Directors' remuneration needs shareholder approval where Table A applies, and the saving provisions preserve that restriction for existing companies.

Directors of a private company governed by Table A under the Indian Companies Act, 1913 could not claim remuneration or allowances without authorisation by the company in general meeting. The articles, read with Table A, left management to the board but reserved directors' remuneration to shareholder approval, and no such resolution had been passed. The commencement of the Companies Act, 1956 did not displace this requirement for an existing company, because the saving provision preserved the earlier Table A regime and the board could not exercise powers reserved to the company in general meeting. Claims framed as salary or expenses were treated as remuneration claims in substance and rejected.

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Issues: Whether the directors of a private company registered under the Indian Companies Act, 1913 could claim remuneration or allowances on the basis of articles and board resolutions without approval by the company in general meeting, including after the commencement of the Companies Act, 1956.

Analysis: The company's articles had adopted Table A of the First Schedule to the Indian Companies Act, 1913, and by section 17(2) the articles were deemed to contain the applicable Table A regulations. Regulation 71 left management powers to the directors subject to the requirement in regulation 69 that directors' remuneration be determined from time to time by the company in general meeting. No resolution of the general meeting authorised payment of remuneration. The later Companies Act, 1956 did not remove this requirement for an existing company merely because section 309(9) did not apply to a private company not being a subsidiary of a public company. Section 657(c) preserved the applicability of Table A of the 1913 Act to existing companies, and section 291 reinforced that powers reserved to the company in general meeting could not be exercised by the board. The claims were also rejected as remuneration claims in substance, despite being described as salary or expenses.

Conclusion: The directors were not entitled to the claimed remuneration or allowances, and the rejection of their claims was upheld.

Final Conclusion: The appeals failed because the claimed payments could not be sustained without the requisite approval of the company in general meeting, and the pre-existing Table A restrictions continued to govern the company.

Ratio Decidendi: For a company governed by Table A under the Indian Companies Act, 1913, directors' remuneration must be authorised by the company in general meeting, and that requirement continues to bind an existing company notwithstanding the commencement of the Companies Act, 1956 where preserved by the saving provision.

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