section 314

Hi,

Prima facie I am presuming that in your case none of the director is on office or place of profit because they were not drawing anything over and above the remuneration to which they were entitled as such.

So in your case none of the director is holding office or place of profit read with section 314(3).

As the directors themself are out of the definition of office or place of profit hence, no question arises about the applicability of office or place of profit on second director (relative).

If in your case Mr. X is drawing anything over and above his salary as director then section-314 is applicable in your case and you have to go for CG approval.

Best Regards

I agree with you but my query is this if Ms. X resign as director and still an employee of the co at a remuneration of 50 lakhs does co has to take central goverment approval , is there any case law or notifi

I agree with you but my query is this if Ms. X resign as director and still an employee of the co at a remuneration of 50 lakhs does co has to take central goverment approval , is there any case law or notifification in this regard.

Thanks fr ur prompt reply  and please guide

If section-314 is not applicable then CG approval is not required as far as other provisions are concerned.

However you have to disclose the particulars of Ms. X in your Directors’ Report pursuant to section-217(2A).

Regards

ankur, is there any notification, circular in this regard ki person resigns frm directorship and then also she is employee with a salary exceedingthe limit and314 is nt applicable

Hi,

As far as i know there is no notification to that effect. As per interpretation of section 314(3) there is no need for any notification. However this is my viewpoint. You may wait for the views of other learned members.

Regards

Thanks ankur,

nw my query is whether 314(3)(a) is applicable or 314 (3)(b) would be applicable , as per my understandinf if latter is applicable then 314 becomes applicable. kindly guide

In your case clause (a) is applicable. Kindly appreciate we have to judge the position of Ms. Y (Now relative status) by virtue of the position of Mr. X.

So by virtue of this interpretation there is no room for the applicability of clause (b).

Regards

 From plain reading of sec. 314 (1) (b) read with sec 314 (3) (b), you have to take prior approval of  CG in this case.  Attention  is also invited on  department clarification( letter no.3/36/87-CL V dt.29-05-1989. Published in  guide to companies act by A. Ramaiya fifteenth edition 2001 page2774-2775

 I sure agree with Vijay and tht you have to go for a special resolution and file form 24B......

Mr Ankur correct me if i'm wrong, i think your still missing the point that Ms Y resigns and is no longer a director and hence Sec 314 (3)b is very much applicable she being an individual other than a director. Sec 314 (3)a only applies to directors.

Adding the Sec 314 (1)(b) to it, it definitely becomes mandatory to file 24B and pass a special resolution.

Ranjith

Hello Friends,

Relative of a Director is getting a remuneration of 25,000p.m but director is not drawing anything from the Company. Pl tell me whether it would be considered as office of place of profit and Special Rsesolution would be reqd to be passed or not. As the section talks about such Director which means Director himself holding office or place of profit and relative of such Director. In my case Director isnot holding any office or place of profit. Pl clarify whether Section 314(1) (b) would be attracted or not.

Thanks in advance

Regards

Preety

 Dear Sir,

 I fully agree with your view in the recent query sent to me on 28-07-2010.

 Dear Sir,

SEction 314 (1) (b) is not applicable in case director is not drawing any remuneration from companyand his relative is drawing salary from the company.

Thanks a lot Mr Vijay

Regards

Preety