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7. About 212 depositors have joined together and have filed common objections through the learned counsel Sri. S.M. Chandrashekar. They contend that the quorum of the meeting which was convened to consider the scheme should be 75 per cent of the value of the creditors and 75 per cent of the value of the shareholders under section 391 of the Companies Act. 16275 persons said to have attended the meeting and the value of which is Rs. 56,71,64,000 and 7277 persons value of which is said to be Rs. 22,38,78,302 as against Rs. 310 crores. Having regard to the value of the creditors of the company and shareholders, unsecured creditors said to have attended the meeting, the Scheme was not approved by the 75 per cent of the creditors under section 391 of the Act and, therefore, the petition is not maintainable. The report submitted by the Chairman to this court is illegal and it is not in accordance with law and the court should not act on the said report. These 212 objectors altogether have invested a sum of Rs. 1,05,19,500 in Royal bond certificate, Premier bond certificate and other schemes. They have filed Company Petition No. 206/02 under sections 433(e) and (f) of the Companies Act for winding up of the company and notice to the company has been ordered in the said petition. The Reserve Bank of India has directed the company to close down the operation and liquidate the debts. These objectors were not aware of the said orders and they have invested money. As the company's financial position is crippled and as there are no signs of revival, as the entire infrastructure has collapsed, therefore, the scheme propounded by the company is sham. Hence it has to be rejected. Many of the creditors have not received notice. Some of the creditors have received notice after meeting. Thus the company has prevented the genuine creditors from attending the meeting and expressing their opinion. Number of persons shown to have attended the meeting is exaggerated. Only 500 to 600 persons were present in the meeting hall. A close scrutiny of the proxy forms of the company shows that the company might have forged the proxy forms and votes said to have been polled in favour of the scheme, ballot boxes were not sealed, unauthorized persons were allowed to cast votes in favour of the scheme, the company has conveniently and cleverly prevented the genuine creditors from attending the meeting and thus got approval of the scheme fraudulently. The scheme is not fair and opposed to the interest of the creditors. Thus the creditors will be deprived of company funds in the hands of the above-said persons. If the company is unable to implement the directions issued by the Reserve Bank of India the company has to be wound up. The best option is to appoint the Official Liquidator and under the supervision of the High Court to liquidate the assets of the company and distribute the proceeds. These deposits have invested their hard earned money and life savings. They are unable to meet their daily needs such as hospitalisation, marriages, social engagements etc. Therefore they contend that the petition is liable to be dismissed and no sanction should be accorded to the scheme.

"...It appears that proxies may both speak and vote at meetings of creditors or members, and that the inability of proxies for members to speak at general meetings of a public company does not apply to meetings called to approve scheme of arrangement. The vote on the scheme at each meeting of members or creditors is taken by a poll, and for a resolution approving the scheme to be carried, the persons who are present in person or by proxy at the meeting and who vote in favour of the scheme must comprise a majority in number of all persons who vote in person or by proxy, and they must also hold three-quarters in value of the interests of all such persons. The number and the value of the interests of persons who do not attend and are not represented at the meeting, or who do attend the meeting but abstain from voting, are immaterial, and do not enter into the calculation at all. Likewise, the interests of persons who appoint proxies are disregarded if the proxies do not attend the meeting, or do attend but do not vote..."
In all these three cases the requisite majority is of the members entitled P to vote and actually voting cither in person or by proxy where proxy voting is allowed. This may and, in the case of a public company normally will, be much less than a majority of the total membership, and may even be less than a majority of the members present at the meeting, for those who refrain from voting are ignored. To take an extreme case: A meeting of a company with 5,00,000 preference shares without voting rights, and 5,00,000 ordinary shares each with one vote, is attended only by five ordinary shareholders, four with one share each and one with hundred shares. If on a poll a resolution is voted for by three of the holders of one share and against by the fourth shareholder with one share, the holder of the hundred shares abstaining, the resolution will have been duly carried even if it is an extraordinary or special resolution, notwithstanding that only three out of a total of one million shares, three out of 5,00,000 total votes and three out of 104 votes exercisable at the meeting, have actually been polled in its favour. As we shall see later the procedure of voting on a show of hands, unless a poll is effectively demanded, may produce even greater anomalies."

30. In the aforesaid case of Kirloskar Electric Co. Ltd. {supra) this Court had an occasion to consider the meaning of the words "present and voting" and it was held as under:

"Sub-section (2) of section 391 requires that a scheme of compromise or arrangement must be approved by majority of creditors/members representing three-fourths in value of the creditors or class of creditors, or members or class of members, present and voting either in person or where proxies are allowed, by proxy. There is no difficulty in understanding the word 'present' as the creditors or members should be physically present in person or through their proxy in the meeting. The problem arises in the context of the word 'voting'. Voting is formal expression of will or opinion by the person entitled to exercise the right on the subject or issue in question. Voting is explained as the expression of ones will, preference, or choice in regard to the decision to be made by the body as a whole upon any proposed measure or proceeding. Right to vote means right to exercise the right in favour of or against the motion or regulation. A member present and voting may remain neutral, indifferent, unbiased or impartial not engaged on either side. Voting has to be either in the affirmative or negative, i. e., 'yes' or 'no' on the ballot paper or voting paper. One is not supposed to write anything except putting 'yes' or 'no' either in favour of the proposition or against the proposition. In addition to the same, if any suggestion, condition, reservation or stipulation is written stating that the expression of the will or opinion either for or against the proposition is subject to those things, then, the votes have to be necessarily treated as invalid or void, as such votes are no votes leading either way. A vote cast without indicating the mind of the voter either for or against the resolution is no voting at all. Similarly, voting for or against the motion subject to the conditions stipulated in the vote is no voting in the eye of law. Therefore, voting understood in a proper perspective, it could be either in the affirmative or in the negative. Therefore, in construing whether a resolution is passed by three-fourths majority present and voting, what is to be taken into consideration in calculating the majority is not the number of persons present and voting, but the number of valid votes polled in such meeting. The number of valid votes includes only votes which are indicating the mind of the voter for or against the resolution.