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CA Intermediate · Corporate and Other Laws · Management & Administration

Vikram Steel Ltd needs to pass a special resolution at a general meeting. Of the votes cast on a poll, 72 lakh votes are in favour and 26 lakh against. What is the correct legal position?

The special resolution is not passed. It requires votes in favour to be at least three times the votes cast against; three times 26 lakh is 78 lakh, and only 72 lakh were cast in favour. A simple majority suffices only for ordinary resolutions.

  1. APassed, because votes in favour are at least three times the votes against
  2. BNot passed, because votes in favour are less than three times the votes againstCorrect
  3. CPassed, because votes in favour exceed 50% of votes cast
  4. DNot passed, because 75% of total members must vote in favour

Explanation

A special resolution needs votes in favour of at least three times the votes cast against. Three times 26 lakh is 78 lakh, and 72 lakh is below it. Though 72/98 exceeds 50%, a simple majority is only enough for an ordinary resolution.

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