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TMI Blog1986 (7) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... ce his graduation in civil engineering from Poona University, at the age of 22, in 1957, ranking first in the University. He proceeded to France under a French Government scholarship for advanced studies and training in pre-stressed design construction and secured the D.C.T. He was awarded the ACTIM MEDAL for the most outstanding professional among 35,000 renowned experts trained by ACTIM (French Government agency) over a period of 20 years. He is a recognised expert on structural design and diverse applications of pre-stressed concrete. He is editor of the Stup Bulletin of Information, a quarterly journal priced at Rs. 6 per issue, which enjoys considerable circulation in the professional circles concerned with civil engineering. He has been the vice-president from India of the Federation International FIP Congress, (FIP) and as such vice-President brought out a report to the Ninth International FIP Congress, Stockholm 1982, a report which has been published by the Institution of Engineers (India). The said report contains not only his foreword as vice-president of FIP from India, but also contains an article by him and another professional named Shri P.C. Bhasin and Shri N. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any. As managing director of the company, he is concerned with matters of several kinds which are essentially of organisational nature as described already in paragraph 4 above. These matters also involve their own peculiar responsibility but in view of the professional services by which he is able to fulfil himself in relation to various clients of the company, he is content to be an honorary managing director as resolved by the company. The copies of the resolutions passed by the company in general meeting in respect of the two capacities of Shri Alimchandani as managing director and as senior chief consultant on the same date, namely, July 20, 1982, are annexed hereto and marked as annexure "F" and "G" respectively." In the counter-affidavit that has been filed, there is no exception taken to the assertions in paragraph 6 of the writ petition that Shri C R. Alimchandani is one of the "outstanding professionals". Reply to paragraph 6 is common with other paragraphs of the writ petition, namely, paragraphs 1 to 6 and reads as under : "1-6. Paras. 1 to 6 of the petition filed by the petitioner are matters of record and need no comments." In view of this reply, it is apparent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies (Amendment) Act, 1960, fees for meetings of the board and any committee thereof, attended by a director are paid on a monthly basis, such fees may continue to be paid on that basis for a period of two years after such commencement or for the remainder of the term of office of such director, whichever is less, but no longer. (3) A director who is either in the whole time employment of the company or a managing director may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profits of the company or partly by one way and partly by the other : Provided that except with the approval of the Central Government such remuneration shall not exceed five per cent, of the net profits for one such director, and if there is more than one such director, ten per cent for all of them together. (4) A director who is neither in the wholetime employment of the company nor a managing director may be paid remuneration either ( a ) by way of a monthly, quarterly or annual payment with the approval of the Central Government ; or ( b )by way of commission if. the company by special resolution authorises such payment : Provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also clear that the proviso to section 309(1) excludes certain remuneration which is received by the directors covered by section 309. If the conditions in provisos ( a ) and ( b ) are satisfied, then the remuneration receivable is not covered by the provisions of section 309. Proviso ( a ) to section 309(1) postulates that if the services for which the director is remunerated are of a professional nature, and if in the opinion of the Central Government the director possesses the requisite qualifications for the practice of the profession, then payments made or remuneration given for rendering of such professional services does not need prior approval of the Central Government. In view of the statutory provisions of the proviso to section 309(1), any company can seek the opinion of the Central Government regarding possessing of requisite qualifications. This provision was invoked by the petitioner company. In their letter dated September 10, 1982, annexure 'H', it was stated that : "We would request the Government for expression of such opinion in the case of C. R. Alimchandani. We may add that in the case of a traditional profession like engineering and in the case of an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 14, 1983, is it asserted by the respondents that C. R. Alimchan-dani does not have the requisite qualifications for the practice of the profession of a civil engineer, and specifically it is not asserted in the counter-affidavit that C. R. Alimchandani should not be appointed as senior chief consultant for the reason that he did not have the requisite experience in the field of pre-stressed concrete design. It is not disputed by the respondents that section 309(1) enables a company to seek the opinion of the Central Government regarding possession of requisite qualifications, as the provision exists in the Companies Act. Upon the power being invoked by a company it is necessary and incumbent upon the Central Government, indeed it is its duty, to express an opinion thereon. The Central Government, in my view, cannot sidetrack the issue by requiring compliance with another provision, or any other aspect of company law as a pre-condition to the expression of opinion by it. The Central Government in the instant case by the impugned order required moving of an application under section 309 of the Companies Act for the purpose of getting approval of the Central Government with resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engineers, for the reason that it is common knowledge that the Government of India has its public works department which employs persons who have professional qualifications as civil engineers and who are its wholetime employees. There being no such prohibition against any person holding a professional qualification of a civil engineer from becoming an employee of any person, in my view, it is not material whether the consultation charges which are paid to a professional engineer are paid on monthly basis, or on a case to case basis. Whatever may be the mode of payment to a professional consultant, what is paid to such person is his professional consultancy fee. In any case, I do not see any difficulty in bifurcating the two things which were required to be done by the Central Government, (1) expression of opinion as to whether Shri C. R. Alimchandani was a professional which opinion was not expressed in the letter dated January 14, 1983 but was not disputed in the counter-affidavit, nor was it disputed before me, and (2) approval of reappointment of C. R. Alimchandani as managing director. In the absence of such dispute, I do not see any purpose being served in directing the res ..... 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