WHETHER THE OFFICE OF DIRECTOR AUTOMATICALLY BECOMES VACANT UNDER SECTION 167(1)(B) OF THE COMPANIES ACT, 2013 IF A DIRECTOR DID NOT ATTEND BOARD MEETINGS FOR 12 MONTHS?

WHETHER THE  OFFICE OF DIRECTOR AUTOMATICALLY BECOMES VACANT UNDER  SECTION 167(1)(B) OF THE COMPANIES ACT, 2013 IF A DIRECTOR DID NOT ATTEND BOARD MEETINGS FOR 12 MONTHS? 

SECTION 167(1)(B) OF THE COMPANIES ACT, 2013  EFFECT

 The office of a director shall become vacant if “he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board.

AUTOMATIC EFFECT:	The vacancy occurs by operation of law, meaning no separate resolution or action by the company is required.
SCOPE:	Applies to all directors (executive, non-executive, independent) unless specifically exempted by another provision.

PRACTICAL IMPLICATIONS FOR COMPANIES

Monitoring attendance:	Companies must maintain accurate records of board meeting attendance to identify when a director has crossed the 12-month threshold.
Filing requirements:	Once the office becomes vacant, the company must file Form DIR-12 with the Registrar of Companies to notify the change.
Board composition:	If the vacancy reduces the number of directors below the statutory minimum (e.g., 2 for private companies, 3 for public companies), the company must promptly appoint new directors.

 

BUT ROC MAY NOT APPROVE THE FORM DIR-12 AND ASK YOU TO RESUBMIT WITH THE FOLLOWING DOCUMENTS

·      Minutes of all Board Meetings during the relevant period

·      Board Meeting Attendance Register

·      AFFIDAVIT CONFIRMING:

• The director had not attended meetings for 12 months

• Meeting notices were properly issued

• No litigation existed regarding the cessation

• The company was regular in MCA filings

COMPLIANCE WITH SECTIONS 167 AND 164

·      The ROC also gave the concerned director an opportunity to submit objections.

·      If no response was received, the DIR-12 was eventually approved.

CASE LAWS ON THE SUBJECT

Union of India v. R. Gandhi (Madras High Court, 2015)	The court emphasized that vacation of office under Section 167 is automatic and does not require a board resolution.
M.K. Srinivasan v. Registrar of Companies (NCLT, 2017)	The NCLT held that once a director fails to attend all meetings for 12 months, the company must file DIR‑12 with the ROC. •      The tribunal rejected arguments that leave of absence could protect the director, affirming that leave is irrelevant under Section 167(1)(b).

KEY LESSON LEARNED

Even though the law provides automatic vacation of office, the ROC may require strong documentary proof before approving DIR-12.

Proper corporate records are therefore critical.

YOUR COMPLIANCE PARTNER – R V SECKAR , FCS, LLB 79047 19295