1. Subject to the provisions contained in sub-section (5 ) of section 149, an independent director may be selected from a data bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, maintained by any body, institute or association, as may by notified by the Central Government, having expertise in creation and maintenance of such data bank and put on their website for the use by the company making the appointment of such directors:
Provided that: responsibility of exercising due diligence before selecting a person from the data bank referred to above, as an independent director shall lie with the company making such appointment.
2. The appointment of independent director shall be approved by the company in general meeting as provided in sub-section (2 ) of section 152 and the explanatory statement annexed to the notice of the general meeting called to consider the said appointment shall indicate the justification for choosing the appointee for appointment as independent director.
3. The data bank referred to in sub-section (1), shall create and maintain data of persons willing to act as independent director in accordance with such rules as may be prescribed.
4. The Central Government may prescribe the manner and procedure of selection of independent directors who fulfil the qualifications and requirements specified under section 149.
Legal Commentary & Landmark Judgments: Section 150
Section 150 of the Companies Act, 2013 governs the statutory mechanism for the selection of independent directors and the maintenance of the online databank by a notified body, requiring board due diligence, general meeting approval, and compliance with proficiency assessment standards.
When convening a general meeting to appoint an independent director, secretarial counsel must ensure that the explanatory statement annexed under Section 102 expressly records: (i) the candidate's registration in the IICA databank, (ii) proof of passing or exemption from the online proficiency self-assessment test under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and (iii) the Board's reasoned opinion affirming the candidate's independence and expertise. Omission of these statutory disclosures renders the explanatory statement defective and subjects the appointment to challenge under Section 241.