Citizens' Issues
E-voting rules - New mess everyday!
The MCA has just amended the rules on e-voting. It has the potential of raising thousands of new queries
The rules on e-voting system posed challenges of its own when introduced last year and Ministry of Corporate Affairs (MCA) was forced to make it optional considering the barrage of queries and clarifications the rules demanded.  As soon as the industry was settling down with the rules on e-voting, MCA amended the rules on e-voting vide Companies (Management and Administration) Rules, 2015 issued on 19th March, 2015 ( new rules). The first reading of the amendments has the potential of raising a thousand new queries on the changes. Rule 20 as applicable on e-voting has been substituted by the new provisions as introduced by the amendment of 2015.
The new rules on e-voting will have to be complied with for all general meetings in respect of which notices are issued after the date of commencement of this rule. That is to say, all notices issued for general meeting after the publication of the rules in the official gazette will have to comply with these rules.  
All companies with equity shares listed on recognised stock exchange or companies having not less than thousand members will have to provide its members facility to exercise their right to vote on resolutions proposed to be considered at general meetings by electronic means.
The new rule also states that the rule shall not apply to companies referred to in Chapter XB or Chapter XC of SEBI ICDR regulations along with companies with less than 1000 members. Chapter XB of the ICDR regulations is on issue of specified securities by small and medium enterprises and Chapter XC of the ICDR regulations is with regard to listing on the Exchange made possible without bringing an initial public offer by SMEs. The provisions of e-voting will not be applicable to listed SMEs, which means general meetings will be conducted by using means such as show of hands, poll, ballot paper etc. 
The new rule does seem to suggest that voting through electronic means at the meeting is optional. This also means additional cost burden for companies to introduce voting through electronic means for members at the meeting – technologically enabling the meetings to provide for the option and also explaining the modus operandi to the members to put the option to use. 
This was seemingly even suggested by the Bombay High Court in the matter of amalgamation of Wadala Commodities Ltd and Godrej Industries Ltd, where Justice GS Patel under Para 24 (a) stated the following:
“All provisions for compulsory voting by postal ballot and by electronic voting to the exclusion of an actual meeting cannot and do not apply to court-convened meetings. At such meetings, provision must be made for postal ballots and electronic voting, in addition to an actual meeting. Electronic voting must also be made available at the venue of the meeting. Any shareholder who has cast his vote by postal ballot or by electronic voting from a remote location (other than the venue of the meeting) shall not be entitled to vote at the meeting. He or she may, however, attend the meeting and participate in those proceedings.”

Concept of cut-off date for remote e-voting - 

The new rule talks about a cut-off date which is defined to be a date not earlier than seven days before the date of the general meeting for determining eligibility to vote by electronic means or in the general meeting. Assume the general meeting is on 30 September 2015, cut-off date can’t be beyond 23 September 2015.
Rule 20 (4) (v) (e) – requires the Company to state in the public notice the manner in which the persons who have acquired shares and become members of the company after the despatch of notice may obtain the login ID and password.
However, Rule 20 (4) (f) (D) states that a person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting in the general meeting.
Going by this, if the Company cannot follow the practice of keeping the same date taken for determining names of shareholders for despatch of notice as cut-off date for e-voting. . Companies will be required to have a cut-off ( or determination date or record date) date for despatch of notice, for remote e-voting as well as mode of voting at the meeting and one for dividend. 
There is no question of providing such facility to persons who have become members after the cut-off date. If so was the case, the concept of cut-off date and identifying members of the company for attending the general meeting itself would become completely redundant. In view of the above discussion, it would be a prudent step to have same record date, which is fixed by the Company for the purpose of dividend, to be the record date for the purpose of e-voting and voting by poll too. The agencies offering e-voting platform shall refer the list of shareholders as on record date, upload the same and generate user id and password for such shareholders. The shareholders as on cut-off date who are unable to vote electronically may attend and vote at the AGM by way of poll or electronic means as the case may be.

Modus operandi for remote e-voting and e-voting at general meeting

Rule 20 (4)(vi) states that the remote e-voting facility will be open for not less than three days and shall close at 5:00 pm on the date preceding the date of the general meeting. The rule seems to indicate that the remote e-voting facility will be open till a day preceding the general meeting. Formerly, the rules specified the minimum and maximum number of days for which the facility may be offered. However, considering the cost and complexity, the Companies may consider keeping open for maximum three days. Assuming the general meeting is on 30 September 2015, the remote e-voting facility may be kept open from 27th to 29th September, 2015 thereby complying with both of aforesaid requirements.
The proviso to Rule 20 (4)(viii) indicates that the remote e-voting facility will be blocked on the day preceding the general meeting. However, if the same electronic voting system is being used for providing voting through electronic means during the general meeting as well, then the said facility shall be in operation till all resolutions are considered and voted upon in the meeting. The facility may be used for voting only by members attending the meeting and who have not exercised their right to vote through remote e-voting. 
The rule seems to fail to make distinction between remote e-voting and voting at the meeting through electronic means. Remote e-voting is to stop one day prior to the general meeting at 5.00 pm however, where the Company opts to provide same electronic voting system will remain operative for voting through electronic means. How will the company create a distinction between those members who have voted from remote e-voting and those who will be exercising the voting through electronic means at the meeting?  Sure enough the system will have to close for the company to make a note of such members who have exercised the right to vote already. Rule 20 (4)(xiii) seem to indicate that there will be closure period for remote e-voting  and before commencement of general meeting for the scrutinizer to make an account of all the shareholders who have exercised their right to vote through remote e-voting. The voting through electronic means shall re-open after the scrutinizer has taken account of the members who have voted through remote e-voting. The Company may consider re-opening the same on commencement of e-voting.
Now comes the challenging part. How will the agency ensure that while the e-voting has been allowed at general meeting, no member is accessing the portal through remote e-voting and casting vote at the same time? The agency providing the facility will have to ensure this possibly by de-activating the login ids of members other than those attending the general meeting as the scrutinizer would have taken record of those who have already voted through remote e-voting. 

Trouble of amending resolutions

The new rules indicate that resolution cannot be withdrawn where voting through electronic means is provided, but not sure whether amendment to the resolution is possible or permissible. The rule seems to be silent on the issue. 

Voting at meetings

Rule 20 (4)(xi) seems to indicate that at the meeting voting through electronic means or using ballot or polling paper will have to be allowed for all those members who are present at the general meeting but have not exercised their voting rights already.
Considering the level of complexity and challenges involved, it seems that Company may opt for the time tested method of providing poll at the meeting. Since, it will be cumbersome to provide electronic voting booths at the venue. Several shareholders who may not be technologically sound will require guidance. Of course the AGM will turn into a long drawn process.

Announcing results 

Oddly unlike the current practices where the Chairman announces whether the resolution is passed or not, in future the results of the resolution will be announced not later than three days from the meeting. Once the scrutinizer gives his consolidated report of the total votes cast in favour or against, within three days from the conclusion of the general meeting, the Chairman or a person authorised by him in writing, shall declare results forthwith. 
While the results of the voting on resolutions will be announced three days from the general meeting, the resolution will be considered to be passed on the date of the general meeting. This will surely contradict with requirement of clause 35A of equity listing agreement where companies are required to report the voting results within 48 hours of conclusion of general meeting. In case of equity listed companies, the results will be needed to be given within 2 days from conclusion of general meeting.
The transformation of law was to transpire to be facilitating and in sync with the global developments such that companies had the ease of doing business. The laws could be updated to get rid of the redundancy. 
The law cannot take away the essence of the meeting and be mindless, impulsive and reactive. It seems the MCA has goofed up yet again with this new rule as well. 
(CS Nidhi Bothra is executive vice president while CS Vinita Nair is practising Company Secretary and look after corporate law division at Vinod Kothari Consultants Pvt Ltd)


Saharasa GRP rescues 22 children from traffickers
Traffickers had lured parents and guardians of these children by assuring them that their children would be paid well and taken care of in Amritsar
The Government Railway Police (GRP), on Sunday, nabbed three from a gang of child traffickers and rescued 22 children at the Saharasa railway station, after they received information from the members of the NGO Childline. The GRP officers recovered the children from different bogies of the Amritsar-bound Jan Seva Express at Saharsa junction and also arrested three members of the trafficking gang - identified as Dinesh Kumar, Santosh Rai and Mangal, says a report. 
The Childline coordinator, Bal Kishore Jha, had been tipped off about the trafficking that was to taking place, and he immediately passed the information to the GRP at Saharsa railway station. 
On Monday, Dhananjay Kumar, Saharsa GRP officer in charge (OC) stated that the three arrested traffickers, who hail from Purnia and Supaul districts, had brought the children, from Purnia, Saharasa, Supaul and Madhepura. 
The children were aged between 9 years and 14 years, and the traffickers had lured their parents and guardians by assuring them that their children would be paid well and taken care of in Amritsar. According to the report from Times of India, it is likely that the children would have been engaged in farm activities in Punjab. 


Off-duty Police saves woman trapped in train-platform gap
A traffic police not only rescued a girl trapped between the train and platform at Thane station, but also helped to move her to nearest hospital
On 22 March 2015, RB Kawale, an off-duty traffic constable, saved a young girl trapped in the train-platform gap at Thane station, according to a report in Times of India
The accident occurred when the girl tried to get off from the Hyderabad-Mumbai Express train, which doesn't have a halt at Thane. 
The incident took place in the afternoon. According to the newspaper, the passengers on the train were alert and pulled the chain as soon as they witnessed what had happened. However, Kawale, who is attached to Thane's Naupada unit, spotted the girl and immediately rushed to her rescue. After he pulled her out, she was then taken to the Thane civil hospital in Kalwa, and later shifted to JJ Hospital. The victim was a resident of Vikhroli and was on her way back from Pune. She has suffered serious injuries on her right hand and forehead. 
Kawale has said that was off-duty and on his way to Mumbai when he spotted the girl. Realising that there was no way she could have come out of the gap on her own, he went ahead and pulled her out. 
Central Railway public relation officer (PRO) AK Singh has said that the police will “examine the accident” and look into why she tried to alight the train at Thane. 
Several such accidents are reported every year, and not everyone is lucky enough to find help at the right time. While is it imperative that the Railways take efforts to prevent such accidents, passengers must also be careful and avoid getting off from moving trains. 


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