Department of Company Affairs.

Should an Additional Director be required to hold qualification shares? A person who is appointed as a director must not suffer from any disqualification.

This rule equally applies to the requirement of share qualification where the Articles so provide. An additional director is nonetheless a director and,

therefore, is subject to requirements as to qualification including share qualification in the same manner as any other director.

(b) Casual Vacandes (Sec. 262). A casual vacancy is one that arises in the office of a director appointed by the general meeting otherwise than by

retirement or the expiration of the time fixed for the appointment. Section 262 authorises the Board of Directors to fill a casual vacancy at its meeting

subject however to any regulations contained in the Articles.

It may be noted that as per Section 262 vacancy in the office of a Director appointed by the company in general meeting only is a casual vacancy. Thus,

where a vacancy is caused in the office of a Director appointed by the Board of Directors, strictly speaking, it

is not a casual vacancy. Thus, if ‘A’—a director appointed by the general meeting - dies

and ‘B’ is appointed in his place by the Board. B resigns. Can the vacancy so caused be filled by the Board as a casual vacancy? The Department of

Company Affairs, while recognising that, strictly speaking, it is not a casual vacancy has allowed it to be filled as a casual

. vacancy by the Board. Certain authors are, however, of the opinion that such a vacancy should be filled by appointing an Additional Director and not as a

casual vacancy so that

the tenure shall be up to next AGM only and then the appointment may be regularised.

Tenure. Section 262(2) provides that a person appointed to fill a casual vacancy shall hold office only up to the date up to which the Director in whose

place he is appointed would have peld office if it had not been vacated. Thus, if Ram is elected a Director and resigns after a month, Bharat appointed in

his place would continue for the whole period for whi Ram, if he had not resigned, would have continued.

Filling of Casual Vacancy by a Private Company. Section 262 does not apply to a private company which is not a subsidiary of a public company.