TEXT :
14.22 hrs
MR. CHAIRMAN: The House will now take up item Nos. 19 and 20 regarding disapproval of the Companies (Amendment) Ordinance and Companies (Amendment) Bill.
Shri Radhakrishnan - not present.
Mr. Minister.
THE MINISTER OF LAW, JUSTICE AND COMPANY AFFAIRS AND MINISTER OF SURFACE TRANSPORT (DR. M. THAMBI DURAI): Sir, in the last session, I had already replied to certain points raised by hon. Members. But once again, I would give a brief note on this Bill and then, the Bill may be taken up for clause-by-clause consideration and passed.
SHRI SUNIL KHAN (DURGAPUR): Sir, what about item No.19?
DR. M. THAMBI DURAI: Sir, clause-by-clause consideration had already been taken up in the last session....(Interruptions)
THE MINISTER OF POWER, MINISTER OF PARLIAMENTARY AFFAIRS AND MINISTER OF NON-CONVENTIONAL ENERGY SOURCES (SHRI P.R. KUMARAMANGALAM): Sir, with your permission, I would like to clarify this point. Item Nos.19 and 20 came up during the last Session but due to lack of quorum, we could not complete it. It was in the process of clause-by-clause consideration. Last Session was in 1998 and now, it is 1999 and hence, there are formal amendments of change of dates which have to be carried out. That is all. It is now in the process of clause-by-clause consideration. If the Minister wants to say a few words on the question of formal amendments, he may do so and we may complete the procedure. We already had a detailed discussion.
SHRI V.V. RAGHAVAN (TRICHUR): No, Sir, This is a new Ordinance and we have every right to object to it....(Interruptions)
SHRI P.R. KUMARAMANGALAM: I may submit that they have all the right to object to the Ordinance and that is a different story. But item No.20 is not replacement of Ordinance but a Bill in itself. What has happened last time was, because of lack of quorum in the House, we could not complete the voting process. And since that was the last day of the Session, it was decided that we might complete it in the next session....(Interruptions)
SHRI V.V. RAGHAVAN : Every Member has the right to object to it.
SHRI P.R. KUMARAMANGALAM: Item No.19 can be moved, if they wish to but normally, item Nos.19 and 20 are taken up together.
DR. SUBRAMANIAN SWAMY (MADURAI): Disapproval of the Statutory Resolution will always have a precedence over other items....(Interruptions)
MR. CHAIRMAN: Shri V.V. Raghavan.
SHRI V.V. RAGHAVAN (TRICHUR): I beg to move:
"That this House disapproves of the Companies (Amendment) Ordinance, 1999 (No.1 of 1999) promulgated by the President on 7th January, 1999."
Sir, I am very sorry to say that the Government is making a mockery of this hon. House. How many times can an Ordinance be re-promulgated? If Government wanted this Bill to be passed last time, they could have extended the Session for a few more days and could have very well passed the Bill.
After the House adjourned, again an Ordinance was promulgated including some new clauses. I can very well understand the hon. Minister's anxiety to encourage the corporate houses and monopoly houses by buying and selling shares. The hon. Minister has said about that. But what necessitated the promulgation of the Ordinance?
In the Statement, it has been said and I quote:
"The Corporate Sector is going through difficult times. The capital market requires immediate morale boosting efforts on the part of the Government to promote investor's confidence in the capital market. The economy also needs certain impetus for promoting inter-corporate investments considering slow flow of funds in new investments."
Is it an urgent cause for the promulgation of an Ordinance? Bypassing the right of Parliament to discuss threadbare the clauses, it has been promulgated. The House was adjourned and then new clauses had been incorporated in the Bill. Again, it was promulgated as an Ordinance. So, the Bill now has been imposed on us. It is a fait accompli. The Government have already implemented the clauses.
What is happening in the share market by the selling and buying efforts in our country? Even the hon. Prime Minister could not get the details as to how many fake companies have looted the masses and looted the investors. Today's newspaper says that more four than hundred fake companies
totally faked the securities and they are nowhere to be traced. How many fake companies are coming up, looting the masses and looting the share markets?
We have not forgotten the Harshad Mehta affair. And Harshad Mehta onwards, how many fake companies have come up and gone? Thousands of crores of rupees of the masses have been looted. Even in the case of the UTI, where has the fund gone? Hon. Minister, please excuse me for telling this. Unreliable monopoly houses have looted the UTI Fund. Why all these things are happening today? Crores of common people invested in the Unit Trust of India and the Fund was utilised by the monopoly houses challenging all the established rules. Where was the SEBI? Where was the Reserve Bank of India? Where was the Government of India? Thousands of crores of rupees of the common investors are looted by so many companies everyday.
Mr. Minister, could you reveal how many companies have gone underground after faking the securities? I can understand your anxiety for saving the corporate sector. But our anxiety is that crores of people are looted everyday by these unscrupulous fake companies. The Government is doing nothing on that point. So, when we think of the Companies Act and its various clauses, can you impose them on us by an Ordinance? Now, the Government come and say that it has already been implemented and we should pass it.
It is an embarrassing position for us. Proclaiming Ordinance is repeated not once but several times. The first Ordinance came in October. Then the House was in Session. What was the difficulty of the Government in asking us to sit for two more days for discussing and passing this Bill? Why was the House adjourned without passing the Bill? You thought that let the House go, we will enact it by an Ordinance. It is bypassing Parliament. You have done this several times. If the Government is serious about Parliament, the House should have been allowed to scrutinise this. If this Bill is not passed, you will again bring the Ordinance. This is not a small or ordinary thing. People's money are involved. It is going on unchecked. It is going on even now. Is it right that the number of companies involved in cheating are not available even for the hon. Prime Minister? The hon. Prime Minister asked the concerned authorities to furnish a report within three months as to how many companies have cheated the people. The facts are not furnished till now. One newspaper said that the hon. Prime Minister did not get a report from the SEBI and other agencies as to how many companies have been involved in cheating the people and as to how many thousands and crores of money have been involved.
Your anxiety for helping the corporate houses and monopoly houses is understandable. But please think of crores of common masses who have been cheated. Do you not owe any responsibility to them? This Ordinance - the Companies (Amendment) Act do not at all care for the people. There is no guarantee for the safety of their investment. The SEBI is very much there for a very long time. They have done nothing. I object to the proclamation of Ordinance by the Government. All these unreliable and unscrupulous companies float shares and cheat the people. The same is the case with the UTI Fund also.
The hon. Finance Minister is now very much worried about these things. The masses have at last realised that they are being cheated. The hon. Finance Minister has proclaimed so many incentives for the UTI and others. What is the use of it? He should guarantee that there will not be any cheating again and again. The Companies Act, the SEBI rules, etc. have to be thoroughly scrutinised. There must be some safeguards. After that you can say all these things. Then, I will agree with your arguments. But you are imposing the Ordinances on us fait accompli. The interest of the common masses who have invested the money is not taken care of. They are being cheated and the cheating goes on and on. The Government is bypassing Parliament by imposing such a legislation by proclaiming the Ordinance. It is the negation of basic principle of parliamentary democracy. The Government is repeatedly proclaiming Ordinances. The Supreme Court has pointed out that it is not the right thing to issue an Ordinance again and again.
The Government is not even adhering to the verdict of the Supreme Court. So, I oppose the Ordinance promulgated by the Government. This cannot be accepted and I request the House that this Statutory Resolution be passed.
DR. M. THAMBI DURAI: Mr. Chairman, Sir, I request that further clause-by-clause consideration of the Bill further to amend the Companies Act, 1956 may be taken up.
MR. CHAIRMAN : Motion moved:
"That this House disapproves of the Companies (Amendment) Ordinance, 1999 (No.1 of 1999) promulgated by the President on 7th January, 1999."
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SHRI SUNIL KHAN : Sir, I would like to say something.
MR. CHAIRMAN : No; your name is not there.
SHRI SUNIL KHAN : It is there in the List of Business.
MR. CHAIRMAN: Your name is there in the List. But Shri V.V. Raghavan has already moved it.
THE MINISTER OF LAW, JUSTICE AND COMPANY AFFAIRS AND MINISTER OF SURFACE TRANSPORT (DR. M. THAMBI DURAI): Mr. Chairman, Sir, the hon. Members have just now raised objections as to how the Government has brought forward the Ordinance and now trying to get it passed in the House. It is not an intention of the Government to bypass Parliament. It is also not that we have done it intentionally. In the last Session, it was explained why we had brought forward the Ordinance. Due to the representations made by various organisations and in order to see that the economy is revived, we had brought forward the Ordinance. The comprehensive Bill is already pending before the Standing Committee. As soon as the Standing Committee approves all the necessary clauses, these can be taken up afterwards.
14.42 hrs [Dr. Laxminarayan Pandey in the Chair]
Anyhow, as hon. Members have mentioned, some new companies are emerging. They collect the funds and run away. That is the apprehension. The Ministry is taking all the necessary steps to see that it does not happen in our country. Whenever we receive complaints, we take immediate action.
Actually, the Bill provides for a facility to the investors to make nominations in respect of fixed deposits, shares and debentures in favour of a person who will hold these shares and debentures or will get the benefit from the fixed deposits in the event of investor's death and also to see that the corporate sector could reinvest in some other subsidiary companies in order to promote the industries.
Therefore, I, once again, request the House that the Companies (Amendment) Bill, 1998, which will replace, with appropriate modifications, the Companies ( Amendment) Ordinance, 1999 (No. 1 of 1999 promulgated by the President on 7th January, 1999 be taken up for consideration and the Companies (Amendment) Bill, 1998 be accordingly passed.
MR. CHAIRMAN : Shri Raghavan is not present in the House. So, I shall now put the Resolution, moved by Shri V.V. Raghavan, to the vote of the House. The question is:
"That this House disapproves of the Companies (Amendment) Ordinance, 1999 (No. 1 of 1999) promulgated by the President on 7th January, 1999."
The motion was negatived.
MR. CHAIRMAN : The House will now take up clause-by-clause consideration of the Bill.
The question is:
"That clauses 2 to 10 stand part of the Bill."
The motion was adopted.
Clauses 2 to 10 were added to the Bill.
Clause 11
Amendment made:
Page 6, line 3,-
for "1998" substitute "1999" (3)
(Dr. M.Thambi Durai)
MR. CHAIRMAN : The question is:
"That clause 11, as amended, stand part of the Bill."
The motion was adopted.
Clause 11, as amended, was added to the Bill.
Clauses 12 and 13 were added to the Bill.
Clause 14
Amendment made:
Page 8,-
for lines 26 to 29 substitute -
"Provided that the standard of accounting specified by the Institute of Chartered Accountants of India shall be deemed to be the Accounting Standards until the accounting standards are prescribed by the Central Government under this sub-section". (4)
(Dr. M.Thambi Durai)
MR. CHAIRMAN: The question is:
"That clause 14, as amended, stand part of the Bill."
The motion was adopted.
Clause 14, as amended, was added to the Bill.
Clauses 15 and 16 were added to the Bill.
Clause 17
Amendment made:
Page 8, line 44,-
for "1998" substitute "1999" (5)
(Dr. M.Thambi Durai)
MR. CHAIRMAN: The question is:
"That clause 17, as amended, stand part of the Bill."
The motion was adopted.
Clause 17, as amended, was added to the Bill.
Clause 18
Amendment made:
Page 9, line 4,-
for "1998" substitute "1999" (6)
(Dr. M. Thambi Durai)
MR. CHAIRMAN: The question is:
"That clause 18, as amended, stand part of the Bill."
The motion was adopted.