Section 16A
Arrangement with corresponding new bank on appointment of directors to prevail.
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
About this Act
An Act to provide for the acquisition and transfer of the undertakings of certain banking companies, having regard to their size, resources, coverage and organisation, in order further to control the heights of the economy, to meet progressively, and serve better, the needs of the development of the economy and to promote the welfare of the people, in conformity with the policy of the State towards securing the principles laid down in clauses (b) and (c) of article 39 of the Constitution and for matters connected therewith or incidental thereto.
1[16A. Arrangement with corresponding new bank on appointment of directors to prevail.--(1) Where any arrangement entered into by a corresponding new bank with a company
provides for the appointment by the corresponding new bank of one or more directors of such company,
such provision and any appointment of directors made in pursuance thereof shall be valid and effective
notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956), or in any
other law for the time being in force or in the memorandum, articles of association or any other
instrument relating to the company, and any provision regarding share qualification, age limit, number of
directorships, removal from office of directors and such like conditions contained in any such law or
instrument aforesaid, shall not apply to any director appointed by the corresponding new bank in
pursuance of the arrangement as aforesaid.
(2) Any director appointed as aforesaid shall--
(a) hold office during the pleasure of the corresponding new bank and may be removed or substituted by any person by order in writing of the corresponding new bank;
(b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anthing in relation thereto;
(c) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.]
(2) Any director appointed as aforesaid shall--
(a) hold office during the pleasure of the corresponding new bank and may be removed or substituted by any person by order in writing of the corresponding new bank;
(b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anthing in relation thereto;
(c) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.]
Notes
1. Ins. by Act 1 of 1984, s. 74 (w.e.f. 15-2-1984)