Upgrad LLM

appointment as director without consent


The problem is as follows:

Mr X has been made a non-executive director in a private limited company. The company filed form 32 about 9 months back. Mr. X had never given his consent to become a director. The company has never sent him any communications like notices for board meetings, etc. Mr.X was providing marketing services to the company as a third party. Even after repeated written notices, the company tells Mr. X that they will remove his name only if he gives the company a 'no-dues' letter (i.e write off the money owed to him by the company as marketing commission).

What legal action can Mr. X take?

Can action be taken under Company Law and Criminal Law? If yes, under which provisions?

Any reference to judgments will help. Please advise. 

 
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Dear Mr. Gupta,

No one can be made a director of a company unless he consents to become a director.  Please note that Section 264 of the Companies Act requires the consent to act as a Director be filed with Form 32 with the Registrar of Companies.  Now, as you are saying no consent was given to become a Director, the question arises how they have filed Form 32.  Has the company filed a forged consent letter with Form 32, if that is the case, you have remedies available under the Criminal laws.  You also have remedies available under Civil laws for naming you as Director without your consent.

Further, considering that you may have forgotton signing of consent and your appointment as Director is completely valid, no one can force you to hold the office of Director.  You can submit your resignation anytime you wish.  The only precaution you have to take is you should have an acknowledgement.  You can send your resignation over mail also addressed to the company and all the Directors.  It is the duty of the company to file Form 32 for resignation within 30 days of your resignation.  As a precaution, you can also get the same submitted to the concerned ROC office.

As regards the remuneration, if there is a contractual arrangement, you can take appropriate action for recovery of the same from the company.

 

 
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