The Ministry of Corporate Affairs (MCA) has sought time to respond to a public interest litigation (PIL) in Delhi High Court, which alleges that the Registrar of Companies (ROC) discriminates against lawyers by only allowing chartered accounts, company secretaries or cost accountants to certify electronic submissions to the corporate registrar.
The petitioner Legum and Law Awareness Society has challenged the restriction imposed on advocates who are practicing in the field of corporate law, which was heard yesterday.
According to the petition, till 2006 Registrar of Companies (ROC) was accepting the incorporation documents and other information from companies in physical or manual forms.
In that environment lawyers were serving corporate clients on their own, similar to professionals such as chartered accountants and company secretaries. But since the introduction of e-governance in the ROC, all physical forms have been replaced with electronically submitted e-forms, requiring certification by at least one chartered accountant, cost accountant or company secretary.
Since 2006 therefore, advocates were not permitted to certify e-forms and had to retain other professionals to get every form certified before submitting it to the ROC, argued the petition, adding that the Ministry has alienated the advocates from the definition of practicing professionals.
The petioner’s advocate Sandeep Sharma contended in court: “The word corporate lawyer is just an illusion, we can’t even file a small document with the Registrar of Companies. When I had written to them about this anomaly, the ROC responded by saying that the Ministry’s guidelines were responsible for this and I should get in touch with the Ministry of Corporate Affairs.”
In approaching the Delhi High Court, the Petitioner now argues that the use of technology should be for the upliftment and betterment of all the professions and not just for selected ones.
The bench of acting Chief Justice Madan B Lokur and Justice Mukta Gupta had earlier sought responses from the MCA in this regard.
The petition noted that section 33 of The Companies Act 1956 was the main provision governing the incorporation of companies, which clearly empowered an advocate to make a declaration that all the requirements of the Act and the rules thereunder were complied with in respect of the registration of a company and matters precedent and incidental thereto.
This section further provides that the Registrar may accept such a declaration as sufficient evidence of such compliance. It is pertinent to mention that this section does not empower the registrar to call for any certificate from any professional to certify the declaration made by an Advocate.
Luthra and Jaggi partner Navin Raheja commented: “It’s a clear case of discrimination against the Advocates. The Bar Council of India must intervene in the matter to protect the interests of millions of lawyers in the country.”
Further commenting, Society of Indian Law Firms (SILF) president Lalit Bhasin said: “If the lawyers are allowed to certify the documents, it will instill a confidence in the minds of clients. The Chartered Accountants and Company Secretaries are entering in the territory of law practice, it should be discouraged.”
When asked about if he would represent the lawyers’ interest in the matter Bhasin said that SILF had not yet been approached, but if the petitioner needed any help the body would be ready to assist in court.
The PIL prayed to the court to direct the Ministry of Corporate Affairs to include advocates in the list of practicing professionals, enabling them to issue various certificates integrated into e-forms, notified under the Companies Act 1956 and Limited Liability Partnership Act 2008
Comments
Since when did compliance with the Companies Act and filing of forms prescribed thereunder go out of lawyers' domain? Does the Act say so, or is it your own considered view? Please do reply. Also, please don't say general things like CAs do a better job etc. if the law does not say so.
Junior lawyer.
What makes you put the word secretary in quotes?
Posting as anonymous should give you full liberty to express your thoughts.
Please let me know if law school taught you which form needs to be filed for a fresh issue of shares (unless you attended one of NLS' exotic M&A seminars, if any)? Did the Bar Council require that you successfully file a form on the RoC site before you enrolled? It did not, right? Lawyers were never meant to do secretarial work (and now I know authenticating compliance with the Act is NOT secretarial in the true sense of the term). It's only with the inevitable dimension that transactional law brings with it that lawyers got themselves associated with form filings.
Big law firms at least outsource incorporation related work to retainer CS firms and do not bother themselves with the authentication. Now, I am not aware if you set up a practice only to verify forms.
And please read my comment once more. I never said CAs do a "better" job: I was only on whose province form filing better was. No doubt the law empowers a lawyer (and if I am not wrong, only a HC lawyer), to verify compliance with the Act. That is an entitlement that only a minuscule portion of the bar taps, which takes me back to my point that this is a province better left to CSs and CAs.
The word 'secretary' is very descriptive of the predominant role that CSs play: be it as persons who finalise board minutes, issue general meeting notices or do form filings on a regular basis, their work (for a decent part) is secretarial in nature. The reason why I put the word in quotes was to emphasise on this. No offence meant - I did not intend to negate and am one of those who appreciate the thoroughness to procedure that CSs bring to their job.
Lawschool did not teach most things I do today, but I have picked up practice points that were not taught by faculty. While we do give work to CS, it is the senior lawyers who take a call on issues, as forms are based on requirements of the law. The filing is left to CS. Also, an exotic seminar on M&A offered by a partner of a London based law firm in my college over 4 days, were in a different league in terms of practical content than what faculty professed (It may interest you to note that I am not from NLS B’lore and NLS is not the only lawschool offering exotic options today !!)
#4
typo: i meant karnataka, not kerala. i read somewhere that he wants to be karnataka cm if cong wins there. anyway, he should ideally be banished to mars. his only achievements have been helping tytler,sajjan kumar and quattrochi avoid punishment and using the CBI as a political tool.. of course, SILF would probably rate him as the best minister of all time.
[Agreed, somewhat tenous... Was scrambling to look for an interesting photo of a form but thought this was more fun. -Ed]
“Lawyers work is to practice in court of law” – HA HA. There you go again, doling out bullshit. What do you think transactional lawyers in law corporate firms / the Mumbai solicitors do? For your info, not all lawyers go to court.
“CSs are only allowed to certify all the forms under MCA regime” – WHERE DO YOU GET THIS FROM? Is it a general statement and a figment of your imagination, or does some law say so?
Going by your random comments, superior knowledge and gaseous intellect, I don't even think you will understand what I am saying. This post is more for viewers entertainment than for you.
lol..prize for best comment.
Certain document writers earn not less than Rs. 25,000/- per day. The black money they generate are being utilised in the real-estate business which further generates huge black money.
A system of e-filing like companies registration must be implemented all over India, so that uniform system is maintained as well as fraud elements like duplicate stamp paper, bribery can be reduced. But, who will bell the cat? Our Income-Tax department has a website, but strangely, there is no email id of officials mentioned in the site. Is it that they are illiterate about emails?
And the issue here is only a certification from a CS. I have friends who have CS' certify ten forms a day. the email with the form comes back in 10 odd minutes so I doubt if that form has even been looked at, ever.
So don't go about glorifying yourself. You're not doing rocket science work.
Also, don't forget, whatever a CS does, in house or otherwise, all that work is tested by a lawyer in a due diligence, and boy have I personally gone crazy in identifying and rectifying goof ups by your brethren. Check SEBI guidelines, before filing a DRHP, you need a lawyer's certificate that the books and records are being maintained as per the companies act, not a CS'. Get your facts straight boss, and then lets argue on stuff you don't know.
If you guys genuinely do feel it should be your domain alone, I would really, really, like to see your beloved ICAI or ICSI go out in support of the MCA. try it and lemme know.
# 4/ 9/ 13
PS - Why does "MCA" and "rocket science" sound familiar? ;-)
Most lawyers even dnt knw wats the difference between private and public company. When annual return needs to be submitted. When Form-23 needs to be submitted. SO do you expect them to certified forms.
Also, you are missing the issue. Assuming some lawyers know the stuff (while the reality is that most corporate lawyers do, if not all), should the ROC be entitled to discriminate, when the law does not permit? That is what the PIL is about. I think you may not understand this legalese .... if you don't, refer #9.
ANYWAYS .... the issue here is "Can ROC discriminate, as the PIL says it does, against qualified lawyers? Esp. when the Parliament does not want that to happen". Do not comment when you don't understand and waste others' time with irrelevant stuff. And not even a correct page reference ... have consideration for readers man (or woman).
My dear fried i think you need to change your outlook in this era of post LPG Because lawyers are not only lawyers they are lawyers on specified fields such as "corporate lawyers".
So the right to certify forms should rest not only with CS And CA but also with corporate lawyers.
"No one knows the law better than lawyers"
The Company law is not an exception to this rule.