Reduction of share capital confirmed where creditors received notice and no objections were raised.

A company's special resolution for reduction of share capital was confirmed under the Companies Act, 1956 where partly paid shares were to be converted into a reduced number of fully paid shares and the unpaid balance cancelled, extinguishing the corresponding liability to share capital and share premium. Public notice was issued, creditors were notified, no objections were received from creditors or the public, and the resolution complied with the Act and the articles. The statutory minute required for the reduction was also placed before the Court. The reduction of share capital was therefore confirmed and the petition was allowed.

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Issues: Whether the petitioner-company's special resolution for reduction of share capital deserved confirmation under the Companies Act, 1956.

Analysis: The company proposed to modify the allotment of partly paid shares into a reduced number of fully paid shares and to cancel the unpaid balance, thereby extinguishing the corresponding liability towards share capital and share premium. Public notice was issued, creditors were notified, and no objections were received from the creditor or from the public. The resolution was passed in accordance with the Act and the relevant articles, and the statutory minute required for reduction was placed before the Court.

Conclusion: The reduction of share capital was confirmed and the petition was allowed.

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