TMI Blog1982 (7) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... , and the third respondent, an employee in the said company had vacated their respective offices at least from December 31, 1979. The applicant's case is that while the second respondent was holding the post of a director, his son, the third respondent, was appointed on probation as a clerk on a starting monthly salary of Rs. 600 in May, 1979, and, therefore, as per the provisions of section 314 of the Companies Act, 1956, no relative of a director shall hold any office or place of profit carrying a total monthly remuneration of Rs. 500 or more without prior consent of the company. In this case, as the consent of the company was not obtained either in the general meeting of the company held for the first time after holding of such office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or or a firm in which such relative is a partner, is appointed to an office or place of profit under the company or a subsidiary thereof without the knowledge of the director, the consent of the company may be obtained either in the general meeting aforesaid or within three months from the date of the appointment, whichever is later. Explanation. For the purpose of this sub-section, a special resolution according consent shall be necessary for every appointment in the first instance to an office or place of profit and to every subsequent appointment to such office or place of profit on a higher remuneration not covered by the special resolution, except where an appointment on a time scale has already been approved by the special resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company held for the first time after the holding of such office or place of profit or within three months from the date of appointment, whichever is later. It is necessary at this stage to advert to the argument advanced by Mr. Thampi, learned counsel for the applicant. Pointing out the second proviso, viz ., provided further that where a relative of a director or a firm in which such relative is a partner, is appointed to an office or place of profit under the company or a subsidiary thereof without the knowledge of the director, the consent of the company may be obtained either in the general meeting aforesaid or within three months from the date of the appointment, whichever is later, the learned counsel submitted that in so far as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 314(1)( a ) but not any ordinary director. The deeming vacation of the office of the director visualised under section 314(1)( a ) will apply to a director who holds any office or place of profit without obtaining the consent referred to above. This, in turn, takes me to the question, when is a director said to hold any office or place of profit. The answer is found in section 314(3) and I extract the relevant portion: "Any office or place shall be deemed to be an office or place of profit under the company within the meaning of this section, ( a )in case the office or place is held by a director, if the director holding it obtains from the company anything by way of ...whether as salary, fees, commission, perquisites, the right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committee thereof attended by him, he shall not be deemed to hold any office or place of profit. Article 39( a ) in the articles of association of the first respondent company prescribes the remuneration that is to be paid to every director as sitting fee per meeting of the board of directors in addition to travelling expenses. Unfortunately for the applicant, he has not stated in his affidavit filed in support of the application that over and above the remuneration to which the second respondent is entitled as an ordinary director as provided in article 39( a ), the second respondent is drawing any further remuneration from the company. There is no whisper either that the second respondent is holding any office or place of profit within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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