#Can a person whose age is 70 can be appointed as an Independent director of a public company?#
Channel: R V Seckar
Date: 2020-06-13

#Can a person who has attained the age of 70 can be appointed as an Independent or non-executive director of a public company?#
# R V Seckar #

Can a person who has attained the age of 70 can be appointed as an Independent or non-executive director of a public company?

No age limit need be prescribed as per law. There should be adequate disclosure of age in the company’s documents. It should be the duty of the Director to disclose his age correctly. 
 In case of a public company, appointment of directors beyond a prescribed age say 70 years, should be subject to a special resolution by the shareholders which should also prescribe his term. Continuation of a director above the age of 70 years, beyond such term, should be subject to a fresh resolution.
 Then in such case it attracts the provisions of section 196(3)(a) which lays down that no company shall appoint or continue the employment of any person as its managing director,whole time director or manager who-is below the age of twenty one years or has attained the age of 70 years.However special resolution can be passed with justification of such appointment stated in notice (in explanatory statement to the Special Resolution).
196 (3) (a) No company shall appoint or continue the employment of any person as managing director, whole-time director or manager who —
(a) is below the age of twenty-one years or has attained the age of seventy years:
Provided that appointment of a person who has attained the age of seventy years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person;
4[Provided further that where no such special resolution is passed but votes cast in favour of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the company, the appointment of the person who has attained the age of seventy years may be made.]

Another interesting situation happened in the case 
Hon’ble High Court of Bombay had decided following issues in case of Ultramarine & Pigments Limited v/s Mr. Rangaswamy Sampath

As per proviso it’s clear that if at the time of appointment age of person is more than 70 year then by passing of Special Resolution that person can be appoint as Managing Director. But now question is IF person .attain age of 70 after appointment during his tenure then what are the consequences?
There is no mid-tenure cessation of Managing Directorship as a result of Section 196(3) (a).
High Court observed that Is the age of 70 an absolute bar? A public limited company may well appoint a person of 80 years of age as a Managing Director. All that is needed is a special resolution. That is what the proviso plainly says. Therefore, it’s not a absolute bar.
According to the defendant if a person who is of the age of 68 years is appointed after 1st April 2014 for five years, he shall not continue after two years once he attains the age of 70 years. The court did not agree to this view either and gave a judgment that the age is relevant only on the date of appointment and not any time later.
While conducting secretarial audit of a company, the practicing company secretary shall keep this judgment in view while ascertaining compliance with provisions of Section 196 of CA, 2013 by the company.

SEBI amended the clause relating to ‘board of directors’ in the Listing Regulations and inserted regulation 17(1A) as:
No listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of seventy five years unless a special resolution is passed to that effect, in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such a person.

Conclusion
1.Thus , an Independent Director or a non-executive director can be appointed in a public company even if his age is 70 years as section 196(3)(a) says that only in case of appointment of Managing Director , or Whole-time Director or Manager of a public company , approval by special resolution in general meeting is needed.
2. The age is relevant only on the date of appointment and not any time later as held in Ultramarine & Pigments Limited v/s Mr. Rangaswamy Sampath
3. Even Listed companies can appoint an Independent director or non-executive director who has attained the age of 70 or above by passing a special resolution as the listed companies have to take the approval from members for appointment of Independent director in the general meeting.
4.There is no bar for a private limited companies to appoint a person as director who has attained the age of 70.