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TMI Blog2017 (5) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution, alter its articles including alterations having the effect 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, have to be filed and disposed as per the earlier provisions. 2. This 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 dear 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bits of Section 14 of the Act. This Section prescribes that a company, either a Public 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 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Kraftsware (India) Limited" to Private Limited Company by the name and style of "M/s. Kraftsware (India) Private Limited". Thereafter, at the Extraordinary General Meeting held on 1st November, 2016 at the Petitioner Company's registered office at G-10/E, Laxmi Mill Compound, Shakti Mill Lane, Mumbai, 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. (a) The related facts for conversion into a Private Company (Rule 68(2)(e) as emerged from the petition are considered- That the Petitioner Company was incorporated in Mumbai on 15th January 1986 with the object that "To carry on all or any of manufactures, proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by authorized to execute all such documents, instruments and writings as may be required and to take all such steps and actions and give such directions as may in its absolute discretion deem necessary and to settle any question that may arise in this regard". (b) As shown in their Company Petition the capital structure of Petitioner Company is as under: - "The Authorized share capital of the company is Rs. 25,00,000/- (Rupees Twenty-Five Lacs Only) divided into 10,000 (Ten Thousand) equity shares of Rs. 100/- (Rupees Hundred Only) each and 15,000 (Fifteen Thousand) Preference share of Rs. 100/- (Rupees Hundred Only) each. The current issued, Subscribed and paid-up capital of the company is Rs. 10,00,000/- (Rupees Ten Lacs Only) divided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any will be prejudiced by the proposed conversion of the Company from a Public Limited Company to a Private Limited Company and its proposed conversion is just and equitable. 8. In the light of the foregoing legal position, it is hereby summarised that the 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 effe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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