Section 109 Companies Act: Demand for poll

Section 109 of Companies Act: Corporate Governance & Statutory Compliance

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

1. Before or on the declaration of the result of the voting on any resolution on show of hands, a poll may be ordered to be taken by the Chairman of the meeting on his own motion, and shall be ordered to be taken by him on a demand made in that behalf,

a. in the case a company having a share capital, by the members present in person or by proxy, where allowed, and having not less than one-tenth of the total voting power or holding shares on which an aggregate sum of not less than five lakh rupees or such higher amount as may be prescribed has been paid-up; and

b. in the case of any other company, by any member or members present in person or by proxy, where allowed, and having not less than one-tenth of the total voting power.

2. The demand for a poll may be withdrawn at any time by the persons who made the demand.

3. A poll demanded for adjournment of the meeting or appointment of Chairman of the meeting shall be taken forthwith.

4. A poll demanded on any question other than adjournment of the meeting or appointment of Chairman shall be taken at such time, not being later than forty-eight hours from the time when the demand was made, as the Chairman of the meeting may direct.

5. Where a poll is to be taken, the Chairman of the meeting shall appoint such number of persons, as he deems necessary, to scrutinise the poll process and votes given on the poll and to report thereon to him in the manner as may be prescribed.

6. Subject to the provisions of this section, the Chairman of the meeting shall have power to regulate the manner in which the poll shall be taken.

7. The result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 109

Section 109 of the Companies Act, 2013 codifies the substantive right of qualified members to demand a poll on any resolution before or immediately upon the declaration of the result on a show of hands, thereby displacing the one-member-one-vote rule in favor of proportionate voting strength based on capital held.

Statutory Threshold for Demanding Poll: A poll may be ordered suo motu by the Chairman or must be ordered upon demand by members present in person or by proxy holding not less than one-tenth of the total voting power or holding shares on which an aggregate sum of not less than five lakh rupees (or such higher prescribed amount) has been paid up; in companies without share capital, by members with at least one-tenth voting power.
Temporal Mandate and Procedural Conduct: A poll demanded on the election of a Chairman or on an adjournment question must be taken immediately. A poll demanded on any other resolution must be taken at such time as the Chairman directs, but no later than forty-eight hours from the time the demand was made.
Scrutineer Mechanism and Evidentiary Finality: The Chairman must appoint at least one scrutinizer (and where e-voting applies, independent scrutinizers under Rule 21 of the Companies (Management and Administration) Rules, 2014) to ensure fair counting and submit a formal report; the result of the poll supersedes any prior show of hands and is legally deemed to be the resolution of the general meeting.

Key Landmark Precedents:

M.K. Srinivasan v. W.S. Subrahmanya Ayyar, AIR 1932 Mad 100: The Madras High Court held that when a poll is validly demanded in compliance with statutory thresholds, it supersedes and nullifies the preliminary result declared on a show of hands; any subsequent resolution declared without taking the demanded poll is void ab initio.
Carruth v. Imperial Chemical Industries Ltd., [1937] AC 707 (HL): The House of Lords affirmed that the right to demand a poll is an inherent proprietary safeguard of shareholders designed to ascertain the true financial voting strength of the electorate, which the chairman has no legal authority to deny.
N.V.R. Nagappa Chettiar v. Madras Race Club, AIR 1951 Mad 831: Held that where the chairman wrongfully refuses or bypasses a valid demand for a poll made by qualified members, the entire proceedings of the meeting relating to that resolution are vitiated and liable to be set aside.

Courtroom Practice & Strategic Litigation Guidance:

In corporate litigation before the NCLT under Section 241/242 challenging contested shareholder meetings, requisitionists must preserve contemporaneous proof of holding the statutory one-tenth voting power or five lakh rupees paid-up capital at the exact moment of demand. File an interlocutory application for the production of meeting video recordings, physical attendance registers, and scrutinizer sheets in Form MGT-12. If the Chairman unlawfully declined the poll or declared the resolution passed on a show of hands, seek summary invalidation of the resolution on the ground of jurisdictional breach of Section 109.

Section 109: Demand for poll

Section 109 of Companies Act: Corporate Governance & Statutory Compliance

Legal Commentary & Landmark Judgments: Section 109