Section 137, The Companies Act, 2009

No transaction shall be entered into by or on behalf of acompany whereby the total number of its shares, or of its shares of any one class, held by persons other than the company or its nominees becomes less than 70 per cent of the total number of shares of that class, which have been issued but– (a) redeemable shares shall be disregarded for the purposes of this section; and (b) where, after shares of any class have been issued or, the number of such shares has been reduced, this section shall apply as if the number originally issued (including shares of that class cancelled before the reduction took effect) had been the number as so reduced.