qualification shares

SSD IS NOT REQUIRED TO HOLD QUALIFICATION SHARES WITH REFERENCE TO THE EXCEPTION CONTAINED IN SEC 270.AND YOU MAY ALSO REFER RULE 58 A AND 58AA FOR FURTHER REFERENCE

VAIBHAV MALHOTRA

Mr. Vaibhav thanks for replying but there is no exemption under section 270 to SSD  and 58A and 58AA is regarding small depositors and not SSD plz first clearify yourself........

Is small shareholder director required to hold qualification shares (sec.270)  ????????

If not which section or rule is applicable ???????

I read in many reputed books (like munish bhandari) that a small shareholder director need not to hold qualification shares but they didn't maintioned any provision regarding same.

Please clearify........

This is the clarification to ur question nikita....

A small share holder need not hold any qualification shares under provisions of Section 270. He is governed by the rules made u/s 252

yeah i know povisions regarding SSD governed by Sec. 252 and rules made hereunder.

I read whole section and rules also. Nowhere it is given tht SSD is not required to hold qualification shares.

Mr .shreekanth plz read the section and rules first then reply............

FIRST OF ALL.DONT BE OVER CONFIDENT NIKITA .READ SEC 270 CAREFULLY WITH ITS EXCEPTION IN MUNISH BHANDHARI SIR BOOK.

there is no statutory requirement that a director must hold qualification share in the company in which he is director.Thus a person may be a director in a company without being its member unless the articles provide otherwise.

Mr. vaibhav first thing which i wanna tell you that dont take it otherwise....

now second thing I do agree that this is given in munish bhndari's book (as i wrote in my origanal question). My confusion is that this thing is not give in bare act.

And third thing the munish bhandari book is interpretation of law and rules made thereunder and it is not above bare act......

In a nutshell i wanna know the reason of such exclusion..........

Mr. ali it is obvious that my question is of condition where article requires to hold qualification shares to all directors.

I wanna know about is there any specific exemption in tht case. Did u get that?????

yes there is exemption to a director appointed by central government on the board of any company u/s 408 of the act need not hold qualification share[sec 408(4).and also there is exemption to nominne directors representing  those finacial institution that are established by seprate statute of parliament are not required the qualifiction shares..(eg 30a of idbi act,sec 19a of the uti act)

hope you got the answer......if not plz inform

Mr ali we are talking about SSD...............

sorry......sorry i am extremely sorry for giving reckless answers............

actually i was not aware of SSD appoinment guidance 2001........

after studying that i realise that there was not anything about exemption............for qualification share

Hi Nitika,

Nobody was up to the mark while giving his answer. I’ll try my best to solve this query.

Let’s discuss about SSD.

Yes you are right. Almost in every book it is mentioned that provisions related to Qualification shares are not applicable to SSD. Munish Bhandari is the best book for law. In fact I use the same book during my CS Final preparation.

Anyways now observe carefully:

Specific provision overrule general provision

1. As per rule-6 of SSD rules almost all the important clauses of section-283 are there except 283(1)(a) which talks about vacation of office of director for failure to obtain Q.S. and that itself is an indication towards intention of law. Here we may interpret that law wants to exempt SSD to hold Q.S. by not mentioning 283(1)(a) in rule-6 of SSD rules.
2. SSD Rules are specifically talks about SSD and the intention of law for introduction of these rules was to regulate the whole provision of appointment, qualification, Disqualification etc. Hence, again we may interpret that SSD provisions are governed strictly by theses rules and provisions of section-270 are not applicable to SSD or we may say that SSD exempted from Q.S. provisions.
3. There has always been a saying in Company Law that Specific provision overrules General Provision. Hence in this case and keeping in view the intention of law we may conclude that specific provision (SSD rules) prevails over general provision (section-270). Here I am considering sec-270 as general provision as SSD rules are more specific as far as SSD is concerned.
4. If you are still looking for more specific DCA clarification/section provision/exemption notification in favour of SSD then let me tell you that there is nothing in law regarding this. This exemption from Q.S. in favour of SSD is totally based on interpretation of SSD rules read with Section-270.

Your query is absolutely genuine and in fact it is gray area of law because if article provide for Q.S. then it is also applicable to SSD like any other director. But by virtue of specific SSD Rules we may overrule articles in this case and various eminent also support our view. As far as your exams are concerned you may 100% go ahead with this interpretation.

Looking for more fruitful discussion from your side.

Best Regards Ankur   

Hello Ankur sir i am very much agree with u. I already read SSD rules there are various grounds are given for disqualification of SSD but no one is about qualification share but i thought may be this interpretation is not correct and i wanted to confirm it with all of u but no one got my problem wht acctually i wanted to know.

But u are only person who unterstood my point and u have same view as i have.......

i wanna thank u for this help........

I want to know about Qualification Shares