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Section 417: Removal of Members

Companies Act, 2013 · Chapter XXVII: National Company Law Tribunal And Appellate Tribunal · In force

This section is for the removal of members from office due to various grounds such as insolvency, moral turpitude, or misbehaviour.

The section, clause by clause

What the section says
In plain terms
(1)The Central Government may, after consultation with the Chief Justice of India, remove from office the President, Chairperson or any Member, who—
The Central Government can remove the President, Chairperson, or any Member from office if they have been adjudged an insolvent, convicted of an offence involving moral turpitude, become physically or mentally incapable, acquired a financial interest that affects their functions, or abused their position to the detriment of public interest.
(1)(a)has been adjudged an insolvent; or
(1)(b)has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or
(1)(c)has become physically or mentally incapable of acting as such President, the Chairperson, or Member; or
(1)(d)has acquired such financial or other interest as is likely to affect prejudicially his functions as such President, the Chairperson or Member; or
(1)(e)has so abused his position as to render his continuance in office prejudicial to the public interest:
provisoProvided that the President, the Chairperson or the Member shall not be removed on any of the grounds specified in clauses (b) to (e) without giving him a reasonable opportunity of being heard.
(2)Without prejudice to the provisions of sub-section (1), the President, the Chairperson or the Member shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the Supreme Court nominated by the Chief Justice of India on a reference made to him by the Central Government in which such President, the Chairperson or Member had been informed of the charges against him and given a reasonable opportunity of being heard.
The President, Chairperson, or Member can only be removed from office by the Central Government if there is proved misbehaviour or incapacity after an inquiry by a Supreme Court Judge, where they have been informed of the charges and given a reasonable opportunity to be heard.
(3)The Central Government may, with the concurrence of the Chief Justice of India, suspend from office, the President, the Chairperson or Member in respect of whom reference has been made to the Judge of the Supreme Court under sub-section (2) until the Central Government has passed orders on receipt of the report of the Judge of the Supreme Court on such reference.
The Central Government can suspend the President, Chairperson, or Member from office until a decision is made, if a reference has been made to the Supreme Court Judge, with the concurrence of the Chief Justice of India.
(4)The Central Government shall, after consultation with the Supreme Court, make rules to regulate the procedure for the inquiry on the ground of proved misbehaviour or incapacity referred to in sub- section (2).
The Central Government must make rules, after consulting the Supreme Court, to regulate the procedure for the inquiry into proved misbehaviour or incapacity.

The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.

Amendment notes

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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.