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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights

Kaveri Foods Ltd, a listed public company, has an NRC-recommended candidate, Ms. Rao, for director. A member proposes a different non-retiring candidate, Mr. Shah, who is not independent and not recommended by the NRC or the Board, by leaving notice at the registered office 14 days before the meeting. What does Section 160 require for Mr. Shah's candidature?

Mr. Shah must accompany the notice with a deposit of one lakh rupees or a higher prescribed amount. It is refunded if he is elected or secures more than twenty-five per cent of total valid votes. The exemption covers only independent directors or NRC- or Board-recommended candidates, not him.

  1. AA deposit of one lakh rupees or higher prescribed amount, refundable if he is elected or gets more than 25% of valid votesCorrect
  2. BNo deposit, since any member's proposal is exempt
  3. CA deposit refundable only if he gets a majority of votes
  4. DA deposit that is forfeited in every case

Explanation

Section 160(1) requires the deposit of one lakh rupees (or higher prescribed amount) with the notice. It is refunded if the person is elected or gets more than 25% of total valid votes. The exemption applies only to independent directors or those recommended by the NRC or Board, which Mr. Shah is not.

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