2022 (4) TMI 946 - Tri - Companies Law

Reduction of share capital of the Petitioner Company - Section 66 of the Companies Act, 2013 - HELD THAT - It is seen that the Regional Director has stated in its report that after going through the Scheme of Reduction of Capital, the Regional Director has decided not to make any objections to the Scheme. Upon memo of clarification having been filed by the petitioner for the clarification sought regarding Reserves and Surplus; Cash and Cash Equivalents, this Tribunal is of the view that it is just and proper to confirm the Reduction of Share Capital of the Petitioner Company as resolved by the members of the Company by passing a special resolution and by way of consents in the form of Affidavits, This Tribunal also approves the proposed form of minutes to be registered under Section 66(5) of the Companies Act, 2013. While approving the Reduction of Share Capital as above, it is clarified that this Order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any payment is due or required in accordance with the law or in respect of any permission/compliance with any other requirement which may be specifically required under the law. Further, all compliances as are required to be done by the Petitioner Company upon this order confirming reduction of share capital and security premium reserve shall be duly complied with in relation to SEBI, FEMA and Income Tax Laws, as may be applicable. Petition allowed.

Summary

Issues:
1. Reduction of share capital under Section 66 of the Companies Act, 2013.

Analysis:
The judgment pertains to a petition filed by a company, M/s. Zifo Technologies Private Limited, seeking confirmation for the reduction of its share capital under Section 66 of the Companies Act, 2013. The company, incorporated in 2008, engaged in software business, presented its main objects as outlined in its Memorandum of Association. The authorized share capital of the company was detailed, along with the intention to reduce the issued, subscribed, and paid-up capital due to excess cash reserves. The process involved a special resolution passed by shareholders, supported by certificates from a Chartered Accountant and Statutory Auditor confirming the financial position of the company. The Regional Director's report highlighted the company's compliance with statutory requirements, leading to no objections to the reduction of capital. The tribunal, after due consideration and clarification on reserves and surplus, approved the reduction of share capital as proposed by the company, emphasizing compliance with laws and regulations. The judgment also underscored that any deficiencies or violations would not be shielded by the approval granted, and all necessary compliances with SEBI, FEMA, and Income Tax Laws must be adhered to. The company was directed to publish the order in specified newspapers and file a copy with the Registrar of Companies within a specified timeframe.

This detailed analysis encapsulates the key legal and procedural aspects addressed in the judgment, providing a comprehensive overview of the case involving the reduction of share capital by the petitioner company.