25 October 2010
Hi The Nominee Director is not counted for determining the strength of the Board or for the purpose of retirement of directors by rotation in the case of nominees and institutions under which nominate them by virtue of powers vested in them under the enactments under which they have been constituted. In other case such nominees will be counted for the purpose of determining the strength of the Board of Director and for determining the number of directors liable to retire by rotation. Nominee director is considered as independent director for the purpose of provisions of Corporate Governance applicable to listed company. In short, your company made default the provisions of sction 255 and 256 of the Companies Act, 1956
He can appoint in same company but he can not appoint in any other company.
• COMMENCEMENT OF DISQUALIFICATION All the existing directors of a public company in default other than the directors who have been exempted from application of section 274(1)(g) by the Central Government, will be disqualified for appointment or re-appointment as director in any other public company from the date on which the default committed by the said company is deemed to crystallize into a disqualification of the directors prescribed under this section. The date of commencement of disqualification under section 274(1)(g) is as under: (a) For non-filing of annual accounts and annual returns: Rule 3(a) of the Disqualification Rules, provides that if a company fails to file the annual accounts and annual returns for any continuous three financial years commencing on or after the first day of April, 1999, persons who are directors on the last due date for filing the annual accounts and annual returns in respect of the last three continuous financial years, shall become disqualified under section 274(1)(g). (b) For failure to repay deposits, etc.: Rule 3(b) of the Disqualification Rules, provides that if a company fails to repay any deposit or interest thereon, or redeem its debentures, or pay any dividend declared on the respective due dates and if such failure continues for a period for one year, all the person who have been directors on the date of expiry of one year after the default has occurred shall stand disqualified under section 274(1)(g). It may be noted that even if a person ceased to be director of the company subsequent to the expiry of one year from the date of occurrence of the date shall stand disqualified. But if a director has resigned before the expiry of one year from the date of occurrence of the default, the disqualification will not visit him. Explanation to Rule 3(b) clarifies that if the non-payment of dividends is due to the reasons of dividend not being claimed or dividend has been kept in a separate bank account as required under section 205A of the Companies Act, 1956 or dividend has been paid into Investor Education and Protection Fund is required under section 205C, it shall not be deemed a failure to make payment of dividend. A director shall attract disqualification under section 274 (1)(g)(A) of the Companies Act, 1956 if and only if a company has defaulted in filing of both ‘annual accounts and annual returns’ for continuous 3 financial years. The legislature has used the word “AND” and not “OR”.
25 October 2010
I m referring munish bhandari,and as per the author he also can be re-appointed in a same company. he has specially written that director cant be re-appointed in a defaulting company also.
further you have also written that he cant be re-appointed but in ur conclusion u sad he can be
"All the existing directors of a public company in default other than the directors who have been exempted from application of section 274(1)(g) by the Central Government, will be disqualified for appointment or re-appointment as director"
A director appointed by Board OR nominee director of CG OR PFI is not liable to retired by rotation.
2. Yes A director of defaulting company under section 274(1)(g)be re-appointed in same company. Section prohibits appointment in any "other" public company.
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