Conviction-based disqualification of a Managing Director is not stayed by appeal, interim orders, estoppel, or inherent criminal powers.

A conviction for an offence involving moral turpitude triggers an absolute statutory bar under the Companies Act, 1956 on appointment or continuance as Managing Director, and that disqualification is not lifted by pendency of a criminal appeal or an interim appellate order. Section 389 CrPC may suspend execution of the sentence or order appealed against, but it does not suspend the conviction itself, and section 482 CrPC cannot be used to create such a power. The distinction between Directors and Managing Directors, the prior consent terms, and any estoppel are ineffective against a mandatory public-interest disqualification. The injunction restraining interference with the office of Chairman and Managing Director was therefore unsustainable.

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Issues: Whether a person convicted of an offence involving moral turpitude can continue as Managing Director of a company despite pendency of a criminal appeal and an interim order from the appellate criminal court, and whether an injunction could restrain interference with his functioning as Chairman and Managing Director.

Analysis: Section 267 of the Companies Act, 1956 imposes an absolute bar on appointment or continuance as Managing Director of a person who has been convicted of an offence involving moral turpitude. The statutory scheme distinguishing Directors from Managing Directors, including the separate treatment in sections 274 and 283, shows that the Legislature did not intend the conviction-related disqualification of a Managing Director to be relaxed by appeal, governmental dispensation, or other saving provision. An appellate criminal court under section 389 of the Code of Criminal Procedure, 1973 may suspend execution of the sentence or other order appealed against, but not the conviction itself. The inherent power under section 482 of the Code of Criminal Procedure, 1973 cannot be used to create a power to suspend conviction where the Code does not confer it. The prior withdrawal of proceedings and consent terms could not defeat the operation of the statutory bar, and estoppel cannot override a mandatory provision enacted in public interest.

Conclusion: The conviction continued to attract the statutory disqualification, and the respondent could not validly be protected in the office of Managing Director; the injunction restraining interference with his functioning as Chairman and Managing Director was unsustainable.

Ratio Decidendi: A criminal appeal and any interim order therein do not suspend a conviction for the purpose of a statutory disqualification, and a mandatory corporate disqualification based on conviction cannot be displaced by estoppel, consent, or inherent powers.

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