The time period within which a company can be referred to National Company Law Tribunal been increased from sixty days time period (given in SICA) to 180, which is further extendable by 90 days, thus giving sufficient time period to refer the company to the Tribunal for the revival or rehabilitation. The application to the tribunal is proposed to be accompanied by a certified copy of accounts audited by the body of auditors prepared by the Tribunal and not by the Board of Directors (as provided in SICA), thus removing the scope for manipulation of accounts by the directors of the company and there by preventing them from misusing the provisions of SICA. While referring to National Company Law Tribunal, a company is required to submit revival and rehabilitation scheme under section 424 A of the proposed bill. The bill also requires that the permission of the central or state government shall be taken before a government company can be referred to the NCLT.
In the proposed Companies (Amendment) Bill, 2001, measures are being taken to solve the problems regarding winding up of a company which are highlighted in justice Eradi Committee Report relating to delay in filing of statement of Affairs, delay in handing over updated books of account and records, delay in finalization of list of creditors and debtors, inadequate power and staff given to Official Liquidator (OL), non availability of funds etc. Section 493(1) of the proposed Bill requires every company to file its statement of affairs concurrently with the petition for winding up or while opposing a petition for its winding up. The statement shall be filed along with the names and addresses of the directors, creditors and debtors of the company and the location of assets and their values and such other information as ordered by the Tribunal. This provision will reduce the delay, which used to occur in making a statement of affairs of the company. Under section 457 C (a) of the proposed Bill the Official Liquidator has been entrusted with wide powers such as, he can appoint Chartered Surveyors, Chartered Accountants to value the assets of the company. In this Bill, earlier provisions of Official Liquidator requiring to take courts permission for even small decisions has been eliminated with For example now he can appoint security guards to protect the property of the company and other helping staff required.
To solve the problem of paucity of funds, the proposed Bill has put in place Revival and Rehabilitation Fund accumulated by the collection of cess which shall be levied at the rate of .005% -1% on the annual turnover or the gross receipts of the company. This proposed fund will take care of the interim payment of wages to the workers, protection of assets and for other rehabilitation works. Under the proposed Bill, NCLT has been conferred with inherent powers to review its own decisions, which has been provided as per Sec.10 FN of the proposed bill.
