06 October 2009
A private limited company wanted to remove a director from the board. The company neither received a written communication from the shareholders nor a special notice was issued to them. The motion came up in the AGM in which the said director failed to get sufficient number of votes to get elected resulting in the removal of the said director from the board. Whether the proceeding is legally valid in view of section 284 of The Companies Act,1956.
My answer is NO based on the decision in
Queens Kuries & Loans P Ltd Vs. Sheena Jose (1993) 76 Com Cases 821(Ker).
You have mentioned in your post that he failed to get elected. As per my understanding if he was a rotational director and failed to get re-appointed in this AGM then this not a case of removal u/s 284.
Section 284 is applicable only when a person is on the board of directors.
Sir kindly elaborate the case a bit or elaborate 'director failed to get sufficient number of votes to get elected'.
06 October 2009
Issue is elaborated little more. He is a non rotational director. He was in board up to the time of AGM. The company did not receive a written communication from any shareholder seeking removal of the director. So special notice could not be send by the company to the share holders. At the time of AGM when the question of reappointment motion came up it was put to vote in which the said director failed to get sufficient number of votes to get reappointed.
This is not a case of Section 284. No need to comply with section 284 at all. This is a simple case of vacation of office. File form-32 within 30 days of AGM.
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