Removal and Cessation of Office

A whole-time Company Secretary holds office at the pleasure of the Board of Directors, since it was the Board's resolution under Section 203 that created the appointment in the first place; consistent with this, the Board that appoints a Company Secretary also has the power to remove one, ordinarily by passing a corresponding resolution. Because removal terminates a contract of service and can affect the Company Secretary's professional standing, the settled practice — reinforced by the general principles of natural justice that apply to any decision affecting a person's livelihood — is that the Company Secretary be given a fair opportunity to explain his or her conduct before removal is finalised, particularly where the removal is for alleged misconduct rather than by mutual consent or on completion of tenure. A removal carried out in obvious breach of the terms of the employment contract, or without following a fair procedure where one is contractually promised, exposes the company to a claim for wrongful termination, quite apart from any question of whether the removal from the statutory office itself was valid. …