The main legal point established in the judgment is the interpretation of statutory provisions, particularly the word 'continue' in Section 196(3)(a) of the Companies Act, 2013, and its application to the appointment and continued employment of Managing Directors, Whole Time Directors, and Managers of public limited companies.

1. The Notice of Motion seeks an order against the 2nd Defendant from functioning or continuing to exercise his powers as Chairman and Managing Director of the 1st Defendant-Company. I have heard Mr. Mylsami, learned Counsel for the Plaintiff, Mr. Seervai, learned Senior Counsel for Defendant No. 2 and Ms. Thakkar, learned Counsel for the 1st Defendant. I have considered the material before me. With their assistance, I have also considered the statutory provisions applicable and the precedents cited.

2. A few facts are necessary. The 1st Defendant is a public limited listed Company. The 2nd Defendant was appointed as a Chairman and Managing Director of the 1st Defendant-Company on 13th August 1990. On 21st May 1998, the Plaintiff was appointed a Director of the 1st Defendant. On 1st August 2012, the 2nd Defendant was reappointed Chairman and Managing Director of the 1st Defendant-Company for a further five year term till 2017. On that date, the Plaintiff was also appointed a Joint Managing Director of the 1st Defendant-Company.

3. On 1st April 2014, the Companies Act, 2013 (“the 2013 Act”) was brought into force. It introduced a new clause in Section 196(3)(a), one that did not have a corresponding equivalent in Section 267 of the Companies Act, 1956 (“the 1956 Act”). That clause apparently sets a lower and upper age limit of 21 years and 70 years respectively on the appointments and ‘continued employment’ of Managing Directors, Whole Time Directors and Managers. The entire matter turns on an interpretation of this newly introduced statutory provision. For, it is the Plaintiff’s case that since the 2nd Defendant attained the age of 70 years on 11th November 2014, his five year term as Managing Director, one that commenced on 1st August 2012, came to an end by operation of law on 11th November 2014. In Mr. Mylsamy’s words, on his 70th birthday, the 2nd Defendant earned himself statutory disqualification.

4. I will turn first to the provisions of Section 196.

(1) No company shall appoint or employ at the same time a managing director and a manager.

(2) No company shall appoint or re-appoint any person as its managing director, whole-time director or manager for a term exceeding five years at a time:

Provided that no re-appointment shall be made earlier than one year before the expiry of his term.

(3) No company shall appoint or continue the employment of any person as managing director, whole-time director or manager who –

(a) is below the age of twenty-one years or has attained the age of seventy years:

Provided that appointment of a person who has attained the age of seventy years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person;

(b) is an undischarged insolvent or has at any time been adjudged as an insolvent;

(c) has at any time suspended payment to his creditors or makes, or has at any time made, a composition with them; or

(d) has at any time been convicted by a court of an offence and sentenced for a period of more than six months.

(4) Subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions specified in that Schedule:

Provided that a notice convening Board or general meeting for considering such appointment shall include the terms and conditions of such appointment, remuneration payable and such other matters including interest, of a director or directors in such appointments, if any:

Provided further that a return in the prescribed form shall be filed within sixty days of such appointment with the Registrar.

(5) Subject