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TMI Blog2022 (5) TMI 1654X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court. The original share holder i.e., the husband of the defendant died on 22nd June, 2012. The defendant s first assertion of right claiming 500 shares was on 6th November, 2016. Pursuant thereto certain letters were exchanged between the parties. Ultimately, the plaintiff by a letter dated 10th February, 2017 issued 50 shares of Re.1/- each to the defendant which she refused to accept and demanded 500 shares. The defendant thereafter by a letter dated 11th March, 2017 once again requested the plaintiff-company to issue 500 shares which was followed by a complaint to Security Exchange Board of India (SEBI). The suit was instituted on or about 22nd September, 2017 is within limitation. In respect of the relief(s) claimed the defendant is the sole party necessary. The suit is, therefor, maintainable. Whether the paid up equity share capital of the plaintiff stood reduced by 99% in terms of the Order dated December 4, 2007 passed by the Learned Appellate Authority for Industrial and Financial Reconstruction? - To what other reliefs the plaintiff is entitled to? - HELD THAT:- The suit has been admittedly filed after the introduction of IBC and repeal of SICA, 1985 by the 2003 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not also be granted independently of the decree of declaration. Since the suit is dismissed, the connected application filed by the defendant after conclusion of hearing also stands dismissed. Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the parties on priority basis after compliance with all necessary formalities. Suit dismissed. - THE HON BLE JUSTICE ARINDAM MUKHERJEE For the Appellant : Mr. Shyamal Sarkar, Sr. Adv. Mr. Meghajit Mukherjee Advocates For the Defendant : Mrs. Suparna Mukherjee, Mr. Debdut Mukherjee and Ms. Priyanka Sharma Advocates Arindam Mukherjee, J: 1. The plaintiff is a company within the meaning of the Companies Act, 2013 with its registered office at New Delhi and an office at Kolkata but outside the Ordinary Original Civil Jurisdiction of this Court. 2. The defendant is the widow of one Vishwanath Poddar, a shareholder of the plaintiff-company. The defendant is a resident of 4B/S, Mayur Apartments, 3A, Loudon Street, Kolkata- 700017 within the Ordinary Original Civil jurisdiction of this Court. 3. The plaintiff-company was declared a sick company on 27th May, 1988 under the provisions of Sick Industrial Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As a consequence, thereof, equity share capital and preference share capital of the plaintiff-company was reduced. The equity share capital with which we are concerned was reduced to Rs. 20.23 lakhs from Rs. 20.23 crores. 7. Thereafter, the plaintiff filed the order dated 4th December, 2007 along with Form 21 to record the reduction of share capital with the Registrar of Companies. The plaintiff also issued and allotted to all its equity shareholders one equity share of the face value of Re. 1/- each for every 10 equity shares of Rs. 10/- each held by the shareholders as on 29th December, 2007. So the said Vishwanath Poddar, the husband of the defendant herein was according to the plaintiff issued and allotted 50 equity shares with face value of Re.1/- each for the 500 shares of Rs. 10/- face value as held by him in the plaintiff-company. 8. The Rehabilitation Scheme which according to the plaintiff was sanctioned under the provisions of Section 18(2)(f) of SICA, 1985 was operative till 30 th June, 2018. This date has been subsequently extended till 31st March, 2022. 9. On 6th November, 2016 the plaintiff received a letter from defendant informing the death of the original share ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference share capital is valid and binding on the defendant? 4.- Whether the suit is maintainable in this Hon ble Court as framed? 13. The documents disclosed as plaintiff s documents (PD) 1 to 15 were admitted by the parties and were marked as exhibits A to O. The parties have not laid any evidence and wanted this Court to pronounce its judgment on the basis of the admitted facts and documents and the arguments advanced. 14. Issue no.3 which pertains to maintainability of the suit is taken up first. Although, the issue of jurisdiction of this Court and limitation have not been raised separately but same is covered by issue no.3. The defendant being a resident of Loudon Street within the Ordinary Original Civil jurisdiction, the suit against the said defendant can be filed and maintained in this Court. The original share holder i.e., the husband of the defendant died on 22nd June, 2012. The defendant s first assertion of right claiming 500 shares was on 6th November, 2016. Pursuant thereto certain letters were exchanged between the parties. Ultimately, the plaintiff by a letter dated 10th February, 2017 issued 50 shares of Re.1/- each to the defendant which she refused to accept an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiff remains open till the scheme is successfully worked out. It may so happen that the scheme fails and the company is directed to be wound up. The act of reduction of share capital under a scheme like that in the plaintiff is a contingent act, which fructifies on the successful implementation of the scheme. The reduction of share capital allowed under the scheme, therefor, cannot be said to have achieved finality during the implementation of the scheme. This act of reduction of share capital in the plaintiff-company pursuant to the scheme will crystallize only on the scheme being successfully worked out. 17. The SICA, 1985 stood repealed by the Sick Industrial Companies (Special Provisions) Repeal Act, 2003. The 2003 Act was brought into effect on 1st December, 2016 by virtue of a notification dated 25th November, 2016. Under the provisions of Section 4(b) of the 2003 Act, all proceedings pending before the BIFR and AAIFR stood abated with its promulgation. The 2003 Act, however permitted a company whose reference stood abated due to repeal of SICA, 1985 to make a reference under Part VI A of the Companies Act, 1956 by making amendment to the Companies Act, 1956 by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a Rehabilitation Scheme framed under Section 18(2)(f) and Section 18(4) of the SICA, 1985 and not by following the procedure available under the Companies Act. The BIFR and the AAIFR under the provisions of Section 18(2)(f) and Section 18(4) are competent to formulate a composite scheme permitting reduction of share capital for rehabilitation of the company. This fact is not in dispute. In such factual background the reduction in share capital permitted under the Rehabilitation Scheme shall continue to hold good till the scheme is in operation or in such time it is successfully implemented. The situation will be different if the implementation is not successful and an order of winding up of the plaintiff-company is ultimately directed. It is also possible that the Rehabilitation Scheme permitting reduction of share capital may be further modified during the course of implementation which may have an effect over the portion of the scheme which permits reduction of share capital. It can, therefor, be said that still the scheme has been successfully implemented, the reduction of share capital permitted under the said scheme does not achieve finality and is subject to being further m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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