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TMI Blog2023 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... aken from the shareholders of the Company through a special resolution before a person who has attained the age of 75 years can be appointed? - HELD THAT:- The board of directors can appoint any person as an additional director who shall hold office up to the date of the next Annual General Meeting. A reading of Section 152(2) and 161(1) of the Companies Act makes it clear that a director can only be appointed by the shareholders of the Company in an Annual General Meeting. However, the board of directors can appoint any person as an additional director who will hold office up to the date of the next Annual General Meeting. In the instant case, the board of directors appointed Mr. Swaminathan Sivaram as an additional director till the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Life Sciences Ltd. vs. SEBI Ors [ 2023 (5) TMI 447 - SECURITIES APPELLATE TRIBUNAL, MUMBAI] Tribunal considered the provisions of Regulations 17(1A) with other provisions and held that the word unless as depicted in Regulation 17(1A) does not mean prior approval nor the requirement of passing a special resolution was a qualificatory condition for appointment as a director. Thus the contention of the respondent that no person can be appointed as a non-executive independent director unless prior approval of the shareholders was made by a special resolution is erroneous. Thus Regulation 17(1A) and 17(1C) has to be read harmoniously with the provisions of Section 152(2) and 161(1) of the Companies Act which will make it clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional director in the category of non-executive independent director by way of a board resolution. 2. The facts leading to the filing of the present appeal is, that the appellant Company is a public limited company and its shares are listed on the BSE and NSE. The composition of the board of directors of the Company was that it had chairman-cum- managing director, a managing director, a director and four independent directors. The composition of the board of directors was in accordance with the LODR Regulations as it had consisted more than six directors and was in compliance with Regulation 17(1C) of the LODR Regulations. Under the LODR Regulations the Company was required to appoint three independent directors which was already ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fine of Rs. 1,08,560/-. Similar fine was also imposed by NSE. 6. We have heard Shri Anand Kankani, CS with Shri Prakhar Godre, CS and Ms. Muskan Mubarakali Kadiwar for the appellant, Shri Sagar Divekar with Shri Abhimanyu Mhapankar, the learned counsel for the BSE, Shri Ankit Lohia with Shri Shlok Bodar, the learned counsel for NSE and Shri Ravishekhar Pandey, Shri Nishit Dhruva, Ms. Shefali Shankar, Ms. Rasika Ghate and Shri Harsh Sheth, the learned counsel for the respondent no. 2 SEBI. 7. At the outset out we find that no reason whatsoever has been given in the impugned order as to why and how the Company has violated the provisions of Regulation 17(1A) of the LODR Regulations. The impugned order cannot be sustained on this short g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier. 13. A perusal of the aforesaid provisions indicates that the board of directors can appoint any person as an additional director who shall hold office up to the date of the next Annual General Meeting. 14. A reading of Section 152(2) and 161(1) of the Companies Act makes it clear that a director can only be appointed by the shareholders of the Company in an Annual General Meeting. However, the board of directors can appoint any person as an additional director who will hold office up to the date of the next Annual General Meeting. 15. In the instant case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , from a conjoint reading of Section 149, 152(2), 161(1) of the Companies Act 2013 read with Regulation 17(1A) and 17(1C) of the LODR Regulations makes it apparently clear that the director is required to be appointed by the members of the Company. If a person is appointed as an additional director by the board of directors then his appointment is till the next annual general meeting. Regulation 17(1A) provides that if a person who has attained the age of 75 years then his appointment has to be made by a special resolution passed by the members and Regulation 17(1C) provides that appointment must be approved in the next general meeting or within three months from the date of the appointment whichever is earlier. 19. In the instant case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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