section 314 of the Compaines Act, 1956

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Rakesh Munganiya

Rakesh Munganiya (Querist)
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23 December 2009
is there any penlaty in contravation of section 314(1B)

Reply me soon

Ankur Garg

Ankur Garg (Expert)
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23 December 2009 Hello,

If any office or place of profit is held by certain persons which is not as per the provisions of this section then any appointment made under contravention of the section will be held invalid from the date next following the date of holding the general meeting in which the special resolution is passed or from the date of expiry of three months referred to in the second proviso there under. Any remuneration received by such persons who were holding the office or place of profit as such shall pay back the remuneration received by them from the company.

As the proviso under sub-section (1B) has been deleted w.e.f. 15-6-1988 the automatic ceasing of office referred to in sub-section 2(C) has been taken to be effective from the date of appointment. The company is not under an obligation to waive the refund of any amount unless the Central Government, on application, waives such refund.

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