Sec 274(1)(g)
This query is : Resolved
27 July 2013
Can a director be reappointed in the same company, which was defaulted in payment of debenture interest for consecutive two years?
28 July 2013
Hi
Yes, it will be disqualified to re appointment.
The disqualification stated in clause (g) is confined to directors of Public company only.
The word used in section 274(1)(g) is appointment. Wherever the Legislature has intended that the word appointment should include re-appointment. A proviso to Rule 3(b) provides that both the disqualifications would apply to appointment and re-appointment of a director.
Yes, it will be disqualified to re appointment.
The disqualification stated in clause (g) is confined to directors of Public company only.
The word used in section 274(1)(g) is appointment. Wherever the Legislature has intended that the word appointment should include re-appointment. A proviso to Rule 3(b) provides that both the disqualifications would apply to appointment and re-appointment of a director.
28 July 2013
General Circular No. 5/2003 dated 14-01-203- In continuation to this Department’s Circular No. 8/2002 dated 22-03-2002, it is hereby clarified that default in redemption of privately placed bonds/ debentures/debt instruments by public financial Institutions will not be considered as default to disqualify directors under section 274(1)(g) of the Companies Act, 1956.
General Circular No. 5/2003 dated 14-01-203- In continuation to this Department’s Circular No. 8/2002 dated 22-03-2002, it is hereby clarified that default in redemption of privately placed bonds/ debentures/debt instruments by public financial Institutions will not be considered as default to disqualify directors under section 274(1)(g) of the Companies Act, 1956.
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