Paid up capital | differential voting rights

Dear Friends

Section 86 of Companies Act, 1956 read with Rules on Issue of Shares with DVR 2001 allows shares to be issued with differential voting rights. On reading of Section 87, it appears that one's voting right is equivalent to the proportion of his paid up capital in the entire paid up capital of the Company. Therefore if we apply the said principle it would mean that if an ordinary share of a Company of Rs. 10 carries one voting right, therefore for a DVR Share, the paid up should be 1/10 of the paid up of an ordinary share, i.e. Re.1. However in all cases it is observed that DVR shares are also issued at the same price as ordinary equity shares. Therefore how does the principle embedded u/S 87 of the Companies Act, 1956 applied? Then for a DVR Share holder who has paid Rs. 10 for a DVR share should exercise the same right as an ordinary shareholder by virtue of Section 87 of the Companies Act, 1956 and the concept of 1/10 th voting right does not hold good.

In respect of the same, I seek your clarifications.

Regards

Dipen