87.

VOTING RIGHTS
(1) Subject to the provisions of section 89 and sub-section (2) of section 92 :
(a) every member of a company limited by shares and holding any equity share capital therein
shall have a right to vote, in respect of such capital, on every resolution placed before the
company
(b) his voting right on a poll shall be in proportion to his share of the paid-up equity capital of the
company.
(2)(a) Subject as aforesaid and save as provided in clause (b) of this sub-section, every member
of a company limited by shares and holding any preference share capital therein shall, in respect
of such capital, have a right to vote only on resolutions placed before the company which
directly affect the rights attached to his preference shares.
Explanation. - Any resolution for winding up the company or for the repayment or reduction of
its share capital shall be deemed directly to affect the rights attached to preference shares within
the meaning of this clause.
(b) Subject as aforesaid, every member of a company limited by shares and holding any
preference share capital therein shall, in respect of such capital, be entitled to vote on every
resolution placed before the company at any meeting, if the dividend due on such capital or any
part of such dividend has remained unpaid (i) in the case of cumulative preference shares, in respect of an aggregate period of not less than
two years preceding the date of commencement of the meeting ; and
(ii) in the case of non-cumulative preference shares, either in respect of a period of not less than
two years ending with the expiry of the financial year immediately preceding the commencement
of the meeting or in respect of an aggregate period of not less than three years comprised in the
six years ending with the expiry of the financial year aforesaid.
Explanation. - For the purposes of this clause, dividend shall be deemed to be due on preference
shares in respect of
any period, whether a dividend has been declared by the company on such shares for such period
or not, (a) on the last day specified for the payment of such dividend for such period, in the articles or
other instrument executed by the company in that behalf ; or
(b) in case no day is so specified, on the day immediately following such period ;

(c) Where the holder of any preference share has a right to vote on any resolution in accordance
with the provisions of this sub- section, his voting right on a poll, as the holder of such share,
shall, subject to the provisions of section 89 and sub-section (2) of section 92, be in the same
proportion as the capital paid-up in respect of the preference share bears to the total paid-up
equity capital of the company.
89. TERMINATION OF DISPROPORTIONATELY EXCESSIVE VOTING RIGHTS IN
EXISTING COMPANIES
(1) If at the commencement of this Act any shares, by whatever name called, of any existing
company limited by shares carry voting rights in excess of the voting rights attaching under subsection (1) of section 87 to equity shares in respect of which the same amount of capital has been
paid-up, the company shall, within a period of one year from the commencement of this Act,
reduce the voting rights in respect of the shares first-mentioned so as to bring them into
conformity with the voting rights attached to such equity shares under sub-section (1) of section
87.
(2) Before the voting rights are brought into such conformity, the holders of the shares in
question shall not exercise in respect thereof voting rights in excess of what would have been
exercisable by them if the capital paid-up on their shares had been equity share capital, in respect
of the following resolutions placed before the company, namely : 1[(a) any resolution relating to the appointment or re-appointment of a director or to any
variation in the terms of an agreement between the company and a managing or whole-time
director thereof].
(b) any resolution relating to the appointment of buying or selling agents ;
(c) 2[***].
(3) If, by reason of the failure of the requisite proportion of any class of members to agree, it is
not found possible to comply with the provisions of sub-section (1), the company shall, within
one month of the expiry of the period of one year mentioned in that sub-section, apply to the
Court for an order specifying the manner in which the provisions of that sub-section shall be
complied with ; and any order made by the Court in this behalf shall bind the company and all its
shareholders.

If default is made in complying with this sub-section, the company, and every officer of the
company who is in default, shall be punishable with fine which may extend to 3[ten] thousand
rupees.
(4) The Central Government may, in respect of any shares issued by a company before the 1st
day of December, 1949, exempt the company from the requirements of sub-sections (1), (2) and
(3), wholly or in part, if in the opinion of the Central Government the exemption is required
either in the public interest or in the interest of the company or of any class of shareholders
therein or of the creditors or any class of creditors thereof. Every order of exemption made by the
Central Government under this sub-section shall be laid before both Houses of Parliament as
soon as may be after it is made.
1. Substituted by the Companies (Amendment) Act, 2000 w.e.f. 13-12-2000.
Page 64 of 332
2. Omitted by the Companies (Amendment) Act, 2000 w.e.f. 13-12-2000.
3. Substituted for "one" by the Companies (Amendment) Act, 2000 w.e.f. 13-12-2000.

90. SAVINGS
(1) Nothing in sections 85, 86, 88 and 89 shall, in the case of any shares issued by a public
company before the commencement of this Act, affect any voting rights attached to the shares
save as otherwise provided in section 89, or any rights attached to the shares as to dividend,
capital or otherwise.
(2) Nothing in sections 85 to 89 shall apply to a private company, unless it is a subsidiary of a
public company.
(3) For the removal of doubts, it is hereby declared that on and from the commencement of the
Companies
(Amendment) Act, 1974, the provisions of section 87 shall apply in relation to the voting rights
attached to preference shares issued by a public company before the 1st day of April, 1956, as
they apply to the preference shares issued by a public company after that date.
Explanation. - For the purposes of this section, references to a public company shall be construed
as including references to a private company which is a subsidiary of a public company.

The member shall not however be entitled, where the company is one limited by shares, to any
voting rights in respect of the moneys so paid by him until the same would, but for such
payment, become presently payable.

187B. EXERCISE OF VOTING RIGHTS IN RESPECT OF SHARES HELD IN TRUST

(1) Save as otherwise provided in section 153B but notwithstanding anything contained in any
other provisions of this Act or any other law or any contract, memorandum or articles, where any
shares in a company are held in trust by a person (hereinafter referred to as trustee), the rights
and powers (including the right to vote by proxy) exercisable at any meeting of the company or
at any meeting of any class of members of the company by the trustee as a member of the
company shall (a) cease to be exercisable by the trustee as such member, and
(b) become exercisable by the public trustee.
(2) The public trustee may, instead of himself attending the meeting, and exercising the rights
and powers, as aforesaid, appoint as his proxy an officer of Government or the trustee himself to
attend such meeting and to exercise such rights and powers in accordance with the directions of
the public trustee :
Provided that where the trustee is appointed by the public trustee as his proxy, the trustee shall
be entitled, notwithstanding anything contained in any other provisions of this Act, to exercise
such rights and powers in the same manner as he would have been but for the provisions of this
section.
(3) The public trustee may abstain from exercising the rights and powers conferred on him by
this section if in his opinion the objects of the trust or the interests of the beneficiaries of the trust
are not likely to be adversely affected by such abstention.
(4) If for any reason the trustee considers that the public trustee should not abstain from
exercising the rights and powers conferred on him by this section and the exercise of such rights
and powers is necessary in order to safeguard the objects of the trust or the interests of the
beneficiaries of the trust, he may by writing communicate his views in this behalf to the public
trustee but the public trustee may in his discretion either accept such views or reject the same.

(5) No suit, prosecution or other legal proceeding shall lie against the public trustee at the
instance of the trustee or any person on his behalf or any other person on the ground that the
public trustee has abstained from exercising the rights and powers conferred on him by this
section.
(6) In order to enable the public trustee to exercise the rights and powers aforesaid, the public
trustee shall also be entitled to receive and inspect all books and papers under this Act, which a
member is entitled to receive and inspect.
(7) The provisions of this section shall not apply on and after the commencement of the
Companies (Amendment)
Act, 2000.]

581D. MEMBERSHIP AND VOTING RIGHTS OF MEMBERS OF PRODUCER

COMPANY
(1) (a) In a case where the membership consists solely of individual members, the voting rights
shall be based on a single vote for every Member, irrespective of his shareholding or patronage
of the Producer Company.
(b) In a case where the membership consists of Producer institutions only, the voting rights of
such Producer institutions shall be determined on the basis of their participation in the business
of the Producer Company in the previous year, as may be specified by articles :
Provided that during the first year of registration of a Producer Company, the voting rights
shall be determined on the basis of the shareholding by such Producer institutions.
(c) In a case where the membership consists of individuals and Producer institutions, the voting
rights shall be computed on the basis of a single vote for every Member.
(2) The articles of any Producer Company may provide for the conditions, subject to which a
Member may continue to retain his membership, and the manner in which voting rights shall be
exercised by the Members.
(3) Notwithstanding anything contained in sub-section (7) or sub-section(2), any Producer
Company may, if so authorised by its articles, restrict the voting rights to active Members, in any
special or general meeting.

(4) No person, who has any business interest which is in conflict with business of the Producer
Company, shall become a Member of that Company.
(5) A Member, who acquires any business interest which is in conflict with the business of the
Producer Company, shall cease to be a Member of that Company and be removed as a Member
in accordance with articles.

117. DEBENTURES WITH VOTING RIGHTS NOT TO BE ISSUED HEREAFTER

No company shall, after the commencement of this Act, issue any debentures carrying voting
rights at any meeting of the company, whether generally or in respect of particular classes of
business.

581Z. VOTING RIGHTS

Save as otherwise provided in sub-sections (1) and (3) of section 58ID, every Member shall have
one vote and in the case of equality of votes, the Chairman or the person presiding shall have a
casting vote except in the case of election of the Chairman.

Votes of members
56. Subject to any rights or restrictions for the time being attached to any class or classes of
shares, (a) on a show of hands, every member present in person shall have one vote ; and
(b) on a poll the voting rights of members shall be as laid down in section 87.
57. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by
proxy, shall be
accepted to the exclusion of the votes of the other joint holders.
For this purpose, seniority shall be determined by the order in which the names stand in the
register of members.
58. A member of unsound mind, or in respect of whom an order has been made by any Court
having jurisdiction in
lunacy, may vote, whether on a show of hands or on a poll, by his committee or other legal
guardian, and any such

committee or guardian may, on a poll, vote by proxy.

59. No member shall be entitled to vote at any general meeting unless all calls or other sums
presently payable by him
in respect of shares in the company have been paid.
60. (1) No objection shall be raised to the qualification of any voter except at the meeting or
adjourned meeting at
which the vote objected to is given or tendered, and every vote not disallowed at such meeting
shall be valid for all
purposes.
(2) Any such objection made in due time shall be referred to the chairman of the meeting, whose
decision shall be
final and conclusive.
61. The instrument appointing a proxy and the power of attorney or other authority, if any, under
which it is signed or a
notarially certified copy of that power or authority, shall be deposited at the registered office of
the company not less
than 48 hours before the time for holding the meeting or adjourned meeting at which the person
named in the
instrument proposes to vote, or, in the case of a poll, not less than 24 hours before the time
appointed for the taking of
the poll ; and in default the instrument of proxy shall not be treated as valid.

62. An instrument appointing a proxy shall be in either of the forms in Schedule IX to the Act or
a form as near thereto
as circumstances admit.
63. A vote given in accordance with the terms of an instrument of proxy shall be valid,
notwithstanding the previous
death or insanity of the principal or the revocation of the proxy or of the authority under which
the proxy was executed,
or the transfer of the shares in respect of which the proxy is given :

Provided that no intimation in writing of such death, insanity, revo- cation or transfer shall have
been received by the
company at its office before the commencement of the meeting or adjourned meeting at which
the proxy is used.

Hfidfibfeiufh

581D. MEMBERSHIP AND VOTING RIGHTS OF MEMBERS OF PRODUCER COMPANY

(1) (a) In a case where the membership consists solely of individual members, the voting rights
shall be based on a single vote for every Member, irrespective of his shareholding or patronage
of the Producer Company.
(b) In a case where the membership consists of Producer institutions only, the voting rights of
such Producer institutions shall be determined on the basis of their participation in the business
of the Producer Company in the previous year, as may be specified by articles :

Provided that during the first year of registration of a Producer Company, the voting rights shall
be determined on the basis of the shareholding by such Producer institutions.
(c) In a case where the membership consists of individuals and Producer institutions, the voting
rights shall be computed on the basis of a single vote for every Member.
(2) The articles of any Producer Company may provide for the conditions, subject to which a
Member may continue to retain his membership, and the manner in which voting rights shall be
exercised by the Members.
(3) Notwithstanding anything contained in sub-section (7) or sub-section(2), any Producer
Company may, if so authorised by its articles, restrict the voting rights to active Members, in any
special or general meeting.
(4) No person, who has any business interest which is in conflict with business of the Producer
Company, shall become a Member of that Company.
(5) A Member, who acquires any business interest which is in conflict with the business of the
Producer Company, shall cease to be a Member of that Company and be removed as a Member
in accordance with articles.

2013

1. Voting rights
The provisions of 2013 Act regarding voting rights are similar to the existing section 87 of the
1956 Act. The only change noted in the 2013 Act is the removal of distinction provided by the
1956 Act with respect to the entitlement to vote in case the company fails to pay dividend to its
cumulative and non-cumulative preference share holders [section 47 of 2013 Act]

The 2013 Act proposes to re-instate the existing concept of shares with differential voting rights.
Pursuant to this section the company may face hardship with regards to computation of
proportionate voting rights.

Power to issue Shares with differential voting rights

The Company shall have the power to issue shares with such differential rights
as to dividend, voting or otherwise, subject to the compliance with requirements
as provided for in the Companies (Issue of Share Capital with Differential
Voting Rights) Rules, 2001, or any other law as may be applicable.

The Member shall not be entitled to any voting rights in respect of the
moneys so paid by him until the same would but for such payment
become presently payable.

Voting rights of Members

a) On a show of hands every member holding equity shares and present in
person shall have one vote.
b) On a poll, every member holding equity shares therein shall have voting
rights in proportion to his share of the paid up equity share capital.
c) On a poll, a member having more than one vote, or his proxy or other
persons entitled to vote for him need not use all his votes in the same
way.
95. Voting by joint-holders
In case of joint-holders the vote of first named of such joint-holders who tender
a vote whether in person or by proxy shall be accepted to the exclusion of the
votes of other joint holders.
96. Voting my Member of Unsound Mind
A member of unsound mind, or in respect of whom an order has been made by
any court having jurisdiction in lunacy, may vote, whether on a show of hands
or on a poll, by his committee or other legal guardian, and any such committee
or legal guardian may, on a pollm vote by proxy.
97. No right to vote unless calls are paid

31
No member shall be entitled to vote at any general meeting unless all calls or
other sums presently payable by him have been paid, or in regard to which the
Company has lien and has exercised any right of lien.
98. Proxy
On a poll, votes may be given either personally or by proxy.
99. Instrument of proxy
The instrument appointing a proxy shall be in writing under the hand of
appointer or of his attorney duly authorized in writing or if appointed by a
Corporation either under its common seal or under the hand of its attorney duly
authorized in writing. Any person whether or not he is a member of the
Company may be appointed as a proxy.
The instrument appointing a proxy and power of attorney or other authority (if
any) under which it is signed must be deposited at the Office of the Company
not less than forty eight hours prior to the time fixed for holding the meeting at
which the person named in the instrument proposed to vote, or, in case of a poll,
not less than twenty four hours before the time appointed for the taking of the
poll, and in default the instrument of proxy shall not be treated as valid.
A vote given in accordance with the terms of an instrument of proxy shall be
valid, notwithstanding the previous death or insanity of the principal or the
revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of shares in respect of which the proxy is given, provided that no
intimation in writing of such death, insanity, revocation or transfer shall have
been received by the Company at its office before the commencement of the
meeting at which the proxy is used.
100. The form of proxy shall be two way proxies as given in Schedule IX of the Act
enabling the shareholder to vote for/against any resolution.
101. Validity of proxy
A vote given in accordance with the terms of an instrument of proxy shall be
valid, notwithstanding the previous death of or insanity of the principal or the
revocation of the proxy or of the authority under which the proxy was executed

or the shares in respect of revocation or transfer shall have been received by the
Company at its Office before the commencement of the meeting or adjourned
meeting at which the proxy is used.
102. Corporate Members
Any corporation which is a member of the Company may, by resolution of its
Board of Directors or other governing body, authorize such person as it thinks
fit to act as its representative at any meeting of the Company and the said
person so authorized shall be entitled to exercise the same powers on behalf of
the corporation which he represents as that corporation could have exercised if
32
it were an individual member of the Company (including the right to vote by
proxy).