2016 (7) TMI 1616 - HC - Companies Law

Dispensation of procedure prescribed under Section 101(2) of the Companies Act, 1956 - Scheme for Reduction of Share Capital - HELD THAT - No objector has come forward to oppose the proposed reduction - Filing and issue drawn up order is dispensed with. Petitioner to publish notices in the same newspapers i.e. Free Press Journal in English language and Navshakti, in Marathi language both having circulation in Mumbai about registration of Order and minutes of reduction by the concerned Registrar of Companies, Maharashtra - Publication in Maharashtra Government Gazette is dispensed with.

Summary

Issues involved:
Reduction of Share Capital under Section 101(2) of the Companies Act, 1956 based on Special Resolution passed by the Petitioner Company.

Analysis:
The judgment delivered by the Bombay High Court pertains to a Scheme for Reduction of Share Capital by a company. The court noted that no objector had opposed the scheme, and all statutory requirements had been complied with. The counsel for the Petitioner Company highlighted that the company had the power to reduce its share capital as per Article 4 of its Articles of Association and had passed a Special Resolution at an Extraordinary General Meeting for the reduction. The Special Resolution approved the reduction of Equity Share Capital from a certain amount to a new amount by canceling a specific number of shares held by an individual, with the company agreeing to pay a consideration for the reduction. The court observed that the Petitioner Company had fulfilled all statutory requirements and filed necessary affidavits of compliance. As no objections were raised and all procedures were followed, the court made the Company Scheme Petition absolute as per the prayer clauses. The court dispensed with the filing and issue drawn up order, directing all concerned parties to act on an ordinary copy of the order and the form of minutes authenticated by the Company Registrar. Additionally, the Petitioner was instructed to publish notices in specified newspapers about the registration of the order and reduction minutes by the Registrar of Companies in Maharashtra.

This judgment showcases the legal process involved in reducing a company's share capital under the Companies Act, 1956. It emphasizes the importance of complying with statutory requirements, passing a Special Resolution, and obtaining necessary approvals for such reductions. The court's decision to make the Company Scheme Petition absolute underscores the significance of following due process and ensuring all stakeholders are informed about the reduction. The directive to publish notices in newspapers and dispense with certain publication requirements further demonstrates the court's attention to detail in overseeing the reduction process and notifying relevant parties about the changes in the company's share capital structure.