Akshay for going abroad for 6 months, appointed Raghav as a director in his place during his absence from India. The Board, rejecting the appointment of Raghav, appointed Madhuri as an alternate director to Akshay. Expla

Section 161(2) of the Companies Act, 2013(Act), empowers the Board, if so, authorized by its articles or by a resolution passed by the company in general meeting, to appoint a person, not being a person holding any alternate directorship for any other director in the company or holding directorship in the same company, to act as an alternate director for a director during his absence for a period of not less than three months from India. Section 161 (2) of the Act applies to all companies, whether public or private. Conditions for appointment of an alternate director: The Board of Directors of a company must be authorised by its articles or by a resolution passed by the company in general meeting for appointment of the alternate director. The person in whose place the Alternate Director is being appointed should be absent for a period of not less than 3 months from India. The person to be appointed as the Alternate Director shall be the person other than the person holding any alternate directorship for any other Director in the company or holding directorship in the same company. If it is proposed to appoint an Alternate Director to an Independent Director, it must be ensured that he is qualified to be appointed as an independent director under the provisions of this Act Power to appoint: The Board may appoint an alternate director only if it is authorized by the articles or by an ordinary resolution passed at a general meeting. The right to appoint an alternate director vest in the Board. The original director has no right to appoint an alternate director. The members have no right to appoint an alternate director, the members can only empower the Board to appoint alternate director as and when board thinks fit. Method of appointment: There is no condition that an alternate director shall be appointed only by passing a resolution at a Board meeting. Therefore, an alternate director can be appointed by passing a resolution by circulation. Term of office of an alternate director: An alternate director shall not hold office for a period longer than that permissible to the director in whose place he has been appointed. If the original director ceases to be a director by reason of death or vacation of office under section 167 the alternate director shall immediately cease to hold his office The alternate director shall vacate his office when the original director in whose place he has been appointed returns to India. In light of the above provisions, Akshay cannot appoint Raghav as an alternate director and his appointment is invalid. The board can appoint an alternate director and hence the appointment of Madhuri is valid assuming that the articles of the company authorise the Board for such appointment. Madhuri will vacate the office in accordance with the provisions of the Act, as explained above.