How does a Director appointed by way of a proportional representation under section 265 is removed from his office before the expiration of his terms?Kindly explain
C.A Saurabh Jain (CA ) (164 Points)
11 June 2010How does a Director appointed by way of a proportional representation under section 265 is removed from his office before the expiration of his terms?Kindly explain
Arti
(Jr Manager)
(123 Points)
Replied 11 June 2010
Appointed only if Articles provide.
Appoint at least 2/3rd of directors.
Appointed once in every 3 years.
CANNOT BE REMOVED.
khushboo
(CS)
(234 Points)
Replied 11 June 2010
Sir for your question plz refer section 284 which itself clear your confusion:
Removal of directors.
284. (1) A company may, by ordinary resolution, remove a director (not being a director appointed by the Central Government in pursuance of section 408) before the expiry of his period of office :
Provided that this sub-section shall not, in the case of a private company, authorise the removal of a director holding office for life on the 1st day of April, 1952, whether or not he is subject to retirement under an age limit by virtue of the articles or otherwise :
Provided further that nothing contained in this sub-section shall apply where the company has availed itself of the option given to it under section 265 to appoint not less than two-thirds of the total number of directors according to the principle of proportional representation.
(2) Special notice shall be required of any resolution to remove a director under this section, or to appoint somebody instead of a director so removed at the meeting at which he is removed.
(3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.
(4) Where notice is given of a resolution to remove a director under this section and the director concerned makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so,—
(a) in any notice of the resolution given to members of the company, state the fact of the representations having been made; and
(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company) ;
and if a copy of the representations is not sent as aforesaid because they were received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting :
Provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application11 either of the company or of any other person who claims to be aggrieved, the 12[Central Government] is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter ; and the 12[Central Government] may order the company’s costs on the application to be paid in whole or in part by the director notwithstanding that he is not a party to it.
(5) A vacancy created by the removal of a director under this section may, if he had been appointed by the company in general meeting or by the Board in pursuance of section 262, be filled by the appointment of another director in his stead by the meeting at which he is removed, provided special notice of the intended appointment has been given under sub-section (2).
A director so appointed shall hold office until the date up to which his predecessor would have held office if he had not been removed as aforesaid.
(6) If the vacancy is not filled under sub-section (5), it may be filled as a casual vacancy in accordance with the provisions, so far as they may be applicable, of section 262, and all the provisions of that section shall apply accordingly :
Provided that the director who was removed from office shall not be reappointed as a director by the Board of directors.
(7) Nothing in this section shall be taken—
(a) as depriving a person removed thereunder of any compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director ; or
(b) as derogating from any power to remove a director which may exist apart from this section
Regards
Khushboo Surana
Arti
(Jr Manager)
(123 Points)
Replied 11 June 2010
Section 265 is overrides the Companies Act 1956. Director cannot be removed. The main purpose of this section is to prevent oppression and mismanagement, then how can such director be removed??
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 11 June 2010
A director elected in accordance with section 265 cannot be removed under section 284.
But section 265 is totally useless and outdated as far as prevention of oppression and mismanagement is concerned because of its recommendatory nature.
Check the words---articles may provide
khushboo
(CS)
(234 Points)
Replied 11 June 2010
Completely agreed with Arti
Director can not be removed
Akhil Gupta
(Manager F&A)
(856 Points)
Replied 11 June 2010
Agreed with Aarti
Director cannot be removed.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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