#Can a person whose age is 70 can be appointed as an Independent directo...

Can a person who has attained the age of 70 can be appointed
as an Independent or non-executive director of a public company? https://youtu.be/WDZ5Pq9oRek

No age limit need be prescribed as per law. There should be
adequate disclosure of age in the company’s documents. It should be the duty of
the Director to disclose his age correctly.

 In case of a public
company, appointment of directors beyond a prescribed age say 70 years, should
be subject to a special resolution by the shareholders which should also
prescribe his term. Continuation of a director above the age of 70 years,
beyond such term, should be subject to a fresh resolution.

 Then in such case it
attracts the provisions of section 196(3)(a) of
Companies Act 2013 which lays down that no company shall appoint or continue the
employment of any person as its managing director,whole time director or
manager who-is below the age of twenty one years or has attained the age of 70
years.However special resolution can be passed with justification of such
appointment stated in notice (in explanatory statement to the Special
Resolution).

196 (3) (a) 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;

4[Provided further that where no such special resolution is
passed but votes cast in favour of the motion exceed the votes, if any, cast
against the motion and the Central Government is satisfied, on an application
made by the Board, that such appointment is most beneficial to the company, the
appointment of the person who has attained the age of seventy years may be
made.]

Another interesting situation happened in the case

Hon’ble High Court of Bombay had decided following issues in
case of

 Ultramarine &
Pigments Limited vs Rangaswamy Sampath

As per proviso it’s clear that if at the time of appointment
age of person is more than 70 year then by passing of Special Resolution that
person can be appoint as Managing Director. But now question is IF person .attain
age of 70 after appointment during his tenure then what are the consequences?

There is no
mid-tenure cessation of Managing Directorship as a result of Section 196(3)
(a).

High Court
observed that Is the age of 70 an absolute bar? A public limited company may
well appoint a person of 80 years of age as a Managing Director. All that is
needed is a special resolution. That is what the proviso plainly says.
Therefore, it’s not a absolute bar.

According to
the defendant if a person who is of the age of 68 years is appointed after 1st
April 2014 for five years, he shall not continue after two years once he
attains the age of 70 years. The court did not agree to this view either and
gave a judgment that the age is relevant only on the date of appointment and
not any time later.

While
conducting secretarial audit of a company, the practicing company secretary
shall keep this judgment in view while ascertaining compliance with provisions
of Section 196 of CA, 2013 by the company.

SEBI amended the clause relating to ‘board of directors’ in
the Listing Regulations and inserted

SEBI regulation 17(1A)

No listed entity shall appoint a person or continue the
directorship of any person as a non-executive director who has attained the age
of seventy five years unless a special
resolution is passed to that effect, in which case the explanatory statement
annexed to the notice for such motion shall indicate the justification for
appointing such a person.

Conclusion

1.Thus , an Independent Director or a non-executive director
can be appointed in a public company even if his age is 70 years as section
196(3)(a) says that only in case of appointment of Managing Director , or
Whole-time Director or Manager of a public company , approval by special
resolution in general meeting is needed.

2. The age is relevant only on the date of appointment and
not any time later as held in Ultramarine & Pigments Limited v/s Mr.
Rangaswamy Sampath

3. Even Listed companies can appoint an Independent director
or non-executive director who has attained the age of 70 or above by passing a
special resolution as the listed companies have to take the approval from
members for appointment of Independent director in the general meeting.

4.There is no bar for a private limited companies to appoint
a person as director who has attained the age of 70.