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Press Club members wary of contesting elections due to New Companies Act 2013
MUMBAI: With the elections looming over the Press Club of India (PCI), the new Companies Act 2013 is acting as a major hurdle for members wanting to contest the elections.
However, the new Companies Act, 2013 makes it mandatory for those contesting elections in PCI to deposit Rs 1 lakh in cash, cheque or demand draft.
This has become a deterrent for many candidates to join the race. Of the two panels running for elections which are slated to be held on 30 May, one could gather only 13 candidates out of a total 21 posts in PCI, as per a report in Business Standard.
PCI is a Section 8 company. This means it is a non-profit association registered as a company.
Earlier, it was a Section 25 company under the old Companies Act of 1956, which also meant non-profit associations. These companies were exempted from mandatory fee for contesting elections for directorship of the companies, at the time pegged at Rs 500 only, states the report.
But, now no such exemptions were made for section 8 companies and candidates have to deposit Rs 1 lakh which is refundable later.
The new Act came into force on 1 April 2014. As PCI had elections in March last year, it was not required to comply with the new requirements.
Section 160 of the new Act has no mention about what will happen to refunding of the mandatory fee, if the candidate fails to get 25 per cent of votes.
PCI wrote a letter to Finance and Information & Broadcasting minister Arun Jaitley requesting him to exempt those contesting elections in Section 8 companies from this mandatory fees, writes BS.
PCI members later met the minister as well. It seems Jaitley has assured PCI members of government amending the clause in the new Companies Act. However, nothing could be done unless the amended clause is passed by Parliament, the report stated.