Lets Analyze

The intention behind including this new corner in our news letter is keeping in view our professional colleagues and also other stakeholders who work on company law related matters.

Being CS professionals all of us know the importance of interpretation of law/statue and especially Company/Corporate law which is treated as Holy Bible by all of us.

Generally in interpreting the statute we do depend upon the commentary written by various renowned authors such as Mr. A. Ramaiya and Mr. K. R. Chandra Atre and others. Thereafter we also depend upon the various case-laws that have been decided by various statutory Bodies in order to arrive at conclusion while interpreting Company Law.

Keeping in view the importance of the case-laws as aforementioned, we have included this corner in our news letter, which we think will be useful for our readers.

In this corner every month we shall be discussing about the various case-laws pertaining to a particular Section(s) in Company law, which would help to understand a particular section in different angles.

To start with we hereby give the case-law related to the Section 2(30) of the Companies Act 1956 which deals with the definition of “Officer”:

Section 2(30):

“Officer includes any Director, Manager or Secretary or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the Directors is or are accustomed to Act”.

By plain reading of the above section we can conclude that “Secretary” is included in the definition of “Officer” of the company. In this context we would like to draw your attention to the following case-law:

Case/Question decided:

Does the Company Secretary fall under the definition of “Officer” under all circumstances irrespective of the context ?

Decided Case law:

Haryana Seeds Development Corporation Limited

Vs.

J.K. Agarwal

Facts of the case:

In the above case, one of the Articles of the company’s Articles of Association has given the Board of Directors the power to appoint or remove the Secretary.

However another Article delegated the power to Managing Director to appoint, suspend and dismiss the officers, staff and workmen of the company.

Exercising these powers Managing Director dismissed the Secretary. The Secretary then filed a petition before the court stating that the Managing Director did not have the power to dismiss him.

Clarification:

The Court pronounced the decision in the favor of the Secretary and decided that the Managing Director did not have the power to remove the Secretary.

Important Point:

While deciding the case the court has stressed on the starting sentence of Section 2 i.e., “ In this Act, unless the context otherwise requires” and has concluded that, in case the context gives a different meaning to the words specified in Section 2, then the same will prevail over the definition given in Section – 2.