Compensation to Sole Selling Agents for Loss of Office

Indtlstries in which Appointment of Sole Selling agents is Prohibited
In exercise of the powers conferred under Sub-section (1) of Section 294-AA, the Central Government has by notifications prohibited appointment of sole selling agents for the following goods for varying periods from the respective dates of notifications :
(a) Sugar, Vanaspati, Cement and Paper; and
(b) every category of 'bulk drug', 'drug' and 'formulations' as defined in the
Drugs (Price Control) Order, 1979, not being any bona fide preparation included in the A yurvedic or Unani systems of medicine or any preparation in Homoeopathic system of medicine.
Q; 4. Describe the restrictions on the payment of compensation to sole selling agents for loss of office.

5J.ns .

Compensation to Sole Selling Agents for Loss of Office
Section 294-A prohibits a company from paying any compensation to a sole selling
agent for loss of office in any of the following circumstances:
(a) Where the appointment of the sole-selling agent ceases to be valid by virtue of sub-section (2-A) of Sec. 294, i.e., if the company in general meeting disapproves the appointment. The appointment in such a case shall cease to be valid with effect from the date of that general meeting. However, it may be noted that payment of compensation is prohibited only when the sole selling agency ceases to be valid as per Sub-section (2-A) of Section 294 (as aforesaid). In case the sole selling agency ceases to be valid as per Sub-section (2) by reason of the subject not being brought at all to the general meeting through the default of the Board of Directors or for other reason, the sole selling agent is, not prohibited from claiming compensation for loss of his office caused thereby unless he himself had instigated or brought about that default ~ith a view to bringing about the termination of his appointment. A situation like this may arise when after appointing a sole-selling agent, the Board wants to bring about the termination of the appointment and with that end in view, deliberately omits to bring the subject for the approval of the next general meeting. In such a case, the sole selling agent will certainly be entitled to claim compensation;
(b) Where the agent resigns his office in view of the reconstruction of the company or of its amalgamation with any other body corporate or bodies corporate and is appointed as the sole selling agent of the reconstructed company or of the body corporate resulting from the amalgamation;
(c) Where the sole selling agent resigns his office, otherwise than on the
reconstruction of the company or its amalgamation as aforesaid;
(d) Where the sole selling agent has been guilty of fraud or breach of trust in
relation to, or of gross negligence in, the conduct of his duty as sole-selling
agent;
(e) Where the agent has instigated, or has taken part directly or indirectly in
bringing about, the termination of the sole selling agency.