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The Supreme Court through its judgement dated 10.03.2026 in the matter of Pannalal Bhansali v. Bharti Telecom Limited & Ors.1 held that obtaining a valuation report is not a statutory requirement under Section 66 of the Companies Act, 2013 (“Companies Act”) when a company reduces its share capital.
Further, the court held that reduction of share capital can be achieved by a special resolution and confirmation by the Tribunal, without a valuation report from a registered valuer, and that such report does not fall within the ambit of “relevant material” without the full and complete disclosure of which the reduction of capital cannot be acted upon. The court further observed that wherever the legislature intended valuation to be mandatory, it has been expressly provided for under the statute, however, no such requirement is prescribed under Section 66 of the Companies Act.
The court while adjudicating on the issue of composition of National Company Law Appellate Tribunal (“NCLAT”) bench, held that Section 418A of the Companies Act, only prescribes that the NCLAT bench should consist of two members, one of whom should be a judicial member and the other should be a technical member, since Section 418A of the Companies Act does not state that the majority of the members in the NCLAT bench should be judicial members, hence the bench which constitutes of a majority of technical members should not be considered as illegal.
Footnote
1 Civil Appeal No. 7655 of 2025.
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