Companies Act Section 406 — Provision relating to Nidhis and its application, etc
CHAPTER XXVI — NIDHIS
Commercial / Corporate
Summary
Sub-section (1) defines the terms used in this section. A "Nidhi" or "Mutual Benefit Society" is a company that the Central Government officially declares to be one through a notice published in the Official Gazette.
Sub-section (2) gives the Central Government the power to issue a notification in the Official Gazette. Through this notification, the government can direct that any provision of the Companies Act mentioned in the notification either shall not apply to a Nidhi or Mutual Benefit Society, or shall apply to it with specific exceptions, modifications, and adaptations that are listed in the notification.
Under clause (a) of sub-section (2), the government can specify that a particular provision of the Act will not apply at all to a Nidhi or Mutual Benefit Society.
Under clause (b) of sub-section (2), the government can specify that a particular provision of the Act will apply to a Nidhi or Mutual Benefit Society, but only with the exceptions, modifications, and adaptations that are detailed in the notification.
Sub-section (3) requires that a draft of every notification proposed to be issued under sub-section (2) must be placed before each House of Parliament while it is in session, for a total period of thirty days. If both Houses agree to disapprove the notification, it will not be issued. If both Houses agree to make modifications, the notification will be issued only in the modified form that both Houses agree upon.
Sub-section (4) explains how to count the thirty-day period mentioned in sub-section (3). Any time during which the House is prorogued or adjourned for more than four consecutive days is not counted as part of that thirty-day period.
Sub-section (5) requires that copies of every notification issued under this section must be laid before each House of Parliament as soon as possible after the notification has been issued.
Official Text
(1) In this section, “Nidhi” or “Mutual Benefit Society” means a company which the Central Government may, by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be.
(2) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act specified in the notification—
(a) shall not apply to any Nidhi or Mutual Benefit Society; or
(b) shall apply to any Nidhi or Mutual Benefit Society with such exceptions, modifications and adaptations as may be specified in the notification.
(3) A copy of every notification proposed to be issued under sub-section (2), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days, and if, both Houses agree in disapproving the issue of notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses.
(4) In reckoning any such period of thirty days as is referred to in sub-section (3), no account shall be taken of any period during which the House referred to in sub-section (3) is prorogued or adjourned for more than four consecutive days.
(5) The copies of every notification issued under this section shall, as soon as may be after it has been issued, be laid before each House of Parliament.]