Section 256 further provides that if the AGM fails to fill up the vacancy caused by retirement and the meeting has not expressly

resolved not to fill the vacancy it shall stand adjourned to the same day, time and place in the next week. If the adjourned meeting also fails to elect a director to fill up the

vacancy, the retiring directors shall be deemed to have been re-appointed unless the meeting has already resolved not to fill up the vacancy or a resolution

for re-appointment of a retiring director had already been moved in a meeting and lost, or he has expressed in writing his unwillingness to continue or he

has become disqualified or a resolution, whether special or ordinary, is required for his appointment or re-appointment.

It may be noted that aforesaid provisions of Sections 255 and 256 are applicable to a public company and a private company which is a subsidiary of a

public company.

Retirement of Directors where AGM is not held. A director who is to retire by rotation at an annual general meeting cannot continue in office after the last

day on which the AGM should have been held as required by Section 166 of the Companies Act. If

the AGM is not held on the last day on which it should have been held in accordance

money received by the directors shall be held in trust for the shareholders who have

sold their shares. .

Section 320 also provides that in pursuance of any agreement relating to any of the above transfers, if the director receives any payment from the

transferee within one year before or within 2 years after the transfer, it shall be accounted for to the company unless the director proves that it is not by

way of compensation for loss of office.Section 321 further provides that if the price paid to a retiring director for his share in the company is in excess of the price paid to other shareholders or

any other valuable consideration has been given to him, it shall also be regarded as compensation and should be disclosed to the shareholders.