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December 2022

Corporate Law Corner Part A : Company Law

By Pramod Prabhudesai | Vinod Agrawal, Chartered Accountants
Kaushik M. Jhaveri, Company Secretary
Reading Time 5 mins
12. Economy Hotels India Services Pvt. Ltd.
vs. Registrar of Companies & Anr.
Company Appeal (AT) No. 97 of 2020
Date of order: 24th August, 2020

A 'typographical error' in the extract of 'Minutes', does not alter the fact that the resolution passed  by the shareholders is a 'special resolution'.

FACTS

The National Company Law Tribunal (NCLT) observed the following:

Section 66 of the Companies Act, 2013 (CA 2013) states that subject to confirmation by the Tribunal on an application by the company, a company limited by shares or limited by guarantee and having a share capital may, by a special resolution, reduce the share capital in any manner.

Article 9 of the Articles of Association of EHISPL allowed it to reduce its share capital by passing a special resolution. The Board of Directors, vide their resolution dated 29th July, 2019 recommended a reduction in the capital. Article 9 further provided that the said resolution was subject to the consent of members by a special resolution.

The NCLT perused the minutes of the Annual General Meeting (AGM) of the company held on 19th August, 2019. The minutes stated that Mr. BS was elected to chair the meeting. The minutes recorded that in the said AGM, members had passed the resolution for reducing capital “as an ordinary resolution”. The Minutes of the said AGM were signed by the Chairman of the meeting.

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