Ministry of Corporate Affairs' Notification dated 7th May, 2018, reads as follows:-
In exercise of the powers conferred by sections 149 and 168 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Qualification of Directors) Rules, 2014, namely:-
1. (1) These rules may be called the Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Appointment and Qualification of Directors) Rules, 2014, rule 5 shall be numbered as sub-rule (1) thereof, and after sub-rule (1) as so numbered, the following sub-rule shall be inserted, namely:-
"(2) None of the relatives of an independent director, for the purposes of sub-clauses (ii) and (iii) of clause (d) of sub-section (6) of section 149,-
(i) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors; or
(ii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company,
for an amount of fifty lakhs rupees, at any time during the two immediately preceding financial years or during the current financial year." .
3. In the principal rules, in rule 16, for the word "shall", the word "may" shall be substituted.
Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide notification number G.S.R. 259(E), dated the 31st March, 2014 and subsequently amended vide the following notifications:-
Serial Number | Notification Number | Notification Date
1. | G.S.R. 671(E) | 18th September, 2014
2. | G.S.R. 42 (E) | 19th January, 2015
3. | G.S.R. 839(E) | 5th July, 2017
4. | G.S.R. 51 (E) | 22nd January, 2018