Mr. Atul Rastogi, the Managing Director of ABC Limited has resigned from the Managing Directorship of the company. He, however, wants to continue as a director in the company. Referring to the provisions of the Companies

Yes. According to the provisions of the Companies Act, 2013, Mr. Atul Rastogi can continue as a director of the company in the given case. In G. Subba Rao v. Rasmi Die-Casting Ltd. [1998] 93 Com. Cases. 797, the Andhra Pradesh High Court held that from the definition of 'managing director' as per Section 2(26) [Corresponds to section 2(54) of the Companies Act, 2013], it is clear that the managing director has to act under the superintendence, control and direction of the Board of directors. Moreover, powers of routine administrative nature like the power to affix common seal, to draw and endorse any negotiable instrument do not fall within the substantial powers conferred upon the managing director. What is to be seen is whether the managing director making any representation for and on behalf of a company had in fact, 'actual authority' either in terms of the provisions of the constitution of that company or by virtue of the delegation by the Board of directors. A managing director must hold and continue to hold the office of director. A managing director is first a director and then a managing director with certain additional powers [Shanta Shamsher Jung Bahadur v. Kamani Brothers P. Ltd. (1959) 29 Com Cases 501 (Bom.)]. A managing director is an ordinary director entrusted with special powers. If a company wants to appoint a person as managing director, who is not a director of the company, he has first to be appointed as an additional director in accordance with the provisions of Section 260 [Corresponds to section 161 of the Companies Act, 2013] of the Act.