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TMI Blog2017 (8) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... capital is deserved to be allowed. Hence it is allowed and made absolute in the terms of its prayer clause. In the result the petitioner company is dispensed with the use of word “and reduced” in the name of the petitioner company or even in the memorandum of association, as no special reason is shown by the Central Government to be existing which may call for giving such direction by this Tribunal to the Company. - Company Application No. 94/ALD/2016 - - - Dated:- 7-7-2017 - MR. H.P. CHATURVEDI, J. For The Petitioner : Navin Sinha, Sr. Adv. and Rahul Agarwal, Adv. For The Respondent : Krishna Dev, CGSC and M.K. Bagri, Official Liquidator ORDER 1. The instant application is filed by the applicant Jubilant Clinsys Limited, before this Tribunal under the provision of Section 66 of the Companies Act, 2013 by seeking following reliefs: I. The reduction of capital resolved on 16th day of December, 2016 by the special resolution as set out in paragraph 17 of the application be confirmed; II. The use of words 'AND REDUCED' in the name of the Company be dispensed with; III. The form of Minute under Section 66(5) of the Companies Act, 2013 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by Jubilant Life Sciences Limited (collectively Preference Shares ) and III. payment of an aggregate paid up value of Preference Share of ₹ 27,05,00,000 to the holders of the Preference Shareholding 2,70,50,000 Preference Shares as on March 31, 2016 being made. 7. It is further stated in the Para 20 of application that six out of seven equity shareholders of the Petitioner Company and its sole preference shareholder attended extraordinary general meeting and have unanimously approved the above stated resolution. No shareholder voted against the proposed reduction of the share capital of the company. 8. It is also stated by the Petitioner Company that the company has not accepted any deposits and has no secured or unsecured creditors. Thus in absence of any creditors, the aforesaid extinguishment and cancellation of preference shares will not be prejudicial to the creditors of Company. 9. In response of the present application the Central Government through the Regional Director has filed its representation affidavit dated 06.04.2017. As per Para 6 of the same the Applicant Company is a wholly owned subsidiary of M/s. Jubilant Drug Development Ptc. Ltd., a F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company, alter its memorandum by reducing the amount of its share capital and of its shares accordingly: Provided that no such reduction shall be made if the company is in arrears in the repayment of any deposits accepted by it, either before or after the commencement of this Act, or the interest payable thereon. 2. The Tribunal shall give notice of every application made to it under sub-section (1) to the Central Government, Registrar and to the Securities and Exchange Board, in the case of listed companies, and the creditors of the company and shall take into consideration the representations, if any, made to it by that Government, Registrar, the Securities and Exchange Board and the creditors within a period of three months from the date of receipt of the notice: Provided that where no representation has been received from the Central Government, Registrar, the Securities and Exchange Board or the creditors within the said period, it shall be presumed that they have no objection to the reduction. 3. The Tribunal may, if it is satisfied that the debt or claim of every creditor of the company has been discharged or determined or has been secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure seems to be fulfilled, and no any kind of objections is received against to the proposed reduction. That apart, by making a judicial outlook in the present case we see the Hon'ble Bombay High Court came to examine the legal preposition for approving Reduction of Capital in the matter of In Elpro International Ltd., In re [2008] 86 SCL 47 (Bom.) (as per Hon'blc Justice D. Y Chandrachud observed as such: Reduction of share capital will be at such rate which is provided in the resolution. In Hindustan Commercial Bank Ltd. v. Hindustan General Electric Corpn. Ltd. AIR 1960 Cal 637 the Calcutta High Court referred to the judgment of the House of Lords in the British American Trustee case with approval and held that the question of reducing capital is a domestic affair to be decided by the majority. The Court held that the Companies Act, 1956 leaves it to the company to decide for itself the extent and mode of reduction and application of the moneys thereby. This is, however, subject to the confirmation of the Court, which is required for safeguarding the interests of creditors and minority shareholders and seeing that it is fair, just and reasonable. A sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its shares without dealing in the same manner as with all other shares of the same class. Consequently, it is purely a domestic matter and is to be decided as to whether each member shall have his share proportionately reduced, or whether some members shall retain their shares unreduced, the shares of others being extinguished totally, receiving a just equivalent. (iv) The company limited by shares is permitted to reduce its share capital in any manner. (v) When the matter comes to the Court, before confirming the proposed reduction the Court has to be satisfied that (i) there is no unfair or Inequitable transaction and (ii) all the creditors entitled to object to the reduction have either consented or been paid or secured. 15. In the light of the above stated rulings applicable to the present Company Application for reduction of share capital is deserved to be allowed. Hence it is allowed and made absolute in the terms of its prayer clause. 16. In the result the petitioner company is dispensed with the use of word and reduced in the name of the petitioner company or even in the memorandum of association, as no special reason is shown by the Central Government to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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