Quorum for the meeting
As per Regulation 22 of the CIRP, 2016, minimum 33% of voting rights is required to be present for any meeting to hold good. Such members may be present either in person or by video conferencing or by any audio-visual means. However, as per Regulation 21 (3) (b) read with 25 (5) of the CIRP, 2016, no voting can take place at the meeting in case even a single member of the CoC is absent. The Resolution Professional conducting the meeting has to provide for e-voting facility in case any (even single) member of the CoC is absent from the meeting.
On reading of the two Regulations referred above, it seems that in IBC – there are effectively two quorum – (a) 33 % of the total voting rights of the CoC – for the meeting to hold good for discussion; (b) 100 % of the total members of the CoC – for allowing voting at the meeting.
This is unlike the age old practice being followed for Companies Act purposes where once quorum is present, deliberation can be done and voting can
Participation by video-conferencing and e voting
The concept of e-voting is to allow such members to vote who are unable to attend the meeting in person. Accordingly, where all the members of the CoC are present at the meeting and ready to vote at the meeting, the requirement of providing video conferencing facility and voting by electronic means may be done away with. However, where some members are not present, or where members want to take time (for example, consultations at their respective offices / heads), members may vote electronically.
Voting by circulation
Meetings are meant for decision making. Unlike Companies Act, while there is not explicit provision for voting remotely (by circulation or through e-voting only), however at the same time, the law has not expressly ruled out the same.
Meetings of the CoC under Insolvency Code
Infact, section 24(1) of the IBC, 2016 provides that voting can be conducted either at the meeting or by such electronic means as may be prescribed As such, participation by audio visual means is permitted and also encouraged. Meeting by circulation and voting remotely is a convenient mode for fast decision making and particularly for such a time bound process as resolution; therefore, there is nothing wrong in the COC deciding to adopt a resolution by circulation, particularly for matters which are not covered by the statute (that is a non-section 28(1) matter). The same is also hinted in Regulation 25 (1) and 25 (2) of the CIRP. Where clause (1) for section 28 items mentions that the same “shall” be considered at the meeting; clause (2) for non-section 28 items mentions that such items “may” be considered at the meeting. To infer, a non-section 28 item may be considered through voting by circulation.
Voting Percentage Required
For any resolution to sail through, minimum 75% of votes in favour is required. Practically, there can be three situation – (a) assent; (b) dissent; and (d) present but did not vote i.e abstained from voting. The age old practice for corporate meetings have been that only “present and voted” is counted for the purpose of drawing conclusion for any agenda item. The reason for the same is that the ones who were present and still chose to abstain from voting were unable to make up their mind to either go for the resolution or against- hence they choose to remain with the majority.