Section 109 of CA 2013 : Section 109: Demand For Poll

Explanation using Example

Imagine a scenario where a tech company, with a share capital, holds its annual general meeting (AGM). During the meeting, a resolution is proposed to expand the company's operations overseas. The Chairman conducts a vote via a show of hands, and it appears the resolution will pass.

However, a small group of shareholders, who together hold 11% of the total voting power and shares worth 7 lakh rupees, are concerned about the risks of such expansion. They believe the matter requires more careful consideration and a more accurate count of votes. Relying on Section 109 of the Companies Act, 2013, they demand a poll.

The Chairman, acknowledging the demand that meets the criteria under Section 109(1)(a), orders the poll to be taken. As per Section 109(4), the Chairman sets the poll to occur within 48 hours. During this time, shareholders can cast their votes in more detail than the show of hands allowed.

After the poll is conducted, the votes are scrutinized as per Section 109(5), and the final result shows that a majority of the voting power is actually against the resolution. According to Section 109(7), the result of the poll is deemed to be the decision of the meeting, and the resolution to expand operations overseas is therefore not passed.