Approval of reimbursement of medical expenses incurred beyond the ceiling mentioned in the total managerial remuneration package - Companies Law - CIRCULAR LETTER NO. 2/31/CL-VII/95

CIRCULAR LETTER NO. 2/31/CL-VII/95 DATED 7-11-1996, ADDRESSED TO ALL CHAMBERS OF COMMERCE AND INDUSTRY BY THE DEPARTMENT OF COMPANY AFFAIRS Subject:- Approval of reimbursement of medical expenses incurred beyond the ceiling mentioned in the total managerial remuneration package In supersession of this Department's Circular No. 1/91, dated 12th February, 1991, I am directed to say that in accordance with the provisions of Part II of Schedule XIII of the Companies Act, 1956 no separate ceiling has been prescribed for expenses incurred on medical treatment. This Department has been receiving proposals for reimbursement of expenditure incurred on specialised medical treatment abroad of managing director/whole-time director/manager of public limited companies over and above the ceiling laid down in the managerial remuneration package. Any proposal for reimbursement of medical expenses incurred by managerial personnel on a specialised medical treatment abroad in excess of the limits mentioned in total managerial remuneration package requires the approval of Central Government under section 310 of the Companies Act. You may, therefore, advise your constituent members that an application for this purpose should be preferred with the Central Government in the prescribed form after complying with the required formalities. You may also like to advise your members that such proposals are normally considered by the Central Government within the framework of the policy as stated below : (a) Having regard to the improved medical facilities available in India, the managerial personnel should obtain specialised treatment abroad only in exceptional and deserving cases. All proposals for reimbursement on specialised medical treatment abroad must invariably be accompanied by an essentiality certificate issued and signed by Director General of. Health Services of the concerned State Government/Union Territory. (b) The ceiling on reimbursement of medical expenses on specialised medical treatment abroad (inclusive of air fare, boarding/lodging for the patient and the attendant, where the Director General of Health Services considers it necessary that the attendant should accompany the patient) is Rs. 9 lakhs only. (c) The proposal for increase in the remuneration by way of reimbursement of medical expenses on specialised treatment abroad is considered in respect of the managerial personnel himself/herself and not his/her family members or dependents. (d) It should be noted that any claim for an amount in excess of Rs. 9 lakh would not be entertained by the Central Government. (e) The application under section 310 of the Companies Act, in this regard, should be preferred within the currency of the tenure of the managerial personnel concerned.