Term of a managing director

Section 317 of Companies Act, 1956

MANAGING DIRECTOR NOT TO BE APPOINTED FOR MORE THAN FIVE YEARS AT A TIME.

(1) No company shall, after the commencement of this Act, appoint or employ any individual as its

managing director for a term exceeding five years at a time.

(2) Any individual holding at the commencement of this Act the office of managing director in a

company shall, unless his term expires earlier, be deemed to have vacated his office immediately

on the expiry of five years from the commencement of this Act.

(3) Nothing contained in sub-section (1) shall be deemed to prohibit the re-appointment, reemployment,

or the extension of the term of office, of any person by further periods not exceeding

five years on each occasion :

Provided that any such re-appointment, re-employment or extension shall not be sanctioned

earlier than two years from the date on which it is to come into force.

(4) This section shall not apply to a private company unless it is a subsidiary of a public company

As the company converted to public company immediately after approntment of MD in the instant case, then Section 317 is applicable.