What is Consequence of termination or modification of certain agreements What is Right to apply under section 241 Section 243 and 244 of Indian Companies Act 2013
Consequence of termination or modification of certain agreements and Right to apply under section 241 are defined under Section 243 and 244 of Indian Companies Act 2013. Provisions under these Sections are:
Section 243 of Indian Companies Act 2013 "Consequence of termination or modification of certain agreements"
(1) Where an
order made under section 242 terminates, sets aside or
modifies an agreement such as is referred to in sub-section
(2) of that section,
(b) no managing director or other director or manager whose agreement is so terminated or set aside shall, for a period of five years from the date of the order terminating or setting aside the agreement, without the leave of the Tribunal, be appointed, or act, as the managing director or other director or manager of the company:
Provided that the Tribunal shall not grant leave under this clause unless notice of the intention to apply for leave has been served on the Central Government and that Government has been given a reasonable opportunity of being heard in the matter.
Punishment for violation of Section 243 of the Companies Act 2013 regarding termination and modification of certain agreements
(2) Any person who knowingly acts as a managing director or other director or manager of a company in contravention of clause (b) of sub-section (1), and every other director of the company who is knowingly a party to such contravention, shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to five lakh rupees, or with both.
Section 244 of Indian Companies Act 2013 "Right to apply under section 241"
(1) The following members of a company shall have the right to apply under section 241, namely: -
(a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one tenth of the issued share capital of the company, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares;
(b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members:
Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements specified in clause (a) or clause (b) so as to enable the members to apply under section 241.
Explanation.For the purposes of this sub-section, where any share or shares are held by two or more persons jointly, they shall be counted only as one member.
(2) Where any members of a company are entitled to make an application under subsection (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them.