2022 (10) TMI 1015 - Tri - Companies Law

Seeking permission to issue further redeemable preference shares for a period of 5 years equal to the amount due - Section 55 (3) of the Companies Act, 2013 - HELD THAT - An examination of the contents of the present petition shows that it meets the criteria laid in the Section and Rule 69 of NCLT Rules, 2016. The Petitioner has filed Form-MGT 14 before the ROC which is not disputed by the ROC. Therefore, the present Company Petition deserves to be allowed and the relief sought for by the Petitioner be granted permitting the Petitioner Company to issue further redeemable Preference Shares for a period of 5 years equal to the amount due, including the dividend thereon, in respect of the unredeemed preference shares and allow to treat the unredeemed preference shares shall be deemed to have been redeemed. This Company Petition is hereby Allowed.

Issues:
1. Company petition seeking permission to issue further redeemable preference shares for a period of 5 years.
2. Compliance with Section 55 of the Companies Act, 2013 and Rules framed thereunder.
3. Consent of preference shareholders for the issue of further preference shares.
4. Approval of the National Company Law Tribunal for the issuance of redeemable preference shares.
5. Examination of the petition's compliance with legal criteria.

Issue 1: Company petition seeking permission to issue further redeemable preference shares for a period of 5 years

The Company Petition was filed by M/s MFAR Hotels & Resorts Private Limited under Section 55(3) of the Companies Act, 2013, requesting permission to issue further redeemable preference shares for a period of 5 years equal to the amount due, including dividends, in respect of the unredeemed preference shares. The Petitioner, engaged in the business of running hotels and resorts, sought to treat the unredeemed preference shares as deemed to have been redeemed.

Issue 2: Compliance with Section 55 of the Companies Act, 2013 and Rules framed thereunder

The Registrar of Companies raised an objection regarding the Petitioner's compliance with Section 55 of the Companies Act and Rule 9 of the Companies (Share Capital and Debentures) Rules, 2014. The Petitioner responded by filing Form-MGT 14, indicating an effort to address the compliance requirements.

Issue 3: Consent of preference shareholders for the issue of further preference shares

All the 12.5% Preference Shareholders consented to the issue of further shares in respect of the proposed unredeemed shares. The Petitioner obtained written consent from the Preference Shareholders, demonstrating compliance with the necessary procedural steps.

Issue 4: Approval of the National Company Law Tribunal for the issuance of redeemable preference shares

After considering the submissions and documents presented, the Tribunal reviewed the Resolution passed by the Board of Directors of the Company, authorizing the initiation of action under Section 55(3) for the issue of further preference shares. The Tribunal also examined the consent affidavit filed by Respondents and found that the Petition met the criteria laid out in Section 55 and Rule 69 of NCLT Rules, 2016.

Issue 5: Examination of the petition's compliance with legal criteria

Upon thorough examination, the Tribunal concluded that the Company Petition met the necessary legal criteria and deserved to be allowed. The relief sought by the Petitioner was granted, permitting the issuance of further redeemable Preference Shares for a period of 5 years, including the redemption of unredeemed preference shares.

In conclusion, the Tribunal allowed the Company Petition, directing the Petitioner to place a copy of the Order before the Registrar of Companies, Kerala. The Petition was disposed of with no order as to costs, and a certified copy of the Order was to be issued upon compliance with formalities.

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