"RELATIVE" - A brief study as dealt by the Companies Act, 1956

1. Sec 2(41) --> "Relative" means with reference to any person, any one who is related to such person in any of the ways specified U/s 6 and NO others.
2. Sec 6 -->
   a) This is substituted by sec.4, Act 65, 1960.
   
   b) "A Person shall be deemed to be a relative of another if and only if:
   
   i) they are members of a Hindu Undivided Family,
   ii) they are husband & wife,
   iii) one is related to the other in the manner indicated in schedule - I A"
   
   c) Schedule - I A was inserted by Act 65, 1960 with 49 types of relationships vide List of Relatives to Companies Act, 1956.
   
   d) However, courtesy Companies Amendment Act, 1965, w.e.f 15-10-1965 27 types of relationships were omitted (i.e. from Nos. 23 - 49)
   
   e) Thus, the law as stands today 22 types of relationships subsists (For details please refer Schedule - I A of the Companies Act, 1956 as amended up-to-date)
   
   f) They are succinctly grouped as under:
   
   

   i)	Father - Mother	2
   ii)	Parents of Father & Mother (I.e. Paternal as well as Maternal grand parents)	4
   iii)	Son - Son's Wife	2
   iv)	Children with spouse of (iii) above	4
   v)	Daughter - Daughter's husband	2
   vi)	Children with spouse of (v) above	4
   vii)	Brother - Brother's wife	2
   viii)	Sister - Sister's husband	2
   		22

   Notes:
1. 1) Mother includes Step-Mother
   2) Son includes Step-Son
   3) Brother includes Step-Brother
   4) Daughter includes Step-Daughter
   5) N.B: (B's) spouse's parents i.e. Father-in-law & Mother-in-law are NOT relatives as per schedule - I A of the Companies Act, 1956.
3. It may not be out of place to note here that section 6 begins with the phrase "Meaning of Relatives".
   
   
   1. According to Interpretation of Statutes - A particular expression is often defined by the legislature by using the word "MEANS" or the word "INCLUDES" or "MEANS and INCLUDES". However, in the context of section 6, the word used is "Meaning", which indicates that the definition is hard and fast definition, and no other meaning can be assigned to the expression than is put down in the definition.
      
   2. Thus, when the word means is used in the definition is prima facie restrictive & exhaustive. Whereas, when word "Includes" is used, the definition is prima facie extensive.
      
   3. Please note: Definition given in a statute is not always exhaustive unless it is expressly made clear in the statute itself. (Kalpanath Rai Vs. State (1997) 8 SCC 732.
      
4. Departmental Clarification: - Reverse Relationships not specified: Sub-section (c) of section 6 of the Companies Act, 1956 does not cover any reciprocal relationships in the reverse direction in the case of any of the relatives enumerated in the schedule except those expressly included in the schedule itself.
   
5. Departmental Clarification: -
   
   • Relatives of a deceased spouse (Deemed to be relatives U/s 6)
     
   • Relationship by half blood
     Examples: a) Step Mother
     b) Step Son / Daughter
     c) Step Brother
     
   • Person given away adoption, ceases to be a relative
     
6. The definition U/s 6 does not cover an illegitimate child
   (Lakshmikutty Vs. Mohandas AIR 1990 Ker 78,81
   
7. Provisions under Companies Act, 1956 where definition of relative is relevant:
   
   a) Sec 3(1)(iii)(d) --> Prohibition w.r.t. A private company from making any invitation or accepting or deposits from persons other than its members, directors or their relatives.
   
   b) 314 --> Director, etc. not to hold office or place of profit.
   
   c) 294AA --> Power of Central Government to prohibit the appointment of sole selling agent in certain cases.
   
   d) 295 --> Loans to Directors, etc.
   
   e) 297 --> Board's sanction to be required for certain contracts in which particular directors are interested.
   
8. The expression "Members of a Hindu Undivided Family" is a wider term than "Coparceners" and includes all female members, including the wives of coparceners.
   Departmental Clarification F.No. 8/16(1)/62 - PR