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Archita Bhattacharjee
| Updated: 08 Jun, 2020 | Category: Compliances

Demand for Poll under Companies Act 2013: An Overall Regime

Demand for Poll

In consonance with Legislative experiences on Demand for Poll, Clause 109 pursues to deliver on a declaration of result of voting on any perseverance by a ‘show of hands.’ Chairman of the Meeting on his own or demand made identified by members order for a poll corresponds to ‘sections 179, 180, 184 and 185’ of the Companies Act, 1956 (now 2013)[1]

This clause additionally provides that the persons who made the demandmay withdraw the unchanged demand/request. With this, the chairman of the Meeting shall appoint a scrutinizer for observing votes given on poll and report thereon and the poll process. Moreover, the conference’s decision on the resolution deemed to be the outcome of the poll. The chairman will control how the poll shall get occupied.”

Demand for Poll under Companies

What do you mean by demand for poll and withdrawal for the same?

Considering Demand for Poll, the sub-section (1) of section 109 seeks to provide Chairman of the Meeting might on his own or shall on demand for a poll made by specified member’s order, on any resolution by a ‘show of hands’ before or on a declaration of result of the voting.

Moreover, when it gets exercised ‘suo motu,’ then such power to order poll is meant to be discretionary/unrestricted. When the specified number makes the demand of members, this decision gets intended to be taken away or completed. 

There are the considered numbers of members obligatory to make a demand for the poll, which are as follows:-

  • In matters where a company having a share capital, by the members attended in person or by proxy, where permitted, and having not less than 1/10 of the entire voting power or holding shares on which a cumulative sum of not less than 5 lakh rupees or such advanced/more considerable amount as may be prearranged has been paid-up/compensated;
  • In matters where other companies by any member or members attended in person or by proxy, where permitted, and having not less than 1/10 of the entire voting power   

From now, a demand for a poll may be completed by a proxy also. Additionally, demand for the poll can be made by a single member holding required voting power or shares on which shares in the paid-up share capital of the company as prescribed/specified above or required amount is paid up who is holding voting power.   

Any demand for poll may be withdrawn by the persons who made the demand, provided under sub-section (2) of the Act. Other than the business for which a poll (as demanded) is incomplete, it may be expected that any business can be sustained without coming up with such business of poll demanded results.

As delivered in section 47, sub-section 1clause (b), it can say that the voting rights of a member on poll are in proportion/fraction to his share of the company in the paid-up equity capital of the same. On the other hand, this provision is subject to section 43 and sub-section (2) of section 50 of the Act.  

What are the Three Objects for which the poll may demand at the Meeting of Company?

  • Aimed at Appointment of Chairman, which should take place instantly to have chairman nominated for meeting to continue.
  • Aimed at the adjournment of the Meeting, numerous polls are demanded by the members or proxies who must also take place immediately to know whether to adjourn or precede Meeting. 
  • Aimed at passing any other resolution, many polls are demanded by the proxies or members.

What meant for Timings of conducting the poll?

Whenever Appointment of Chairman of the Meeting or a poll is demanded adjournment of the Meeting, the poll shall be taken immediately. It shall be taken within 48 hours of the demand for poll as the chairman may direct it if it concerns or any other query.  

According to the Secretarial Standard-2 para 9.2, it provides that the chairman shall inform the members if the venue, time, and date of taking the poll cannot be publicized at the Meeting. Moreover, the time and the modes of such communication must be within 24 hours of closure of the Meeting in any case.  

Case: – Jackson v. Hamlyn [(1953) 1 All ER 887; 2 WLR 709 (1953)]

It was apprehended that the word ‘immediately’ meant as soon as possible wherever the articles of association provided conditions for a poll to be taken “immediately.” In such cases, a member can participate and vote in the poll, which did not attend the Meeting.

What is Appointment of scrutinizers at the Meeting of Company?  

For observing the votes given on poll, poll process, and report thereon, the chairman of the Meeting shall appoint a scrutinizer for the company at Meeting. The result of the poll will consider the decision of the Meeting, which is depending on resolution. Moreover, the chairman shall control the manner in which poll shall be occupied.

According to the Secretarial Standard-2 para 9.4, it provides that the scrutinizer (s) may be:- 

  • Practicing Company Secretary,
  • Practicing Chartered accountant, 
  • Practicing Cost accountant, or 
  • Practicing advocate 
  • Or any other person of reputation who is not in the service of the company, besides; 
  • Who can, in the view of the board, scrutinize the e-voting procedure or the ballot procedure, as the case may be, in a fair-minded and clear as crystal.

Who is not in engagement/service of the company, such scrutinizer may take support of a person. Moreover, the condition says that such a member is available and willing to be appointed, at least one of the scrutinizers intend to be a member is present at the Meeting of company.

Any vote by-poll will be put to the vote distinctly considering in each resolution put to. According to the ‘Secretarial Standard- 2 in paragraph 9.3’, one ballot paper possibly will be utilized for more than one item only.

Case Law: – Anthony V. Seger (1789) Hagg Cons Annulled R. V. Cooper, (1870) LR 5 QB 457

  • Conferring to the case mentioned, if a valid demand for a poll has been received the result of voting by ‘show of hands,’ it ensures no effect and becomes immaterial. According to the subsection (2), it gives the above-said facility that those who offered the demand might withdraw it at any instant. For that reason, previous passing of the resolution on show of hands with the effect of withdrawal also converts invalid.

Case Law: – M. K. Srinivasan and Others v. W. S. Subrahmanya Ayyar and Others Cas. 147 (1932) 2 Comp.

  • Even if the chairman had refused to grant the poll, a poll, when validly demanded, should be taken into consideration. As a result, the Meeting shall either a new Meeting convened to hold the poll or re-convened to consider. Moreover, the item should be in respect of which the valid demand for poll was not granted if a valid demand for poll is refused, as the case may be by the chairman.
  • This case also depicts the fact that one ballot paper may be utilized for more than one item at the Meeting. The result publicized will indicate the number of votes cast in ‘favor’ of & ‘against’ each Resolution, and each Resolution on which a poll is demanded should be put to the vote distinctly. However, to be separately marked by the voters, all the Resolutions may be included on one sheet of paper. Also, each of the items and resolution shall deal with a single item of commercial activity.

What are the Powers of Chairman to regulate the manner of Meeting?

Chairman has powers to regulate how poll is to be taken under Sub-section (6) of section 109. Concerning the same, this power is subject to other provisions in the section. According to the Secretarial Standard-2 per para 9.2, he has powers to permit any member to appear during counting of votes in the Meeting.  

What are the Powers of the scrutinizers on demands for polls?  

The chairman’s responsibility is to ensure that the scrutinizers intend to be provided with the register of members, attendance, specimen signatures, ‘proxy and representation documents,’ and ‘register and register of proxies.’ The Scrutinisers shall assemble for polling papers in form MGT-12 only. The empty polling boxes will get sealed in presence of members, and proxies which are to be unlocked in presence of two witnesses only after voting process. 

What is the Procedure required while Demand on Poll?

  • The scrutinizer shall deal out with the polling paper to the members & proxies and apply a combination lock on empty box while they are present in the room.
  • Subsequently, after voting, scrutinizer will open the box in existence of at least 2 witnesses.
  • Scrutinizer shall count the votes and check the subsequent things.

Those are as follows:-

Procedure required while Demand on Poll

It should be guaranteed that members who have voted electronically or ballot papers under 35B (2) of registered agreement are not exercising their voting right another time at the company’s General Meeting.

Read our article:Right to Inspect by Members of the Company

What is the issue’s on the result of the poll after the process?

  • Considering the resolution on which the poll was taken, in that case, the result of the poll shall be considered to be the decision of the Meeting only. Within seven days of poll, the scrutinizer shall submit the report to the chairman in form MGT-13 as required
  • The chairman will declare the result of the poll within two days of the submission of report by the scrutinizer, which will include with details of invalid votes, the number of votes cast for and against the resolution, and whether the resolution has been actually carried out or didn’t.  
  • The scrutinizers will submit the report to the chairman only. However, chairman is the person who shall counter-sign the same or in his nonappearance or any other authorized manager/director. The result shall be publicized in writing for this purpose by the chairman or any other person authorized by the chairman only.  
  • All results of the poll using details of invalid votes, the number of votes cast, and whether the resolution has been approved or not, will be exhibited on the notice board of the company. Those may include its head office, including corporate offices and its registered office also. If in case those offices are situated somewhere else, and in case of public companies having a website, shall also be engaged on the website of the company.  
  • The results acknowledged along with the scrutinizer’s report must be placed on the website of the company and on the website of the agency surrounded by within two days of passing of the resolution at the pertinent general Meeting of associates of the company. Moreover, in case of public companies, result shall also be shown on the website of the company also.

What are the Provisions not pertinent in case of electronic voting?  

According to the general ‘Circular no 20/2014’, it provides that the provisions relating to demand for poll are not pertinent for the companies which are providing voting done over electronic means (under section 108 read with rule 20). This explanation is issued as both at poll and at voting through electronic means keep an eye on the proportion principle essentially.  

What is the relevance of the section to private company?  

Except the articles of association provide otherwise, this section relates to a private company too. Moreover, this exemption was assumed by the ‘notification no. G.S.R. 464 (E) dated 05.06.2015′ stating that the articles of the private company may make its own regulations and eliminate the applicability of this section as per requirement.  

What is the nature of Punishment in Contraventions? Multifaceted

Infringement as per Sections

This section does not recommend any penal provision for contravention of the section. Henceforth, section 450 of the Act will be appropriate. In view of that, the punishment for infringement, the company, and every offer of the company who is in default must be punishable with a fine up to Rs. 10,000. If the contravention is an on-going one, then the fine shall be Rs.1, 000 for every day of such infringement.  

Infringement as per Rules

According to rule 30 of Companies (Management and Administration) Rules, 2014, the contravention of rules made under this section. With this, the company and every officer of the company in default are carrying a punishment and a fine up to Rs. Five Thousand, where the contravention is a continuing one, then the fine shall be Rs. 500 for every day of infringement. The crimes committed under this section and rules are multi-facetted under section 441, as stated above.

What are the Documents required while Demand on Poll?

Documents required while Demand on Poll

What MCS had come up amid COVID-19 outbreak concerning Demand for Poll?

During the predominant time of COVID – 19 pandemic and consequent government lockdown in India, the MCA (Ministry of Corporate Affairs) has been playing a vigorous role in applying numerous relaxations and directives while taking understanding of the public health issue in advance to the citizen.

In continuance of its ‘circulars dated March 19, 2020, and March 24, 2020’ whereby definite compliance relaxations were presented, MCA has now dispensed two numbers of circulars dated (“Circular 1“) April 8, 2020, and (“Circular 2“) April 13, 2020. Those are for relaxation of special resolutions and ordinary in light of the current extra-ordinary conditions.

COVID-19 outbreak concerning Demand for Poll

Circular dated April 8, 2020 

In this circular, the MCA has requested companies to take all pronouncements of urgent nature. It should be requiring the members’ endorsement other than for items of ordinary business and matters where any person concede a right to be heard through the apparatus of postal ballot/e-voting, deprived of the physical presence of members holding a general meeting. 

Circular dated April 13, 2020

According to the vide Circular 2, the MCA, while illuminating the issue of dispatch of notices by companies through post. The members of their ‘assent or dissent’ communication on appropriate resolutions should be by post under the current conditions. 

It has also stated that while such companies are managing any matter only by postal ballot, up to June 30, 2020, or any further notification provided. Moreover, the Rules” are similar to the framework delivered in the Circulars would be pertinent mutatis mutandisAll the requirements are delivered in Rule 20 of the Companies (Management and Administration) Rules, 2014. 

E-Voting on Demand for Poll

If demand for poll is made under Section 109 of the Act, less than fifty (50) members voting shall be piloted through e-voting scheme. Moreover, chairman shall guarantee that the e-voting system’s facility is obtainable for voting throughout the company’s Meeting.

If in cases where less than 50 members are present in the General Meeting, the chairman may deport a vote by show of hands, if not a demand for poll is made under Section 109 of the Companies Act, 2013.

Conclusion 

The companies must ensure that all additional compliances connected with the provisions regarding general meetings or the making of disclosures, or approvals for voting by bodies corporate, examination of related documents/registers by members, etc. as conveyed in the Act. Moreover, the articles of association of the company are to be accomplished through electronic mode only. 

If you would like more appropriate information or detailed assistance as per your requirements in formulating for your Annual General Meeting, please connect with our Corpbiz Professionals. Our Corpbiz group will be at your disposal if you want expert advice on any aspect of Entity Compliances and registration. We will support you to ensure complete compliances as per your desired activities, safeguarding the fruitful and well-timed completion of your inquiry.

Read our article:Appointment of Additional Director in a Company as per Companies Act, 2013

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Archita Bhattacharjee

Archita Bhattacharjee is a fellow of legal studies and has proving experience about 1.5 years as Corporate legal Researcher in law firms and Rajya Sabha and authors in diverse journal publications. She has refined her skills by representing India in Paris and the University of Leiden over implications of International Humanitarian and Criminal Law being certified member of Legal Centers. As a part-time thinker, she is building intelligible legal Content for Corpbiz.

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