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Provision:
As per 196(3) No company shall appoint or continue the employment of any person as
managing director, whole-time director or manager who is below the age to twenty-one years or
has attained the age of seventy years:
Provided that appointment of a person who has attained the age of seventy years may be made
by passing a special resolution in which case the explanatory statement annexed to the notice for
such motion shall indicate the justification for appointing such person;
Note:
As per proviso its clear that if at the time of appointment age of person is more than 70 year
then by passing of Special Resolution that person can be appoint as Managing Director. But now
question is IF person attain age of 70 after appointment during his tenure then what are the
consequences?
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DIVESH GOYAL
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The arguments of the counsel of the Plaintiff: Once person attain age of 70 year even
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DIVESH GOYAL
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According to the defendant if a person who is of the age of 68 years is appointed after 1st April
2014 for five years, he shall not continue after two years once he attains the age of 70 years. The
court did not agree to thisview either and gave a judgment that the age is relevant only on the
date of appointment and not anytimelater.
While conducting secretarial audit of a company, the practicing company secretary shall keep
this judgment inview while ascertaining compliance with provisions of Section 196 of CA, 2013
by the company.
My View:
As per the decision of Honble Bombay High court, attainment of age of 70 years
year after
appointment is not a result of mid
mid-term
term disqualification of Managerial Personnel.
But as per my understanding Company is required to pass Special resolution before attainment
of age of 70 year or subsequent General Meeting of Company held after attainment
attainmen of age of 70
year to continue as Managerial Personnel of the Company.
Company can also pass special resolution even at the time of appointment if the director who is
to appointed is going to attain age of 70 years during his tenure.
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