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TMI Blog2018 (9) TMI 1967X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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. The prescribed statutory procedure have been duly followed with the approval of the members and creditor of the company and that no objection has been received against the proposed reduction and therefore proposed reduction can be confirmed by passing order in terms of rule 6 of the Rules - Registrar of Companies shall issue a certificate of Registration of Order and Minute in Form RSC-7 of the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016. - Company Petition No. 538 of 2016. - - - Dated:- 7-9-2018 - M. M. Kumar C. J. (Retd) (President) and S. K. MOHAPATRA Technical Member For the Petitioner : Rohit Mahajan For the Income-Tax Department : Ms. Sonam Sharma, Company Prosecutor for the Regional Director. Rajat Nayar , Standing Counsel ORDER S. K. MOHAPATRA (TECHNICAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p for each share. The present proposal for reduction of capital in terms of provisions of section 100(1)(a) of the Companies Act, 1956 is intended to reduce and extinguish the unpaid liability of ₹ 5 (rupees five only) per share of the subscribers. 6. It is submitted that the need for reduction of capital as stated in the application is that the unpaid amount of ₹ 5 on each of the equity share of the subscribed capital of the petitioner-company is much beyond the business requirement of the petitioner-company and such amount is not required as it may not be profitably/gainfully utilized by the petitioner-company. 7. It is stated that the petitioner-company does not have immediate plan for expansion and these funds if called up will remain idle locking of the scarce resources and funds from shareholders. It is also emphasized that after the proposed reduction of share capital, the petitioner-company will continue to have sufficient cash flow and availability of funds to meet not only its present requirements but also its immediate future requirements. 8. The petitioner-company further submits that there will not be any cash repayment to the members/subscribers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , make an order confirming the reduction of share capital on such terms and conditions as it deems fit : Provided that no application for reduction of share capital shall be sanctioned by the Tribunal unless the accounting treatment, proposed by the company for such reduction is in conformity with the accounting standards specified in section 133 or any other provision of this Act and a certificate to that effect by the company's auditor has been filed with the Tribunal. (4) The order of confirmation of the reduction of share capital by the Tribunal under sub-section (3) shall be published by the company in such manner as the Tribunal may direct. (5) The company shall deliver a certified copy of the order of the Tribunal under sub-section (3) and of a minute approved by the Tribunal showing- (a) the amount of share capital ; (b) the number of shares into which it is to be divided ; (c) the amount of each share ; and (d) the amount, if any, at the date of registration deemed to be paid-up on each share, to the Registrar within thirty days of the receipt of the copy of the order, who shall register the same and issue a certificate to that effect. (6) No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s general meeting resolving to reduce the share capital. In this regard the petitioner company has referred to article 41 of its articles of association, which empowers the petitioner-company to reduce its share capital in any manner from time to time by passing special resolution. 12. The proposal of capital reduction has been consented by the share-holders of the petitioner-company by a special resolution duly passed in pursuance of section 100 of the Companies Act, 1956 and in accordance with section 114 of the Companies Act, 2013, at the extraordinary general meeting of the petitioner-company held on April 28, 2016, whereat it was resolved as follows : Resolved that pursuant to the provisions of sections 100 to 104 and other applicable provisions, if any of the Companies Act, 1956, article 41 of the articles of association of the company and subject to the confirmation by the hon'ble High Court of Judicature at Delhi, or other appropriate authorities, if required, consent of the members of company be and is hereby accorded for reducing the subscribed share capital of the company from ₹ 75,00,00,000 (rupees seventy five crores only) divided into 7,50,00,000 (sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proposed reduction. The consent letter has been placed on record. 16. The petitioner-company has two shareholders and their consent letters in favour of the proposed reduction have been placed on record. Needless to say that shareholders of the company unanimously have approved the proposed reduction in the extraordinary general meeting held on April 28, 2016. In that view of the matter as the consent of the members and the sole creditor of the company are on record, the requirement of convening any meeting of members or creditors of the petitioner-company does not arise. 17. The petitioner-company has further filed an affidavit dated July 21, 2017 affirming that the petitioner has published the notice in compliance with order dated July 21, 2016 passed by the hon'ble High Court of Delhi in Dainik Bhaskar and Times of India on December 24, 2016. It has also been affirmed that the petitioner-company has not received any objection from any person till date. 18. In the same affidavit dated July 21, 2017 the petitioner-company has also submitted that the copies of petition along with the copies of the notices have been duly served on the Registrar of Companies and Region ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Companies Act, 2013 has already been placed on record. No specific objection has been raised in the report against the proposed reduction. 21. It is seen from the order dated May 15, 2018 that the learned company prosecutor has specifically stated at the time of oral hearing that the requirements of section 66 of the Companies Act, 2013 stand fulfilled. 22. The department of Income-tax has filed its representation on February 27, 2018 with the following submissions : (a) As per the ITR filed by the assessee for assessment year 2016-17, the company was formed on October 21, 2015. (b) It filed its first ITR for assessment year 2016-17. (c) The case of the assessee has been selected for scrutiny for the assessment year 2016-17. (d) No demand is outstanding as on date as per the ITR system against the assessee. (e) As per the financials of the company submitted with department, prima facie no adverse impact on the interest of revenue can be perceived at this stage. However, the proceedings of security assessment for the assessment year 2016-17, time barring on December 31, 2018 are still pending. 23. A perusal of the aforesaid report reveals that no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n duly followed with the approval of the members and creditor of the company and that no objection has been received against the proposed reduction and therefore proposed reduction can be confirmed by passing order in terms of rule 6 of the Rules. This Tribunal do order 28. The minutes as proposed to be registered under section 66 of the Companies Act, 2013 is hereby approved : Form of minute The authorized share capital of Nippon Signal India P. Ltd., is ₹ 75,00,00,000 (rupees seventy five crores only) comprising of 15,00,00,000 (fifteen crores) equity shares of ₹ 5 (rupees five only) each. The issued subscribed and paid-up capital of the company is ₹ 37,50,00,000 (rupees thirty seven crores and fifty lakhs only) com prising of 7,50,00,000 (seven crores fifty lakhs) equity shares of ₹ 5 (rupees five only) each, reduced from ₹ 75,00,00,000 (rupees seventy five crores only) comprising of 7,50,00,000 (seven crores fifty lakhs) equity shares of ₹ 10 (rupees ten only) each. At the date of registration of this minute, 7,50,00,000 (seven crores fifty lakhs) equity shares of ₹ 5 (rupees five only) each amounting to ₹ 37,50,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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