)]. Section 64 empowers Commission to make regulations. [Note – Sections 7 and 64 have been brought into effect on 19-6-2003. However, so far, i.e. till July 2004, Competition Commission has not been constituted].

Composition of Commission - The Commission shall consist of a Chairperson and not less than two and not more than ten other Members to be appointed by the Central Government. Provided that the Central Government shall appoint the Chairper­son and a Member during the first year of the establishment of the Commission. [section 8(1)].

The Chairperson and every other Member shall be a person of ability, integrity and standing and who has been, or is qualified to be, a Judge of a High Court or has special knowledge of, and professional experience of not less than fifteen years in inter­national trade, economics, business, commerce, law, finance accountancy, management, industry public affairs, administration or in any other matter which, in the opinion of the Central Government, may be useful to the Commission. [section 8(2)]. The Chairperson and other Members shall be whole-time Mem­bers. [section 8(3)].

Thus, Chairman of Commission may or may not be a judicial person.

Selection of Chairperson and other Members - The Chairperson and other Members shall be selected in the manner as may be prescribed. [section 9] [Effective from 31-3-2003] - - Competition Commission of India (Selection of Chairperson and Other Members of the Commission) Rules, 2003 have been notified on 4-4-2003.  As per these rules, a three member Committee shall be constituted. The committee shall recommend a person or panel of not more than three persons within 90 days from constitution of Committee by Central Government.

Term of office of Chairperson and other Members - The Chairperson and every other Member shall hold office as such for a term of five years from the date on which he enters upon his office and shall be eligible for reappointment . However, Chairperson can hold office upto age of 67 years and other Members shall hold office till the age of 65 only. [section 10(1)]. Vacancy will be filled by fresh appointment. [section 10(2)]. The Chairperson and every other Member shall, before entering upon his office, make and subscribe to an oath of office and of secrecy in prescribed form and manner. [section 10(3)].

Vacancy in office of Chairman - In the event of the occurrence of a vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most Member shall act as the Chairperson, until the date on which a new Chairperson takes office. [section 10(4)]. When the Chairperson is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member shall discharge the functions of the Chairperson until the date on which the Chairperson resumes the charge of his func­tions. [section 10(5)].

Resignation, removal and suspension of Chairperson and other Members - Section 11 makes provisions for resignation, removal and suspension of Chairman and other members of Competition Commission.

Restriction on employment of Chairperson and other Members in certain cases - The Chairperson and other Members shall not, for a period of one year from the date on which they cease to hold office, accept any employment in, or connected with the management or administration of, any enterprise which has been a party to a proceeding before the Commission under this Act . However, they can accept employment under Central Government or a State Government or local authority or in any statutory authority or any corpora­tion established by or under any Central, State or Provincial Act or a Government company. [section 12].

Financial and administrative powers of Member Administration - The Central Government shall designate any Member as Member Administration who shall exercise such financial and administra­tive powers as may be vested in him under the rules made by the Central Government. The Member Administration can delegate his financial and administrative powers to any other officer of the Commission. [section 13].

Salary and allowances and other terms and conditions of Chairperson and other members - The salary, and the other terms and conditions of service of the Chairperson and other Members including travelling ex­penses, house rent allowance and conveyance facilities, sumptuary allowance and medical facilities shall be such as may be prescribed. The salary, allowances and other terms and conditions of service of the Chairperson or a Member shall not be varied to his disadvantage after appointment. [section 14].

Vacancy, etc., not to invalidate proceedings of Commission - No act or proceeding of the Commission shall be invalid merely by reason of (a) any vacancy in, or any defect in the constitution of, the Commission; or (b) any defect in the appointment of a person acting as a Chairperson or as a Member; or (c) any irregularity in the procedure of the Commission not affecting the merits of the case. [section 15].

Duties of Commission - Duty of the Commission is to eliminate practices having adverse effect on competition, promote and sustain competition, protect the inter­ests of consumers, and ensure freedom of trade carried on by other par­ticipants, in markets in India. [section 18] [Section not yet brought in force]

Commission can enter into arrangement with foreign agency - The Commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with the prior approval of the Central Government, with any agency of any foreign country. [proviso to section 18]. [section not brought in force]

Director General and Registrar

The Director General will investigate the complaints/references on receipt of orders from Commission and then submit his report to Commission. He will also conduct the cases before CCI. The Director General cannot conduct investigation suo motu. DG will be appointed by Central Government. - - Registrar will be in charge of administration side of Commission. He and his staff will be appointed by Commission, i.e. CCI.

Appointment of Director General - The Central Government will appoint a Director General and as many Additional, Joint, Deputy or Assist­ant Directors General or such other advisers, consultants or officers, as it may think fit, for the purposes of assisting the Commission in conducting inquiry into contravention of any of the provisions of this Act and for the conduct of cases before the Commission and for performing such other functions as are, or may be, provided by or under this Act. [section 16(1)]. Every Additional, Joint, Deputy and Assistant Directors General or such other advisers, consultants or officers shall exercise his powers, and discharge his functions, subject to the general control, supervision and direction of the Director General. [section 16(2)]. The salary, allowances and other terms and conditions of service of the Director General and Additional, Joint, Deputy and Assistant Directors General or such other advisors, consultants or officers shall be such as may be prescribed by rules. [section 16(3)]. The Director General, and Additional, Joint, Deputy and Assistant Directors General or such other advisors, consultants or officers shall be appointed from amongst persons of integrity and outstanding ability and who have experi­ence in investigation, and knowledge of accountancy, management, business, public administration, international trade, law or economics and such other qualifications as may be prescribed. [section 16(4)].

Section 2(f) provides that ‘Director General’ includes any Additional, Joint, Deputy or Assistant Director. Thus, the powers of Director General has specified in the Act can be exercised by Additional / Deputy / Joint / Assistant Director also.

Director General to investigate contraventions - The Director General shall, when so directed by the Commission, assist the Commission in investigating into any contravention of the provisions of this Act or any rules or regulations made thereunder. [section 41(1)]. The Director-General shall have all the powers as are con­ferred upon the Commission under section 36(2). [section 41(3)]. Sections 240 and 240A of the Companies Act, 1956 (1 of 1956) shall apply to an investigation made by the Direc­tor General or any other person investigating under his authori­ty, as they apply to an inspector appointed under that Act. [section 41(3)]. [This section not yet made effective, but given here to give idea of functions of Director General]

Registrar and officers and other employees of Commission - The Commission may appoint a Registrar and such officers and other employees, as it considers necessary for the efficient performance of its functions under this Act. The salaries and allowances payable to and other terms and conditions of service of the Registrar and officers and other employees of the Commission and the number of such officers and employees shall be such as may be prescribed. [section 17]

Power of Central Government to make rules

Section 63(1) made effective on 31-3-2003 gives powers to Central Government to make rules to carry out the provisions of the Competition Act. Parts of section 63(2) brought into effect on 31-3-2003 give powers to Central government to make rules for specified matters – (a) manner in which Chairperson and other members of Commission shall be selected u/s 9 (b) form and manner in which and authority before whom oath of office and secrecy shall be made and subscribed u/s 10(3)  - - (d) Salary and terms and conditions, allowances and facilities of Chairperson and members of Competition Commission u/s 14(1) (e) Salary and other terms of Director General, Additional/Joint/Deputy/Assistant Director General, advisers, consultants etc. u/s 16(3) (f) Qualifications for appointment of Director General, Additional/Joint/Deputy/Assistant Director General (g) Salary, allowances and other terms for appointment of Registrar and other employees.