Delegation of Adjudicating Powers by the Central Government: A Brief Overview of Section 458 in relation with Section 247 of the Companies Act, 2013
Brief Introduction
Adjudicating Authority for all the matters pertaining to Companies Act, 2013 is vested with the Registrar of Companies or the office of the Regional Director. However it is quite interesting to note that there is only one instance in the entire Companies Act, 2013 in which neither the Registrar of Companies nor the office of the Regional Director act as the adjudicating authority but Insolvency and Bankruptcy Board of India is vested with the adjudicating powers in the matter pertaining to Section 247.
Ministry of Corporate Affairs vide Notification dated 23rd October, 2017:
(1) The Central Government may, by notification, and subject to such conditions, limitations and restrictions as may be specified therein, delegate any of its powers or functions under this
Act other than the power to make rules to such authority or officer as may be specified in the notification: Provided that the powers to enforce the provisions contained in section 194 and section 195 relating to forward dealing and insider trading shall be delegated to Securities and Exchange Board for listed companies or the companies which intend to get their securities listed and in such case, any officer authorised by the Securities and Exchange Board shall have the power to file a complaint in the court of competent jurisdiction.
(2) A copy of every notification issued under sub-section (1) shall, as soon as may be after it is issued, be laid before each House of Parliament.
Central Government by virtue of Section 458 of the Companies Act, 2013 delegates the adjudicating powers to Insolvency and Bankruptcy Board of India with regard to provisions of Section 247.
Relevant Provisions of the Companies Act, 2013
Section 458: Delegation by Central Government of its powers and functions
(1) The Central Government may, by notification, and subject to such conditions,
limitations and restrictions as may be specified therein, delegate any of its powers or functions under this Act other than the power to make rules to such authority or officer as may be specified in the notification.
Section 247: Valuation by registered valuers
Where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provision of this Act, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed and appointed by the audit committee or in its absence by the Board of Directors of that company.
Definition: A registered valuer is a valuation expert who can assess the worth of stocks, bonds, intangible assets, and tangible assets. Qualification: Member of institute of Chartered Accountants of India, Member of Institute of Company Secretaries of India, Member of the Institute of Cost Accountants of India, Master of Business Administration or Post Graduate Diploma in Business Management (specialisation in finance).
Conclusion: Comprehending the above mentioned provisions, it is pertinent to note that Central Government has the discretion to make rules with respect to delegation of adjudicating powers.
However, the execution is done by Insolvency and Bankruptcy Board of India.
Additionally, with the changing needs of the legislation and dynamic environment the Government may make further additions or deletions with respect to the delegation of adjudicating powers.