The Companies Act, 1956
310. Provisions for increase in remuneration to require Government sanction
1[In the case of a public company, or a private company which is a subsidiary of a public company, any provision relating to the remuneration of any director including a managing or whole-time director, or any amendment thereof, which purports to increase] or has the effect of increasing, whether directly or indirectly, the amount thereof, whether that provision be contained in the company’s memorandum or articles, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or by its Board of directors 2[shall not have any effect-
(a) in cases where Schedule XIII is applicable, unless such increase is in accordance with the conditions specified in that Schedule; and
(b) in any other case, unless it is approved by the Central Government:]
3[Provided that the approval of the Central Government shall not be required where any such provision or any amendment thereof purports to increase, or has the effect of increasing the amount of such remuneration only by way of a fee for each meeting of the Board or a committee thereof attended by any such director and the amount of such fee after such increase does not exceed 4[such sum as may be prescribed]:]
5[Provided further that where in the case of any private company which converts itself into a public company or becomes a public company under the provisions of section 43 A, any provision relating to the remuneration of any director including a managing or whole-time director as contained in its memorandum or articles or in any agreement entered into by it or in any resolution passed by it in general meeting or by its Board of directors includes a provision for the payment of fee for each meeting of the Board or a Committee thereof attended by any such director which is in excess of the sum specified under the first provision, such provision shall be deemed to be an increase in the remuneration of such director and shall not, after it ceases to be a private company, or, as the case may be, becomes a public company, have any effect unless approved by the Central Government.]
1. Subs. by Act 65 of I960, sec. 114, for certain words (w.e.f. 28-12-1960).
2. Subs. by Act 31 of 1988, sec. 47, for certain words (w.e.f. 15-6-1988).
3. Added by Act 31 of 1965, sec. 43 (w.e.f. 15-10-1965).
4. Subs. by Act 31 of 1988, sec. 47, for “two hundred and fifty rupees” (w.e.f. 15-6-1988).
5. Ins. by Act 31 of 1988, sec. 47 (w.e.f. 15-6-1988).