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Section 299 of the Companies Act, 1956

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Section 299 of the Companies Act, 1956

Postby Supinder Kaur Bhui » Wed Jan 21, 2009 4:35 pm

Dear All

Here is one question that needs to be answered by all of you in order to help to clarify the provisions of Section 299.

Mr. A of XYZ Company has to give Form 24AA in the month of March 2009 for the year 2009-2010 as per the requirements of Section 299 of the Companies Act, 1956. Mr. A prepares a copy of Form 24AA, dated 28th February as he has to go for his Hernia operation in US. He had to leave India on 1st march for being admitted in the hospital on 2nd March. After being admitted in the hospital, he would not be in a position to sign any paper.

Can Form 24AA signed by him dated 28th February be taken as a valid disclosure for the year 2009-2010 ?

Will this Form suffice the requirements of Section 299?

Section 299 (3) (b) states that such disclosure has to be given in the last month of the preceeding financial year for the current financial year but it does not talks about the date on which it should be dated. So can this mean that the said Form can be dated earlier than March but if given in March, it will be considered valid as per the terms of Section 299 or will it be invalid and it has to be dated March only?

Thanks & Regards
Supinder Kaur
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Re: Section 299 of the Companies Act, 1956

Postby j.aman1983 » Wed Jan 21, 2009 6:22 pm

Dear Supinder Kaur Bhui (Chairperson),

According to me it’s good if you give general notice u/s 299(3). But it’s not mandatory if there is no change in list of Body Corporates in which particular director are Interested at next year then you don't have to file form 24AA again and again. If there will any change or director would become interested in future then give adhoc notice.


Others views are solicited
regards

Aman Jain

AMAN JAIN & ASSOCIATES,
COMPANY SECRETARIES
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Re: Section 299 of the Companies Act, 1956

Postby srinivasaraghavan » Thu Jan 22, 2009 9:12 am

Dear Mr.Aman,

The problem is that the general notice given u/s 299(3) would expire at the end of the financial year for which it was intended unless, renewed in accordance with section 299(3)(b). That would certainly mean no valid notice on record for the new financial year. Therefore, he will have to make disclosure contract by contract, the general notice being no more valid, which will make it tedious for any director.

The wording of the section is 'fresh notice given' , that is to the Board, 'in the last month of the financial year'. Therefore, in my opinion,
even if the letter is dated 28th february 2009, the notice, if it gets served on 1st March (the interval also not seeming to be abnormal from the practical point of view of time interval between issue and receipt), under the circumstances stated by the queriest, it will be in order, rather than allowing the general notice to expire.
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Re: Section 299 of the Companies Act, 1956

Postby csjyotika » Thu Jan 22, 2009 9:22 am

Hi all

Vy cant the director sign it on 1st of march and then send either from india or from u.s


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Re: Section 299 of the Companies Act, 1956

Postby Supinder Kaur Bhui » Fri Jan 23, 2009 3:54 pm

Hello all

Thanks for replying to my query. I have given a situation whereby the Director will not be in a position to sign anything once he reaches US. The question is not that whetehr he signs it after or when the form is delivered, the basic question is what will happen to the validity of the Form 24AA if it is gioven dated any date before March (being the last month of the year)?

Thanks & Regards
Supinder Kaur
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Re: Section 299 of the Companies Act, 1956

Postby csjyotika » Sat Jan 24, 2009 12:49 pm

Dear supinder,

Simply it has no validity if it is not given in last month or the first month of next financial year.

Regards
Jyoti
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Re: Section 299 of the Companies Act, 1956

Postby suresh_cs » Sat Jan 24, 2009 4:47 pm

Dear All,

I fully agree with Sri. sir and like to addsomething.

first of all general notice u/s. 299 is not mandatory it is optional. if the notice is not given, then a director has to disclose at board meeting case to case basis in specific, if he is interested in any matter.

As per Ss. 3, General Notice is expired by end of the financial year thats why it is practise to give fresh notice in March. However I think a director can give general notice at any point of time during the financial year and the said notice is valid up to next March.

Suresh
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Re: Section 299 of the Companies Act, 1956

Postby urja shah » Wed Feb 08, 2012 12:47 pm

Dear All,

A post dated notice can be prepared which can be signed by the Director before he leaves for U.S.I.e. he can sign on 28th Feb on the notice dated 1st March or some othre date of the same month for complying with provisions of the section 299(3).
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Re: Section 299 of the Companies Act, 1956

Postby preyansh_extempore » Wed Feb 08, 2012 1:09 pm

Yes Ms. Shah you are right!
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Re: Section 299 of the Companies Act, 1956

Postby kennedy2012 » Thu Feb 09, 2012 4:15 pm

I agree with u.
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Re: Section 299 of the Companies Act, 1956

Postby pca » Fri Feb 10, 2012 11:42 am

Section 299(3)(b) reads as under:

"Any such general notice shall expire at the end of the financial year in which it is given, but may be renewed for further period of one financial year at a time by a fresh notice given in the last month of the financial year in which it would otherwise expire."

Following points have to be noted:

1. General notice u/s 299 is advisable. However it is optional and not mandatory.
2. Original general notice, if given, will expire at the end of the financial year. However, in case of renewal of general notice, renewal notice can be given in last month of the financial year and it will be valid for the next financial year.
3. Notice has to be 'given' to the Board as provided in Sec.299(3)(c). Simply dating the notice as 1st March will not be sufficient to say that the notice was 'given' on 1st March.
4. The notice should be properly served on the company as clearly provided in Section 51.

There is a generally accepted practice (which is recognised by law also) to issue post dated cheques. Excepting this, there is no requirement in any law which requires someone to sign post dated document. The director can very well sign on 28th Feb and arrange to 'give' it to the Board in March.
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