2017 (6) TMI 1350 - Tri - Insolvency and Bankruptcy

Reduction of share capital - Article 52 of the Articles of Association of the Company - HELD THAT - Since the requisite statutory procedure has been fulfilled, the Company Petition is made absolute in terms of the prayer clause of the Petition. All concerned regulatory authorities to act on certified copy of the order and the form of minutes forming part of the Petition, duly certified by the Deputy Director, National Company Law Tribunal. The Petitioner Company undertakes to file the same with the Registrar within 30 days from the date of the receipt of the order.

Summary

Issues:
1. Reduction of share capital in compliance with statutory requirements.

Analysis:
The judgment delivered by the National Company Law Tribunal, Mumbai Bench, revolves around the issue of reducing the share capital of the petitioner company in accordance with the statutory provisions. The Counsel for the Petitioner Company highlighted that no objections were raised by the Central Government, Regional Director, Registrar of Companies, or Creditors during the stipulated period, indicating their non-opposition to the proposed reduction. It was emphasized that the company's Articles of Association, specifically Article 52, provided the necessary authority for such reduction. The proposed reduction aimed at presenting a true and fair view of the company's financial status by adjusting the deficit in the Statement of Profit and Loss through the reduction in the Securities Premium Account.

Furthermore, the Counsel pointed out that a Special Resolution was passed by the petitioner company through a Postal Ballot, approving the reduction in the Securities Premium Account. The compliance with statutory requirements and the filing of necessary affidavits were duly confirmed by the Counsel on behalf of the petitioner company. The Tribunal acknowledged the fulfillment of the statutory procedure and accordingly made the Company Petition absolute as per the prayer clause. The judgment directed all regulatory authorities to act upon the certified copy of the order and the minutes forming part of the petition, which were to be filed with the Registrar within 30 days. Additionally, the petitioner was instructed to publish notices regarding the registration of the order and minutes of reduction in two newspapers within Mumbai to ensure public awareness and compliance with regulatory obligations.