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Issues: (i) Whether, for reduction of share capital under Section 66 of the Companies Act, 2013, a separate class voting by public shareholders was required. (ii) Whether the reduction approved by the requisite majority and confirmed by the Tribunal could be interfered with.
Issue (i): Whether, for reduction of share capital under Section 66 of the Companies Act, 2013, a separate class voting by public shareholders was required.
Analysis: The reduction was proposed through the AGM notice with a stated rationale of providing an exit opportunity and liquidity to public shareholders at fair value. The voting requirement for a special resolution was satisfied under Section 114(2) of the Companies Act, 2013, as the resolution secured overwhelming support. The scheme of Section 66 does not create a separate voting class for public shareholders merely because they are affected by the reduction. The question of reduction of capital is treated as a matter of domestic concern, and the decision of the majority prevails where the statutory requirements are met.
Conclusion: No separate class voting by public shareholders was required, and the appellants' objection on that ground was rejected.
Issue (ii): Whether the reduction approved by the requisite majority and confirmed by the Tribunal could be interfered with.
Analysis: The reduction had already been approved by the shareholders with 99.954% voting in favour and only a negligible minority opposing it. The appellants held an insignificant portion of the shareholding. No challenge to valuation was made, and the material showed that the public shareholders were offered an exit opportunity on fair and just terms. In these circumstances, there was no basis to upset the Tribunal's confirmation of the reduction.
Conclusion: The approved reduction of share capital was not liable to be interfered with.
Final Conclusion: The appeal failed on merits, and the confirmation of the reduction of share capital remained undisturbed.
Ratio Decidendi: Where a reduction of share capital is approved by the statutorily required special resolution and no separate class voting is mandated by the Companies Act, 2013, the majority-approved reduction will not be set aside merely because a small group of public shareholders objects.
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