X, an employee of ABC Ltd, was appointed as an alternate director. In the
meantime, the original director returned and wanted to attend the Board
meeting. Advise.
●As per Section 161(2) of the Companies Act, 2013, Alternate Director can
be appointed in place of a director who is temporarily unavailable/leave for
a period of more than 3 months from INDIA.
●Alternate Director is like a substitute for the original Director. The
appointment of an alternate director must be authorized by the Articles of
the company otherwise we need to alter the Article first.
●The alternate director’s tenure comes to an end as soon as the original
director is back in the country i.e. after a minimum period of three months.
Besides that, an alternate director cannot maintain his position in the event
of a sudden resignation of the original director.
●Notices and Meeting :- Appointment of alternate directors wouldn’t keep
the original directors sidelined. The original director as well as the alternate
director, is entitled to receive notices of board meetings, and may participate
in it.
●This is especially relevant when a meeting takes place in a location where
the original director is stationed. It may be noted that both the original and
alternate director cannot attend the same meeting. The alternate director is
specifically appointed to fill the temporary void of the original director.
A, The secretary of the company issues a certificate in favour of B by forging
the signatures of two directors. He also affixes the seal of the company on the
certificate without authority. Can B hold the company liable for the shares
covered by the share certificate? Give reasons
Transactions involving forgery are void ab initio (null and void) since it is not the
case of absence of free consent; it is a situation of no consent at all. This has been
established in the Ruben V Great Fingall Consolidated case [1906] 1 AC 439. A
person was issued a share certificate with a common seal of the company. The
signature of two directors and the secretary was required for a valid certificate. The
secretary signed the certificate in his name and also forged the signatures of the
two directors. The holder contented that he was not aware of the forgery, and he is
