1. Any class or classes of companies, as the Securities and Exchange Board may provide by regulations in this behalf, may file a shelf prospectus with the Registrar at the stage of the first offer of securities included therein which shall indicate a period not exceeding one year as the period of validity of such prospectus which shall commence from the date of opening of the first offer of securities under that prospectus, and in respect of a second or subsequent offer of such securities issued during the period of validity of that prospectus, no further prospectus is required.
2. A company filing a shelf prospectus shall be required to file an information memorandum containing all material facts relating to new charges created, changes in the financial position of the company as have occurred between the first offer of securities or the previous offer of securities and the succeeding offer of securities and such other changes as may be prescribed, with the Registrar within the prescribed time, prior to the issue of a second or subsequent offer of securities under the shelf prospectus:
Provided that: where a company or any other person has received applications for the allotment of securities along with advance payments of subscription before the making of any such change, the company or other person shall intimate the changes to such applicants and if they express a desire to withdraw their application, the company or other person shall refund all the monies received as subscription within fifteen days thereof.
3. Where an information memorandum is filed, every time an offer of securities is made under sub-section (2 ), such memorandum together with the shelf prospectus shall be deemed to be a prospectus.
Explanation.- — For the purposes of this section, the expression "shelf prospectus" means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.
Legal Commentary & Landmark Judgments: Section 31
Section 31 enables prescribed classes of companies to file a 'Shelf Prospectus' with the Registrar, allowing multiple tranches of securities to be issued over a one-year validity period without fresh prospectuses.
When advising banks or NBFCs issuing debentures under a shelf prospectus, ensure Form PAS-2 is filed with the RoC prior to opening every subsequent tranche under Section 31(2). Failure to file invalidates the subsequent issue and triggers automatic refund liabilities.