DR Thapa brings up confusion over Companies Act in Assembly Session, Minister reassures that Old Law

Summit Report

Gangtok, 07 Dec:

Upper Burtuk MLA DR Thapa today brought up the confusion prevailing in the absence of any “active laws” regarding registration of companies in the State.

In question posed to the Industries Minister in the Legislative Assembly today, Mr Thapa pointed out that was a lot of confusion among the people because the Companies Act 2013 has not been extended to Sikkim even as the Sikkim Companies Act has been repealed.

He pointed out that the state was losing revenue and employment opportunities due to the confusion and urged the government to take immediate action and offer appropriate solutions to implement Sikkim Companies Act in the interest of the local people.

He enquired after what steps have been taken to regulate companies operating in the State since 30 Jan, 2019 when the Sikkim Companies Act was repealed.

Responding on the query, Minister to Commerce & Industries Department, BS Panth, said that the government was already seized of the matter and the need for enabling statute for regulation of companies operating in the State.

He added that in keeping with the constitutional provisions of Article 371F, the old laws of Sikkim are in force and hence the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) was still in force here.

“However, it would be necessary to have comprehensive rules framed with the purpose of strengthening this statute, to meet the requirement of the present situation, incorporating changes as may be necessary, taking into account the industrial prerogatives and ensuring that an ecosystem is developed in keeping with the local aspirations of people of Sikkim. The progressive policies that are brought into force would be formulated without bending on old laws, while taking care of local interests,” he details in his written answer to the Upper Burtuk MLA’s query.

The Minister said the Registration of Companies (Sikkim) Act 1961 was enacted on the basis of situations prevailing at the time and added that minimal amendments will hence be required, in keeping with the present times and taking into consideration interests of the state and paving the way for rules to be framed on the basis of wide-ranging consultations with stakeholders and inviting public opinion on the draft bills and rules that were framed.

He informed that the government has already constituted a committee under the chairmanship of former Judge of High Court of Sikkim, Justice SP Wangdi, to examine/ review the Registration of Companies (Sikkim) Act 1961.

The government may also make some required changes in the terms of reference as also in the composition, to empower the committee to address many emerging issues in the context of drafting the minimal amendments to the Registration of Companies (Sikkim) Act, 1961, he added.

The Minister added that the Companies Act of the Central Government 1956 with its amendment in 2013 has not been extended to the State of Sikkim.

“The question of repeal of our Registration of Companies (Sikkim) Act, 1961 as such does not arise, as the old laws have the protection of Article 371F,” he argues, adding, “The old laws of Sikkim have relevance and are not to be repealed.”

He stressed that the effort was to make minimal amendments preserving the essential elements of the original act and incorporating improvements in the best interest of the state. These changes suited to the present time will provide more opportunities for the entrepreneurs of the State as also those investors wanting to partner in setting up industrial units in the State and they would also take into consideration the aspirations of the people of the State to pursue business opportunities, set up industrial business units in various sectors of the economy and such changes will also aim to bring resolution to many issues currently faced by our industrial units, he details.

“Our government is making effort to bringing comprehensive rules which address the ushering in of a progressive climate for industrial investments, facilitate ease of doing business, ensuring rational and simplified industrial policies, setting up industrial tribunal within the state, resolving issues related to GST, cashless transactions, tax evasion, reduced compliance burden, while also ensuring that harassments are not faced by our own people in the State, wanting to set up industrial units. Again, there needs to be made provisions to control and penalize industrial unit carrying out operations with the intent of committing fraud or in violation of the government policies,” the Minister said.

He mentioned that the department has already taken aggressive steps of ease of doing business to bring more investments in the state and create more opportunities for the educated unemployed and an SPV for developing and managing E-enabled services for facilitating establishment of industrial units and business enterprises, regulating their conduct of business and ensuring their sustainability and growth would be established.

He stated that courts in Sikkim will be established and empowered to take cognizance of issues arising from the enforcement of various industrial laws and policies of the state and to resolve such matters locally, in the interest of the State

“Most importantly, it will ensure that revenues from GST do not go to other states. The needs to benefit from the progressive industrial climate of the green, clean environment and opportunities that it offers. Industrial units are using our natural resources, water bodies, springs and derive industrial benefits generating profits within the state. however, the state does not benefit from such industrial growth and expansion,” he added.

He stated that it was in this context, that a very comprehensive set of rules and minimal amendment are being considered to facilitate the registration of industrial units within the state and to ensure that such acts and policies drafted, enacted and enforced are in keeping with the best interest of the state and its people.

“In summary, I will say that Member DR Thapa may be apprised that there is no question of repeal of old laws. Retaining the spirit and essential element of our 1961 Act as I have explained, minimal amendments will be considered and comprehensive rules will be framed in keeping with the local interest and progressive interests of the people of Sikkim. An industrial tribunal will be established in the State of Sikkim, giving opportunities for our own Sikkimese educated lawyers to defend the people of the state and to resolve issues and to obtain orders which are just and fair, aligned with local people’s interest,” the Minister said.

He added that the amendment proposed to 1961 Act and the comprehensive rules in its draft form will be subject to scrutiny, inviting suggestions, opinions and comments from stakeholders and also placed in the public domain, by holding seminars, workshops on such bills, before being finalized for consideration in the state legislature.