Appoint of Managerial Personnel above age of 70:
No company shall appoint or continue the employment of any person as managing director, whole-time director or manager who is below the age to twenty-one years or has attained the age of seventy years:
Provided that appointment of a person who has attained the age of seventy years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person;
Note:
As per proviso it’s clear that if at the time of appointment age of person is more than 70 year then by passing of Special Resolution that person can be appoint as Managing Director. But now question is IF person attain age of 70 after appointment during his tenure then what are the consequences?
As per Ultramarine & Pigments Limited v/s Mr. Rangaswamy Sampath
- It does not interrupt the appointment of a Managing Director appointed after 1 April 2014 where at the date of such appointment or re-appointment the Managing Director was below the age of 70 years but crossed that age during his tenure. There is no mid tenure cessation of Managing Directorship as a result of Section 196 (3) (a).
- The impact of the word “continue” in Section 196(3)(a) is as regards cessation under section 196 (3) (b), (c) and (d) of CA, 2013 where there is immediate cessation on the happening of the events in these clauses. As regards Section 196 (3) (a) of CA, 2013, the word “continue” in this sense shall apply to appointment and reappointment.
- A remark by the judge turning 70 is an occasion for celebration and the person of 70 years should not be compared with fraudsters is interesting. Attaining age should not be a disqualification per se.
- Where a Managing Director is appointed after 1 April, 2014 and he attains 70 years during the term of his appointment, such appointment would also not be interrupted. There is no mid-tenure cessation of Managing Directorship as a result of Section 196 (3) (a) of CA, 2013.
CAclubindia
