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TMI Blog2017 (5) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... of conversion of - (a) a private company into a public company; or (b) a public company into a private company: Provided that....... Provided further that any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit. (2) Every alteration of the articles registered under sub-section (2) shall, subject to the provisions of this Act, be valid as if it were originally in the articles" 2. It is important to clarify that the transition period of Companies Act, 1956 into Companies Act, 2013 was fairly large; hence, in the interregnum, certain arrangements were made by the Ministry of Corporate Affairs, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issues with the approval of the Competent Authority. Sd/- (Sanjay Kumar Gupta) Deputy Director Ph: 23384657)" 3. By issuance of the Notification it was made clear that the corresponding provisions of Companies Act, 1956 shall remain in force till corresponding provisions of Companies Act, 2013 are notified. As a result, the impact of this Notification was that after the MCA Notification dated 01.06.2016 (to be discussed herein below), the applicability of the old provisions along with the attached rules got suspended. To proceed with the matter, it is requisite to hold that Rule 33 of the Companies (Incorporation) Rule, 2014, which had prescribed that for effecting the conversion of a Private Company into a Public Company was to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic Company or a Private Company, can alter its Article if such condition is contained in its Memorandum, but by a special resolution. Such alteration, for the purpose of this section, has the effect of conversion of a Public Company into a Private Company. The issue in hand is dealt with by second proviso to Section 14(c) which says that any alteration having the effect of conversion of a Public Company into a Private Company shall not come into operation except with the approval of the Tribunal (NCLT). The Tribunal shall make such order as it may deem fit. Further, a procedure is also laid down to give effect of the order of the NCLT in sub-section (2) of Section 14 of the Act. This sub-section has prescribed that a copy of such alterati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tyle of "M/s. Fiabila India Private Limited". Thereafter, at the Extraordinary General Meeting held on 2nd January, 2017 at the Petitioner Company's registered office at 17 MIDC Taloja, Raigad, a resolution has been passed for conversion of the Petitioner Company from Public Limited Company to Private Limited Company, the Members have also approved the conversion. (b) The reason for conversion into a Private Company (Rule 68(2)(e) can be narrated in brief as under:- a. The Company is a closely held public limited company managed by its Board of Directors comprising of 3 (Three) Directors. b. The Board of Directors Company in its meeting held on December 09, 2016 decided to convert the company from a Public Limited Company to Privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l structure of Petitioner Company is as under:- "The Authorised share capital of the company is Rs. 50,00,000/- (Rupees Fifty Lacs Only) divided into 5,00,000 (Five Lacs) Equity Shares of Rs. 10/- each. The issued, subscribed and paid up share capital of the company as on date is Rs. 41,11,110/- (Rupees Forty- One Lacs Eleven Thousand One Hundred and Ten Only) divided into 4,11,111 (Four Lacs Eleven Thousand One Hundred and Eleven) Equity Shares of Rs. 10/- (Rupees Ten) each." 7. In their Company Petition under consideration, the Petitioner Company has cited the following reasons for the proposed conversion from Public Company to Private Company, in brief narrated as under:- 7.1 The Company was incorporated as a Public Limited Company w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner has complied with provisions of Section 14 to be read with Rule 68 of NCLT Rules, 2016. Therefore, having regard to all the circumstances, the conversion from public to private is in the interest of the Company which is being made with a view to comply efficiently with the provisions of Companies Act, 2013 causing no prejudice either to the members or to the creditors of the Petitioner. Therefore, the conversion is hereby allowed. The Petitioner is hereby directed to give effect of the conversion by requisite alteration in its Articles which is hereby addressed and communicate the altered Articles within a period of 15 days to the Registrar.
CP 16/14(1)/NCLT/MB/MAH/2017 IS, therefore allowed.
No order as to cost. X X X X Extracts X X X X X X X X Extracts X X X X
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