New Delhi, Sep 6 (IANS) A parliamentary committee has asked the Corporate Affairs ministry to cut down on the number of provisions in the Companies Bill, which grant the ministry discretionary powers in dealing with issues, including authentication of financial statements.
The standing committee on finance in its report on the Companies Bill 2009 said excessive delegation is a form of quasi legislation which an administrating authority like a ministry can issue in the form of rules, notifications. It asked the ministry to reconsider the provision made for excessive delegated legislation.
‘The standing committee has observed that the words ‘as may be prescribed’ has been used in the bill approximately 235 times, thereby suggesting excessive role and scope for delegated legislation,’ said the committee, led by former finance minister Yashwant Sinha.
Some of the provisions in which the ministry assumed discretionary powers include time limit for lodging share transfer form with a company, maintenance of minute books, manner of authentication of financial statements and the manner of conducting extra ordinary general meeting by requisitionists.
There were 25 provisions which the committee found could be used mis-appropriately if the methodology of its use was not warranted in the bill itself.
‘The committee has recommended that the afore-mentioned provisions for delegated legislation or rule making may be appropriately incorporated in the bill,’ said the committee.
In a statement Monday, the ministry said it had agreed to incorporate these provisions into the bill.
‘At the same time the standing committee has emphasised that simple procedural aspects which may require flexibility and periodic revision depending on time-period or economic circumstances should continue to remain in the domain of delegated legislation,’ said the ministry’s statement.
