(1) In addition to the disqualifications specified in clauses (a) to (e) of sub-section (1) of section 60 of the Act, a person shall be ineligible for being chosen as a director if he is convicted with a sentence of imprisonment for six months or more for any offence under the Indian Penal Code, 1860 (45 of 1860) or under any other law for the time being in force.
(2) A person shall cease to be a director if such person incurs the disqualification specified in subrule (1).
(3) A person who incurs any disqualification specified in sub-section (1) or (2) of section 60 of the Act or sub-rule (1) or (2) of Rule 42 shall cease to be a member of the board of directors.
(4) (a) Notwithstanding anything contained in the foregoing sub-rules of rule 42, the cessation as director of a person who has incurred disqualification shall come into effect only after following the procedure mentioned in sub-clause (b).
(b) A person who incurs any disqualification specified in sub-section (1) or (2) of section 60 of the Act or sub-rule (1) or (2) of rule 42, shall be given notice by the chief executive to show cause against such disqualification, within fifteen days from the date of knowledge of such disqualification.
(c) The board of directors shall consider the matter of cessation of membership of the Board of the concerned director within fifteen days from the receipt of such notice by the concerned director and take decision on such cessation and such decision shall be communicated by the chief executive to the said director.
(d) In case the board of directors decides that the concerned director has incurred cessation, the decision of the board of directors shall come into effect immediately and the seat of such member on the board of directors shall be deemed to be vacant.