It has been found that Mrs. Shweta, director of a company, has drawn remuneration in excess of the prescribed limits. The Chief Financial Officer of the company has sought your advice in the matter. As the Secretary of t

According to Section 197(9), if any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed or without the prior sanction of the Central Government, where it is required, he shall refund such sums to the company and until such sum is refunded, hold it in trust for the company. Further as per sub section 10 of section 197, the company shall not waive the recovery of any sum refundable to it under sub-section 9, unless the same is permitted by the Central Government. As a Secretary of the Company it is recommended that Mrs. Shweta should refund such excess sum to the company and until such sum is refunded, she shall hold the same in trust for the company.