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2020 (12) TMI 708 - HC - Companies LawValidity of Rule 20(4)(vi) of the Companies (Management and Administration) Rules, 2014 - vires of Articles 14 and 19(1)(a) of the Constitution of India - disallowance of remote e-voting or e-voting in the AGM of respondent No.4 or allow the same on the day of the AGM - appointment of an independent observer to oversee the elections of respondent No.4 scheduled on 21.12.2020 - HELD THAT - While we may examine the challenge to vires of Rule 20(4)(vi) of the Companies (Management and Administration) Rules, 2014, we are not inclined to interfere with the on-going electoral process. We are of the view that once the electoral process has commenced there should be no or little interference by the Court. Issue notice - Stand over to 25.02.2021.
Issues involved:
Petition under Article 226 seeking various reliefs related to e-voting and AGM of respondent No.4, challenge to the constitutionality of Rule 20(4)(vi) of the Companies (Management and Administration) Rules, 2014, violation of Articles 14 and 19(1)(a) of the Constitution of India, right of members to know candidates' viewpoints, excessive delegation of legislative power, and interference by the Court in ongoing electoral process. Analysis: 1. The petitioner filed a petition under Article 226 seeking directions regarding e-voting and AGM of respondent No.4. Initially, the petition sought a decision on e-voting, clarification on Companies Rules, and a direction not to hold the AGM. Additional prayers were later added challenging the constitutionality of Rule 20(4)(vi) and seeking an independent observer for the elections. 2. The petitioner, a special life member of respondent No.4, challenged the AGM scheduled for 21.12.2020 and raised concerns about remote e-voting procedures. The contention was that Rule 20(4)(vi) of the Companies Rules is arbitrary and violates Articles 14 and 19(1)(a) of the Constitution by depriving members of the right to hear candidates' viewpoints before voting. 3. The petitioner argued that e-voting before the AGM prevents members from making informed decisions and is against the principles of natural justice. Reference was made to legal precedents to support the argument that the provision for remote e-voting is manifestly arbitrary and unreasonable. 4. Respondent No.4 opposed the petition, stating that the electoral process had already commenced with multiple candidates in the fray. The respondent highlighted the timeline of events, including nomination submissions and withdrawals, and the ongoing remote e-voting process. 5. The Court, while acknowledging the challenge to the constitutionality of Rule 20(4)(vi), declined to interfere in the ongoing electoral process. It emphasized minimal interference once the electoral process has started and directed respondents to file detailed affidavits in response to the petitioner's contentions. 6. The Court declined the prayer for interim relief and scheduled the matter for further hearing on a later date. The order emphasized digital signing for official communication and set a future date for the next proceedings, allowing respondents to respond to the petitioner's arguments. In conclusion, the judgment addressed the complex issues surrounding e-voting, AGM procedures, constitutional validity of rules, and the balance between legal challenges and ongoing electoral processes, providing insights into the legal principles and considerations involved in such matters.
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