Section 152 deals with the appointment and retirement of directors at a public company’s Annual General Meeting. At the annual general meeting at which a director retires, the Company fills the vacancy by appointing the retiring director or another person to the position.
The article here is discussing the AWO provisions, namely sections 152 and 160 of the Companies Act 2013. Section 160 is analyzed to understand eligibility and the conditions for submitting the special notice. Secondly, section 152(6)is examined to determine whether any person other than the retiring director is eligible to be appointed as director in place of the retiring director. Section 152(6)(e) states that, at the annual general meeting at which a director retires as aforesaid, the Company fills the vacancy by appointing the retiring director or some other person thereto.
Section 160 of the Companies Act, 2013
Section 160 as per the bare Act statActthat, Act1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be ActgibleAAct appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the Company, CCompany in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five per cent. Of total valid votes cast either on a show of hands or on the poll on such resolution.”
Elaborating on the same, we can understand that:
A director who is notretiringr as per section 152 shall subject to the provisions of this Act, shaActbe elAActle for appointment to the office of a director at any general meeting, if he or any other member intending to propose him as a director, has submitted a notice in writing under his hand signifying his candidature as director or as the case may be within not less than 14 days before the date of meeting, along with a deposit of INR 1 Lakh or such higher amount as may be prescribed. And such deposited amount shall be refunded to such person, who made the deposit or as the case maybe, to the member 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.
Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the Nomination and Remuneration Committee, if any, constituted under section 178(1) or a director recommended by the Board of Directors of the Company, in the case of a company not required to constitute Nomination and Remuneration Committee. The Company or its members are to consider the candidature of a person for the office of director in such manner as may be prescribed.
Section 152 of the Companies Act, 2013
As per section 152(6)(a), unless the articles provide for the retirement of all directors at every annual general meeting, not less than two-thirds of the total number of public companies (Company), whose period of office is liable to be determined by the retirement of directors by rotation; and
(ii) Save as expressly provided in this Act and the Act appointed by the Company in any minute under section 152(6)(e), at the annual general meeting at which a director retires as aforesaid, the Company fills the vacancy by appointing the retiring director or some other person thereto.
Explanation—For this subsection, “total number of directors” shall include independent directors, whether appointed under this Act or any other Act for the time being in force, on the Board of a company.
Rotational directors are those directors whose term of office is liable to retire by rotation in every Annual General Meeting and who are eligible for reappointment in accordance with the provisions of section 152 of the Companies Act, 2013. Rotational directors are also known as retiring directors or temporary directors.
So, we can understand that the Company may appoint a vacancy by re-appointing the retiring director or some other person thereto. We can say that here, in place of a retiring director, the company shareholders in its meeting either appoint the retiring director or some other person in the general meeting, and the general body would be the final authority to decide who should be appointed.
In the Compendium of “KEY ISS” ES UNDER CORPORATE LAW (Volume 4) by DR. K.R Chandratre, mention is made on page no 22-16, Para II mentioned that:
“Section” 152(6)(e) states that, at the annual general meeting at which a director retires as aforesaid, the Company fills the vacancy by appointing the retiring director or some other person thereto. To fill the vacancy by appointing a person who is not a retiring director, the provision of Section 160 must be complied with”.
Hence,” if the retiring director wishes to be re-appointed, then he shall serve his consent to be re-appointed as director with the Company aCCompanyother member shall also make a proposal for such retiring director candidature to such directordirectors 14 days prior to the date of meeting (without failure) by depositing INR 1 Lakh or such amount as may be prescribed, and it shall be refunded in cases which were stipulated before.
