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CS Professional · Drafting, Pleadings and Appearances · Applications, Petitions and Appeals under Companies Act, 2013

Kaveri Foods Pvt Ltd obtained an exemption from the Central Government under a provision of the Act, subject to a condition that it would file a quarterly statement. The company repeatedly ignored this condition. What can the Central Government do under Section 459?

The Central Government may rescind or withdraw the exemption. Section 459(1) allows the granting authority, where a condition, limitation or restriction attached to an approval or exemption is contravened, to withdraw it. The power comes from Section 459 itself and does not depend on a separate provision.

  1. AOnly impose a fine, since the exemption once granted is irrevocable
  2. BRescind or withdraw the exemption because of the contravention of the conditionCorrect
  3. CRefer the matter to the Tribunal, which alone may withdraw exemptions
  4. DNothing, unless the provision granting the exemption itself provides for withdrawal

Explanation

Section 459(1) provides that, in case of contravention of any condition, limitation or restriction, the authority may rescind or withdraw the approval, sanction, consent, confirmation, recognition, direction or exemption. Option D is wrong because this power flows from Section 459 itself, subject only to anything contrary in the provision.

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