Authority: National Company Law Appellate Tribunal, Chennai (Justice N. Seshasayee - Member (Judicial) and Jatindranath Swain - Member (Technical))
Order Date: October 5, 2026
Case Overview
The National Company Law Appellate Tribunal (NCLAT) heard arguments in Company Appeal (AT) (CH) No. 52/2026 between appellants V Krishnaveni & 2 Others and respondents Sri Varadaraja Textiles Pvt. Ltd. & 7 Others. The appeal concerns the interpretation and application of Section 167 of the Companies Act, 2013 regarding director disqualification due to absence from board meetings.
The respondent's counsel presented two key arguments. First, on factual grounds, the respondent (an octogenarian director) alleged repeated prevention from participating in board meetings, which culminated in an NCLT order dated September 24, 2025 appointing an observer for meetings. The director was hospitalized on December 26, 2025, preventing attendance at the crucial board meeting scheduled for December 27, 2025 - the final meeting relevant for calculating the one-year absence period under Section 167. This period coincided with the tribunal's cognizance of oppression and mismanagement allegations filed by the respondent.
Second, on legal interpretation, counsel argued that both Section 283(1)(g) of the Companies Act, 1956 and Section 167 of the 2013 Act require the absence to be voluntary, as indicated by the phrase 'absents himself.' The legislative intent is to address situations where a director shows no inclination to fulfill responsibilities, not cases of incapacity or external prevention.
Final Outcome
The NCLAT adjourned the matter for continuation of arguments, listing it immediately after admission on November 16, 2026. No final ruling was issued in this hearing order.
Topics: Director Disqualification, Corporate Governance, Legal Interpretation