DIRECTORS DISPUTE AND FILING OF FORM 32

Directors Dispute  and Filling of Form 32

 There is always Mismanagement in some companies due to fraud or Mismanagement by one group of Directors may be with in the family members or relatives .When Mismanagement happens disputes arises and it can be sorted out  under sec 397&398 of the Companies Act 1956..When there is dispute  Form 32 is not filed for the Directors who has resigned . Sometimes the Company removes the Director without the consent of the Director by filing form 32 on its own..

 When there is management dispute the company is required to mandatory file the Form 32 with the ROC concerned irrespective of the  ground of cessation (a) retirement (b) disqualification (c) death (d) resignation (e) vacation of office (f) removal (g) withdrawal of nomination by appointing authority or (h) absence of re-appointment.

In accordance with circular no 17/135/2011-CL V  Dated on 10th February 2012.issued by Department of Company Affairs, where Form 32 is not filed by the Company, any Director is aggrieved with his cessation can file complaint in the Investor Complaint Form in MCA website. On receipt of complaint, the ROC will examine the complaint and mark the company as having management dispute and also issues a letter to the company to settle the matter amicably or get an order/ interim order from a Court. Till such disputes is settled , the documents will not be approved / registered/recorded /will not available for Public viewing.

The measure taken by the Government is welcome and it will help the ignorant Directors to sort out their grievances at earliest .                          Government Of India, Ministry Of Corporate Affairs

                                                                                                 

                                                                           Dated the 10th February 2012                                                                                     

                                                                             

To,

All Regional Directors,

All Registrars of Companies

Sub: Filling of conflicting returns by contesting parties – clarification regarding

Sir,

I am directed to invite a reference to Ministry’s circular No. 19 and 20of 2011 issued on 02.05.2011 laying down certain procedure to regulate cases wherein filing of conflicting returns with regard to appointment of Directors or change of Director/Directors was laid down. In the light of some specific cases wherein it appears that either there was lack of consent of the removed/changed  director or due process of Law were not followed, it has been decided to supersede the circulars.

2. In order to avoid such eventualities wherever there is management dispute, the company is required to mandatorily file the attachment relating to cause of cessation alongwith Form 32 with the ROC concerned irrespective of the ground of cessation,Viz (a) retirement; (b) disqualification;(c) death;(d) resignation;(e) vacation of office u/s 283 or 313 or 260;(f) removal u/s 284;(g) withdrawal of nomination by appointing authority or (h) absence of re-appointment.

3. In case, any Director is aggrieved with his cessation in the company, he may file complaint in the investor Complaint Form. On receipt of Complaint, the ROC Concerned will examine the complaint and mark the Company as having ‘management dispute’. Also, the ROC will issues a letter to the company and the parties to settle the matter amicably or get an order/interim order from a Court or Tribunal of competent jurisdiction. Till such dispute is settled, the documents filed by the company and by the contesting groups of Directors will not be approved/ registered/ recorded and will thus not be available in registry for public viewing.

Yours faithfully

(Monika Gupta) Assistant Director