CS Divesh Goyal

Practicing Company Secretary

GOYAL DIVESH & ASSOCIATES

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

REMOVAL OF DIRECTORS UNDER COMPANIES ACT- 2013

GOYAL DIVESH & ASSOCIATES, Practicing

Company Secretary
SERIES

PROCEDURE REMOVALDIRECTOR CA- 2013

NO- 34

Series-34
Power to remove directors has always been bestowed on
shareholders, as we all know that at the end of the day,
directors are answerable to shareholders. Nothing has changed in
the procedural aspect under Companies Act, 2013 as well.
Shareholders can remove any director before the expiry of his
tenure, except any director appointed by Tribunal for prevention of
oppression and mismanagement u/s 242 and a director appointed under
principle of proportional representation u/s 163.
Right to Remove a Director is Legal Right of Share Holders:
Section 169 and Chapter 7 of Companies Act, 2013 Right of Shareholders
to remove a director in the General Meeting through Ordinary Resolution is
a Legal Right. This legal right cannot be damaged or taken away by MOA,
AOA or any other documents or Agreement.
Section 169 and Chapter 7 details the procedure of removal of director by
shareholders as follows: A company MAY, by ORDINARY RESOLUTION, remove a director, Not
being a director appointed by the Tribunal under section 242, before the
expiry of the period of his office after giving him a reasonable opportunity
of being heard.

CS Divesh Goyal
Practicing Company Secretary
GOYAL DIVESH & ASSOCIATES

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

The provision relating to removal shall not apply where the company has
availed itself of the option to appoint not less than 2/3RD (two thirds) of
the total number of directors according to the principle of proportional
representation.
A special notice shall be required of any resolution, to remove a director, or
to appoint somebody in place of a director so removed.
As per Section- 115 of Companies Act, 2013:
Special notice To Company-There is a criteria, who can send the notice to
the Company. Only shareholder/s holding not less than 1% of total voting
power or holding shares on which an aggregate sum of not less than Rs.
5,00,000 has been paid up as on the date of notice, can send special
notice to the Company for removal of director. The same should be signed
by the concerned shareholder/s.

Date of meeting- Shareholders have the right to decide the date of
meeting. However, the special notice shall not be sent earlier than 3
months (three months) from the date of meeting but at least 14 clear
days before the date of the meeting, at which the resolution is to be
moved.
On receipt of notice of a resolution to remove a director, the company shall
immediately send a copy thereof to the director concerned, and the
director, whether or not he is a member of the company, shall be entitled
to be heard on the resolution at the meeting.
Intimation to Director- The Company shall forthwith send a copy of the
notice to the concerned director.

CS Divesh Goyal
Practicing Company Secretary
GOYAL DIVESH & ASSOCIATES

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

Reasonable Opportunity of being heard- The director concerned may make

representation in writing to the company and requests its notification to
members

of

the

company.

The

Director

may

request

to

send

his

representations along with the notice to the members and to be heard at

the meeting. However, the rights may not be available, if on the application
either of the Company or of any other person who claims to be aggrieved.
Intimation By Company to all shareholders:
1. The company shall, if the time permits it to do so;
(a)Company shall take immediate steps to send the notice to its
members, at least 7 clear days before the meeting. The notice has to be
sent in the same manner as in case of any other general meeting of the
Company; and
(b) Send a copy of the representation to every member of the company
to whom notice of the meeting is sent.
2. The company shall, if the time not permits it to do so;
Notice shall be published in English language in English newspaper and in
vernacular language in a vernacular newspaper, both having wide
circulation in the State where the registered office of the Company is
situated. At the same time, the notice shall also be posted on the website,
(if any). However, it shall be published at least 7 clear days before the
meeting.
The

copy

of

the

representation

need

not

be

sent

out

and

the

representation need not be read out at the meeting if, on the application
either of the company or of any other person who claims to be aggrieved,

CS Divesh Goyal
Practicing Company Secretary
GOYAL DIVESH & ASSOCIATES

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

The Tribunal is satisfied that the rights conferred by this sub-section are
being abused to secure needless publicity for defamatory matter; and the
Tribunal may order the companys costs on the application to be paid in
whole or in part by the director inspite of that he is not a party to it.
***Members may pass remove the director by passing ordinary resolution.
Appointment of director in place of removed director- A vacancy created
by the removal of a director under this section may, if he had been
appointed by the company in general meeting or by the Board, be filled by
the appointment of another director in his place at the meeting at which he
is removed, provided special notice of the intended appointment has been
given. A director so appointed shall hold office till the date up to which his
predecessor would have held office if he had not been removed. If the
vacancy is not filled, it may be filled as a casual vacancy. The director who
was removed from office shall not be re-appointed as a director by the
Board of Directors.
File Form- DIR-12 within 30 days of passing of resolution for appointment
of Director.
Some Important Judgment come under Section- 284 of Companies Act,
1956 (Corresponding of Section-169 of Companies Act, 2013):
KHETAN INDUSTRIES PRIVATE LIMITED VS. MANJU RAVINDRA PRASAD
KHETAN
In this case it was held by the court that the shareholders have a right to
remove the directors under section 284 by passing ordinary resolution and
section 284 provides an inbuilt mechanism for the enforcement of the right
and civil court has no jurisdiction to entertain the suit for removal of
director.

CS Divesh Goyal
Practicing Company Secretary
GOYAL DIVESH & ASSOCIATES

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

LIC of India v Escorts Ltd.

As per a milestone judgment given in LIC of India v Escorts Ltd. (1986) it
was held that it is not necessary to give reasons in explanatory statement
for removal of a director as desired by section 173(2) (corresponding
Section-102) . Reason behind this judgment given by the court was that
the company is acting on the basis of a special notice given by the
shareholder u/s 284 and it is not a resolution proposed by the company.
Only shareholder/s holding not less than 1% of total voting power or
holding shares on which an aggregate sum of not less than Rs. 5,00,000
has been paid up as on the date of notice, can send special notice to the
Company for removal of director

PROCEDURE FOR REMOVAL OF DIRECTOR IN TABULAR FORM:

1.

A (Special notice) of the intension to move a resolution for the

removal of director be furnished by No. of members (according to
requirement of Section- 115 of Companies Act, 2013) to the
company at least 14 days before the meeting at which it is to be
moved, exclusive of the day on which the notice is served and the
day of the meeting. (Section 169)

2.

The company shall, immediately after the notice of the intention to

move any such resolution has been received by it, give its members
notice of the resolution in the same manner as it gives notice of the
meeting.

3.

If is not possible for the company to give notice to all the members,
publish by advertisement in the newspaper having an appropriate

CS Divesh Goyal
Practicing Company Secretary
GOYAL DIVESH & ASSOCIATES

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

circulation not less than 7 days before the meeting.

4.

The company must give intimation to the concerned director of the

intended resolution by sending a copy of the special notice received
by it, forthwith on receipt thereof. The director shall have the right
to be heard on the resolution at the meeting.

5.

The

director,

who

is

sought

to

be

removed,

can

make

representation in writing against his removal and request the

company to notify it to the company's members [section 169]. If
the director requests the company to notify the members of the
company

his

representation

against

his

removal

and

the

representation is of reasonable length and it has been received not

too late, the company must
(a) Mention in the notice of the resolution to be moved at the
annual general meeting, the fact of the representation having
been received; and
(b) Send a copy of the representation to every member along with
the notice of the meeting if the representation has been
received before sending the notice of the meeting or separately
if the representation has been received after sending the notice
of the meeting.
If the representation could not be sent to the members because it
was received too late or because the company made a default in
sending it, the company must read out the representation at the
annual general meeting, if the director requires it to do so. In
addition, director can make oral representation at the annual
general meeting.

CS Divesh Goyal
Practicing Company Secretary
GOYAL DIVESH & ASSOCIATES

6.

Mob: +91-8130757966
EMAIL: csdiveshgoyal@gmail.com

Hold and convene a General meeting to discuss besides others the

following matters: To pass a [Ordinary resolution] for the removal
of director.

7.

In case of listed companies, file a copy of the proceeding of the

general meeting in the Stock exchange (s) where the securities of
the company are listed.

8.

File [e-form no. 12] with the Registrar of Companies within 30

days of passing the resolution.

9.

Pay the requisite fees, as prescribed by the Companies (Registration

Offices and Fees) Rules, 2014.

10.

Fees can be paid through Credit Card / by cash / by cheque in

favour of MCA Collection Account ICICI Bank at the prescribed
rates.
http://www.mca.gov.in/Ministry/pdf/tableoffee_01042014.pdf
Table of Fees given on this Link.

(Author CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and
can be contacted at csdiveshgoyal@gmail.com) Disclaimer: The entire contents of this document have been
prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.
Though utmost efforts has made to provide authentic information, it is suggested that to have better
understanding kindly cross-check the relevant sections, rules under the Companies Act, 2013. The observations
of the author are personal view and the authors do not take responsibility of the same and this cannot be quoted
before any authority without the written