TaxTMI 
TaxTMI 
2007 (9) TMI 426
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....td. on 21-4-1962. The name was thereafter, again changed to Shriram Refrigeration Industries Ltd. on 7-6-1966. The name of the company was yet again changed to Shriram Industrial Enterprises Ltd. on 20-5-1992. Subsequently, the name of the company was changed to its present name on 10-5-1995, with the Registrar of Companies, NCT of Delhi and Haryana by the Registrar of Companies, NCT of Delhi and Haryana. The registered office of the petitioner-company is situated in the NCT of Delhi within the jurisdiction of this court. 3. The petitioner has produced a copy of its memorandum and articles of association. By article 53 of the articles of association of the company, the petitioner-company has been empowered and authorized to reduce its share capital. The petitioner-company has also filed a separate petition for scheme of arrangement between Mawana Sugar Ltd. with the present petitioner along with this reduction petition. 4. The present authorized share capital of the petitioner/transferee company as on 31-3-2007, is Rs. 100,00,00,000 divided into 7,00,00,000 equity share of Rs. 10 each, 5,00,000 13.5 per cent redeemable cumulative preference shares of Rs. 100 each and 25,00,00....
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....shares of value of Rs. 10 each in the transferee company as fully paid-up (hereinafter referred to as "the exchange shares") for every 2 (two) equity shares of Rs. 10 each fully paid-up held in transferor company. It is clarified that consequent to the reduction of share capital of the transferee company as provided for in clause 5.2 below, the entitlement of the shareholders of the transferor company to the shares in the transferee company, i.e., the exchange shares shall also consequently reduce. The shares of transferee company held by transferor company (hereinafter called as "the cross holdings") shall be cancelled and no exchange shares entitlement shall arise on these shares. 5.2(a) The equity share capital of the transferee company after cancellation of cross holdings but including the exchange shares entitlement pursuant to clause 5.1 of this scheme shall become Rs. 73,95,08,081 (rupees seventy three crores ninety five lakhs eight thousand and eighty one only) comprising of 7,39,50,808 (seven crores thirty nine lakhs fifty thousand eight hundred and eight) equity shares of Rs. 10 each as fully paid-up, which shall be reduced to Rs. 24,63,86,251 (rupees twenty four crore....
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....he transferee company and the transferee company shall not be required to convene any separate meeting for that purpose. The order of the Hon'ble High Court sanctioning the scheme shall be deemed to be an order under section 102 of the Act. 5.5 The total number of new equity shares of transferee company to be issued and allotted to members of transferor and transferee company shall be at par, credited as fully paid-up and shall be on the following terms : (a )The new equity shares to be issued and allotted in terms hereof will be subject to the memorandum and articles of association of the transferee company. (b )Subject to the provisions of this scheme, the new equity shares to be issued and allotted to the shareholders of the transferor company and transferee company pursuant to this scheme shall in all respects, rank pari passu in respect of dividend, bonus, rights shares, voting rights and other corporate benefits. Until the effective date, the holders of the equity shares of the transferor company shall continue to enjoy their rights under their articles of association, including the right to receive dividend, if any, declared in accordance with the Act and the articl....
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....s) shall sell the same in market at such time(s) (not later than six months upon coming into effect of this scheme) at such price(s) and to such person(s) as it/he/they may deem fit, and pay to the transferee company the net sale proceeds thereof. Thereupon, the transferee company shall distribute the net sale proceeds, after deduction of applicable taxes/duties/levies, if any, to the members entitled in proportion to their respective fractional entitlements. In case the number of such shares to be allotted to the director/officer by virtue of consolidation of fractional entitlements is a fraction, one additional equity share will be issued in the transferee company to such director/ officer. (g )In respect of equity shares of the transferor company where calls are in arrears, without prejudice to any remedies that the transferor company or the transferee company, as the case may be, shall have in this behalf, the transferee company shall not be bound to issue any new equity shares of the transferee company (whether partly paid or otherwise) nor to confirm any entitlement to such holder until such time as the call in arrears are paid, together with any charges that may be applic....
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....the transferee company without any further act or deed." 8. The paragraph 5.4 of Part II of the scheme provides that the reduction of share capital of the petitioner/transferee company pursuant to the scheme shall be given effect as an integral part of the scheme and the consent given to the scheme by the shareholders and the creditors of the transferee company shall be deemed to be their consent under the provisions of section 100 and all other applicable provisions of the Act to such reduction of capital of the transferee company and the transferee company shall not be required to convene any separate meeting for that purpose. However, vide order dated 4-5-2007, the court had directed the petitioner-company to hold separate meetings of its shareholders and creditors on 11-6-2007, for amalgamation of the scheme. In addition to the said meetings, the petitioner-company held a separate extraordinary general meeting of its shareholders for reduction of their capital on 11-6-2007, as an abundant precaution. In the said meeting, the resolution for reduction of share capital was passed as a special resolution. The scheme was approved by an overwhelming majority of shareholders and cr....
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.... been filed deposing that the copy of the petition has been examined and the Regional Director is acquainted with the facts of the matter and the Central Government has no objection to the proposed reduction of share capital. 13. Section 100 of the Companies Act, 1956, authorizes a company to reduce the share capital and lays down the procedure for taking such action. This section reads as under : "100. Special resolution for reduction of share capital.-(1) Subject to confirmation by the Tribunal, a company limited by shares or a company limited by guarantee and having a share capital, may, if so authorised by its articles, by special resolution, reduce its share capital in any way; and in particular and without prejudice to the generality of the foregoing power, may- (a )extinguish or reduce the liability on any of its shares in respect of share capital not paid-up; (b )either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost; or is unrepresented by available assets; or (c )either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is ....