03 August 2007
A managing director neither holding board meeting and nor make compliance to roc when the matter comes with other directors they arrange for board meetings and issue notices and held the same consecutively 5 times , but the same time old md is neither attending the meeting nor respond whether as per section 284 board can remove him if yes then how
04 August 2007
A director may be removed or barred from office either by moving a resolution for this purpose or by defeating the resolution for his appointment. The proposal to remove a director may emanate from the Board or from the shareholders. 208.2 Non-applicability The provisions are not applicable to— u the nominee director(s) appointed by the Central Government/Financial Institutions who cannot be removed by the company; u a director of a private company who has been appointed for life as on 1st April, 1952 whether or not he is subject to retirement under an age limit by virtue of the articles or otherwise; u a director who has been appointed by the company in general meeting according to the principles of proportional representation. 208.3 Special notice In case the proposal for removal of director, emanates from the Board, a Board Resolution (Annex 208.1) should be passed for removal of director and for convening a general meeting in this regard. In case the removal is sought by the shareholder(s), a special notice (Annex 208.2) should be given of any resolution to remove a director. There is no requirement with regard to the number of members or their shareholding and even one member is entitled to give special *RELEVANT PROVISIONS : u Companies Act, 1956 : Sections 190, 284, 318. u Companies (Central Government’s) General Rules and Forms, 1956. u Standard Listing Agreement. APPLICABILITY : ALL COMPANIES. notice — Karnataka Bank Ltd. v. A.B. Datar [1994] 79 Comp. Cas. 417 (Kar.). There is no need to give any reason for removal of a direction in the resolution proposed to be moved — Karnataka Bank Ltd. v. A.B. Datar [1994] 79 Comp. Cas. 417 (Kar.). 208.4 Forwarding copy of notice to the director A copy of the notice (Annex 208.3) of a resolution to remove a director should be sent to the concerned director forthwith. The director, whether or not he is a member of the company, shall be entitled to be heard at the meeting. The resolution may also be published (Annex 208.4) in the newspaper. 208.5 Circulation of representation made by director In case the concerned director makes any representation in writing (not exceeding a reasonable length) and requests the company to notify the same to the members of the company, the fact of receiving the representation should be stated in the notice of the meeting and a copy should be circulated to all the members. If it is received too late for inclusion in the notice or if there is omission by the company, the representation should be read out at the meeting. 208.5-1 Exemption from circulation The company or the person who is likely to be affected may make an application to the Company Law Board1 seeking exemption from circulating or reading out the representations if the rights are sought to be abused to secure needless publicity for defamatory matter. The Company Law Board1 may make an order for exemption from reading out or circulating the same. 208.6 General Meeting Resolution The General Meeting should accordingly be held and the resolution (Annex 208.5) for removal of a director should be passed. If a special notice is also given for the appointment of some other person in his place, the same should also be considered at the meeting. 208.6-1 Filling up of vacancy A vacancy created by the removal of the director may be filled up by appointing some other person at the same meeting or by the Board as casual vacancy. 208.6-2 Prohibition for reappointment A director who is removed from the office should not be reappointed as a director by the Board. 1. The powers of Company Law Board in this regard shall stand transferred to the Central Government when Companies (Second Amendment) Act, 2002 is brought into force. 208.7 Payment of compensation The director is entitled to be paid compensation for termination of his appointment as director or any appointment terminating with the office of director like a director manager. 208.8 Filing of Form No. 32 with the Registrar of Companies Within 30 days of the passing the resolution, a return in Form No. 32 (Annex 2.8) should be filed, with the Registrar of Companies together with the filing fees, through MCA portal www.mca.gov.in. 208.9 Entry in registers Particulars regarding the removal of director should be entered in the Register of Directors (Annex 203.3) and the Register of Directors’ Shareholdings. 208.10 Prohibition to remove directors of Government Companies In the case of Government companies, the director(s) cannot be removed by the company in general meeting. The Government alone is entitled to revoke the appointment in terms of the articles of association. The Government’s right under the provisions of the articles of association was not the same thing as removal of a director by the company under section 284 - Smt. Farrel Futado v. State of Goa [1994] 80 Comp. Cas. 659 (Bom.). 208.11 Forwarding of Minute to stock exchange In the case of a listed company, a copy of the proceedings of the general meeting should be sent to each of the stock exchange(s) in which the securities of the company are enlisted. ANNEX 208.1 (Refer Para 208.3) BOARD RESOLUTION FOR REMOVAL OF DIRECTOR RESOLVED that, pursuant to section 284 of the Companies Act, 1956, Mr.....director of the company be and is hereby removed as a director. RESOLVED FURTHER that an extraordinary General Meeting of the company be held on.........at........(time) at...........(venue) to secure the consent of members in this regard. RESOLVED FURTHER that the notice of the General Meeting, as per the draft submitted to this meeting, be approved and that the same be issued to all eligible members of the company. RESOLVED FURTHER that the secretary be and is hereby authorised to comply with all formalities required for giving effect to this resolution. ANNEX 208.2 (Refer Para 208.3) SPECIAL NOTICE FOR REMOVAL OF DIRECTOR NOTICE BY SHAREHOLDERS TO COMPANY - MOVING A RESOLUTION FOR REMOVING - DIRECTOR - SPECIAL NOTICE To The Secretary, ............................................... Ltd., ............................... Dear Sir, I hereby give notice, pursuant to section 284 of the Companies Act, 1956, of my intention to propose the following resolution as ordinary resolution at the ....General Meeting of the company to be held on..... 20.... [Set out the proposed resolution] Yours faithfully, ......................................... Signature of member ANNEX 208.3 (Refer Para 208.4) NOTICE TO DIRECTOR FOR HIS REMOVAL NOTICE BY COMPANY TO DIRECTOR - NOTICE TO DIRECTOR OF INTENDED RESOLUTION FOR HIS REMOVAL XYZ LTD. REGISTERED OFFICE 111, MOUNT ROAD, CHENNAI-600 023 To ............................................ ............................................ Dear Sir, I am directed to forward a copy of a notice received from a shareholder, of a resolution for your removal from office of director which, as appears from the said notice, is intended to be moved at the.....meeting being held at....on....., 20...at......AM/PM. Your attention is drawn to the provisions of sub-section (3) of section 284 which entitle you to be heard on the resolution at the meeting and to sub-section (4) of the said section pursuant to which you can make representation in writing to the meeting for notification to members. Your presence is solicited. Agenda for the meeting is enclosed. Yours faithfully, for...........................Ltd., .......................................... Secretary Note: It is suggested to obtain acknowledgement receipt of this notice from the Director. ANNEX 208.4 (Refer Para 208.4) NOTICE FOR REMOVAL OF DIRECTOR FOR PUBLICATION IN NEWSPAPER Following item of business will be included in the notice: To consider and, if thought fit, to pass the following resolution as an ordinary resolution, special notice of which having been given pursuant to section 284 of the Companies Act, 1956: “RESOLVED that Mr......be and is hereby removed from his office as Director of the company. RESOLVED FURTHER that Mr.....be and is hereby appointed as Director of the company in place of Mr.....to hold office during such time as Mr......would have held if he had not been removed. Dated......20... By order of the Board, ................................................ Secretary ANNEX 208.5 (Refer Para 208.6) GENERAL MEETING RESOLUTION FOR REMOVAL OF A DIRECTOR AND APPOINTMENT OF ANOTHER DIRECTOR RESOLVED that Mr.....be and is hereby removed from his office as Director of the Company. RESOLVED FURTHER that Mr.....be and is hereby appointed a Director of the Company in place of Mr.....to hold office during such time as Mr....would have held had he not been removed. Explanatory statement A notice under section 284(2), read with section 190, of the Companies Act, has been received from a member of the Company proposing to remove Mr....from the office of Director and to appoint Mr....in his place. In compliance with sub-section (3) of section 284 of the Act, a copy of the said notice had been sent to the said Mr......and he had made no representation in this behalf. A copy of the notice may be inspected at the registered office of the Company during business hours on any working day.
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