MCA Reprieve for Non-Executive Directors

By: NitishGoel, National University of Juridical Sciences

The Companies Act, 1956 (hereinafter Companies Act) casts a fiduciary duty upon the Directors to work in the best interests of the stakeholders of the company. Also, the Act provides for various penalties in case the Directors are unable to fulfil their statutory duties. This framework is provided to keep a check on the activities of the Directors as well as to protect the interests of the shareholders who are otherwise not involved in the regular functioning of the company.

The Companies Act does not provide a descriptive definition of the term