Discussion w.r.t. Section 160 (section 257 in erstwhile CA 1956)
Technically a Director who comes for regularization is outside the preview of Section 160 (section 257 in CA 1956) for 2 reasons as given below:
- He is a retiring Director; (and Section 160 is primarily applicable to the candidature of a proposed director who is not a retiring director.)
- His candidature is usually proposed by the Board of Directors. (and not by the candidate himself or by any member which is a pre-condition for section 160 (section 257 in CA 1956)).
However, long time back, the Department took a view that still section 257 would be applicable to an additional Director who comes for regularization and professionals were compelled to take care of the provisions of section 257 at the time of regularization of directors.
Can we conclude that the same opinion of department will continue with respect to section 160 of CA 2013 even if pre-conditions of section 160 can’t be fulfilled?
Further as per my understanding section 160 is not applicable to the appointment of independent directors as the candidature of independent director is required to be proposed by the Board of Directors read with section 178 and schedule IV.
Let’s discuss.
Thanks
CS Ankur Garg
CAclubindia
