Meaning of Relative as per Companies Act 2013

Relative - Section 2(77) of the Companies Act, 2013 

Section 2(77) of the Companies Act, 2013 defines the word relative as below. “relative”, with reference to any person, means anyone who is related to another, if – they are members of a Hindu Undivided Family; they are husband and wife; or on person is related to the other in such manner as may be prescribed. Rule 4 of the Companies (Specification of definitions details) Rules, 2014 reads as follows List of relatives in terms of clause (77) of section 2.- A person shall be deemed to be the relative of another, if he or she is related to another in the following manner, namely:-

1. Father: Provided that the term “Father” includes step-father.

2. Mother: Provided that the term “Mother” includes step-mother.

3. Son: Provided that the term “Son” includes step-son.

 4. Son’s Wife.

 5. Daughter.

6. Daughter’s husband.

7. Brother: Provided that the term “Brother” includes step-brother.

8. Sister: Provided that the term “Sister” includes step-sister.

 The list given as above is very crystal clear. However, following needs to be understood. Father, mother, son, brother and sister include the step-counterparts but there is no specific mention about step-daughter. It may be a drafting mistake or may be an intentional exclusion. Whatever it may be, but the plain interpretation of the section indicates that step daughter is not a relative.

We get one more surprising thing here. In one case, a person can be relative of another in one way, but the reverse way, the person is not a relative. For example, Mr. A has a step daughter Ms. B. So for Ms. B, Mr. A, being a step-father, is a relative. However, for Mr. A, Ms. B is not a relative as step-daughter is not a relative. It is worth considering that son’s wife includes step son’s wife. However, daughter’s husband does not include step daughter’s husband. On division of a Hindu Undivided Family, the members of the family, except included in the above list of relatives, cease to be relatives.

Also, if we compare with Companies Act, 1956, the list of relatives is drastically cut short. The following snapshots will show the comparison of respective acts.