2015 (12) TMI 571 - HC - Indian Laws

Permission to increase in authorised share capital of the Petitioner Company as per the orders passed by BIFR without the payment of the requisite fees - Held that - In the first instance, there was considerable debate and argument as to whether the BIFR prepared and sanctioned the Scheme within the meaning of section 18 of the Sick Industrial Companies (Special Provisions) Act 1985, the representative of the State was present or not and whether the Scheme was duly circulated and brought to the notice of the State Government. However, after taking instructions, Mr Patwardhan states that the Petitioners would make an application referring to the State s power under section 9 and invoke the same specifically so as to claim remission or compounding of the proper stamp duty on the instrument in question. If such an application is made to the Government and addressed to the Principal Secretary, Revenue Department, Government of Maharashtra, the same shall be duly considered on its own merits and in accordance with law and a decision taken thereon. Such a decision shall be taken and duly communicated to the Petitioners within a period of three months from the date of receipt of such application. Once the Authorities have agreed in the aforesaid terms, then we need not decide any wider question or controversy. We keep the same open to be gone into in an appropriate case or state. We dispose off the Petition by accepting the statement of the learned Additional Solicitor General and in terms of the directions issued to the State of Maharashtra above. There will no order as to costs. The State Government shall also take into consideration the Petition before us and the averments and statements therein, so also contents of all the annexures.

Summary

Issues:
1. Increase in authorized share capital without payment of requisite fees
2. Communication set aside regarding email dated 24th April 2011
3. Stamp duty under Maharashtra Stamp Act 1958 on Articles of Association

Issue 1: Increase in authorized share capital without payment of requisite fees

The petition sought a writ of mandamus to direct the authorities to permit the increase in authorized share capital without payment of fees, based on orders from the BIFR. The Respondent Nos.1 and 2, exercising powers under the Indian Companies Act 1956, agreed to take a decision within three months and communicate it to the Petitioners after considering all relevant materials. The court accepted this and directed the authorities to make a decision within the stipulated time frame.

Issue 2: Communication set aside regarding email dated 24th April 2011

The second prayer in the petition involved the State of Maharashtra and the Principal Secretary, Revenue Ministry. The court noted that the Maharashtra Stamp Act 1958 governed the matter of stamp duty on the Articles of Association of a company. The Petitioners were advised to make an application to the State Government under section 9 of the Act to claim remission or compounding of the stamp duty. The court directed that if such an application was made, it should be considered on its merits and a decision communicated within three months.

Issue 3: Stamp duty under Maharashtra Stamp Act 1958 on Articles of Association

The court highlighted the provision of section 9 of the Maharashtra Stamp Act 1958, granting the State Government the power to reduce, remit, or compound duties in the public interest. It was emphasized that no application had been made by the Petitioners to the State Government for such relief. The court instructed the Petitioners to address the Principal Secretary, Revenue Department, Government of Maharashtra, for consideration of their application under section 9. Once the authorities agreed to the terms, the court stated that wider questions or controversies need not be decided at that time.

In conclusion, the judgment addressed the issues of increasing authorized share capital without payment of fees, setting aside a communication regarding stamp duty, and the application of the Maharashtra Stamp Act 1958. The court provided directions for the authorities to make decisions within specific time frames and emphasized the need for the Petitioners to follow the legal process for seeking relief under the stamp duty provisions.