9911796707
TMI Blog1968 (5) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... are capital to the Registrar as required under section 97(1) and (2) of the Companies Act (hereinafter called the Act) and which is punishable under clause (3) of the said section. The company was registered under the Indian Companies Act VII of 1913 with authorised capital of Rs. 25,00,000 divided into 25,000 shares of 100 each. According to the articles of association of the company, its capital could be increased in accordance with the regulations of the company and the legislative provisions for the time being in force in this behalf and the increased capital must be divided into shares of rupees hundred or less or more, as the board of directors may deem fit. On 31st October, 1960, the company passed a special resolution making new m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reased and he had also intimated to the Registrar about the said resolution although it had not been done in the prescribed form along with the prescribed fee. On the basis of the above admission the trial court found the petitioners guilty and sentenced them as stated above. The petitioners preferred an appeal against their conviction in the Court of the Sessions Judge, Jaipur City, but did not put in appearance at the time of hearing and so the learned Sessions Judge, after considering the ground taken in the memo of appeal, rejected it. In this court learned counsel for the petitioners has contended that the share capital of the company could only be increased in the manner provided in section 94 and unless this is so done it cannot am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; ( e )cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled. (2)The powers conferred by this section shall be exercised by the company in general meeting and shall not require to be confirmed by the court. (3)A cancellation of shares in pursuance of this section shall not be deemed to be a reduction of share capital within the meaning of this Act. 97. Notice of increase of share capital or of members. (1) Where a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pursuant to section 97 of the Companies Act, 1956, that by ( a ) resolution of the company dated theday of19the share capital of the company has been increased by the addition thereto of the sum of Rs.beyond the present authorised capital of Rs. Dated theday of19 . The additional capital is divided as follows : Number of sharesClass of shares Nominal amount of each share The conditions ( e.g., voting rights, dividend rights, winding up rights, etc.) subject to which the new shares have been or are to be issued are as follows : ( if any of the new shares are preference shares, state whether they are redeemable or not). Signature Dated the ................. day of ............. 19.Designation ( b ) ( a )State whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut under the Act in sub-clause ( a ) it is provided that it may increase its share capital by such amount as it thinks expedient by issuing new shares. Now the question is as to when can a company be said to have increased its share capital. Whether by actual allotment of shares or registration of the names of the shareholders in the books of the company or by merely creation of new shares, whether they have been offered to the shareholders or not. As would appear from section 81 of the Act that the offer of further shares to the persons who, at the date of the offer, are holders of the equity shares of the company, in proportion, as nearly as circumstances admit, to the capital paid up on those shares at that date is to be made by notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the new shares should have been offered, allotted or the names of the shareholders be registered in the books of the company. I also derive support for my view from the following observations of Dass J., as he then was, in Nandlal Zaver v. Bombay Life Assurance Co. Ltd. [1949] 19 Comp. Cas. 26 at page 188: "It is true that 272 4/5 shares remain in hand. At best although issued they have not been offered to anyone". So, even though the shares have not been offered or allotted to anyone, they are still "issued" within the meaning of section 94(1)( a ) of the Act when they have been created by special resolution of the company and consequently its share capital has been increased and default by the petitioners in giving a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
