Removal of Director

A company may go for removal of director by ordinary resolution, (not being a director appointed by the Central Government in pursuance of section 408) before the expiry of his period of office. This provision shall not apply where the company has availed itself of the option given to it of proportional representation on the Board of Directors to appoint not less than two-thirds of the total number of directors according to the   principle of proportional representation. Special notice shall be required of any resolution for removal of  director, or to appoint somebody instead of a director so removed at the meeting at which he is removed. On receipt of notice of a resolution for removal of director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting. Where notice is given of a resolution for removal of director and the director concerned makes representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so :-

  1. in any notice of the resolution given to members of the company state the fact of the representations having been made; and
  2. send a copy of the representations to every member of the company to whom notice of the meeting is sent

If a copy of the representations is not sent as aforesaid because they were received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting. However, copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Company Law Board is satisfied that the rights conferred by this provision are being abused to secure needless publicity for defamatory matter and the Company Law Board may order the company’s costs on the application to be paid in whole or in part by the director. A vacancy created by the removal of director if he had been appointed by the company in general meeting or by the board in on a casual vacancy, be filled by the appointment of another director in his stead by the meeting at which he is removed, provided special notice of the intended appointment has been given. A director so appointed shall hold office until the date up to which his predecessor would have held office if he had not been removed as aforesaid. If the vacancy is not filled, it may be filled as a causal vacancy in accordance with the provisions. . The above provisions for removal of  director shall not affect :-

  1. any compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director
  2. any other power to remove a director which may exist apart from this provision.

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