Section 283 of companies act 1956

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Piyush Agrawal (Querist)

10 July 2013 Dear All,

There is a clause in Section 283 which is written below,can any body help me to get understood this clause...

(2) Notwithstanding anything in clauses (d), (e) and (j) of sub- section (1), the disqualification referred to in those clauses shall not take effect-
(a) for thirty days from the date of the adjudication, sentence or order;
(b) where any appeal or petition is preferred within the thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence, or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or
(c) where within seven days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentence, conviction, or order, and the appeal or petition, if allowed, would result in the removal of the disquali- fication, until such further appeal or petition is disposed of.

This clause is not much clear to me.

Ajay Mishra

Ajay Mishra (Expert)

10 July 2013 Hi

Section 383 of the Companies Act, 1956 deal with "deemed vacation of office of director" of the Company. This section specified situation under which a person shall be deemed to vacate their office.

Postponement of effect of certain disqualifications:
The disqualifications stated under sections 283(1)(d), 283(1)(e) and 283(1)(j) shall not take effect:—
(a) for thirty days from the date of the adjudication, sentence or order;
(b) where an appeal or petition is preferred within the 30 days aforesaid against the adjudication, sentence or conviction resulting in the sentence, or order until the expiry of 7 days from the date on which such appeal or petition is disposed of; or
(c) where within the 7 days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentence, conviction, or order, and the appeal or petition, if allowed, would result in the removal of the disqualification, until such further appeal or petition is disposed of.

Clause (d), (e) and (j) deal where Cour is involve. As per this sub clause where case is pending before court , you can not treat such director as deemed vacation until final order of the court is come on such director.

So if such director is covered under sub clause but he can not be vacated by company until case is decided in favour of or against the director.

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