Sikkim’s defence of its Companies Act

Constitutional Expert engaged to assist Sikkim’s defence of its Companies Act

GANGTOK, 08 Jan: Source:Sikkim Now.

 The Companies Bill 2012 has worked up certain sections of the society here in Sikkim as it seeks to repeal an old law of the state. The Bill was introduced in Parliament on 18 December, passed the same day in the Lok Sabha and is expected to be passed in the Rajya Sabha in the upcoming session of Parliament. Chapter 29, Section 465 (1) clearly states that “The Companies Act, 1956 and the Registration of Companies (Sikkim) Act, 1961 shall stand repealed.”

The Bill was much in the news across the country, but not in relation to Sikkim and more for the FDI regime it facilitates for the retail sector. After extensive exchange of allegations and counter-allegations, it was passed surprisingly quickly, within a day. This also caught Sikkim off-guard, but as details of the Bill became known shouts of protest against the repealing of an old law of Sikkim are coming in from various quarters. The State Government, recognizing that old laws evoke strong passions in Sikkim, has now engaged a Constitutional Expert to study the repeal of the Sikkim Registration of Companies Act, 1961 with the passage of the Companies Bill, and help draft an appropriate response for the central government.

More aptly, engaged in this study is the constitutional expert along with the two Members of Parliament from Sikkim, PD Rai and Hissey Lachungpa from the Lok Sabha and Rajya Sabha respectively. They have been formed into a kind of committee to study the repealing of the Old law from the legal and constitutional standpoint.

Besides studying the Companies Bill 2012 the team will also prepare an appropriate response to the proposed enactment in Parliament. It is likely that this remark on the bill will be read out by the Rajya Sabha MP, Hissey Lachungpa on behalf of Sikkim when Parliament convenes in a few weeks time.
The Rajya Sabha will hopefully see a proper discussion on the Bill and the State, sources inform, plans to argue from the standpoint of not just allowing an Old Law to continue but also protecting the sanctity of the Constitution of India which protects Sikkim’s Old Laws.

On the repealing of an old law, a senior bureaucrat stated that this was an emotive issue. However it was conceded that the Parliament is the authority to make laws and enactments and where it thought necessary and appropriate it could make necessary laws and interventions. The Companies Bill 2012 itself has actually been in the pipeline since 2009 when it was first drafted. Thereafter there had been various interjections from various quarters including state governments seeking certain amendments and inclusions in the bill till it was finally introduced in December 2012 in the Lok Sabha.

It may be mentioned here that Companies already registered and operating under the old law will continue to be valid and deemed registered already. The Bill also provides in section 465 that offices already existing for registration of companies shall continue under provisions of the new Act as far as the Act to be repealed is concerned. Clause 2 (g) of Section 465 clearly states that “the incorporation of companies registered under the repealed enactments (Sikkim Companies Act, 1961) shall continue to be valid…”