Sitting fees from Subsidiary? Urgent

Well In my opinion, it can be done as Y Compnay is paying sitting fees to Mr. A in the capicity as Director. It has nothing to do with Holding and Subsidary Compnay.

I request lerned members  to share their views.

Regards

Originally posted by : Mayuri Lal
	Dear Members,   Mr. A is a non executive independent Director of X Ltd (Holding Co.) and also in Y Ltd(wHOLLY oWNEDsubsidiary of XLtd).   M extremely confused as to whether the Y Ltd(subsidiary of X) can pay siittting fees to Mr.A.   he is getting sitting fees from X Ltd . So now we want to pay him sitting fees from Y Ltd as well.   CAn we do that??? If yes please tell the section for which supports the answer.   Its very urgent.   regrads, Mayuri Lal

 Hi Mayuri

I agree with Mr.Jaideep's view.

As far as person acting as director in number of companies within specified limit,

he is entitled to receive sitting fees from respective companies for the respective Board Meeting .

Other views solicited

regards

Santosh Shah

Thanks Santosh for your views...........

However we would like to have views of more members...

Regards

Jaideep Pandya

Thanks Jaideep and Santosh.

But still there is a paragraph in Ramaya under section 314 under the heading "Hosling and Subsidiary Co."  m attaching the extract of it fo your reference.

The second paragraph is confusing me.

Originally posted by : Mayuri Lal
	Thanks Jaideep and Santosh.   But still there is a paragraph in Ramaya under section 314 under the heading "Hosling and Subsidiary Co."  m attaching the extract of it fo your reference.   The second paragraph is confusing me.

 Hi Mayuri

I clarified this issue with people known to me.

It seems if a director acting as Non -Executive Director then he is entitled to get

Sitting Fees both from Holding & Subsidiary.

But if he is acting as Executive Director in a holding company & Non -Executive in Subsidiary Company

then section 314 ( Office of Place of Profit) will attract, and such sitting fees needs to be returned back

to Susbsidiary company.

So all matters is the Director is in what capacity.

In your case he is Non-Executive Director so he should be entitled to receive from both companies in my view.

Experts / Other members please provide your valuable opinions.

regards

Santosh Shah

Hi Santoh

Thanx for reply..

But the scanned abstract which i hav attached in the previous reply , under the Holding and Subcidiary Company there are teo paragraphs, the second one is confusing me. Bkoz it is silent as to which director and its says even sitting fees ...

If anybody can clarify me regarding that.

Even i agree with you u n Jaideep .. But this particular abstract of 314 is confusing me.. and thats why not getting confidence

Originally posted by : Mayuri Lal
	Hi Santoh   Thanx for reply..   But the scanned abstract which i hav attached in the previous reply , under the Holding and Subcidiary Company there are teo paragraphs, the second one is confusing me. Bkoz it is silent as to which director and its says even sitting fees ...   If anybody can clarify me regarding that.   Even i agree with you u n Jaideep .. But this particular abstract of 314 is confusing me.. and thats why not getting confidence

 Hi Mayuri

I agree that its confusing. I suggest you not to depend  on Ramayya Book only.

Refer other books if the statement is confusing in Ramayya Book.

and wait for experts / other members to reply.

regards

Santosh Shah

I guess, we should read that para in context of the section, which then implies what santosh is referring. Section 314 will not attract unless he is holding office or place of profit i.e. if he is not holding directorship in execcutive capacity.

We can not directly apply apply rule of ejesdum - generis here, Neverthless, we have rules of interpretation by which we can co-relate text with heading.

Regards

Jaideep Pandya

and also we hav appointed him because of fullfiling the condition of clause 49 that atlast one non executive director will be on board of Subsidiary