Companies Act Section 378Q — Vacation of office by directors
CHAPTER XXI
Commercial / Corporate
Summary
Sub-section (1) lists the situations in which a director of a Producer Company must vacate their office. The office becomes vacant if the director is convicted by a court of an offence involving moral turpitude and is sentenced to imprisonment for at least six months.
Under clause (b) of sub-section (1), the office also becomes vacant if the Producer Company in which the person is a director has defaulted on repaying any advances or loans taken from any company, institution, or other person, and that default continues for ninety days.
Under clause (c) of sub-section (1), the office becomes vacant if the director themselves has defaulted on repaying any advances or loans taken from the Producer Company in which they are a director.
Under clause (d) of sub-section (1), the office becomes vacant if the Producer Company in which the person is a director has not filed its annual accounts and annual return for any continuous three financial years, or has failed to repay its deposit, withheld price, patronage bonus, or interest on those amounts on the due date, or has failed to pay dividend, and such failure continues for one year or more.
Under clause (e) of sub-section (1), the office becomes vacant if a default is made in holding an election for the office of director in the Producer Company, in accordance with the provisions of the Act and the company's articles.
Under clause (f) of sub-section (1), the office becomes vacant if the annual general meeting or extraordinary general meeting of the Producer Company in which the person is a director is not called in accordance with the provisions of the Act, except where this is due to a natural calamity or some other similar reason.
Sub-section (2) states that the provisions of sub-section (1) apply, as far as may be, to the director of a Producer Institution that is a member of a Producer Company.
Official Text
(1) The office of the director of a Producer Company shall become vacant if,—
(a) he is convicted by a court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months;
(b) the Producer Company, in which he is a director, has made a default in repayment of any advances or loans taken from any company or institution or any other person and such default continues for ninety days;
(c) he has made a default in repayment of any advances or loans taken from the Producer Company in which he is a director;
(d) the Producer Company, in which he is a director—
(i) has not filed the annual accounts and annual return for any continuous three financial years; or
(ii) has failed to, repay its deposit or withheld price or patronage bonus or interest thereon on due date, or pay dividend and such failure continues for one year or more;
(e) default is made in holding election for the office of director, in the Producer Company in which he is a director, in accordance with the provisions of this Act and articles;
(f) the annual general meeting or extraordinary general meeting of the Producer Company, in which he is a director, is not called in accordance with the provisions of this Act except due to natural calamity or such other reason.
(2) The provisions of sub-section (1) shall, as far as may be, apply to the director of a Producer Institution which is a member of a Producer Company.