Articles of Association

Accordingly, the resolution as aforesaid shall be required to be passed.
'A’ was appointed as Managing Director for life by the Articles of Association of a
private company incorporated on 1st June, 1970. The Articlesalso empowered X’to appoint
a successor. X’ appointed, by will,’G to succeed him after his death. Answer the following:
(i)Can ‘G succeed ‘X’ as Managing Director after the death of ‘X?
(ii)Is it possible for the company in general meeting to remove ‘X’ from his office
of directorship during his lifetime? [CA. (Final) Nov., 1995J
5lns.
(i)‘G’ can succeed ‘X’. Appointing a successor under a power conferred under
the Articles is not considered as ‘assignment of office’ which is prohibited
under Section312 [OrientalMetal Pressingvs. BhaskerKashinathThakoor[1961]
31Comp. Cas. 143 (SC)].
‘(j)’)In case of private companies only, directors appointed for life up to 1st April, 1952 V cannot be removed.
Any other director can be removed under Section 284, i.e.,by passing an ordinary
resolution of which special notice had been given.
(i) In Parween Woodcraft Co. Ltd., Mr. James was named in the list of first
directors. He, however, died before he could assume office. How can the problem
reg. g the appointment of a director be solved in this case?
(ii)case of appointment of directors of a company, all the directors were not
vote on individually, but were appointed by one resolution and no shareholder
objected to it. Discuss the position under the provision of the Companies Act.
(i) The vacancy in question is not a casual vacancy under Section 262 and
cannot, therefore, be filled by the Board of Directors. Accordingly, it will be necessary
for the subscribers to the Memorandum (who will then be only members) to convene
a meeting for the appointment of the director. To the extent to which the Articles do
not make any other provision in this behalf subscribers who would be entitled to
requisition a meeting may call the meeting. A meeting is not necessary if all the
subscribers concur in the appointment.
(i’i)Section 263 stipulates that in the case of a public company or a private company
which is a subsidiary of a public company a motion shall not be made for the
. appointment of two or more persons as director of the company by a single resolution
unless a resolution that it shall be so made has been first agreed to at the meeting
without any vote being given against it [Section 263(1)]. A resolution which is in
contravention of Section 263 (1) shall be void, whether or not objection was taken at
the time of its being so moved [Section 263 (2)]. Hence the appointment of directors
will be void. But, this does not exclude operation of Section 290 which validates acts
where defects are afterwards discovered.XYZMachineries Ltd. having a paid-up share capital of Rs. 80 lakhs proposes
to enter into contract with the following parties for the supply of certain components for a period of five years with effect from 1st January, 1995