sec 314(1B) - Filing of Form 24B

You write what your calculation derives the figure; it would be immaterial beacuse you are paying under Sch XIII. Plz. don't get confused in this case with the 11% ceiling because it is not applicable if you are paying remuneration under Sch XIII.

Regards,

Kindly clarify.

You said remuneration is as per is subject to schedule xiii of Part II of Section II

But as per Sec 309 read with Schedule XIII you cannot pay remuneration more than 10% to WTD & MD.

Thus you also need to get CG approval for above payment to WTD & MD

You have rightly said it is subject to determination under Section 309 but upto my understanding this can be determined uder 309 if Company s having adequate profit but if Company is not having adequate profit or no profit then it will go with Sch XIII and in that case Section 198 will be read as follows:-

198 [(4) Notwithstanding anything contained in sub-sections (1) to (3), but subject to the provisions of section 269, read with Schedule XIII, if, in any financial year, a company has no profits or its profits are inadequate, the company shall not pay to its directors, including any managing or wholetime director or manager, by way of remuneration any sum [exclusive of any fees payable to directors under sub-section (2) of section 309], except with the previous approval of the Central Government.3]

Schedule XII

PART II

Remuneration

Section I.—Remuneration payable by companies having profits

Subject to the provisions of section 198 and section 309, a company having profits in a financial year may pay any remuneration, by way of salary, dearness allowance, perquisites, commission and other allowances, which shall not exceed five per cent of its net profits for one such managerial person, and if there is more than one such managerial person, ten per cent for all of them together.

Section II.—Remuneration payable by companies having no profits or inadequate profits

2[1. Notwithstanding anything contained in this Part, where in any financial year during the currency of tenure of the managerial person, a company has no profits or its profits are inadequate, it may pay remuneration to a managerial person by way of salary, dearness allowance, perquisites and any other allowances,—

By reading all the highlighted contents in consonance, it can be drawn that if remuneration is payable under Sch. XIII Part II then it shall have overriding effect on Section 198 and 309.

Regards,

314. Director, etc., not to hold office or place of profit

¹[(1) Except with the ²[consent] of the company accorded by a special resolution,-

(a) no director of a company shall hold any office or place of profit, and

(b) ³[no partner or relative of such director, no firm in which such director, or a relative of such director, is a partner, no private company of which such director is a director or member, and no director or manager of such a private company shall hold any office or place of profit carrying a total monthly remuneration of ⁴[such sum as may be prescribed],

except that of managing director or manager,] banker, or trustee for the holders of debentures of the company-

(i) under the company; or

(ii) under any subsidiary of the company, unless the remuneration received from such subsidiary in respect of such office or place of profit is paid over to the company or its holding company:

⁵[Provided that it shall be sufficient if the special resolution according the consent of the company is passed at the general meeting of the company held for the first time after the holding of such office or place of profit:

Provided further that where a relative of a director or a firm in which such relative is a partner, is appointed to an office or place of profit under the company or a subsidiary thereof without the knowledge of the director, the consent of the company may be obtained either in the general meeting aforesaid or within three months from the date of the appointment, whichever is later.]

Explanation.-For the purpose of this sub-section, a special resolution according consent shall be necessary for every appointment in the first instance to an office or place of profit and to every subsequent appointment to such office or place of profit on a higher remuneration not covered by the special resolution, except where an appointment on a time scale has already been approved by the special resolution.

(1A) Nothing in sub-section (1), shall apply where a relative of a director or a firm in which such relative is a partner holds any office or place of profit under the company or a subsidiary thereof having been appointed to such office or place before such director becomes a director of the company.]

⁶[(1B) Notwithstanding anything contained in sub-section (1),-

(a) no partner or relative of a director or manager,

(b) no firm in which such director or manager, or relative of either, is a partner,

(c) no private company of which such a director or manager, or relative of either, is a director or member,

shall hold any office or place of profit in the company which carries a total monthly remuneration of not less than ⁷[such sum as may be prescribed] except with the prior consent of the company by a special resolution and the approval of the Central Government:

⁸[***]]

⁹[(2) ¹⁰[(a)] If any office or place of profit is held in contravention of the provisions of sub-section (1) the director, partner, relative, firm, private company, ¹¹[***] or the manager, concerned, shall be deemed to have vacated his or its office as such on and from the date next following the date of the general meeting of the company referred to in the first proviso or, as the case may be, the date of the expiry of the period of three months referred to in the second proviso to that sub-section, and shall also be liable to refund to the company any remuneration received or the monetary equivalent of any perquisite or advantage enjoyed by him or it for the period immediately preceding the date aforesaid in respect of such office or place of profit.]

⁶[(b) The company shall not waive the recovery of any sum refundable to it under clause (a) unless permitted to do so by the Central Government.]

¹²[(2A) Every individual, firm, private company or other body corporate proposed to be appointed to any office or place of profit to which this section applies shall, before or at the time of such appointment, declare in writing whether he or it is or is not connected with a director of the company in any of the ways referred to in sub-section (1).]

⁶[(2B) If, after the commencement of the Companies (Amendment) Act, 1974 any office or place of profit is held, without the prior consent of the company by a special resolution and the approval of the Central Government the partner, relative, firm or private company appointed to such office or place of profit shall be liable to refund to the company any remuneration received or the monetary equivalent of any perquisite or advantage enjoyed by him on and from the date on which the office was so held by him.]

⁶[(2C) If any office or place of profit is held in contravention of the provisions of the proviso to sub-section (1B), the director, partner, relative, firm, private company or manager concerned shall be deemed to have vacated his or its office as such on and from the expiry of six months from the commencement of the Companies (Amendment) Act, 1974 of the date next following the date of the general meeting of the company referred to in the said proviso, whichever is earlier, and shall be liable to refund to the company any remuneration received or the monetary equivalent of any perquisite or advantage enjoyed by him or it for the period immediately preceding the date aforesaid in respect of such office or place of profit.]

⁶[(2D) The company shall not waive the recovery of any sum refundable to it under sub-section (2B) ¹³[***] unless permitted to do so by the Central Government.]

(3) Any office or place ¹⁴[***] shall be deemed to be an office or place of profit under the company ¹⁵[within the meaning of this section]

(a) in case the office or place is held by a director, if the director holding it ¹⁶[obtains from the company anything] by way of remuneration over and above the remuneration to which he is entitled as such director, whether as salary, fees, commission, perquisites, the right to occupy free of rent any premises as a place of residence, or otherwise;

(b) in case the office or place is held by an individual other than a director or by any firm, private company or other body corporate, if the individual, firm, private company or body corporate holding it ¹⁶[obtains from the company anything] by way of remuneration whether as salary, fees, commission, perquisites, the right to occupy free of rent any premises as a place of residence, or otherwise.

⁶[(4) Nothing in this section shall apply to a person, who being the holder of any office of profit in the company, is appointed by the Central Government, under section 408, as a director.]

Thats a good effort  Mr. Kalpesh Chauhan. You  have typed the entire Section 314 of the companies act 1956.