Section 314 of the Companies Act applies only to a director holding an office or place of profit beyond ordinary director remuneration.

Section 314 of the Companies Act, 1956 applies only where a director himself holds an office or place of profit within the statutory meaning; ordinary remuneration attached to a director's office is not enough. Additional salary, fees, commission, perquisites or similar benefits beyond director's remuneration must be shown before the provision is attracted. On the pleadings and affidavit evidence, no such additional benefit or qualifying office was proved in relation to the director, so the relative clause could not be invoked against his son as an employee. The deeming vacation of office under Section 314(2)(a) therefore did not arise, and the claim that both respondents had vacated their offices failed.

---

---

Issues: Whether the second respondent, as a director, and the third respondent, as his son and an employee, were covered by Section 314 of the Companies Act, 1956 so as to be deemed to have vacated their offices for want of the company's consent.

Analysis: Section 314 distinguishes between a director who holds an office or place of profit and a relative of such director. A director is not treated as holding an office or place of profit merely because he receives the remuneration attached to his office as director; the provision is attracted only when he receives additional remuneration by way of salary, fees, commission, perquisites or similar benefits beyond the ordinary director's remuneration. On the pleadings and affidavit evidence, there was no allegation or proof that the second respondent received any such additional benefit or held an office or place of profit within Section 314(3) of the Companies Act, 1956. Since the second respondent was not shown to fall within Section 314(1)(a), the third respondent, though his son, could not be brought within Section 314(1)(b), which applies only to the relative of such a director. The deeming vacation under Section 314(2)(a) therefore did not arise.

Conclusion: The application under Section 314 of the Companies Act, 1956 was not maintainable on the facts proved, and the claim that both respondents had vacated their offices failed.

Ratio Decidendi: Section 314 applies only where the director himself holds an office or place of profit within the statutory meaning, and the relative clause operates only in relation to such a director; ordinary director's remuneration does not by itself constitute an office or place of profit.

---