05 January 2012
My company is a pvt ltd co and intends to remove 2 directors from directorship as they are not working as per the terms agreed by them. Also the company has many times incurred losses because of their inefficient working.
My company is following all the legal procedure as required for removal of directors u/s 284.
My query is that what this 2 directors can do to harm the company after the BOD and before the EGM (We are giving 14 days notice for EGM). And also let me know what they can do after the EGM. And pls also suggest the measures to prevent their opposition.
Can they go to CLB and ask for any stay order, or can they stay the bank transactions or any other business transactions of the company.
06 January 2012
Dear Himani No doubt you can remove those two Directors as per Provisions os Section 284 of the Act.In this regard I wish to bring in your kind Notice that earlier approval of eform 32 was with Some officer of the ROC and generally he was not used to remove any Director without his resignation letter.
Now the eform 32 is with in STP mode and this form will be approved in Stright way.
Now next question is What remedy the removed director have,,,,What they Can Do....the Answer is No doubt it Come with in the ambit of Section 397 of the Companies Act 1956 and they can file petition under this section and approach the CLB.
It is clear that CLB forum is available for such kind of thing ,,,Now What happens in CLB it is matter and facts of the Case,We have to prove to the satisfaction of the presiding officer that the How the removed Directors are Prejudiced against the Interest of Our Company and How they have incurred losses to the Company.
I conclude it will depends upon facts of the case and if we are having Strong facts i assure you case will be in Our favour and they would cause No harm to us.
We have taken the opinion on the same matter from a professional. he is of the view that this 2 directors can take a order from CLB which will put a stay on the banking and other transactions of the company even before the EGM.
But according to me CLB can pass such order only when this 2 directors are denied of opportunity to be heard in the EGM and no such stay order can be placed before the EGM.
As far as Stay Order is Concerned I would Like to Say that CLB at this Preliminary Stage will not issue any Stay Order on Banking as well as Other transactions of the Company.
Further,It again depends upon the facts of Your Case.
And As far as Your opinion is Concerned it matters a little.
As far as Stay Order is Concerned I would Like to Say that CLB at this Preliminary Stage will not issue any Stay Order on Banking as well as Other transactions of the Company.
Further,It again depends upon the facts of Your Case.
And As far as Your opinion is Concerned it matters a little.
CAclubindia
