9911796707
TMI Blog1982 (3) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... ad vacated their respective offices at least from December 31, 1979. 2. 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 ₹ 600 in May, 1979, and therefore, as per the provisions of s. 314 of the Companies Act, 1956 no relative a director shall hold any office or place of profit carrying a total monthly remuneration of ₹ 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 or place of profit or within three months from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in 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 resolution ..... (2)(a) If any office or place of profit is held in contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 director or a firm in which such relative is a partner, is appointed to an office of 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 form the date of the appointment, whichever is later the learned counsel submitted that in so far as there is no emphasis as "such director" in that provision, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 s. 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 to occupy free of rent any premises as a place of residence, or otherwise." 4. It is thus clear that a director cannot be said to hold any office or place of profit if he shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 art., 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 it within the meaning of s. 314(1)(a) of the Act It is significant to note that in the counter-affidavit filed by the first respondent company, it is specifically pointed out that the second respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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