U/S 160 of the Companies Act, 2013 applicable to the appointment of new director, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five per cent. of total valid votes cast either on show of hands or on poll on such resolution.
Query:- If a person who wishes to become a director in a company left a notice along with deposit of Rs. 1.00 Lac by cheque. The company did not en-cashed the cheque and hold it as security deposit. He elected director in the company in AGM. Thereafter the company returned cheque of Rs. 1.00 Lac to him. Is it any contravention of the Act for non-en-cashing the cheque?. If no, is it a valid practice?.
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