2016 (4) TMI 1459 - HC - Companies Law

Reduction of Equity Share Capital - procedure prescribed under Section 101(2) of the Companies Act dispensed with - HELD THAT - No objector has come forward to oppose the proposed reduction. Since the requisite statutory procedure has been fulfilled, the Company Scheme Petition is made absolute. 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 and also in the Maharashtra Government Gazette about registration of Order and minutes of reduction by the concerned Registrar of Companies, Maharashtra.

Summary

Issues involved:
Reduction of Equity Share Capital under Section 101(2) of the Companies Act, 2013 through Special Resolution and compliance with statutory requirements.

Analysis:

Reduction of Equity Share Capital:
The judgment pertains to the reduction of equity share capital by a company as per the provisions of the Companies Act, 2013. The petitioner company adopted Table F of the Companies Act, which empowers it to reduce its share capital by passing a Special Resolution. The Special Resolution, passed at an Extra Ordinary General Meeting, authorized the reduction of up to 91,00,000 equity shares out of the existing paid-up capital. The reduction was to be effected by returning capital to the equity shareholders, not exceeding a total amount of Rs. 100,00,00,000. The names of shareholders entitled to the distribution were to be based on the register of members of the company at the effective date of reduction.

Compliance with Statutory Requirements:
The counsel representing the petitioner company affirmed that all statutory requirements had been duly complied with, as per the directions of the Court. The necessary affidavit of compliance was filed in the Court, and the petitioner company undertook to adhere to any further statutory requirements under the Companies Act, 1956, and relevant Rules. No objections were raised against the proposed reduction, and since the requisite statutory procedure had been fulfilled, the Company Scheme Petition was made absolute in accordance with the specified prayer clauses.

Conclusion:
The judgment, delivered by the High Court, approved the reduction of equity share capital by the petitioner company through a Special Resolution, as authorized under the Companies Act, 2013. The compliance with statutory requirements was emphasized, and the absence of objections allowed for the approval of the reduction. The Court dispensed with the filing and issue of a drawn-up order, directing 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 designated newspapers and the Maharashtra Government Gazette regarding the registration of the order and minutes of reduction by the Registrar of Companies, Maharashtra.