Pannalal Bhansali vs Bharti Telecom Ltd. & Ors

Bench: 2 — Sanjay Kumar, K. Vinod Chandran

In Brief

Bharti Telecom Limited, a closely held private company, reduced its share capital to exit minority shareholders by cancelling their 1.09% equity stake at ₹196.80 per share (after tax adjustment). Eleven minority shareholders challenged this as unfairly low and a forced squeeze-out. The Supreme Court upheld the capital reduction. It held that the procedure under Section 66 of the Companies Act was followed fairly, the notice disclosed material facts (not a "tricky notice"), and the valuation using Discount for Lack of Marketability was justified for an unlisted company. The Court found no oppression and dismissed appeals, noting that three-quarters of identified shareholders voted in favour and the price exceeded past buyback offers.

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Corporate Law Company Law Share Capital Minority Shareholder Rights Valuation of Shares Tribunal Jurisdiction Procedural Fairness Discount for Lack of Marketability Unlisted Companies Oppression of Minority Accounting Standards Constitution of Tribunal Judicial Review

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