SEBI´s Companies (Amendment) Bill, 2014 seeks to clarify the issues on Section 185 of the Companies Act, 2013 dealing with the issue of loans to the Directors by their companies. This is the topic of discussion in this January 2015 issue of Corporate Amicus. The article in this regard highlights some of the issues not covered by the proposed amendments.
Ministry of Corporate Affairs has amended cost audit provisions while Ministry of Commerce has permitted dual use of infrastructure in non-processing areas in Special Economic Zones (SEZ). Reserve Bank of India has modified its Master Circular to allow for non-inclusion of non-promoter/non-whole time directors under willful defaulters. These clarifications / relaxations are summarized in this issue.
Ratio decidendi part of this Amicus covers recent judgment of Supreme Court of India holding that when the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect. In another case discussed in this issue the court has held that status of secured creditor is not altered unless charge is explicitly extinguished.