Companies Act, 1956
Sec 388E - Power of Central Government to remove
managerial personnel on the basis of Company Law Board's decision.
(1) Notwithstanding any other provision
contained in this Act, the Central Government shall, by order, remove from
office any director, or any other person concerned in the conduct and
management of the affairs, of a company, against whom there is a decision of
the Company Law Board under this Chapter :
(3) The person against whom an order of
removal from office is made under this section shall not hold the office of a
director or any other office connected with the conduct and management of the
affairs of any company during a period of five years from the date of the order
of removal :
Provided that the Central Government may, with
the previous concurrence of the Company Law Board, permit such person to hold
any such office before the expiry of the said period of five years.
(4) Notwithstanding anything contained in any
other provision of this Act or any other law or any contract, memorandum or
articles, on the removal of a person from the office of a director or, as the
case may be, any other office connected with the conduct and management of the
affairs of the company, that person shall not be entitled to, or be paid, any
compensation for the loss or termination of office.
(5) On the removal of a person from the office
of a director or, as the case may be, any other office connected with the
conduct and management of the affairs of the company, the company may, with the
previous approval of the Central Government, appoint another person to that
office in accordance with the provisions of this Act.