2021 (5) TMI 645 - Tri - Companies Law

Delay in causing paper publication the Applicant - Section 66 of Companies Act, 2013 - HELD THAT - The delay of 128 days in causing paper publication is due to the reason that the mother of the Authorized Representative was diagnosed with Stage 4 cancer during the month of October 2019 and she died on 25.11.2019 and since the last rites was performed during the month of December 2019, the Authorized Representative has resumed office only with effect from 26.12.2019 and hence there was a delay in causing paper publication. The delay as stated by the Learned Authorized Representative for the Application seems to be plausible and reasonable and hence we hereby the delay of 128 days in causing paper publication is condoned. Reduction of share capital - section 66 of the Companies Act, 2013 - HELD THAT - It is seen from the Application and the annexures filed therewith, the shareholders of the Applicant Company have approved the scheme of Reduction of Capital in the Extra ordinary General Meeting held on 01.03.2019 by way of Special Resolution, passed at this meeting - this Tribunal is of the view that it is just and proper to confirm the reduction of paid up share capital of the Applicant Company as resolved by the members of the Company by passing a special resolution and by way of the consents in the form of affidavit. While approving the Reduction of share capital, 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 law or in respect to any permission/compliance with any other requirement which may be specifically required under any law - Application disposed off.

Summary

Issues:
1. Delay in causing paper publication under Section 66 of Companies Act, 2013.
2. Application for confirming reduction of share capital under Section 66 of Companies Act, 2013.

Issue 1: Delay in causing paper publication under Section 66 of Companies Act, 2013

The Tribunal considered an Application (CP/816/2020) by M/s. Navia Commodities Broker Private Limited seeking to condone a delay of 128 days in causing paper publication as required by a previous order. The delay was attributed to the Authorized Representative's personal circumstances, specifically the illness and subsequent demise of their mother. After reviewing the reasons for the delay, the Tribunal found them plausible and reasonable, thus allowing the condonation of the delay through MA/423/2020. Consequently, MA/1195/2020, seeking to re-open the matter, was closed, and the Tribunal proceeded to pass final orders in CP/816/2020.

Issue 2: Application for confirming reduction of share capital under Section 66 of Companies Act, 2013

M/s. Navia Commodities Broker Private Limited, a company incorporated under the Companies Act, 1956, applied for confirming the reduction of its share capital under Section 66 of the Companies Act, 2013. The company, originally engaged in commodity broking, transferred its license to deal in securities and commodities to its holding company. The Board, after reviewing the capital structure and business requirements, recommended the reduction of capital, which was approved by shareholders in an Extraordinary General Meeting. The reduction was proposed to enable the holding company to utilize excess funds effectively.

The application detailed the company's current and proposed share capital structure, along with the necessary approvals and consents obtained. The shareholders' approval was obtained through a Special Resolution, and the proposed reduction was found to be non-prejudicial to any creditors or stakeholders. Certificates from Chartered Accountants confirmed compliance with accounting standards and the absence of creditors. The Tribunal, after reviewing the application and supporting documents, confirmed the reduction of the company's paid-up share capital as approved by the shareholders and the Regional Director. The Tribunal also approved the proposed Form of Minutes and directed the company to publish the order in specified newspapers and file a copy with the Registrar of Companies within 30 days.

In conclusion, the Tribunal addressed the issues of delay in paper publication and the application for reduction of share capital diligently, ensuring compliance with legal provisions and safeguarding the interests of the company and its stakeholders. The detailed analysis and approval of the reduction of share capital demonstrate a thorough consideration of the company's financial position and compliance with regulatory requirements.