Can the appointment of an Independent Director in a listed company be passed, if a special resolution fails to get the requisite majority of votes?

The answer is yes, let's see how.

The appointment, re-appointment or removal of an independent director of a listed entity, shall be subject to the approval of shareholders by way of a special resolution.

What is the voting majority of a special resolution?

The votes cast in favour of the resolution are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.

So how can an appointment be made if it is less than the requisite majority?

According to first proviso to Regulation 25 (2A), where a special resolution for the appointment of an independent director fails to get the requisite majority of votes but the votes cast in favour of the resolution exceed the votes cast against the resolution and the votes cast by the public shareholders in favour of the resolution exceed the votes cast against the resolution, then the appointment of such an independent director shall be deemed to have been made under sub-regulation(2A):

Conclusion:
In summary, while the appointment of an Independent Director in a listed company generally requires a special resolution, Regulation 25(2A) provides flexibility. If the resolution fails to pass but garners more votes in favour (both overall and from public shareholders) than votes cast against, the appointment is still valid. This regulatory nuance balances the principle of enhanced shareholder oversight with practical decision-making flexibility.

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From the desk of CS Sharath