section 314 has two parts

First understand the provision, the actual  language  with come after that

PART I

In case 

• director  of company appointed to any  post i.e  place of profit for any amount of salary  

OR

• parties related to director*  appointed any place of profit  i.e. post (other then post of MD, manager, banker , Trustees of debentures ) for salary exceeding10000 (ten thousand) p.m. 

                                               in the company  or  in the subsidiary of company 

then such appointed  shall not be valid unless a special resolution is passed.

*Now understand the meaning of Parties related to Director 

it means 

1. partner of Director 
2. relative of of Director 
3. partnership firm in which such Director is a partner 
4. A Private Company in which such Director is a Member or Manager.

WHEN TO PASS RESOLUTION AS REFERRED ABOVE  : IN FIRST GENERAL MEETING HELD NEXT AFTER APPOINTMENT 

[section 314(1B)]

·         no partner or relative of a director or manager,

·         no firm in which such director or manager,

·         no firm in which relative  of director or relative of  manager   is a partner,

·         no private company of which such a director or manager relative  of director or relative of  manager   

shall hold any place of profit in the company for  total monthly remuneration  of Rs. 50000 (Fifty thousand ) OR MORE

except with the

a)    prior consent of the company by a special resolution (prior here means SR must be passed before appointment )

And

b)    the approval of the Central Government [for your kind information Form No. is e- form  24B]:

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