167. Vacation of office of director
(1) The office of a director shall become vacant in case—
(a) he incurs any of the disqualifications specified in section 164;
(b) he absents himself from all the meetings of the Board of Directors held
during a period of twelve months with or without seeking leave of absence of the
Board;
(c) he acts in contravention of the provisions of section 184 relating to entering
into contracts or arrangements in which he is directly or indirectly interested;
(d) he fails to disclose his interest in any contract or arrangement in which he is
directly or indirectly interested, in contravention of the provisions of section 184;
(e) he becomes disqualified by an order of a court or the Tribunal;
(f) he is convicted by a court of any offence, whether involving moral turpitude
or otherwise and sentenced in respect thereof to imprisonment for not less than six
months:
Provided that the office shall be vacated by the director even if he has filed an
appeal against the order of such court;
(g) he is removed in pursuance of the provisions of this Act;
(h) he, having been appointed a director by virtue of his holding any office or
other employment in the holding, subsidiary or associate company, ceases to hold
such office or other employment in that company.
(2) If a person, functions as a director even when he knows that the office of director
held by him has become vacant on account of any of the disqualifications specified in subsection
(1), he shall be punishable with imprisonment for a term which may extend to one
year or with fine which shall not be less than one lakh rupees but which may extend to five
lakh rupees, or with both.
(3) Where all the directors of a company vacate their offices under any of the
disqualifications specified in sub-section (1), the promoter or, in his absence, the Central
Government shall appoint the required number of directors who shall hold office till the
directors are appointed by the company in the general meeting.
(4) A private company may, by its articles, provide any other ground for the vacation
of the office of a director in addition to those specified in sub-section (1).