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CS Executive · Company Law and Practice · Directors

Mr. Arvind Rao, a director of Kaveri Textiles Ltd, attends no Board meeting at all during a twelve-month period, although the Board held five meetings in that period. He had not applied for leave of absence. What is the position under the Companies Act, 2013?

His office falls vacant. Section 167(1)(b) provides that a director who absents himself from all Board meetings held during twelve months vacates office, and it applies with or without leave of absence being sought from the Board.

  1. AHis office becomes vacant, whether or not he sought leave of absenceCorrect
  2. BHis office becomes vacant only if the Board refused his leave of absence
  3. CHis office becomes vacant only after he misses three consecutive meetings
  4. DHis office does not become vacant unless the members remove him by ordinary resolution

Explanation

Under section 167(1)(b), a director's office becomes vacant if he absents himself from all Board meetings held during twelve months, with or without seeking leave. Because he attended none of the five meetings, vacancy follows automatically. The option tying vacancy to refusal of leave is wrong because leave makes no difference to this ground.

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