Section 388E - Power of Central Government to remove managerial personnel on the basis of Tribunal's decision. - Companies Act, 1956

[1] Power of Central Government to remove managerial personnel on the basis of [2] [Tribunal's] decision. 388E. (1) Notwithstanding any other provision contained in this Act, the [3] [Central Government shall] by order, remove from office any director, or any other person concerned in the conduct and management of the affairs, of a company, against whom there is a [4] [decision of the 1[Tribunal] under this Chapter]. [5] [* * *] [6] [(2) * * *] (3) The person against whom an order of removal from office is made under this section shall not hold the office of a director or any other office connected with the conduct and management of the affairs of any company during a period of five years from the date of the order of removal: Provided that the Central Government may, with the previous concurrence of the [7] [Tribunal], permit such person to hold any such office before the expiry of the said period of five years. (4) Notwithstanding anything contained in any other provision of this Act or any other law or any contract, memorandum or articles, on the removal of a person from the office of a director or, as the case may be, any other office connected with the conduct and management of the affairs of the company, that person shall not be entitled to, or be paid, any compensation for the loss or termination of office. (5) On the removal of a person from the office of a director or, as the case may be, any other office connected with the conduct and management of the affairs of the company, the company may, with the previous approval of the Central Government, appoint another person to that office in accordance with the provisions of this Act.] -------------------------------------- Notes:- [1] Inserted by the Companies (Amendment) Act, 1963, w.e.f 1-1-1964. [2] Substituted for "Company Law Board's" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [3] Substituted by the Companies Tribunal (Abolition) Act, 1967, Act 17 of 1967 for "Central Government may" w.e.f. 1-7-1967. [4] Substituted by the Companies Tribunal (Abolition) Act, 1967, Act 17 of 1967 w.e.f. 1-7-1967. For the words Finding of the Tribunal under this Chapter or a decision of a High Court thereon [5] Omitted by the Companies (Amendment) Act, 2000, w.e.f. 13-12-2000, as provisions relating to managing agents, etc. had become redundant after abolition of system by Act 17 of 1969. [ Prior to its omission, the proviso, as amended by the Companies Tribunal (Abolition) Act, 1967, w.e.f. 1-7-1967 and Companies (Amendment) Act, 1988, w.e.f. 31-5-1991, read as under: Provided that where a firm or a body corporate is concerned in the conduct and management of the affairs of a company as its managing agent or secretaries and treasures, and the decision of the Company Law Board is against any partner in such firm, or any director of, or any person holding a general power of attorney from, such body corporate, the Central Government may also remove from the office of managing agent or secretaries and treasures, such firm or body coroporte. ]. [6] Omitted by the Companies (Amendment) Act, 2000, w.e.f. 13-12-2000, as provisions relating to managing agents, etc. had become redundant after abolition of system by Act 17 of 1969. [ Prior to its omission, sub-section (2) as substitutes by the Companies Tribunal (Abolition) Act, 1967, Act, 17 of 1967, w.e.f. 1-7-1967 and later on amended by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991, read as under: (2) No order removing a firm or body corporate from the office of managing agents or secretaries and treasures shall be made in pursuance of the proviso to sub-section (1) unless such firm or body corporate has been given a reasonable opportunity of showing cause against the same: Provided that no matter shall be raised by such firm or body corporate before the Central Government if such matter has been decided by the Company Law Board , ]. [7] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. Earlier the quoted words substituted for High Court by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991, and High Court was substituted for Tribunal by the Companies Tribunal (Abolition) Act, 1967, Act 17 of 1967, w.e.f. 1-7-1967.