The quorum for a Board Meeting

As per Section 287 (2) the quorum for a Board Meeting is one-third of the total strength (fraction being rounded off to one) or two directors whichever is higher. In the present case 1/3 of 11 is 3.66 rounded off to 4. Though none of the three directors present in the meeting were interested in any of the items, the required quorum was not present at the outset and the meeting cannot be said to be valid.
(ii) Section 287 of the Act prescribes the quorum for a meeting of the Board of Directors of a Company. It provides that the quorum for the meeting of the Board of Directors shall be one-third of its total strength or two directors whichever is higher. Any fraction contained in one-third is to be rounded off as one. The proviso to Section 287 provides that where at any time the number of interested directors
exceeds or is equal to 2/3rd of the total strength, the remaining directors (non-in- .
terested) not being less than 2 shall form the quorum. In the present case cited in the question, of the seven directors present at the meeting five directors are interested. This number is neither equal to, nor does it exceed two-thirds of the total strength which is 11. In view of this the presence of two directors not interested in the agenda, does not form a quorum and hence the meeting is not a valid one.
(iii) A director who fails to disclose his interest contravening the provisions of Section 299 shall be deemed to have vacated his office in terms of Section 283( i) of the Companies Act. He ceases to be a director from the date of which the resolution passed approvirig the transaction. Further, the director is liable to
a fine of Rs. 50,000 under Section 300.
(a) R is the managing director of a public company with a paid-up capital of Rs. 200 lakhs. He is also a partner of the firm in which the other partners are his wife and two sons. The company proposes to enter into a contract with the firm for sale of its products of the value of Rs. 5 lakhs on credit.
(i) When can the contract be entered into?
(ii) What are the duties of R in such a case?
(Hi) Will it make any difference if the contract is entered into with a private company
in which the wife of R and his two sons 5 and T are members? .
(b) A company sold one of its flats to one of the directors and received 50% of the price in cash and agreed to receive the balance in instalments. Would you consider this as a loan granted to director attracting the provisions of Section 295