In case of a public company or a private company which is a subsidiary of a public company, subject to any regulations in the articles of the company, the Board of directors at a meeting of the board may fill in casual vacancy among the directors. A casual vacancy arises when the office of any director appointed by the company in a general meeting is vacated before his term of office expires in the normal course. Any person so appointed shall hold office only up to which the director in whose place he is appointed would have held office if it would not have been so vacated
A casual vacancy among directors arises by reason of death, resignation, disqualification or any other reason than retirement of director by rotation. If casual vacancy is not filed it is presumed that the number of directors is reduced.
The board of directors may appoint additional directors to hold office only up to the date of the next annual general meeting of the company. However, the number of the directors and additional directors together shall not exceed the maximum strength fixed for the Board by the articles.
In case the director appointed as an additional director vacates his office at the latest on the last day on which the annual general meeting could have been called and cannot continue in office thereafter on the ground that the meeting was not or could not be called within the time prescribed. The expression up to the date of the annual general meeting means up to the date when the next annual general meeting ought to be held at the latest.
Under Section 166 annual general meeting has to be held every year and not more than fifteen months shall elapse between the date of one annual general meeting and the next.
The board of directors of the company may, if so authorized by the articles, or by a resolution passed by the company in a general meeting appoint an alternate director to act for the original director during his absence for a period of not less than 3 months from the state in which meetings of Board are originally held.
An alternate director shall not hold office as such for period longer than that permissible to the original director in whose place he has been appointed and shall vacate office if and when the original director returns to the State in which meetings of the board are ordinarily held.
An alternate director is in the same position as any other director as regards his rights duties and liabilities as a director. He acts on his own. An alternate director must acquire qualification share if articles so provide
Powers of Appointment by the Central Government:
The Central Government may appoint such number of persons as the company law Board may by order in writing specify as being necessary to effectively safeguard the interest of the company or its shareholders or the public interests to hold office as directors thereof for such periods not exceeding three years on any occasion as it may think fit, if the company Law Board –
1) on a reference made to it by the Central Government; or
2) on an application of not less than 100 members of the company; or
3) Of the members of the company holding not less than one tenth of the total voting power therein is satisfied after such inquiry as it deems fit to make that it is necessary to make the appointment in order to prevent the affairs of the company being conducted either in a manner which is oppressive to any members of the company or in a manner which is prejudicial to the interest of the company or to public interests.
Source: Business Law