Reduction of Share Capital is Domestic Affairs of a Company: NCLAT

Economy Hotels India Services Private Limited Vs Registrar of Companies & Anr. (NCLAT)

NCLAT HELD THAT : Reduction of Capital’ under Section 66 of the Companies Act, 2013 is a ‘Domestic Affair’ of a Company in which, ordinarily, a Tribunal will not interfere because of the reason that it is a ‘majority decision’ which prevails.

FACTS OF THE CASE:

The Appellant Company is a closely held Private Company, limited by shares, incorporated on 08.08.2012 under the provisions of erstwhile Companies Act, 1956. The Authorized Share Capital of the Company as on 31.03.2018 was Rs. 90 lakhs only divided into 9 lakhs Equity Shares of Rs. 10/- each and that the issued, subscribed and paid up share capital of the Company as on 31.03.2019 was Rs. 30 lakhs divided into 3 lakhs equity shares of Rs. 10/- each.

Further, the Company had 67,17,900 Unsecured Fully Compulsory Convertible Debentures(UFCCD) of Rs. 100/- each as on 31.03.2019.

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