9911796707
TMI Blog1975 (9) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... for the year 1968 in spite of service of notice and that the company further failed to submit the annual return for the year 1968 which should have been submitted on or before February 7, 1969. When the substance of the complaint was read out to the petitioner (accused No. 2), he stated that he had resigned his directorship and, therefore, he was not liable. Blue Valley Dairies Private Ltd. was registered under the Companies Act on 19th June, 1967. The main object of the company was to establish and run a dairy, agricultural and livestock farms and to carry on business in the manufacture and distribution of cream, butter, ghee, condensed milk, etc., and do all those things necessary for the purpose of developing and improving dairy. By the articles of association, there were four directors. The petitioner, who was a technical expert, was appointed as managing director of the said company at the meeting of the directors of the company held on July 7,1967. The Assistant Registrar of Companies had issued notices to the company and its directors intimating that the annual general body meeting of the company ought to have been held at the latest on December 9, 1968, and the balance-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision relating to the resignation of office of director as in the case of managing agent provided under section 342 of the Act. In exhibit P-1, the memorandum of articles of association, there is no provision giving the right to a director to resign at anytime. Under section 284 of the Act, a company may remove a director before the expiry of his office under the conditions mentioned therein. Section 262 of the Act provides for filling of casual vacancies among the directors if a director appointed by the company in the general meeting vacates before his term of office. Section 283 of the Act deals with the vacation of office by directors, and the circumstances under which the office is vacated are mentioned therein. The relevant portion of section 283 is as follows : "(1) The office of a director shall become vacant if-- (a) he fails to obtain within the time specified in sub-section (1) of section 270, or at any time thereafter ceases to hold, the share qualification, if any, required of him by the articles of the company: (b) he is found to be of unsound mind by a court of competent jurisdiction ; (c) he applies to be adjudicated an insolvent; (d) he is adjudged an insolve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and as to when a resignation by a director takes effect. Thus, we are now left with the precedents and practice on the subject. So far as the Indian Companies Act is concerned, this has followed the pattern of the British law relating to companies. If there is any provision in the articles giving right to a director to resign at any time, the resignation will take effect without any need for its acceptance by the board or the company in the general meeting. In the absence of any provision relating to resignation in the articles of association, it is well-settled that a resignation once made takes effect immediately when the intention to resign is made clear. In Halsbury's Laws of England, fourth edition, volume 7, at page 316, in paragraph 536, under the heading "Resignation", it is stated as follows: "Where by the articles a director has power to resign at any time, his resignation takes effect independently of acceptance by the other directors or the company. Where the articles of association of a company provide that the office of a director is to be vacated ipso facto if by notice in writing to the company a director resigns office, an oral resignation if accepted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the board or the company in general meeting. Where a director is elected or has contracted to act for a fixed period, his resignation, before the expiration of the period, may make him liable for damages for breach of his contract, unless the articles permit such resignation. In the absence of any provision in the articles the ordinary rule of common law as regards resignation by an officer or agent must be followed, namely, intimation by notice given either to the company or the board and acceptance of same by them. See Glossop v. Glossop [1907] 2 Ch 370 and Latchford Premier Cinema Ltd. v. Ennion [1931] 2 Ch 409. In the latter case, even resignation orally tendered at a general meeting and accepted by the meeting was held to be effective. See also State of Bihar v. Sitaram J hunjhunwala AIR 1967 Pat. 433. Where a resignation states that it is to take effect on acceptance, or the articles so require, acceptance is necessary to end the tenure of office. Where, however, resignation says that it is to take effect immediately, acceptance is not necessary, unless the articles or any provision of law makes it necessary. Any form of resignation, whether oral or written, is suffic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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