Shareholder approval not needed for appointing directors over 75. Penalty quashed, appeal allowed.

The Tribunal held that prior approval from shareholders is not required before appointing a person over 75 years as a Non-Executive Director to fill a casual vacancy. The order imposing a penalty for the alleged violation of Regulation 17(1A) was quashed, and the appeal was allowed, as there was no evidence of breach of the Companies Act or relevant regulations.

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Issues Involved:
1. Whether prior approval from shareholders is required before appointing a person over 75 years as a Non-Executive Independent Director to fill a casual vacancy.
2. Applicability and interpretation of Regulation 17(1A) of the LODR Regulations in the context of filling casual vacancies.

Summary:

Issue 1: Prior Approval Requirement for Appointment of Director Over 75 Years
The core issue is whether prior approval is required from the shareholders of the Company through a special resolution before a person who has attained the age of 75 years can be appointed to fill up a casual vacancy. The Tribunal examined relevant provisions of the Companies Act, 2013, including Sections 149, 152(2), and 161(4), which provide that directors can only be appointed by the company in a general meeting, but casual vacancies can be filled by the Board of Directors, subject to subsequent approval by the shareholders in the next general meeting.

Issue 2: Applicability and Interpretation of Regulation 17(1A)
The Tribunal analyzed Regulation 17(1A) and 17(1C) of the LODR Regulations, which state that no person shall be appointed or continue as a Non-Executive Director who is over 75 years unless a special resolution is passed. It was observed that Regulation 17(1A) should not be read in isolation but harmoniously with Sections 152, 161(4) of the Companies Act, Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and Regulation 17(1C) of the LODR Regulations. The Tribunal held that even if a person above the age of 75 years is appointed by the Board to fill a casual vacancy, such appointment must be approved subsequently by a special resolution in the next general meeting.

Conclusion:
The Tribunal concluded that the finding of the respondent that no person can be appointed or continued as a Non-Executive Director without prior approval of the shareholders is erroneous. The impugned order imposing a penalty for violation of Regulation 17(1A) was quashed, and the appeal was allowed. The Tribunal emphasized that no penalty could be imposed for the alleged violation as there was no evidence of any breach of the Companies Act or Regulation 17(1C) of the LODR Regulations.

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