Introduction:
In the Indian scenario, postal ballot is relatively a new concept which was introduced in the Companies Act, 1956 by insertion of a new section, namely Section 192A through an amendment made to the said Act in year 2001. Section 192A of the Companies Act, 1956 states that for the purpose of this section, postal ballot includes voting by electronic mode. However, some of the provisions relating to postal ballot have been amended under Companies Act, 2013.
Definition:
Companies Act, 1956 (“CA 1956”):
“Postal ballot” includes voting by share holders by postal or electronic mode instead of voting personally by presenting for transacting business in a general meeting of the company.
Companies Act, 2013 (“CA 2013”):
“Postal ballot” means voting by post or through any electronic mode”
Applicability:
Provisions regarding postal ballot are primarily contain in Section 110 of CA, 2013 read with rule 22 of Companies (Management and Administration) Rules, 2014.
Comparison of postal ballot provisions under CA 1956 and CA 2013:
| CA 1956 | CA 2013 | |
| Governing sections & rules | Section 192A & The Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 | Section 110 & Rule- 22 of Companies (Management and Administration) Rules, 2014 (Chapter VII) |
| Applicability | Listed public companies | All companies, whether public or private having more than 200 members
(One Person Company exempted) |
| Items of business notified by CG | Nine (09) items of business notified under the aforesaid rules. | Total 10 items of business notified under the aforesaid rules.
New item of business: Change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under section 13(8) of CA, 2013. Refer to Annexure I for detailed list of specified business to be transacted only through postal ballot process and; Refer to Annexure II for items of business that cannot be transacted through postal ballot process |
| Mode of posting notice |
|
|
| Newspaper advertisement | List of five matters specified. | List of seven matters specified with the following two new inclusions:
Please refer to Annexure III for detailed list of matters to be included in the newspaper advertisement |
| Intimation to ROC | Mandatory to file board resolution and calendar of events within one week of Board Meeting. General circular no. 16/2001 dated 24th July, 2001 | Not required. |
| Listing Compliances | Clause 31(c): submit copy of the notice to stock exchanges at the time of dispatch of notice to shareholders.
Clause 49: Among others, the following information to be included in the Report on Corporate Governance in the Annual Report of Listed Companies under the heading – General Body meetings:
|
|
| Scrutinizer’s Report | As soon as possible after the last date of receipt of the postal ballot. | As soon as possible but not later than seven (07) days from the last date of receipt of postal ballot. |
| Placing notice/ results of postal ballot on website | Not specifically mentioned | Required to be placed on the website |
Annexure-I
Lists of specified business to be transacted only through postal ballot process:-
- Alteration of the objects clause/ main objects (in the case of company in existence immediately before the commencement of new Act) of the memorandum;
- Alteration of articles of association in relation to insertion or removal of provisions which, under Section 2(68), are required to be included in the articles of a company in order to constitute it a private company;
- Change in place of registered office outside the local limits of any city, town or village as specified in Section 12(5);
- Giving loans or extending guarantee or providing security in excess of the limit prescribed under Section 186(3);
- Issue of shares with differential rights as to voting or dividend or otherwise under Section 43(a)(ii);
- Variation in the rights attached to a class of shares or debentures or other securities as specified under section 48;
- Buy-back of shares by a company under Section 68(1);
- Election of a director under section 151 of the Act;
- Sale of the whole or substantially the whole of an undertaking of a company as specified under Section 180(1)(a);
Provision included in CA, 2013:
- Change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under Section 13(8);
Annexure- II
Items of business that cannot be transacted through postal ballot
Apart from the above, a company may, at its discretion, transact any other item of business also through voting by postal ballot instead of transacting it at a general meeting, except the following businesses:
- Consideration of financial statements and the reports of the Board of Directors and auditors.
- Declaration of any dividend
- Appointment of directors in place of those retiring.
- Appointment of and the fixing of the remuneration of the auditors.
- Business in respect of which directors or auditors have a right to be heard at any meeting.
Annexure-III
Content of Newspaper advertisement
- Date of completion of dispatch of notices
- Date of commencement of voting
- Date of end of voting
- Statement that any postal ballot received from the member beyond the said date will not be valid and voting whether by post or by electronic means shall not be allowed beyond the said date
- A statement to the effect that members, who have not received postal ballot forms may apply to the company and obtain a duplicate thereof
Provisions included in CA, 2013
- Contact details of the person responsible to address the grievances connected with the voting by postal ballot including voting by electronic means.
- A statement to the effect that the business is to be transacted by postal ballot which includes voting by electronic means and