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THE LATEST DEVELOPMENT UNDER THE INDIAN COMPANIES ACT

[Electronic Voting Under Green Initiative Implemented]

Section 192A of Companies Act, 1956 read with Companies (Passing of Resolution by Postal Ballot) Rules, 2001 recognizes voting by electronic mode in case of postal ballot. The Ministry of Corporate Affairs (MCA) had considered provisions of Information Technology Act, 2000 for legal validity of compliance under Companies Act, 1956 through electronic mode. Thereafter MCA issued a General Circular No. 21/2011 on 02nd May, 2011 wherein it was stated that in order to have secured electronic platform for capturing accurate electronic voting process the agency appointed for providing and supervising electronic platform for electronic voting shall be an agency duly approved by the MCA.

National Securities Depository Limited (NSDL) and Central Securities Depository Limited (CDSL) are the only agencies which were approved by MCA for providing and supervising electronic platform for electronic voting subject to a condition that they obtain a certificate from Standardization Testing and Quality Certification (STQC), Directorate, Department of Information Technology, Ministry of Communications & IT.

Recently CDSL and NSDL have secured STQC Certificates. The delay in getting STQC certificate was a key hurdle in implementation of electronic voting. After getting the approval CDSL launched e-voting platform in India in November, 2011 and thereafter NSDL has also launched its e-voting platform on 25th January, 2012. Till today six companies including Jaipraksh Associates Limited and Tata Metaliks Limited have used electronic voting platform. Electronic voting system is expected to grow as it is user-friendly and results in cost savings for the companies in terms of stationery and postage. Plus it is eco friendly also.