'ADDITIONAL DIRECTOR' OF COMPANY AS AN 'OCCUPIER'

[Dr. Sanjiv Agarwal]

Occupier

As per the provisions of Section 2(n) of the Factories Act, 1948, in case of a company, person who should be designated as occupier must be a director only and not any one who is below the rank of director. Accordingly, any of the directors of the company can be appointed as an 'occupier' under the Factories Act, 1948. Since no specific category of directors is specified in the said section, it can be inferred that any kind or any one of directors can be appointed as an 'occupier' of the company.

Director's Appointment

The Directors appointed at annual general meeting of the company are required to be appointed in accordance with the provisions of Sections 255, 256, 257 and other applicable provisions of the Companies Act, 1956.

Additional Director

The appointment of 'Additional Directors' has to be as per the provisions of Section 161(1) of the Companies Act, 2013. This provision came in force w.e.f 12^th September, 2013. Accordingly, the board of directors, if authorized by the articles of association may appoint any person, other than a person who fails to get appointed as a director in the general meetings, as an additional director at any time. In the instant case, querist company's articles of association provide for such authorization.

The concept additional director has emerged from the basic gene 'directors' only and all the provisions applicable to directors in Companies Act or other legislations shall also be applicable to additional directors.

Even though all the directors cannot be designated as additional directors, but all the additional directors can be appropriately termed and considered as directors of the company and at par with other type of directors.

Duties / Responsibilities of Directors       

The duties and responsibilities of directors are spread over different provisions of the Companies Act. Such duties and responsibilities are equally applicable to the all other kind of directorships like additional directors, alternate directors, independent directors etc.

In the Companies Act, 2013, a new Section 166 relates to the 'duties and responsibilities of the directors' but it has not come into force as of now. These duties, inter alia provide for following:

• Subject to the provisions of this Act, a director of a company shall act in accordance with the company's Articles.
• A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole and in the best interest of the company, its employees, the shareholders, the community and for the protection of environment.
• A director of a company shall exercise his duties with due and reasonable care, skill and diligence.
• A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflict, or possibly may conflict, with the interest of the company.
• A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making undue gain, he shall be liable to pay an amount equal to that gain to the company.
• A director of a company shall not assign his office and any assignment so made shall be void.

All the duties and responsibilities of directors are equally applicable to all the other kind of directorships like additional directors and so on in addition to the duties specifically mentioned in respective sections of the Companies Act, 1956 for such directorships.

Conclusion

To conclude, it can be stated that -

1. The duties and responsibilities of additional director are  same as of other directors, and 
2. Additional director can be appointed as an 'Occupier' under the Factories Act, 1948.