Section 243 Consequence of termination or modification of certain agreements
- Amendments
- 4
- Last changed
- 21 December 2020
243. 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,—
(a) such order shall not give rise to any claims whatever against the company by any person for damages or for compensation for loss of office or in any other respect either in pursuance of the agreement or otherwise;
(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.
Inserted by Companies (Amendment) Act, 2019, s. 35, with effect from 15 August 2019(1A) The person who is not a fit and proper person pursuant to sub-section (4A) of section 242 shall not hold the officer of a director or any other officer connected with the conduct and management of the affairs of any other officer connected with the conduct and management of the affairs of any company for a period of five years from the date of the said decision:
Inserted by Companies (Amendment) Act, 2019, s. 35, with effect from 15 August 2019Provided that the Central Government may, with the leave of the Tribunal, permit such person to hold any such office before the expiry of the said period of five years.
Inserted by Companies (Amendment) Act, 2019, s. 35, with effect from 15 August 2019(1B) Notwithstanding anything contained in any other provisions of this Act, or any other law for the time being in force, or any contract, memorandum or articles, on the removal of a person from the officer of a director or any other officer 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 officer.
(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) Inserted by Companies (Amendment) Act, 2019, s. 35, with effect from 15 August 2019or sub-section (1A), and every other director of the company who is knowingly a party to such contravention, shall be punishable Text omitted by amendmentThe words “with imprisonment for a term which may extend to six months or” omitted by Companies (Amendment) Act, 2020, s. 44, with effect from 21 December 2020. Earlier read: "a term which may extend to six months or” omitted by Act 29 of 2020, s. 44" with fine which may extend to Substituted by Companies (Amendment) Act, 2020, s. 44, with effect from 21 December 2020. Earlier read: "five lakh rupees, or with both"five lakh rupees.