2021 (3) TMI 995

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....ribunal to oppose the Petition nor any party has controverted any averments made in the Petition. 2. The Counsel for the Petitioner Company submits that, the Article 8 of the Articles of Association of the Petitioner Company empowers the Petitioner Company to reduce its share capital in any manner permitted by law by passing a Special Resolution. 3. The Authorized Share Capital of the Petitioner Company is Rs. 29,00,00,000 (Rupees Twenty Nine Crores only) divided into 2,65,00,000 (Rupees Two Crores Sixty Five Lakhs Only), Equity Shares of Rs. 10 (Rupees Ten only) each and Preference Share of Rs. 10 (Rupees Ten Only) each. Out of the above, 2,64,81,370 Equity Shares and 22,70,000 Preference Shares of the Petitioner Company have been is....

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....March 31, 2019 to the extent of Rs. 20,12,79,900/- (Rupees Twenty Crores Twelve Lakhs Seventy-Nine Thousand and Nine Hundred Only). RESOLVED FURTHER THAT subject to the approval of the National Company Law Tribunal, the Equity Shares of Rs. 10/- each so reduced, shall stand cancelled, extinguished and rendered invalid, without any further act or deed by the shareholders of the Company. RESOLVED FURTHER THAT for the purpose of giving effect to the aforesaid resolution, Mr. Nikhil Bhatia and/or Mr. Dhaivat Kora, Directors of the Company, be and are hereby authorized to do all such acts, deeds, matters and things, as may be necessary, proper or expedient to do so without being required to seek any further consent or approval ....

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....f the creditors and no compromise or arrangement is contemplated with the Creditors, although there are no secured creditors but only unsecured creditors. 7. The Counsel for the Petitioner has further stated the rationale for reduction of share capital under paragraph 7 of the Petition which is as under: "7.1 the Company has accumulated losses of Rs. 20,12,79,927/- as on 31st March, 2019. The continued losses have resulted in substantial erosion of the Petitioner Company's share capital and the co-existence of share capital and accumulated losses in the Petitioner Company's financial statements do not reflect the correct picture of the financial health of the Petitioner Company. 7.2 Mere infusion of further funds into t....

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....eturn filed by the Company after giving effect to the proposed reduction. The decision of the Income Tax Authority is binding on the petitioner Company. (c) In view of the observation raised by the ROC, Mumbai as mentioned at para 6 above, Hon'ble Bench may kindly pass appropriate order/orders as deem fit and proper. (d) The proposed reduction of share capital is selective reduction, hence unjust and unfair to the rest of shareholders/members holding equity share capital of the company. Subject to the Observation made in para 6 and 7 (a) to (d) above. Hon'ble NCLT may pass appropriate orders/order as deem fit and proper on merits. 9. In so far as observations made in paragraph 7 of the Report of Regional Direct....

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....mpany to meet working capital requirements on pending orders, else it would have been virtually impossible to meet its obligations, which would have put the Company in further financial difficulty. 11. The Counsel appearing on behalf of the Petitioner Company submitted that the Petitioner Company has complied with all the statutory requirements and the directions of the Tribunal and they have filed the necessary Affidavit of compliance with the Tribunal. Moreover, the Petitioner Company also undertakes to comply with statutory requirements, if any, under the Companies Act, 2013 and the Rules made thereunder, as may be applicable. 12. The petitioner has undertaken to publish Notice of Registration of Order confirming reduction of share....