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Section 107: Voting by show of hands

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Section 106 All 470 Sections of Companies Act Section 108
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Legal Commentary & Landmark Judgments: Section 107

Section 107 governs voting by a show of hands at general meetings, establishing the democratic baseline of 'one member, one vote' unless a formal poll is demanded under Section 109 or electronic voting is utilized, and declaring the Chairman's entry in the minutes to be conclusive evidence.

  • Democratic Show of Hands Baseline: Mandates that every resolution put to a general meeting shall be decided on a show of hands in the first instance, unless a poll is demanded or e-voting applies.
  • One Member, One Vote Principle: On a show of hands, every member present in person has exactly one vote, irrespective of the number of shares or quantum of paid-up capital held.
  • Exclusion of Proxies: Proxies are statutorily prohibited from voting on a show of hands unless the articles of the company expressly authorize them to do so.
  • Conclusiveness of Chairman's Declaration: Sub-section (2) provides that the Chairman's declaration that a resolution has been carried (unanimously or by a particular majority) and an entry to that effect in the minute book constitutes conclusive evidence, barring subsequent challenge absent fraud.
Key Landmark Precedents:
  • E.D. Sassoon United Mills Ltd., In re, AIR 1929 Bom 38: Held that in voting by show of hands, voting power is counted by heads and not by shares; proxies cannot vote unless expressly sanctioned by the articles, and each personally present member has one vote.
  • Wall v. London and Northern Assets Corporation, [1899] 1 Ch 550: The Court of Appeal established that where a Chairman declares a resolution carried on a show of hands and enters it in the minutes, the declaration is conclusive evidence of the fact, precluding courts from re-counting votes unless fraud or manifest error appears on the face of the record.
  • Dhakeswari Cotton Mills Ltd. v. Nil Kamal Chakravarty, AIR 1937 Cal 645: Affirmed that while the Chairman's declaration is conclusive evidence under the statute, it does not validate a declaration that is plainly contrary to the actual facts recorded in the proceedings or where the Chairman acted fraudulently.
Courtroom Practice & Strategic Litigation Guidance:

If representing a majority shareholder in a general meeting where the resolution is put to a show of hands, immediately demand a formal poll under Section 109 before or immediately after the Chairman's show of hands declaration. Once the meeting concludes without a poll demand, Section 107(2) makes the Chairman's declaration conclusive evidence, making it exceptionally difficult to overturn the outcome in NCLT litigation without proving fraud.

Section 106 All 470 Sections of Companies Act Section 108