US presidential polls: Debating the debates

One debate does not mean that the argument is lost. Both Ronald Reagan and George W Bush came roaring back after losing a debate, the onus is now on President Obama to do the same  

Two events occurred—one before the presidential debate in Denver, Colorado, and one after, both of which will cushion the subdued performance of President Obama in the debate and will give the president’s supporters heart as they get on with the last month of campaigning.
The event before the debate was the press reports which showed that there was a run in Tehran on the Iranian currency, the rial, and that the currency was quickly loosing value. This showed more clearly than before that President Obama’s policies on Iran, which were relying on sanctions, were actually biting and this was concrete proof of the same. There were crowds in Tehran, a mini stampede and a run on the banks was altogether possible. This seemed to be a significant foreign policy victory for the president. Of course, it will be debated that it was the Iranian people that it was harming and not the Iranian government but any way you cut it, this will help President Obama in the run up to the election.
The second point is that two days after the debate the unemployment numbers came out and they were 7.8%, which seemed to give President Obama a big boost as the unemployment rate fell below 8% for the first time since the President Obama had taken office. This clearly showed that the economy was headed in the right direction. The 8% number was psychologically an important number for both campaigns and the fact that the number 8% is no more front and centre will help president Obama.
This is something which will actually give President Obama some much-needed momentum and going by reports in the New York Times there was a rush of fund raising. Jack Welch the former head of General Electric tweeted that these Chicago guys will do anything to win the election. That they cannot debate so they will influence the unemployment numbers. There were many such conspiracy theories out there but no one was really taking them very seriously.


Read more articles on US presidential elections, here. 

However, having said all that Romney’s performance in the debate was robust and Obama’s subdued. There was Romney in a red tie girding for battle and there was President Obama in a blue tie, who in the words of Democratic Pundit James Carville, was hoping that he was in some place other than debating Romney. The consensus was that President Obama had taken a conscious decision to stay above the fray and had let Governor Romney go unchallenged on many issues. Was President Obama’s strategy based on the fact that he was ahead by four to five percentage points in the national polls and up to ten percentage points in some swing states, because if that was the case the strategy backfired as his leads in opinion polls disappeared like winter snow under a blazing sun. 
The point where I would really fault the president is that he did not reply to Governor Romney’s allegation about President Obama having taken $780 billion out of medicare and put them in Obama Care. Actually I thought that President Obama’s defence of Obama care was quite robust and cogent and the best he had made. It got Governor Romney saying that his plan (whatever that is) also had a safeguard about pre-existing conditions though that was found not to be true.
However the president was rather restrained when asked about his plan about the economy in the next four years and his strategy seems to have been few features, apart from more education for job training. He did not present a cogent plan for creating jobs. The congressional budget office has said that whoever is the president, 12 million jobs will be created over the next four years and surely the president could have pointed that to counter Governor Romney’s promise of creating twelve million jobs.
The Pundits felt that Obama should have gone after Romney about the 47% comment but I felt as it was already out there and everyone knew it, there was no need really for that.
A quick poll on CNN after the debate showed a 67% to 25% Romney-Obama win-lose rate. I frankly was surprised. I thought Obama had done better than that.             
On the other hand Governor Romney defended his tax cuts and said that yes he would not impose one more dollar of revenue as the growth rate will take care of the revenue. He gently mocked President Obama by saying that he would have to get a new accountant as he did not know that outsourcers got tax breaks. The president did not come roaring back on that one. 
But one debate does not mean that the argument is lost. Both Ronald Reagan and George W Bush came roaring back after losing a debate. The onus is now on President Obama to do the same. The onus is also on Vice-President Joe Biden to hold his own against Paul Ryan in the vice-presidential debate. 
(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)



Rajan Alexander

4 years ago

"The Pew poll is devastating, just devastating. Before the debate, Obama had a 51 - 43 lead; now, Romney has a 49 - 45 lead. That's a simply unprecedented reversal for a candidate in October. Before Obama had leads on every policy issue and personal characteristic; now Romney leads in almost all of them. Obama's performance gave Romney a 12 point swing! I repeat: a 12 point swing." (Daily Beast)

In the end, its all about body language - Romney looks Presidential and Obama a tired President who looks the fight went off his life.

Opinion Polls tends to traditional under-estimate Republican support. Secondly, in terms of turnout, Republican voters hold the edge. The third is the most heartening for the Republicans - undecided voters accounting for around 8% of votes, 2/3rds broke for Romney

But I agree, it is too early to write off Obama and I am sure he will give one hell of a performance on the 16th - the last debate.

Tomorrow's VP debate may not change much the situation - people do not take it seriously as the Presidential debate.

As Climate sceptics we are banking on a 3-0 whitewash of the Democrats - with Republicans holding on to the Congress; and snatching both the Senate and Presidency from the Democrats.

A Romney-Ryan ticket is our best hope to bring this climate change scam to a quick end!

Kejriwal asks for white paper, SIT probe into Haryana government, DLF and Robert Vadra nexus
Arvind Kejriwal claims that a white paper would show that the transactions between DLF and Robert Vadra are not transactions between two friends but a consideration for the favours showered upon DLF by the Haryana government
Anti-corruption activist Arvind Kejriwal has alleged that the Haryana government has showered immense benfits on the DLF group, which in turn has offered the same benefit to Robert Vadra, son-in-law of Congress President Sonia Gandhi. While making more allegations, the anti-corruption activist demanded a white paper on relations between the Haryana government and the DLF group and formation of a Special Investigation Team (SIT) to probe the matter.
“A white paper would show that the transactions between DLF and Robert Vadra are not transactions between two friends but a consideration for the favours showered upon DLF by the Haryana government,” Kejriwal said. 
In his second round of allegations, the India Against Corruption (IAC) activist alleged that the Haryana government vide notifications on 6 December 2006 and 9 March 2007, allowed DLF to use 30 acres of land, which was reserved for construction of a hospital, for its Special Economic Zone (SEZ). This decision was reversed by the Punjab and Haryana High Court, while passing on strictures against the Haryana government, Kejriwal said.
He said, Robert Vadra was a majority stakeholder in DLF SEZ for about a year.” DLF SEZ Holdings Pvt Ltd was incorporated on 2 February 2007. Next year on 13 October 2008, North India IT Parks Pvt Ltd (a Robert Vadra group company) bought almost 50% stake in DLF SEZ. However, in 2009 the stake was sold back to DLF. What role did he play in that one year when DLF SEZ was in Mr Vadra’s control?” Kejriwal asked.
Earlier, DLF refuted all allegations, especially about providing unsecured loans to Vadra. However, Kejriwal said Real Earth Estates Pvt Ltd, a Vadra group company has shown Rs5 crore as loan from DLF in its balance sheet for 2009-10. During the same year, DLF gave Rs50 crore to Sky Light Hospitality Pvt Ltd, another Vadra group company. According to DLF, this company Sky Light Hospitality sold its land at Manesar for Rs58 crore to DLF and the amount of Rs50 crore was paid as advance. 
“Interestingly, this Manesar land was bought by Vadra’s Sky Light Hospitality just a year back for Rs15.38 crore. How did the price of the land soar to Rs58 crore? DLF claims that it made an advanced payment and took possession of the land in 2008-09. This is false. The balance sheet of DLF for FY11 shows that the advance made by the company and the land, both were in possession of Sky Light Hospitality. This means DLF gave 90% of the deal amount as advance and let it remain with the seller for over two years, that too when the company itself was borrowing money from several sources at high interest cost. Another surprise is that Vadra’s Sky Light Hospitality used the money received as advance payment to buy 50% stake in DLF's own hotel,” Kejriwal said.
Here are the details of allegations made by Kejriwal along with supporting documents...




4 years ago


Resignation of directors

What are the rules governing resignation of directors, mainly in private companies

It is a well-known fact that chances of mismanagement are more in private companies. Generally, private companies are formed by relatives, families and such number of directors are appointed on the board of the directors of the companies so as to comply with the minimum requirements of the Companies Act, 1956 (the “Act”).


In most of the cases, private companies, which are family companies and have been formed on principles of quasi-partnerships, have directors representing specific groups. The absence of adequate provisions in the Act and in the charter documents of such private companies with regard to governance of companies often leads to filing of petitions under Section 397/398 of the Act i.e. Oppression and Mismanagement. One of the very common allegations in these matters is illegal removal of directors/unauthorized removal of directors by showing false resignation letters. Hence, it becomes very important to know when does the resignation takes effect in actual and what should be the form of a resignation letter.

Resignations: When Effective?

Section 284 of the Act specifies the manner in which a director can be removed from his post before expiry of his term. Further Section 283 provides certain grounds on which the office of director ceases. However, the Act does not specify any provision relating to cessation from directorship with their own wish and thus the only exit way available to a director is to tender a resignation. Since the Act does not contain any specific provision in this regard, one needs to refer to the Articles of the Association (“AoA”) of the company. In the absence of any provision in the AoA, the terms and conditions of appointment of a director can be seen.  The Madras High Court in T Murari Vs State of Tamil Nadu1 held that

“In the absence of a provision in respect of resignation under the Act or under the articles of association of the company, the resignation tendered by a director or Managing Director unequivocally in writing will take effect from the time when such resignation is tendered.”


However, it is to be noted that director’s resignation takes effect only when resignation is accepted by the company in the general or board meeting and not from the date of communication of same by the director, if the AoA of the company contains specific provision in this regard. Further, the resigning director would also require fulfillment of such additional conditions as may be specified in the AoA of the company. In a nutshell, as the Act does not contemplate any provision for resignation, the same would be completely governed by AoA of the company. In absence of any such provision in AoA also, ordinary and common laws shall prevail. In SS Lakshmana Pillai Vs Registrar of Companies2 the Madras High Court held as follows:


“In the absence of any provision in the articles, the ordinary rule of common law as regards resignation by an officer/agent  must be followed viz., intimation by notice given either to the company or to the board and acceptance of the same by them. Where a resignation states that it is to take effect on acceptance or the Articles so require, acceptance is necessary to end the tenure of office. Where, however, the resignations says that it is take effect immediately, acceptance is not necessary, unless the articles or any provision of law makes it necessary. Any form of resignation, whether oral or written, is sufficient, provided that the intention to resign is clear. It is, however, advisable that the resignation is in writing and also indicates the time when it is to take effect, so that it may serve as a record of reference in case of controversy. In the absence of any indication otherwise, a resignation takes effect immediately. Resignation will not, however, relieve him from any accountability or other liability which he may have incurred while in office.”


A director resigning at a board meeting should make clear whether the resignation is with immediate effect or from the end of the meeting, as he or she is a party to the decisions of the board up until resignation


In SB Shankar Vs Amman Steel Corporation3 the court held that where the resignation letter states that it has to take effect immediately, the date of the resignation letter is taken to the date on which the director has resigned. Thus unless the AoA of the company concerned contain any specific provision about the acceptance of resignation by the board of directors of the company, the resignation from directorship takes effect immediately i.e. from the date of the resignation letter.

Notice Period for Tendering Resignation

As mentioned above, the resignation terms are governed by the AoA and/or the terms of appointment of a director. If the AoA or the terms of appointment requires a notice period to be fulfilled, the resignation can take effect only after meeting such requirement of notice period. However, if there is no specific provision in the AoA, a director can resign without giving a reasonable notice as held in the case of OBC Caspian Ltd Vs Thorp4.


It is to be noted that in case of voluntary resignation of a permanent director when permitted under the AoA, is not dependent upon its acceptance by the company. The permanent director is entitled to relinquish his office as held in Fateh Chand Kad Vs Hindsons (Patiala) Ltd5.{break}

Form and Content of Resignation Letters

A resignation letter should be addressed to the company or the board of directors of the company. If addressed to a third party, such resignations are not acceptable by the company6. It is to be noted that any form of resignation should specify the intention to resign clearly and the date from which such resignation will take effect, any form of resignation will surely not relieve a director from any accountable or any other liabilities.

Oral Resignations: How Much Effective?

Oral resignation at a board meeting will be effective if that resignation and its effective timing are clear and unambiguous and the resignation is accepted by the other directors present, but it is wise to follow up an oral resignation with written confirmation to the company chairman or to the company secretary or as required by the articles.


An oral resignation given by the resigning director in the general meeting and on acceptance of same by the members, can be effective and valid even if the AoA of the company requires a written notice as held in Glossop Vs Glossop7, This international view has also been affirmed in India in State Vs Sitaram8 by the Patna High Court and by Delhi High Court in Mohan Chandra Vs Institute of Chartered Accountant9.

Effect of Filling of Necessary Forms with Concerned Registrar of Companies (RoC)

Section 302(2) of the Act casts a legal obligation on the company to inform the Registrar of Companies (RoC) by filling Form 32 giving particulars of changes, if any, in the office of director. If such a form is filed with the RoC, it is a proof of a director ceasing to be a director but, it is not an act to be complied with in order to make resignation valid. Resignations once made, take effect immediately and the concerned RoC is informed formally in terms of provisions of the Act. However, mere non filing of requisite form with the concerned RoC does not invalidate the resignation of a director. The Bombay High Court in Dushyant D Anjaria Vs Wall Street Finance Ltd10 held that


“…..The resignation of a director would be effective from the date it was submitted, for the reason that the letter brings out clearly the intention of the person to resign. So far as the formalities like filing up Form 32 and sending it to the Registrar of Companies were concerned, it was for the company to comply with them in conformity with the provisions of Sec. 302 or Sec. 303 of the Companies Act. Where there was delay or negligence on the part of the company in intimating the registrar about the date of resignation, the director who had resigned could not be saddled with responsibility and liability for such delay….”{break}

Liability of Resigning Directors

Section 5 of the Act defines “Officer in Default” mentioning a list of officers who will be prosecuted for any violation or offence under the Act. The list includes ‘directors’ also. It is pertinent to note that for the purpose of the said section, the default in reference to an officer means the default during his tenure. In other words, if a default is committed when a person was not even an “officer in default”, he cannot be prosecuted and held liable for such default. In a similar way, if it is proved that a director at the time of the contravention was in-charge of and responsible to the company for the conduct of its business, he will be held liable even if resigns afterwards.


A director who has resigned would not be liable for anything that happens subsequently. However, he can still be held liable for any mischief or offence made during his directorship.


In case of Pandurang Camotim Sancolarcar Vs Suresh Prabhakar Prabhu11 it was held that when the articles of association provided that the resignation would be effective from the date it was tendered and when the respondent had raised a defence that he resigned on 6 May1996, the fact of his resignation was not in dispute, what was in dispute was only the date of resignation. Clearly it was a case where the respondent had resigned on 6 May1996 and ceased to have any connection with the company. It was held that he was not in charge of the management of the day to day affairs of the company subsequent to his resignation.


The Kerala High Court while dealing with a prosecution case against a managing director in Achutha Pai Vs Registrar of Companies12, put additional restriction on resignation of managing directors. In this case, the managing director who was prosecuted for default under Section 220 of the Companies Act, 1956, contended that he was not liable as he had resigned before the last date for filing accounts. The court held that a managing director combines two capacities, namely, manager and director. Hence, resignation of a managing director becomes effective only when the company accepts the resignation and relieves him from his duties as manager as well. 

Resignations by Nominee Directors

It is quite common to appoint nominee directors on a board of directors of a company by lenders. Sometimes, nominee directors are also appointed by another company as its representative pursuant to Shareholders’ Agreement or Joint Venture Agreements. The general law pertaining to resignations is that a resignation is effective once it is tendered. However, the nominee directors so appointed by a nominator owe some duties towards the appointing authority and cannot resign from the directorship without consent of the appointing authority. Any appointment or removal of such nominee directors are governed by AoA of the agreement as entered into with the company. Where nomination is done by an appointing authority, the resignation should be served to the appointing authority and not to the company. Since the nominees have been nominated by such authority only, they acquire the position of agent of the appointing authority and such agency can be terminated only by service to the principal. Once consented by the appointing authority, the nominee director may intimate company also.

Cases with Forged Resignation Letters

As mentioned above, now-a-days, many cases have seen where forged and fabricated resignation letters have been used to show the illegal removal of directors. These cases are quite common in private companies which are lesser regulated and are quasi partnership kind of companies. Forged signatures are used to oust a group/person from the management of a company. Such practice of using forged resignation letters ultimately leads to taking actions before Company Law Boards (CLB) and other appropriate authorities. Thousands of cases under Section 397/398 of the Act are pending with CLBs. Such actions in all cases have been proved to be time consuming and puts heavy cost burden on parties to such dispute. The records available in public domain i.e. records available with the ministry are updated as soon as any form is filed. So, immediately on approval of a Form 32 filed for removal of directors, the name of the removed director, even if removed illegally with the fabricated signature, will disappear from the records of the company.


Presently, RoC approves all forms intimating the resignations of directors without giving any chance of hearing to the removed director. As like in transfers, obtaining consent of transferor has been made mandatory before registering any transfers, such system and procedure also needs to be put in place so that the removed director gets a chance to put his stand. The ministry should formulate the process under which the removed director is intimated before removal. Though, with the time, ministry’s efforts in this respect are commendable as intimation of any removal is intimated to directors vide email, however, yet not sufficient. System should be such so as to provide a prior intimation to the directors before approval of any such form in order to enable them to take necessary action within time.


From the several judicial pronouncements, some of which have been quoted in this write-up, we may conclude that:

  1. Resignations are governed by AoA of a company and if no such provisions are there in the AoA, resignations will be in accordance with the common laws.
  1. Resignations are effective only after acceptance of same by the company in board or general meeting as the case may be. However, resignations may take effect immediately after tendering if so provided by the AoA of the concerned company.
  1. Non filing of requisite form with the concerned RoC does not invalidate the resignations.
  1. Persons cannot be held liable for any breach or default by the company subsequent to their resignations from the post of directorships. However, they may be held liable for any default made during their tenure of directorship.


(The writers can be contacted at [email protected] and [email protected].)

1 (1976) 46 Com. Cases, 613 (Mad)

2 (1977) 47 Com. Cases 652

3 (2002) 51 CLA 341

4 (1998) S.L.T. 653 (Scot)

5 (1957) 27 Com Cases 340

6 Registrar of Companies v. Orissa Paper Products Ltd., (1988) 63 Comp cases 460 (Ori)

7 (1907) 2 Ch 370

8 AIR 1967 Pat 433

9 AIR 1972 Del 91

10 (2001) Comp. Cas. 655 (Bom)

11 (2003) 53 CLA 265

12 (1966) 36 Com. Cases 598 (Ker)



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