COMPANY LAW BOARD vs UPPER DOAB SUGAR MILLS LTD. ETC.

The Supreme Court held that under Section 198(1) of the Companies Act, 1956, the total managerial remuneration to directors cannot exceed eleven percent of the net profits for the financial year. The Court clarified that the Company Law Board has the authority to impose a ceiling on remuneration while granting approval under Section 269, and such conditions are valid under Section 637A. The High Court's ruling that the Board's action was arbitrary was overturned, affirming the Board's discretion in fixing remuneration limits for managing directors.