Applicability of sec 314

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Vandana Mehrotra (Querist)
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06 December 2011 Hi All,

I have a query regarding Section 314, in my case company has 2 Director entered into employment agreement and on pay role of the company designation stated in agreement id Joint Managing Director, drawing Rs. 300,000 for both role of Director and employee per agreement, does 314 is applicable to them?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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06 December 2011 Section 314, specifically exclude 4 offices or places of profit, namely:- 1) Managing Director 2)Manager 3)banker & 4) trustee for the debenture holders of the company. Any of these offices or places would not be regarded as office or place of profit despite that the person holding such office or place obtains from the company some remuneration in respect of such office or place.

Further Section 314 is not applicable where an office or place of profit held by any person other than directors, carrying total monthly remuneration of Rs. 50,000/- or more

In my opinion, in your case Section 314 is not applicable.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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06 December 2011 Mr.Mitesh
Seems the monetary limit is enhanced from Rs.50,000/- to Rs.2,50,000/- vide notification [F.NO. 17/75/2011-C.L.V], DATED 6-4-2011.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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06 December 2011 As per below notification. Limit under Sec 314(1)(b) is increased to Rs. 50,000/- p.m. and under Sec 314(1B) is increased to Rs. 2,50,000/- p.m.

NOTIFICATION G.S.R. NO. 514(E) [F. NO. 17/174/2011-CL.V], DATED 7-7-2011

2. The existing rule 10C shall be substituted by the following rule 10C :
"(1) Rule 10C.—The total monthly remuneration for the purpose of clause (b) of sub-section (1) of section 314, shall not be less than rupees fifty thousand.
(2) The total monthly remuneration, for the purpose of sub-section (1B) of section 314, shall not be less than rupees two lakhs and fifty thousand."