'Reduction of Capital' is a 'Domestic Affair' of a particular corporation in which, ordinarily, a Tribunal will not interfere because a majority judgement prevails, according to the Coram of Justice Venugopal M, Judicial Member, and Kanthi Narahari, Technical Member.
The purpose of the current Company Appeal was to express dissatisfaction with the National Company Law Tribunal's decision to reject the petition submitted in accordance with Section 66(1)(b) of the 2013 Companies Act and allow freedom to file a new application.
In the instant case titled Economy Hotels India Service (P) Ltd. v. Registrar of Companies the issues raised for clarification before the NCLAT was:
Whether the filing of the present petition was valid in terms of reducing the share capital?
With regard to this issue, the respondents determined that the Resolution adopted at the "Annual general Meeting" of the appellant's firm in accordance with Section 66 of the Companies Act was in order. The Registrar of Companies in Delhi determined that the appellant has submitted the aforementioned resolution in accordance with Section 66 of the 2013 Companies Act.
The appellant had filed the special resolutions with it, which satisfied the requirement of Section 66 of the Companies Act, 2013, and also taking into consideration of the first respondent's position that the appellant had filed the special resolutions with it, the tribunal allows the appeal by setting aside the impugned order passed by the NCLT, thereby confirming the reduction of share capital.
The Court categorically stated that,
"The Resolution passed in the 'Annual General Meeting' of the Appellant's Company u/s 66 of the Companies Act was found to be in order by the Respondents. Even the report of Registrar of Companies, Delhi found that the Appellant/Company had filed the said resolution keeping in tune with the ingredients of Section 66 of the Companies Act, 2013."