Judgment :- 1. A short point in company law arises for consideration in this case. The point is, for payment of remuneration to a director of a company for services of a professional nature rendered by him and for excluding it from bis managerial remuneration as a director, is it a certificate of the Central Government under S.309 (1) proviso (b) of the Companies Act, 1956 (for short the Act) that is to be obtained or is it the previous approval of the Central Government, under S.310 of the Act that is to be applied for and got. 2. The 1st petitioner is a Public Limited Company with its registered office at Golf Links Road, Kowdiar, Trivandrum and the 2nd petitioner is a director and shareholder of the 1st petitioner. The 2nd petitioner who is a solicitor and advocate practising at Bombay was appointed as a director of the 1st petitioner in 1974 The 2nd petitioner began to render professional services to the 1st petitioner from September, 1976 onwards. The 1st petitioner, through its advocates, by Ext. P-1 .c application requested the 2nd respondent, Secretary, Company Law Board, for a certificate that the 2nd petitioner possesses the requisite qualifications for the practice of the profession as a solictor. The 3rd respondent Undersecretary by Ext. P-1.b letter dated 10-5-1977 informed the 1st petitioner that an application under Form 26 of the Companies (Central Government's) General Rules and Forms, 1956 should be submitted as S.310 of the Companies Act, 1956 was attracted. The 1st petitioner's advocates by Ext. P-1. a letter dated 18-5-1977 pointed out to the 3rd respondent that the application was under S.309 (1) of the Act for the grant of a certificate and for exclusion of the remuneration paid to the 2nd petitioner for services rendered by him as a solicitor. The 3rd respondent, however, by Ext. P1 letter dated 30-9-1977 insisted that a Form 26 application should be made to the Central Government. By way of abundant caution, and without prejudice to its contentions, the 1st petitioner filed the application as insisted in Ext. P1 letter. As insisted by the 3rd respondent, the 1st petitioner got a resolution passed by the shareholders sanctioning the said payment and forwarded the same to the 3rd respondent. Later, the 1st petitioner reconsidered the matter and by Ext. P1 letter. As insisted by the 3rd respondent, the 1st petitioner got a resolution passed by the shareholders sanctioning the said payment and forwarded the same to the 3rd respondent. Later, the 1st petitioner reconsidered the matter and by Ext. 2(a) letter dated 15-3-1979 withdrew its application submitted under S.310 of the Act and contended that by the payments in question, no question of any increase in the remuneration of the director within the meaning of S.310 of the Act arises. On 31-5-1979 Ext. P-2 reminder was also sent to the 3rd respondent. 3. The 2nd petitioner is a director of two other Companies and he has been rendering legal services to those Companies from 1968 onwards. Exts. P-3 and P-4 are certificates issued by the Central Government under S.309 (1) of the Act, to the said Companies. 4. In spite of Ext.P-2 reminder, no sanction was forthcoming from the respondents It was under the above circumstances that the petitioners approached this Court with this original petition. The reliefs prayed for in the original petition are (1) for a writ in the nature of mandamus or any other writ, direction or order to the respondents to issue a certificate under S.309 (1) of the Act regarding the qualifications of the 2nd petitioner to practise as a solicitor and advocate and (2) for a writ of certiorari or any other writ, direction or order to quash the orders Exts. P-1 and P-1. b. (Instead of 'P-1.b' it is typewritten 'P-1. a'. This can only be a typing mistake.) 5. A counter-affidavit has been filed on behalf of respondents Ito 3. In the counter-affidavit it is stated: The respondents have not rejected the application submitted under S.309 (1) of the Act The powers under S.198, 309 and 310 of the Act can be exercised only by the Central Government The term 'remuneration' given in S.310 includes all remunerations received in any capacity and includes remuneration received for services rendered of a professional nature. The petitioners should apply under S.310 of the Act in Form 26 if they want an opinion of the Central Government under S.309 (1) of the Act It cannot be denied that there is going to be an increase in the total remuneration received by the director. The petitioners should apply under S.310 of the Act in Form 26 if they want an opinion of the Central Government under S.309 (1) of the Act It cannot be denied that there is going to be an increase in the total remuneration received by the director. The petitioners were not justified in assuming that asking to make an application under S.310 implies that the application under the proviso to S.309 (1) of the Act has been rejected or is likely to be rejected 6. The 2nd petitioner has filed a reply affidavit answering the averments and controverting the contentions in the counter-affidavit. 7. S.309 (1) of the Companies Act, 1956 reads: "309. (1) The remuneration payable to the directors of a company, including any managing or whole-time director, shall be determined, in accordance with and subject to the provisions of S.198 and this section, either by the articles of the company, or by a resolution or, if the articles so require, by a special resolution, passed by the company in general meeting and the remuneration payable to any such director determined as aforesaid shall be inclusive of the remuneration payable to such director for services rendered by him in any other capacity: Provided that any remuneration for services rendered by any such director in any other capacity shall not be so included if (a) the services rendered are of a professional nature, and (b) in the opinion of the Central Government, the director possesses the requisite qualifications for the practice of the profession." S.310 of the Act reads: "310. In the case of a public company, or a private company which is a subsidiary of a public company, any provision relating to the remuneration of any director including a managing or whole-time director, or any amendment thereof, which purports to increase or has the effect of increasing whether directly or indirectly, the amount thereof, whether that provision be contained in the company's memorandum or articles, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or by its Board of directors, shall not have any effect unless approved by the Central Government; and the amendment shall become void if, and in so far as, it is disapproved by that Government: S. 309 of the Act as enacted in 1956 came up for consideration in R. A. Thana-wala v. M/s Jyoti Ltd. (AIR. 1958 Bom. 214). The Bombay High Court held: "It will also be noticed that if it was included by the Legislature that the remuneration referred to in sub-section (3) should include not only the remuneration paid to the director as a director, but also remuneration paid to him in any capacity whatsoever, appropriate language could have been used for that purpose, and, as we shall presently point out, in other sections where the Legislature wanted to convey that meaning proper language has been used." (para. 3) In this decision, the Bombay High Court also considered the effect of S.198(1) and held: "What was sought to be controlled was the cost of management and if what was sought to be controlled was the cost of management, then what had to be considered was managerial remuneration and not remuneration paid for any other purpose." It was by the 1965 amendment that the words 'and the remuneration payable to any such director determined as aforesaid shall be inclusive of the remuneration payable to such director for services rendered by him in any other capacity' were inserted in S.309(1). 8. S.198 of the Act fixes a ceiling for managerial remuneration. S.309 provides for the determination of remuneration of directors. S.309(1) as amended ropes in the remuneration paid to a director for services rendered by him in any other capacity also. 8. S.198 of the Act fixes a ceiling for managerial remuneration. S.309 provides for the determination of remuneration of directors. S.309(1) as amended ropes in the remuneration paid to a director for services rendered by him in any other capacity also. The combined effect of S.198 and 309 is that by payment of remuneration for services rendered by a director in any capacity other than that of a director his total remuneration cannot go above the ceiling fixed by S.198. In other words, no remuneration can be paid to a director for services rendered by him in any other capacity if he is getting the maximum managerial remuneration he is entitled to under S.198. But, it is to be noted that there is an exception to the above rule. The exception is that if the services rendered are of a professional nature, the remuneration payable to a director for that will not come within the restriction imposed by S.309(1) Provision for this is there in the proviso to S.309(1) which was also inserted by the 1965 amendment. But the exception is subject to a condition. The condition is that the Central Government should certify that the director concerned possesses the requisite qualifications to practise that profession. So, if a director renders professional service not in his capacity as director and the Central Government certifies that he is having the requisite qualifications to practise that profession, the remuneration paid to him for that service will not form part of the managerial remuneration for which he is entitled to and the payment of which is to be limited to the ceiling fixed by S.198 The net result is that the remuneration for professional service rendered by a director will not be remuneration to be determined under S.309 in accordance with S.198. Then the further question is whether S.310 which provides for increase of remuneration has anything to do with the payment of remuneration for professional services. The increase can only be increase of remuneration. As per S.309, remuneration payable to a director takes in only managerial remuneration and remuneration for services of a non-professional nature rendered by him in any other capacity, remuneration the increase for which permission is required under S.310 will take in only the above remunerations. The increase can only be increase of remuneration. As per S.309, remuneration payable to a director takes in only managerial remuneration and remuneration for services of a non-professional nature rendered by him in any other capacity, remuneration the increase for which permission is required under S.310 will take in only the above remunerations. As remuneration for services of a professional nature will not be remuneration determined under S.309 (1) the payment of the same to a director will not increase the remuneration he is entitled to under S.309(1). So, it goes without saying that for payment of remuneration for services of a professional nature no previous sanction of the Central Government under S.310 is necessary. So, no Form 26 application also need be filed. What is required is a certificate from the Central Government as insisted by the proviso to S.309(1). 9. For the reasons stated above, I hold that the Central Government cannot insist that the 1st petitioner-company should apply for sanction under S.310 in Form 26 for the exclusion of the payment made to the 2nd petitioner-director for services rendered in his capacity as a solicitor and advocate. It is a certificate under proviso (b) to S.309(1) that is required. The 1st petitioner has applied for the same by Ext. P-1 c and that application is pending In view of Exts. P-3 and P4, in the normal course, Ext. P-1.c cannot be rejected. But it is for the 1st respondent to consider Ext. P-1.c and take a decision I direct the 1st respondent to consider Ext. P-1 c and take a decision as expeditiously as possible and, at any rate, within two months from today. Ext. P-1 is quashed. Ext P-1.b to the extent it insists for the filing of an application under S.310 of the Act and for furnishing any information not required under S.309 is also quashed. If any more information is to be furnished by the 1st petitioner, for that one month's time from today is given. 10. The original petition is allowed as above. No costs.