19 June 2014

E-voting clarified

Voting through electronic means i.e. e-voting as contained in Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 is not mandatory till 31st of December, 2014. The Ministry of Corporate Affairs has, on 17th June, clarified certain aspects of these provisions on e-voting. 

According to General Circular No. 20/2014, dated 17-6-2014, certain items of business as specified in Rule 22(16) of the Companies (Management and Administration) Rules, 2014 which are required to be transacted only through postal ballot, would still be required to be conducted in such a way and not through a general meeting where e-voting facility is available. If a company which is not mandated under Rule 20(1), opts for e-voting facility, the procedure specified in Rule 20 will be applicable in entirety.

The Ministry clarifies that a person who has voted through e-voting mechanism shall not be debarred from participation in the general meeting physically but he shall not be able to vote there again. It states that if the shareholder is not able to participate in the general meeting and is also not exercising voting through electronic means, he shall not have the option to vote through postal ballot. Further it was also noted that voting through e-means takes into account ‘Proportion Principle’, i.e. ‘one share - one vote’, unlike ‘one person - one vote’ principle under ‘show of hands’.

It may be noted that recently (on 8-5-2014), the Bombay High Court, after noticing certain grey areas in the provisions, has also held that the new Companies Act, 2013 does not totally do away with the requirement of meetings.



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