The write-up provided here on the above topic discusses two provisions, namely Sections 152 and 60 of the Companies Act 2013.
Section 160 is examined to understand the eligibility and conditions for submitting the special notice. Section 152 (6) has been analyzed and elaborated to know whether any person other than the retiring director is eligible to be appointed as a director in place of the retiring director.
Section 160 of the Companies Act, 2013
As per the provisions of Section 160 of the Companies Act, it has been stated that,
In the case of a person or director who is not a retiring director in terms of Section 152, pertaining to the provisions of the Companies Act, they shall be held eligible for nomination and appointment to the office of a director. And this shall be done at a general meeting if he, or some member intending to propose him as a director, leaves a notice with the registered office of company, atleast 14 days prior to meeting in writing under his hand signifying his candidature as a director or, as the case may be or the implication of the aim which a member held to propose the person as a candidate for that office, along with the deposit of INR 1 Lakh or such higher amount which has been prescribed. It should also be noted that such amount shall be refunded to such person or, as the case may be, to the member, provided that the person proposed in the notice gets elected as a director or gets more than twenty-five per cent of total valid votes cast either on show of hands or on poll on such resolution.
Elaborating on the same, we can understand that: A person or a director who is not retiring as per the provisions of this Act shall be subject to the provisions of this Act and be eligible for being appointed to the office of a director at any general meeting.
- And for this, he or any other member intending to propose him as a director, must submit a written notice under their hand to the company.
- This notice should signify his candidature as director, or as the case may be, by the member.
- And should be submitted at least 14 days prior to the meeting date.
- The notice shall be submitted along with a deposit of INR 1 Lakh or such higher amount as may be prescribed.
- The deposited amount shall be refunded to such person, who made the deposit say the director or the member who proposed as the case maybe, if such proposed candidate gets elected as a director or gets more than 25% of the total valid votes cast either on show of hands or on poll on the resolution to be passed.
It has also been provided that the deposit amount requirement shall not apply in the following cases:
- In case the company has a Nomination and Remuneration Committee constituted as per Section 178(1) of the Companies Act, the appointment of an independent director or a director recommended by such Nomination and Remuneration Committee shall not require a deposit.
- In the event that the company does not have a Nomination and Remuneration Committee formed as per Section 78 (1) of the Companies Act, and the director is recommended by the Board of Directors of the Company, the deposit amount shall also not be required.
The company shall also inform its members regarding the candidature of a person for the office of director in the manner prescribed.
Section 152 of the Companies Act, 2013
Section 152 (6)(a) of the Companies Act states that, unless the articles of the company provide for the retirement of all directors at every annual general meeting, a ratio of directors which is not less than two-thirds of the total number of directors of a public company shall:
(i) be taken for the determination of retirement of directors by rotation, of the persons whose period of office is liable for the same; and
(ii) It has also been expressly provided in this Companies Act that the company shall appoint them in a general meeting held by the company.
As per Section 152(6)(e) of the Companies Act, it has been stated that at the annual general meeting at which a director retires in the manner above, the company may fill the opening by appointing the retiring director or some other person thereto or into such position.
Explanation:
As per this sub-section, it should be noted that the usage “total number of directors” shall not include any independent directors, whether appointed under this Companies Act or any other law for the time being in force, and is applicable to the Board of a company.
Therefore, we can understand that, he company may fill up aan vailable opening, rereappointinghe retiring director or some other qualified person tWe can say that here, in place of a retiring director the company and its shareholders in its meeting may either appoint the retiring director or some other person and it will the general body which would hold the final authority to decide who should be appointed in such position.
