Director disqualification and interested transactions: routine delegation of banking powers was not a conflicting arrangement under company law.

A director is disqualified from voting only where a contract or arrangement creates a personal interest conflicting with duty to the company. Construing section 91B(1) with section 91A of the Indian Companies Act, 1913, the Court held that the prohibition applies to transactions involving personal gain or conflict, not to ordinary corporate management. A board resolution authorising directors to operate company banking arrangements was treated as a normal delegation of managerial power, not an interested arrangement. The resolutions therefore did not attract section 91B(1), no contravention was made out, and the acquittal was upheld.

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Issues: Whether resolutions authorising directors to operate the company's banking arrangements amounted to a contract or arrangement in which the directors were directly or indirectly concerned or interested within section 91B(1) of the Indian Companies Act, 1913.

Analysis: The provision was construed with section 91A, both being directed to the same mischief, namely a director's personal interest conflicting with duty to the company. The statutory prohibition was held to apply to transactions where the director stands in a position of personal gain or conflict, not to acts done in the ordinary course of corporate management. A board resolution delegating operational authority over company accounts was treated as a normal incident of management and not as an arrangement creating a personal interest of the directors as distinct from their role as directors.

Conclusion: The resolutions did not fall within section 91B(1), and there was no contravention of the section.

Final Conclusion: The acquittal of the accused was upheld and the appeals failed.

Ratio Decidendi: A director is disqualified from voting only where the contract or arrangement creates a personal interest that conflicts with duty to the company; a resolution amounting merely to delegation of managerial powers in the ordinary course of corporate administration is not such a contract or arrangement.

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