Resignation of director

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faizan (Querist)
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21 May 2013 a Pvt ltd company has three directors. Now two directors want to remove the third director. So is it necessary to get resignation letter from the third director or a resolution is sufficient passed by two director?

CS M.Kurtrala Nathan

CS M.Kurtrala Nathan (Expert)
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24 May 2013 284. REMOVAL OF DIRECTORS.
(1) A company may, by ordinary resolution, remove a director (not being a director appointed by the Central
Government in pursuance of section 408) before the expiry of his period of office :
Provided that this sub-section shall not, in the case of a private company, authorise the removal of a director holding
office for life on the 1st day of April, 1952, whether or not he is subject to retirement under an age limit by virtue of the
articles or otherwise :
Provided further that nothing contained in this sub-section shall apply where the company has availed itself of the
option given to it under section 265 to appoint not less than two-thirds of the total number of directors according to the
principle of proportional representation.
(2) Special notice shall be required of any resolution to remove a director under this section, or to appoint somebody
instead of a director so removed at the meeting at which he is removed.
(3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a
copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be
entitled to be heard on the resolution at the meeting.
(4) Where notice is given of a resolution to remove a director under this section and the director concerned makes
with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their
notification to members of the company, the company shall, unless the representations are received by it too late for it
to do so, -
(a) in any notice of the resolution given to members of the company, state the fact of the representations having been
made ; and
(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent
(whether before or after receipt of the representations by the company) ;
and if a copy of the representations is not sent as aforesaid because they were received too late or because of the
company's default, the director may (without prejudice to his right to be heard orally) require that the representations
shall be read out at the meeting :
Provided that copies of the representations need not be sent out and the representations need not be read out at the
meeting if, on the application either of the company or of any other person who claims to be aggrieved, the 1[Central
Government] is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for
defamatory matter ; and the 1[Central Government] may order the company's costs on the application to be paid in
whole or in part by the director notwithstanding that he is not a party to it.
(5) A vacancy created by the removal of a director under this section may, if he had been appointed by the company
in general meeting or by the Board in pursuance of section 262, be filled by the appointment of another director in his
stead by the meeting at which he is removed, provided special notice of the intended appointment has been given
under sub-section (2).
A director so appointed shall hold office until the date up to which his predecessor would have held office if he had not
been removed as aforesaid.
(6) If the vacancy is not filled under sub-section (5), it may be filled as a casual vacancy in accordance with the
provisions, so far as they may be applicable, of section 262, and all the provisions of that section shall apply
accordingly :
Provided that the director who was removed from office shall not be reappointed as a director by the Board of
directors.
(7) Nothing in this section shall be taken -
(a) as depriving a person removed thereunder of any compensation or damages payable to him in respect of the
termination of his appointment as director or of any appointment terminating with that as director ; or
(b) as derogating from any power to remove a director which may exist apart from this section.

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faizan

faizan (Querist)
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25 May 2013 it means the two director can remove the third director by passing resolution at board meeting? and no resignation letter is needed in removal of director?

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