'X' was appointed as an Additional director of Precious Ltd w.e.f. 21st November, 2018 in a casual vacancy caused by the unexpected death of "P" by way of a circular resolution passed by the Board of directors. With refe

Section 161(4) of the Companies Act, 2013 states that if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of directors at a meeting of the Board which shall be subsequently approved by members in the immediate next general meeting. Provided that any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated. Section 161 does not authorize the Board to appoint an additional director to fill the casual vacancy If appointment of 'X' is made as an additional director, then, such appointment cannot amount to filling a casual vacancy. If 'X' is appointed to fill a casual vacancy, then he shall not be an additional director. It is thus clear that the appointment of 'X' as an additional director to fill the casual vacancy is not valid. However, 'X' can be treated as additional director and his office as additional director will be valid upto the date of ensuing AGM. In this regard, the text of the resolution dealing with casual vacancy will be void but will be valid to the extent of additional director. Further 'X' has been appointed to fill the casual vacancy by passing a circular resolution. Since the appointment of a director filling a casual vacancy requires passing of resolution in a board meeting, the appointment of 'X' is in contravention of section 161 , and is therefore, invalid.