Resignation of Directors

[Bidu Bhusan Dash]

Dear Members,

I have the below mentioned query:-

In case of a private limited company............ one director has been appointed in the Board meeting held on 8.9.2011 and that director has send his resignation letter on 17.9.2011.............. company didn't take any action on that........... latter after 4 to 5 days MD of the Company said he was withdrawn his resignation letter by sending email to me..........and on 11.10.2011 there was a Board Meeting and he was present/attend the meeting,his signature was also in the attendance register.......... and latter on 31.10.2011 there was also a board meeting and Board wants to accept his resignation letter and remove him from the Board............kindly guide me how to give effect his resignation letter and filed his Form-32 with ROC ?

but the director concerned contended that he will challenge his removal on the basis of his withdrawal of resignation and attended two nos of Board meeting after his resignation   !!!!!!!

its urgent  !   

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Regards,

Bidu

[Naveen Shree Pandey]

Dear,

 

Glossop V. Glossop (1907) 2 Ch.370

            Once a Director has given a notice of resignation, he cannot withdraw it except with the consent of the company properly considered by the directors. But where the articles contain a provision that a director may resign only if the Board consents, the resignation shall not be effective until the Board's consent is given and the resignation may be withdrawn in the meantime.

                        The resignation of a Director would become effective on and from the date it was tendered or submitted and from the articles of the association of the company it would be clear that resignation of a Director would be effective from the date it was tendered. In case of resignation of a Director there is no formality that the Board of Directors should accept it before it becomes operative

 

But in your case the Director have allowed to attend meeting which means indirect acceptance from the side of Company and it's Board.

They neither disallow the withdrawal of resignation expressly.

You have a way out to show that Director as the Special invitee in the meeting of Board. Further, you may also enforce hat Board has not accepted his withdrawal hence he cannot unilaterally withdraw resignation

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Thanks and Regards

 

Naveen Shree Pandey

 

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[Bidu Bhusan Dash]

Dear Naveen

In the last para you have mentioned that show him as special invite ........... but we canot show him as invite becoz we have taken his sign in the Directors attendance register ...........then how you can show him as invite...........please share some other way out..........Can we remove him u/s 284 in the general meeting by passing a ordinary resolution by giving a special notice ............please throw some light on this line ...........may be this is the only method .............please share

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Regards,

Bidu

[Naveen Shree Pandey]

Dear Bidu,

 

The thing is whether you have send him a notice to attend the Board meeting?? if yes then it the acceptence. Further, allowing him to attend meeting means Board did not deny his wihdrawal of resignation.

 

Route of 284 is clumsy as Removal of Director and Removal of Auditor lands into same consequences. Well you may try Remove him through 284.

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Regards,

Bidu

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[Bidu Bhusan Dash]

Dear Naveen

Clumsy means...........is it legally valid or not.....I mean we can remove him or not as per 284..........if not,then what is the other way out.........becoz Board wants to remove from the Board seriously

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Regards,

Bidu

[Naveen Shree Pandey]

As you have said that the Director has warned to take steps against company if he has been removed otherwise.

 

If the Board remove him through 284 then he may apply for oppression or mismanagement as a consequnce. Further, you have to give reason for his removal also.
 

And as the company is public you have to take CG approval also for his removal and in the form you have to attach his representation made at General meetings. So the way is clumsy.

 

It is legally valid but a long way out.

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Regards,

Bidu

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[Bidu Bhusan Dash]

Its a private limited company and that Director is a director only not a share holder

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Regards,

Bidu