Notice of board meeting to director resident outside india
This query is : Resolved
15 February 2012
Dear Sir,
In case of a private company if there are 3 shareholders and out of them only 1 is resident in India, is it enough to send notice of the Board Meeting to just the Director resident in India?
In case of a private company if there are 3 shareholders and out of them only 1 is resident in India, is it enough to send notice of the Board Meeting to just the Director resident in India?
16 February 2012
Notice for every board meeting shall be given in writing to every director for the time being in India and to every other director at his usual address in India".- Section 286
The wordings of this section make it very clear that even if a director is temporarily out of India the notice for the meeting has to served at his usual address in India.
Going strictly by the section 286, it provides only for issuance of notices to addresses in India and a director who is permanently resident abroad not be issued a notice at his foreign address.
This obviously cannot be the spirit of the law since it would mean that a foreign director has no right to receive the notice abroad and has to have a usual address in India where the notices are to be served. In any case the section has not expressly prohibited issuance of notices to a foreign address.
In the case of HM Ebrahim Sait v South Indian Industrial Ltd (1938 8 Com Cases Madras HC} it has been held that a director is entitled to notice even where he is out of India and that the right to receive the notice cannot be waived.
Consider the case of Dr KK Dutta & Anthr V Ruby General Hospital & Others decided by the Company Law Board recently, The CLB has very rightly in this case held that notices should have been served to the foreign address.
It is well settled that notice of a Board meeting must be given to all the directors, otherwise the proceedings of the meeting and the resolutions passed thereat may be declared invalid, when challenged on the ground of absence or inadequacy of the notice.
The wordings of this section make it very clear that even if a director is temporarily out of India the notice for the meeting has to served at his usual address in India.
Going strictly by the section 286, it provides only for issuance of notices to addresses in India and a director who is permanently resident abroad not be issued a notice at his foreign address.
This obviously cannot be the spirit of the law since it would mean that a foreign director has no right to receive the notice abroad and has to have a usual address in India where the notices are to be served. In any case the section has not expressly prohibited issuance of notices to a foreign address.
In the case of HM Ebrahim Sait v South Indian Industrial Ltd (1938 8 Com Cases Madras HC} it has been held that a director is entitled to notice even where he is out of India and that the right to receive the notice cannot be waived.
Consider the case of Dr KK Dutta & Anthr V Ruby General Hospital & Others decided by the Company Law Board recently, The CLB has very rightly in this case held that notices should have been served to the foreign address.
It is well settled that notice of a Board meeting must be given to all the directors, otherwise the proceedings of the meeting and the resolutions passed thereat may be declared invalid, when challenged on the ground of absence or inadequacy of the notice.
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16 February 2012
Thank you very much, your reply was very enlightening...
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