Restrict the affected rights only on a supported basis
For the public-company setting examined here, Companies Act section 106 allows the articles to provide a voting restriction on shares registered in a member’s name where calls or other sums presently payable on them remain unpaid, or the company has exercised a right of lien. The company cannot invent an additional section 106 ground merely because a member is inconvenient. First inspect the actual articles, the share-related obligation and the evidence; an unpaid general trading debt is not automatically an unpaid share call.
This article, checked as of 24 October 2026, addresses ordinary poll-voting controls in a public company. It does not apply the same result automatically to private companies with relevant exemption/article arrangements, or displace a separate statutory voting bar, class right, court order or applicable securities-law requirement. Establish those independently before finalising a voting list.
Four questions determine the exclusion schedule
| Question | Evidence | Risk if omitted |
|---|---|---|
| Do the articles contain the relevant restriction? | Current articles and adoption history | Using a discretionary policy as if it were an article |
| Is the share sum presently payable? | Valid call, due date and payment ledger | Restricting rights for a future amount |
| Has a lien actually been exercised? | Lien basis and operative exercise record | Treating an unexercised power as an exercised lien |
| Which shares and voting entitlements are affected? | Register and entitlement reconciliation | Blocking the whole member unnecessarily |
The statutory language is share-specific. Map each proposed exclusion to the affected holding and the supporting event. Mere existence of a lien clause in the articles does not prove exercise. Likewise, a ledger debit does not establish the validity or due date of a call. Resolve payment cut-offs and disputed postings using evidence rather than automatically copying the previous meeting’s restriction flag.
Compute voting entitlements before applying section 106
Section 106 is not the source of a universal one-share-one-vote calculation for every case. Determine the actual voting rights under the applicable share/class and paid-up-capital framework first. Then identify the voting entitlement linked to restricted shares. The numerical examples use independently established poll-voting units; a unit is not asserted to equal one share regardless of paid-up value.
Where two restriction reasons cover the same holding, take the union rather than adding overlapping exclusions twice. Preserve an exception list for attempted restrictions based on unrelated debts, personal disputes or management preference. Apply the statutory framework governing any separately valid voting restriction on its own terms; section 106 is not authority to ignore another law.
Poll voters may abstain partly and split votes
Subsection (3) states that a member entitled to more than one vote, or an eligible proxy or other person voting for the member, need not use all votes or cast all votes used in the same way. Poll data therefore need separate fields for entitlement, for, against, unused and invalid or rejected entries. Unused rights are not automatically votes against. This rule concerns a poll at a meeting; do not infer every electronic-voting platform’s mechanics or proxy authority from it.
A split-vote reconciliation should prove that valid for plus against does not exceed the independently verified entitlement used, with unused rights identified. Do not force the voter to exercise every unit merely to make software totals equal the full entitlement. Conversely, the right to split does not validate an overvote or cure an unauthorised proxy.
Keep scrutiny evidence with the minutes file
Retain the final register snapshot, articles, call ledger, payment and lien evidence, voter authority, original poll instructions and the scrutinised reconciliation. An adverse flag should show who determined it and why. A disputed entitlement is a legal issue to resolve under the applicable procedure, not a reason to silently discard the ballot. The examples illustrate arithmetic and the stipulated restriction facts; they do not determine the majority needed for any particular resolution.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: Affected entitlement, not whole member
Assume the articles validly impose the relevant restriction. A member has 1,000 independently computed poll-voting units, of which 100 are linked to shares with valid presently due unpaid calls. Eligible units after that established restriction are 900. Do not exclude all 1,000 merely because one part is affected.
Illustrative example 2: Future call is not presently due
A proposed restriction concerns ₹20,000 payable on a future call date. Assume there is no other valid restriction and all relevant entitlement is 1,000 voting units. The presently-unpaid-due basis is not established on these facts, so that future amount alone does not reduce the 1,000 units.
Illustrative example 3: A trading balance is not automatically a share call
A member owes ₹5,00,000 under an unrelated commercial supply contract. Assume no share-related unpaid sum, exercised lien or separate statutory voting bar applies. The 800 established voting units are not reduced to nil merely by renaming the trading balance a section 106 default.
Illustrative example 4: Overlapping grounds
Out of 1,000 established units, 100 are linked to valid unpaid-call restrictions and 200 to valid exercised-lien restrictions; 75 units overlap. The restricted union is 100 + 200 − 75 = 225, leaving 775 eligible units. Excluding 300 would double count the overlap.
Illustrative example 5: Split and unused votes
An eligible voter has 1,000 units, casts 600 for and 250 against, and leaves 150 unused. Cast votes are 850; 850 + 150 reconciles to 1,000. The unused 150 are not added to against merely because the voter did not use them.
Illustrative example 6: Aggregate a split ballot correctly
Voter A validly uses 350 for and 150 against. Other valid ballots contribute 100 for and 200 against. Totals are 450 for, 350 against and 800 cast. Apply the resolution’s independently verified majority rule to these totals; section 106 itself does not prescribe that majority.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Confirm company and meeting scope | Public-company and poll procedure file |
| 2 | Read the current articles | Operative restriction clauses |
| 3 | Determine underlying voting entitlement | Register, class and paid-up-rights working |
| 4 | Verify each call or other share sum | Valid obligation, due date and payment evidence |
| 5 | Verify any exercised lien | Legal basis and operative exercise record |
| 6 | Map restricted shares to units | Holding-specific exclusion schedule |
| 7 | Deduplicate overlapping grounds | Union and eligible-entitlement reconciliation |
| 8 | Verify voter or proxy authority | Appointment and applicable authority documents |
| 9 | Capture for, against and unused votes separately | Original instructions and scrutinised tally |
| 10 | Retain decisions and resolve exceptions | Reasoned entitlement log and meeting records |
Sixteen practitioner FAQs
1. Does an unpaid invoice automatically remove voting rights?
No. An unrelated trading debt is not automatically a presently payable sum on shares.
2. Are the articles relevant?
Yes. Subsection (1) permits the articles to provide the described restriction; inspect the operative wording.
3. Can a future call be treated as presently payable?
Not merely because it has been planned. Establish the actual valid due date.
4. Is a lien clause enough by itself?
The provision refers to shares in regard to which the company has exercised a right of lien. Evidence of exercise matters.
5. Should every holding of the member be excluded?
Map the restriction to the affected shares and their voting rights rather than assuming a whole-member ban.
6. Can management create another restriction because of a dispute?
Section 106(2) does not permit an invented additional ground. Separate lawful restrictions require their own basis.
7. Does this guide override other statutory voting bars?
No. Check the applicable law, orders and class rights independently.
8. Can the public-company analysis be copied to every private company?
No. Relevant exemptions and the company’s articles require a separate review.
9. Does one voting unit always mean one share?
No. The examples assume independently established poll entitlements after the applicable rights calculation.
10. How are overlapping restriction grounds counted?
Count the affected entitlement once using the union of the grounds.
11. Must a poll voter use every available vote?
No. Subsection (3) permits use of fewer than all votes.
12. Must all votes used be cast in the same direction?
No. The provision permits a split of votes used on a poll.
13. Does that automatically validate a proxy?
No. Proxy eligibility and authority must be independently established.
14. Are unused votes automatically against?
No. Keep unused entitlement separate from valid votes cast against.
15. Does section 106 determine an ordinary or special majority?
No. Apply the relevant resolution rules separately to the valid tally.
16. What should scrutiny retain?
Underlying entitlement, restriction evidence, voting authority, original directions and a reconciled tally with exceptions.
Conclusion
Build the restricted-entitlement list from valid articles, due share obligations and exercised liens, then reconcile actual poll choices without forcing all eligible votes to be used.