2013 (5) TMI 1042 - HC - Companies Law

Court approves share capital reduction resolution under Companies Act, 1956. Creditors and shareholders protected. Registrar directed to register.

The court confirmed the resolution for reducing the share capital under Section 100 of the Companies Act, 1956. The company followed proper procedures, ... - Issues involved: Application u/s 100 of the Companies Act, 1956 for confirmation of resolution for reducing share capital.Details of the judgment:The petitioner, a registered company under the Companies Act, applied for confirmation of a resolution to reduce its share capital. The court, satisfied that all creditors were simple trade creditors, dispensed with issuing notices to them. Notices were published in newspapers as per Company Court Rules. No objections were filed against the resolution. The Registrar of Companies confirmed that the proper procedure was followed for reducing the share capital.The company's Board of Directors had resolved to reduce the share capital, followed by a special resolution. The reduction involved paying off equity shareholders at a higher rate than the market value, ensuring their interests were protected. The company would deposit the required amount in an account with a bank, serving the shareholders' interests. The court found no evidence that the reduction would be detrimental to public interest or against national policy. The liability of the company was not affected by the reduction.Considering the facts, the court confirmed the resolution for reducing the share capital and approved the minutes. The Registrar of Companies was directed to register the resolution and minutes as per Section 103 of the Act. The company was instructed to publish a notice of registration in newspapers within 14 days. The petition was allowed, granting the relief sought.