Section 257 recognises the right of any person, whether a member of the company or not, to contest election as a director at any general meeting of the
company. This right to contest election as a director accrues to him as soon as he or some member of the company, acting on his behalf, serves on the
company fourteen clear days’ notice, signifying his candidature for the office of director.
In order to discourage frivolous notice to contest election as a director, the Amendment Act, 1988 introduced a provision for a deposit of Rs. 500. This
amount of deposit shall be refunded if the person proposed/contesting succeeds in getting elected, otherwise the amount is forfeited.
On notice of candidature being received (14 clear days before the general meeting), the company shall inform its members of the candidature by either (z)
serving individual notices on the members not less than seven days before the meeting, or (it) by advertising such candidature not less than seven days
before the meeting in at least two newspapers circulating in the place where the registered office of the company is located, of which one must be in the
English language and the other in the regional language of that place.
In Smt. Namita Gupta vs. Cachar Native Joint Stock
individual reSolution relating to rejection of election of a retiring director and a separate resolution for election of a new director in that place, after following
the procedure as per Section 257.
A member cannot be debarred from contesting election to the Board. Even if a meeting of the company amends the Article to this effect, it will be a moot
point whether the amendment will be valid.
In Dineker Rai Desai vs. R.P. Bhasin (1986) 60 Compo Cas. 14 (
directed amendment of the existing election rules to the effect that a person who had been a member of the executive committee for 2 years was not
entitled to contest without a gap of one year.
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