Julu Retail Limited is a Public Limited Company having a Chairman (who is also a Director), a Managing Director, four whole-time directors (Finance, Technical, Marketing, etc.), six other Directors including five Indepen

The unilateral removal of the Finance Director by the Chairman, merely because the Finance Director refused to comply with an instruction that was questionable, is not legally sustainable. The Finance Director may challenge the action under the Companies Act, 2013, the SEBI Regulations, principles of corporate governance, and the law relating to contracts. 1. Challenge to Removal under the Companies Act, 2013 Under Section 169 of the Companies Act, 2013, a director can be removed by the shareholders through an ordinary resolution/special resolution after complying with the prescribed procedure and after giving the concerned director a reasonable opportunity of being heard. A Chairman does not possess unilateral authority to remove a director. If the prescribed procedure has not been followed, the removal may be challenged as illegal and void. Further, if the removal has been carried out in violation of the Articles of Association of the company or without proper approvals, the Finance Director may challenge such action as being ultra vires the constitutional documents of the company. 2. Remedy before National Company Law Tribunal (NCLT) Where the conduct of the Chairman amounts to oppression and mis-management, the Finance Director, may request to Central Government for taking action 241(2) of the Companies Act, 2013 and the Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under the Chapter relating to oppression and mismanagement. Appropriate relief may inter alia include suitable directions as may be found just and equitable by NCLT. Further, the finance director may bring the matter before the members of the company through legal means for taking action against chapter XVI relating to oppression and mis-management. 3. Corporate Governance and SEBI (LODR) Regulations In the case of a listed company, the Finance Director may raise the issue before the Board of Directors, Independent Directors, Audit Committee, Nomination and Remuneration Committee, or other governance mechanisms established under the SEBI Regulations. The principles of transparency, accountability, integrity, and protection of stakeholder interests require that key managerial personnel and directors should not be subjected to arbitrary action for performing their fiduciary duties. 4. Protection for Refusal to Commit Unlawful Acts Directors and Key Managerial Personnel are under a statutory duty to act in good faith, exercise due care and diligence, and act in the best interests of the company and its stakeholders. Refusal to participate in an unlawful or unethical act cannot ordinarily be treated as misconduct. If the Chairman's instructions involved violation of law, the Finance Director's refusal strengthens his legal position and demonstrates compliance with his fiduciary obligations. 5. Vigil Mechanism and Whistleblower Protection The Finance Director may utilise the vigil mechanism or whistleblower framework established under section 177 the Companies Act, 2013 (if applicable) and applicable corporate governance requirements. Appropriate protection may be sought against retaliatory action. 6. Contractual Remedies If the Finance Director is appointed under an employment contract, service agreement or any other contractual arrangement, he may enforce his contractual rights under the Indian Contract Act, 1872. In case of wrongful termination or breach of contractual obligations, he may claim damages, compensation, or other remedies available under law. 7. Regulatory and Other Remedies Where the company is listed and by reason of such removal, any SEBI related laws have been violated, complaints may also be made before SEBI. The Finance Director may further seek appropriate legal remedies before competent courts or tribunals depending upon the nature of the rights affected. Conclusion The Chairman cannot remove a Finance Director merely on personal discretion or because the Director refused to carry out a questionable instruction. Such removal must comply with the Companies Act, 2013, the Articles of Association, SEBI Act & regulations, contractual obligations, and principles of corporate governance. The Finance Director may challenge the removal before appropriate forums and seek restoration of rights, compensation, or other suitable reliefs available under law.