Title: Naveen Bhatnagar v. M/s Sudarsham Consolidated Limited & others
Decided: 20th October 2023
CP No. 3/2013
Coram: HON’BLE MR. JUSTICE SANJAY DHAR
Introduction
The High court of Jammu & Kashmir has dismissed an appeal challenging the order of the Company Law Board where the resignation of the appellant was not accepted in the manner as provided under the Articles of Association.
Facts of the Case
The Appellant was appointed as a Director of the Company on 06.02.2009 and on 17.09.2010, he addressed a resignation letter to the Board of Directors of the Company, which was duly received and acknowledged by the Company. On 21.09.2010, a communication was addressed by one of the Directors of the Company, informing him that his resignation as on 17.09.2010 has been noted in the records of the Company and that he has been relieved with effect from 21.09.2010. The appellant was also informed that his Form 32 will be filed with the Registrar of the Companies accordingly. Company did not submit Form 32 with the Registrar of the Companies, the appellant made various representations to the Company as well as to the Registrar of the Companies in this regard but no action was taken. Later appellant approached the Company Law Board seeking a direction upon Company to submit Form 32 of the appellant with the Registrar of the Companies, which prayer was declined by the Board.
The appellant has challenged the impugned order passed by Board on ground that once the Company admitted the receipt of resignation letter and conveyed him its acceptance, there was no reason for the Company not to submit Form 32 in due course of time. Appellant contends that the Company Law Board has failed to take note of the resignation letter and the acceptance letter issued by the Company .
Court Analysis and Decision
Court observed that clause 95 of the Articles of Association of the Company clearly provided that the office of the Director would become vacant on resignation of the Director by notice in writing and its acceptance by the Board, meaning that unless the resignation is accepted by all the Board of Directors, the same would not take effect. The Company Law Board is right in holding that, resignation of the appellant would take effect only if his letter of resignation is considered and accepted by the Board of Directors, but it has not been done in the present case. Therefore, the contention of the appellant that the moment resignation was tendered by him, the same would take effect, is not tenable. Merely because one of the Directors had conveyed acceptance of the resignation of the appellant would not make any difference, because the resignation of the appellant was not accepted in the manner as provided under the Articles of Association. Hence, the judge did not find any ground to interfere with the well-reasoned and lucid order passed by the Company Law Board. The order was upheld by dismissing the appeal.
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Written by- K R Bhuvanashri
