Section 620A of the Companies Act, 1956 –

Power to Modify Act in its application to Nidhis etc. – Amendment in

Notification No. GSR 978(E) dated 31-8-2006

NOTIFICATION NO. GSR 517(E), DATED 31-8-2006

In exercise of the powers conferred by sub-section (2) of section 620A read with subsection (1) of section 637A of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following amendments in the Notification of the Government of India, the erstwhile Ministry of Commerce and Industry (Department of Company Law Administrations) No. GSR 978 dated 28th May, 1963, and published in the Gazette of India, in Part II, Section 3, sub-section (i) dated 28th May, 1963, namely:—

In the said notification, for Schedule III, the following Schedule shall be substituted, namely :—

“SCHEDULE III

Provisions of Act                Extent of Application

(1)                                                  (2)

Section 53(1) Shall apply subject to the modification that in the case of a Nidhi or Mutual Benefit Society a document may be served only on members who hold more than one thousand rupees in face value or more than one per cent of the total paid-up capital of the Nidhi company whichever is less.

For other shareholders, document may be served by a public notice in newspaper circulated in the district where the Registered Office of a Nidhi Company is situated; and publication on the notice board of the Nidhi or Mutual Benefit Society.

Section 67(3) Proviso Shall not apply.

Section 77(1) Shall not apply, when shares are purchased by the company from a member on his ceasing to be a depositor or borrower and it shall not be considered as reduction of capital under section 100 to section 104 of the Companies Act, 1956. Section 81 Shall not apply.

Section 87(1) (b) Shall apply subject to the modification that no member shall exercise voting rights in excess of five per cent of total voting rights of equity shareholders.

Section 159(1) Shall apply subject to the modification that for the words “two immediately preceding years” in the proviso, the words “five immediately preceding years” shall be substituted.

Section160(1)(aa) Shall not apply to a Mutual Benefit Society specified in Schedule II, only.

Section 205(5)(b) Shall apply subject to the modification that any dividend payable in cash may be paid by crediting the same to the account of the member, if the dividend is not claimed within 30 days of the announcement of the dividend. announcement of the dividend.

 

Sections 205A &

205B                             Shall not apply.

 

Section 207  Shall apply, subject to the modification that where the dividend payable to a member is twenty-five rupees or less, it shall be sufficient compliance of the provisions of the section, if the declaration of dividend is announced in the local language in one local newspaper of wide circulation and announcement of the said declaration is also displayed in the notice board of the Nidhi or Mutual Benefit Society for at least three months.

Section 219(1) Shall apply, subject to the modification that, in the case of members who do not individually or jointly hold shares of more than one thousand rupees in face value or more than one per cent of the total paid-up capital whichever is less, it shall be sufficient compliance with the provisions of the section if an intimation is sent by public notice in newspaper circulated in the district in which the Registered Office of the Nidhi company is situated stating the date, time and venue of Annual General Meeting and the balance sheet with its enclosures can be inspected at the registered office of the company, and the balance sheet with enclosures are affixed in the Notice Board of the company and a member is entitled to vote either in person or through proxy.

Section 257 Shall apply with the modification that a sum of Rs. 10,000 is required to be deposited under sub-section (1) of section 257 of the Act while proposing the name of a candidate for election as director.

Section 296 Shall not apply provided the loan is given to a director or his relative in their capacity as members and such transaction is disclosed in the annual accounts by a note.

Section 309(4) Shall apply with the modification that the remuneration of a director who is neither in the whole-time employment of the Nidhi or Mutual Benefit Society nor a managing director, for performing special services to the Nidhi or Mutual Benefit Society specified in the Articles of Association may be paid by way of monthly payment subject to the approval of the Central Government and also to the provisions of section 198 :

Provided that no approval of the Central Government shall be

required where,—

(a) a Nidhi or a Mutual Benefit Society does not have a managing director or a whole-time director or a manager,

(b) the remuneration payable during a financial year to all the directors of the Nidhi or the Mutual Benefit Society, as the case may be, does not exceed ten per cent of the net profits or such Nidhi or Mutual Benefit Society or five lakh rupees, whichever is less; and

(c) a remuneration payable under clause (b) of this proviso is approved by a special resolution passed in this behalf by Nidhi or Mutual Benefit Society, as the case may be. Mutual Benefit Society, as the case may be.

Schedule X :-Shall apply with the modification that the filing fee in respect of every return of allotment under section 75 shall be calculated at the rate of one rupee for every one hundred rupees or part thereof on the face value of the shares included in the return but shall not exceed the amount of normal filing fee payable.”