Summary: The Companies Act, 2013, under Section 66, permits the reduction of share capital by a company “in any manner”, subject to passing a special resolution and attaining a confirmation from the National Company Law Tribunal. Whether this flexibility can be extended to permit selective reduction of share capital wherein the shares of only a particular class/category of shareholders is reduced is a question the High Courts and the tribunals have answered in the past, albeit with some contradictions. The Supreme Court in its recent judgment in Pannalal Bhansali v. Bharti Telecom Limited & Ors. has conclusively settled this issue and upheld the validity of selective capital reduction.