Page 202 - DCOM106_COMPANY_LAW

Unit 12: Company Meetings and Proceedings

3. A preference shareholder shall have the right to vote only on resolutions which directly Notes
affect the rights attached to his preference shares [s.87(2)].
Where the directors proposed to increase the shares of the company (i) by issue of further
equity shares, or (ii) by capitalising an amount standing to the credit of the company’s
reserve account and applying the same in paying-up the new equity shares and distributing
the same as fully paid among the equity shareholders, the proposed resolution was held
to affect the rights of the preference shareholders and could, therefore, be only carried out
with their sanction [Re John Smith’s Tadcaster Brewery Co. Ltd. (1952) 2 All ER 751].
4. Voting rights of a member are not affected by the fact that his shares have been attached or
pledged or a receiver has been appointed [Balkrishnan Gupta vs. Swadeshi Polytex Ltd.
(1985) 58 Comp Cas. 563].
5. Voting by show of hands in the first instance. Section 177 provides that, at any general
meeting, a resolution put to vote shall, unless a poll is demanded under s.179, be decided
on a show of hands. A declaration by the chairman that on a show of hands, a resolution
has or has not been carried either unanimously or by a particular majority and an entry to
that effect in the minutes book of the company, shall be conclusive evidence of the fact.
No proof of the number or proportion of the votes cast in favour of or against such
resolution shall be required (s.178).

Demand for Poll

Section 179 provides that before or on declaration of the result of the voting on any resolution
on a show of hands, a poll may be ordered to be taken by the Chairman of the meeting of his
own motion and shall be ordered to be taken by him on a demand made in that behalf by the
person or persons specified below:
(a) In the case of a public company having a share capital, by any member or members
present in person or by proxy and holding shares in the company: (i) which confer a power
to vote on the resolution not being less than 1/10th of the total voting power in respect of
the resolution; or (ii) on which an aggregate sum of not less than fifty thousand rupees has
been paid-up;
(b) In the case of a private company having a share capital, by one member, present in person
or by proxy if not more than seven members are personally present and by two members
present in person or by proxy, if more than seven members are personally present;

(c) In the case of any other company, by any member or members present in person or by
proxy and having not less than 1/10th of the total voting power in respect of the resolution.
The chairman of the meeting may regulate the manner in which the poll should be taken.
He must appoint two scrutinisers to scrutinise the votes given on the poll and to report thereon
to him. Then the chairman will declare the result.

Voting by companies, and Government as members (Ss.187-187-A). Where a company or a
corporation is a member of another company, it may attend the meetings of the other company
through a representative. The representative must be appointed by a resolution of the Board of
directors or the other governing body. Where the Central Government or a State Government
is a member, the President or the Governor of the State, as the case may be, has the power to
appoint representatives to attend meetings of the company. The person nominated shall hold
the position of a proxy.

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