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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Committees

Mr. Sameer Joshi, a shareholder of Pinnacle Ltd, proposes Mr. Dev Malhotra for directorship at the general meeting, giving notice with no deposit. Mr. Malhotra was recommended by the company's NRC constituted under Section 178(1). Is the Section 160 deposit of one lakh rupees required?

No deposit is required. The proviso to Section 160(1) exempts from the deposit requirement an independent director or a director recommended by the Nomination and Remuneration Committee constituted under Section 178(1), so Mr. Malhotra's candidature needs no one lakh rupee deposit.

  1. AYes, the deposit is mandatory for every person who is not a retiring director
  2. BNo, the deposit requirement does not apply to a director recommended by the NRCCorrect
  3. CYes, but it is refundable only if he gets more than fifty per cent of votes
  4. DNo, because the notice period of fourteen days is waived for such persons

Explanation

The proviso to Section 160(1) exempts independent directors, directors recommended by the NRC, and directors recommended by the Board where no NRC is required, from the deposit. The notice requirement itself is not waived.

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