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TMI Blog2016 (4) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... along with an application being: CA No. 1903/2014, came up before this court for hearing, for the first time, on 26.08.2014. This court, on that date, for the reasons given in the order of even date, dispensed with the procedure laid down in Section 101(2) of the 1956 Act. Accordingly, CA No. 1903/2014 was disposed of. 2.1 Furthermore, in so far as the captioned petition is concerned, notice was issued to the Regional Director (in short the RD), which was accepted by Mr Atma Sah, Asstt.ROC. Direction was also issued for serving a copy of the petition on the Registrar of Companies (in short the ROC), within one week of that date. In addition thereto, the petitioner company was directed to carry out publication in the Indian Express (Englis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were dispatched to the shareholders of the petitioner company. 3.4 Consequent thereto, on 19.12.2013, the EOGM of the shareholders was convened, whereat a special resolution was passed approving the reduction in the share capital of the petitioner company. 3.5 The said resolution of the petitioner company, for the sake of convenience, is extracted hereinbelow: ".....RESOLVED THAT pursuant to the provisions of Section 78 read with Sections 100 to 104 and other applicable provisions, if any, of the Companies Act, 1956, read with Article 6A of the Articles of Association of the Company and pursuant to the relevant provisions of the Companies (Court) Rules, 1959 and subject to the confirmation of the Hon'ble High Court of Judicature at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner company, thus, as indicated right at the outset, moved this court on 26.08.2014, when notice was issued in the petition. Since then, the RD, as indicated above, has filed its reply. In the reply, the RD, based on the ROC's report, has after due examination, brought out the following facts: (i) That Article 6A, as referred to in the petition, based on which the petitioner company averred that it had the power to reduce the share capital, did not find mention in its Articles of Association. It is further averred that, though, the petitioner company had filed a special resolution regarding alteration in its Articles of Association with the ROC, on 28.01.2014, the said alteration was not found noted in the certified true copy of the Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stake, which had crept in inadvertently and was noticed by the court on the said date of hearing. 5.1 The petitioner company goes on to assert that the reduction in share capital from Rs. 49,00,000/- to Rs. 11,28,520/- was not being effected, as contended by the RD, by writing off long term loan and advances and cash as shown on the assets side of its balance sheet. Furthermore, the petitioner company denied that the reduction of share capital was sought to be brought about so as to distribute its brought forward profits in order to escape payment of tax on distribution of profits. It is asserted by the petitioner company that the brought forward profits are after tax profits. 6. Mr Awnish Kumar, learned counsel for the petitioner company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in capital may be effected by paying up paid-up capital, which is in excess of one's needs, and that, this can be achieved either with or without extinguishing or reducing liability qua its shares. The petitioner company had already denied that it would be effecting reduction in share capital either by writing off its long term loan and advances or cash, which is shown in the assets side of the balance sheet. 9.1 Even as per the RD, the petitioner company had no accumulated loss on the date of the preparation of the provisional balance sheet. 9.2 As to the observation of the RD, that the reduction in share capital is being sought to distribute brought forward profits of the petitioner company, to escape payment of tax on distribution o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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