Podcast

An independent director contributes significantly to corporate governance by offering an impartial and objective viewpoint during a company’s decision-making processes. To maintain accountability, transparency, and the protection of stakeholders’ interests, independent directors in India are subject to obligations that are outlined in the Companies Act of 2013. In this feature, Aarna Law examines the duties and liabilities of such independent directors.

The Supreme Court clarified that nominations under the Companies Act do not grant absolute rights of ownership in favour of the nominee. Moreover, the usual mode of succession should not be impacted by such a nomination. The legal heirs therefore cannot be excluded by virtue of nomination.

In the case of M.K. Rajagopalan v. Dr. Periasamy Palani Gounder, the Supreme Court provided clarification regarding the requirements for determining the eligibility of a Resolution Applicant. The Court held that the commercial decisions made by the Committee of Creditors must not exceed the boundaries set by the law. Accordingly, the Court affirmed the order of the National Company Law Appellate Tribunal which rejected the Resolution Plan proposed by the Successful Resolution Applicant.