Abhishek Jain (-) (40 Points)
08 August 2012
Charu Srivastava
(Company Secretary)
(4210 Points)
Replied 09 August 2012
See this has been a debatble topic. Check the resolution passed at the time when he is appointed as a CMD, it if says the he will retire by rotation then he can otherwise not.
Wait for other views.
Hi,
Section 317 says that max tenure of Managing director of public company is 5 years while section 255 talks about rotational directors who have to retire at every AGM of the Company. Both sections are different.
If MD is liable to retire at rotation u/s 255, then he will continue as MD only if he is reappointed in the AGM in which he is retiring as rotational director.
With Regards
Abhishek Jain
(-)
(40 Points)
Replied 10 August 2012
BUt as section 317 says md Tenure cant be more than 5 years and further reappointment can be made for a 5 years .(thats is max 2 appointments tenure 10years) THIs is even applicalbe to MANAGER (sec 388 read with 317).
so can a MD who is Chairman too can be NON rotational .
if yes then SECTION 317 relevance is only when MD or CMD is ROTATIONAL
and if MD or CMD is non rotational no relevance of sec 317
plzz suggest ur view
Dear Abhishek jee,
Pls appreciate that as per section 317 max tenure of MD can be 5 years. It means he can not be appointed for more than 5 years at a time. Yes, MD who is Chairman too can be NON rotational u/s 255. Right
But it is wrong to interpreat that SECTION 317 is relevant only when MD or CMD is ROTATIONAL. Even if MD is non - rotational then also his tenure will come to an end after 5 years as per terms of his appointment.
Both section 317 and 255 are putting an end to the tenure of MD and director. Section 317 says tenure will not be more than 5 years and 255 says directors (incl MD if he is non rotational) are liable to retire by rotation in AGM. Hence both section 255 and 317 are applicable on MD. However applicability of 317 is mandatory on MD while section 255 may be excluded by including in the terms of his appointment that MD is not liable to retire by rotation.
I trust difference between and relevance of both the sections are clear now.
Pl revert for any other clarification required.
With Regards,
CS Neha Jain
Abhishek Jain
(-)
(40 Points)
Replied 10 August 2012
THe clarification provided by is really helpful .
BUt i again hav a doubt .
i have been intoo audit of some public cos who are listed. THere are Directors Who are CMd since the begining or incorporation of the co.
u can take Mukesh ambani of Reliance indust or Mr Naik of L & T .
not retired till yet and still in co (that is more than 10 years)
also for how many time a Md can be reappointed coz sec 317 says cant be reappointed for more than 2 time for a tenure of 5 years.
Read Carefully, Section 317 (3) uses the word in case of reappointment as - "further periods not exceeding 5 years on each occassion"
meaning thereby reappointment can be made no of times provided on each occassion it will not be for more than 5 years.
I trust above explanation will be of some guidance to you.
Regards
Abhishek Jain
(-)
(40 Points)
Replied 10 August 2012
gotacha ....
reallly thanks ..
i just got through same section n finded the clarification ..
thakns for ur instant reply
Abhishek Jain
(-)
(40 Points)
Replied 11 August 2012
heyaaa.
again a Querry .
How many managers or president can a public co have
is there any restrictions ???
Also Provisions of section 197A says no appointment of manager and MD together .
so cant a co Employ both of them Together ??
also a Co appoints a number of presidents for its diff department .
are these president deemed to be manager ??? If yes what are the conditions
How many managers or president can a public co have : 1 manager and any no of presidents
Also section 197A says no appointment of manager and MD together : Yes, appt both manager and md can not be made together
Co appoints a number of presidents for its diff department : Yes
President deemed to be manager : NO
Abhishek Jain
(-)
(40 Points)
Replied 11 August 2012
Really thks for a briefing the section widely ..
it was indeed very Helpful .
also i will say u to go through {department letter no 14/37/63-PR , dated 23.9.1963 which says the Nomenclaturre PRESIDENT & VICE PRESIDENT can used for a managerial person provided its meaning and duties/powers is disclosed in the articles
By the way Which sections Covers PRESIDeNT or VICE President or is it governed by articles only ???
CAclubindia
