Share capital consolidation upheld where articles enabled the move, shareholder approval was secured, and minority prejudice was not established.

A company may consolidate equity share capital under Section 61(1)(b) where its articles contain the enabling power, the proposal is approved through the required corporate process, and fractional entitlements are protected through a trustee mechanism. Objections based on alleged prejudice to minority shareholders did not justify refusal because the record showed substantial shareholder approval, diminishing opposition after share transfers, and due compliance with the Companies Act and SEBI framework. The material did not establish any legal impediment to the consolidation, so the challenge to the proposal failed and the consolidation was permitted.

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Issues: Whether the appellant-company was entitled to consolidate its equity share capital under Section 61(1)(b) of the Companies Act, 2013, and whether the objections based on alleged prejudice to minority shareholders justified refusal of the proposal.

Analysis: The Company had the necessary enabling provision in its articles to consolidate and divide share capital. The proposal was approved by the required corporate process, including a substantial majority at the general meeting. The record also showed that the company had provided for protection of fractional entitlements through a trustee mechanism and that the objecting shareholders' concerns had substantially diminished, with most of them having transferred their shares. The Tribunal below had proceeded on an apprehension that compliance with the Act and SEBI framework was being avoided, but the material on record showed due compliance and no legal impediment to the consolidation.

Conclusion: The consolidation of share capital was permissible, the objections of minority shareholders did not warrant rejection, and the appellant succeeded.

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