Approval of Central Government

As the company is incurring losses, the remuneration may be paid in accordance with Section II of Part II of Schedule XIII without approval of Central Government. He may be paid remuneration by way of salary, dearness allowance, perquisites and other allowances not exceeding ceiling limit of Rs. 10,50,000 [now Rs. 24,00,000 w.e.f. 2. 3.
2000] per annum or Rs. 87,500 [now Rs. 2,J!.e.f. 2. 3. 200’61 perlOnth’. He is
also eligible to the following perquisites which shall not be included in the computation of ceiling on remuneration.
(a) contribution to P.F., super-annuation fund or annuity fund to the extent not
taxable under Income Tax Act.
(b) gratuity payable at a rate not exceeding half months’s salary for each com
pleted year of service; and
(c) encashment of leave at the end of tenure.
an existing rotational director of M RN Company Limited whose term expired at the Company’s Annual General Meeting held on 30th September, 1997, was reappointed at the same meeting. J accepted the reappointment and resumed the office without filing his consent with the concemed Registrar of Companies on his reappointment. A group of members of the company object to J’s continuation as director, since J did not file his consent ‘with the Registrar within the stipulated period as required under the Companies Act, 1956. Examining the provisions of the Act, decide:
(i) Whether the members’ contention shall be tenable and whether J has violated
the provisions of the Companies Act, 1956 in this regard?
(ii) What would be your answer in case J is a person named as director of the
company in the Company’s Articles of Association registered with the Registrar
of Companiesof the Companies Act, 1956 requires every person proposed as a candidate for the office of the director to sign and file with the company his consent to act as a director, if appointed. Further, sub-section
(2) of Section 264 requires a person appointed as a director to sign and file with the Registrar his consent in writing to act as such director. The consent with the Registrar must be filed within 30 days of his appointment. However, the consent with the Registrar is not required to be filed n the case of :
(a) a director re-appointed after retirement by rotation or immediately on the
expiry of his term of office; or
(b) an additional or alternate director, or person filling a casual vacancy in the office of
a director under Section 262, appointed as a directororre-appointed as an additional
or alternate director, immediately on the expiry of his term of office; or
(c) a person named as director of the company under its Articles as first
registered.