Report No. 12
117. "Company in which the public are substantially interested".-
(1) For the purposes of section 116 [23A(9)] a company shall be deemed to be a company in which the public are substantially interested-
[Section 23A, Expl. 1 clause (a), clause (b)(i) main para., clause (b)(ii) and clause (b)(iii) main para., earlier half]
(a) if it is a company owned by the Government or in which not less than forty per cent. of the shares are held by the Government;
(b) if it is a public company as defined in the Companies Act, 1956 (1 of 1956), and-
(i) its shares (not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) carrying not less than fifty per cent. of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the previous year beneficially held by, the Government or a corporation established by a Central, State or Provincial Act or the public (not including a company to which the provisions of section 113 [23A(1) operative part] apply): Provided that in the case of any such company as is referred to in clause (ii) of section 120 [section 23A, Exp. 2], this sub-clause shall apply as if for the words "not less than fifty per cent." the words "not less than forty per cent." had been substituted;
(ii) the said shares were at any time during the previous year the subject of dealing in any recognised stock exchange in India or were freely transferable by the holder to other members of the public; and
(iii) the affairs of the company or the shares carrying more than fifty per cent. of the total voting power were at no time during the previous year controlled or held by five or less persons
[Section 23A, Expl. 1, clause (b)(i), proviso]
Provided that in the case of any such company as is referred to in clause (ii) of section 120 [section 23A Exp. 2], this sub-clause shall apply as if for the words "more than fifty per cent." the words "more than sixty per cent." had been substituted.
[Section 23A, Expl. 1, clause (b)(iii), proviso]
(2) In computing the number of five or less persons aforesaid,-
(a) the Government or any corporation established by a Central, State or Provincial Act or a company to which the provisions of section 113 [23A(1), operative part] do not apply, shall not be taken into account, and
(b) persons who are relatives of one another and persons who are nominees of any other person together with that other person shall be treated as a single person.
Explanation.-In this sub-section, the expression "relative" means husband, wife, lineal ascendant or descendant, brother or sister.
[Section 23A, Expl. 1, clause (b), sub-clause (iii), main para., latter half, part)
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