2021 (5) TMI 74 - Tri - Companies Law

Reduction of capital of the petitioner - Section 66 of the Companies Act, 2013 - HELD THAT - The Authorized Share Capital of the Company is ₹ 1,50,00,000 divided into 15,00,000 Equity Shares of ₹ 10 each, which have been issued and have been fully paid-up or credited as fully paid. In compliance of the requirements of proviso to sub section 1 of Section 66 of the Companies, Act, 2013 the petitioner has filed a declaration dated 07.11.2020 affirming that the Petitioner Company as on date has not accepted any deposits and accordingly there is no arrears or repayment due with respect to deposits - Besides the certificate of statutory auditor dated 05.11.2020 has been placed on record which certifies that the accounting treatment proposed by the Company for the reduction of share capital is in conformity with the accounting standards specified under Section 133 or any other Provisions of the Act. Since all the requisite statutory procedures have been fulfilled and no objections received from the governmental authorities or any shareholders before this Tribunal, the Company Petition is made absolute and therefore the proposed reduction can be confirmed by passing order in terms of Rule 6 of the Rules - As per Section 66 (5) of Companies Act, 2013 the petitioner company shall deliver a certified copy of this order under section 66(3) and the minute as approved to the Registrar of Companies within 30 days of receipt of the order. The Registrar of Companies shall issue a certificate of Registration of Order and Minute in Form RSC-7 of The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 - All concerned regulatory authorities to act on certified copy of order duly certified by the Deputy Registrar or Assistant Registrar of this Tribunal. Petition disposed off.

Summary

Issues:
Company petition for confirmation of proposed reduction of capital under Section 66 of the Companies Act, 2013.

Analysis:
1. Background and Company Details: The petitioner, a hotel and resort business, sought confirmation for reducing its share capital as per a special resolution passed by shareholders. The company's financial performance and compliance record were presented to support the petition.
2. Share Capital Details: The authorized, issued, and paid-up share capital of the company pre and post-reduction were outlined, emphasizing the restructuring necessity due to changes in management and business expansion plans requiring substantial investments.
3. Special Resolution and Shareholder Approval: The Board of Directors approved the reduction, and shareholders, including non-promoters, voted in favor at the Annual General Meeting, with no objections received against the proposed capital reduction.
4. Compliance and Notice Issuance: The petitioner complied with the statutory requirements, issuing notices to relevant authorities and creditors, with no objections received, and public notices published in newspapers to invite objections.
5. Legal Provisions and Declarations: The company's Articles of Association and Memorandum of Association empowered share capital reduction, and statutory declarations regarding deposits and accounting treatment were submitted.
6. Auditor's Certificate and Tribunal Decision: The statutory auditor certified the accounting treatment, and the Tribunal, noting compliance and absence of objections, approved the reduction of share capital, making the company petition absolute.
7. Order and Compliance: The Tribunal ordered the reduction of capital, approved the minute, and directed the company to deliver certified copies to the Registrar of Companies and publish the order in newspapers within the specified timeframe.
8. Registrar's Certificate and Conclusion: The Registrar of Companies was instructed to issue a certificate of registration, and regulatory authorities were directed to act upon the order. The case was disposed of on 27th April 2021, ensuring comprehensive compliance with legal procedures.

This detailed analysis highlights the legal proceedings, financial aspects, compliance with statutory requirements, shareholder approvals, and the final order of the Tribunal regarding the reduction of the company's share capital.