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Manager u/s 2(24) for selective sections

Raj Patni (GM Accounts) (26 Points)

23 March 2010

Can a Public Ltd Company [which does not have a Managing Director or WTD] appoint a Manager u/s 2(24) with liability as officer in defaulty only for selective sections of the Companies Act ? say 5 or 6 sections ? who will be considered as officer in default for the remaining provisions of the Act ?

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5 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 23 March 2010

Your query is not very clear. However i'll try to provide some input.

The manager covered by 2(24) is a manager with substantial power of management. He will automatically be counted under section 5 as officer in default. The appointment section of Manager is section 269.

Regards

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Raj Patni (GM Accounts) (26 Points)
Replied 23 March 2010

Thanks Ankur. Ill try and clarify....

Facts : Public Limited with paid up cap of over Rs 10 cr. but not listed.

Incorporated 2006.

No MD / WTD ever appointed.

Now to appoint Manager u/s 2(24) read with 5(f) and his consent under that section, and,

CG approval u/s 269.

Query

Can persons consent u/s 5(f) be in relation to specific sections of the Comp Act to be considered officer in default only for those specific sections ?

Would such limitation of liability be valid u/s 2(24), 5 ?

Who would be considered officer in default u/s 5 for the remaining sections of Comp Act ?

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 23 March 2010

Kindly appreciate there is no question of section 5(f) as The Manager appointed u/s 269 is already cover by section 5(c). He will be fully liable as officer in default u/s 5(c).

Revert if there is any doubt.

Raj Patni (GM Accounts) (26 Points)
Replied 23 March 2010

so effectively, if i understand correctly, there cannot be any limitation on the Manager's liability and it shall be for all sections of the Comp Act, notwithstanding his consent in Form 1 AB only for certain specific sections ?

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 23 March 2010

You are right.

In every section where officer in default is mentioned he will be fully liable but for duties connected or entrusted with him. Also there are certain points to understand. Understand one thing the persons mentioned in the whole list of section 5 will be liable with respect to their duties. For example if there is some default in account section occurred and company have director (finance/account), then he will be responsible and not The Manager.

Best Regards