TaxTMI 
TaxTMI 
2021 (12) TMI 1019
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....respect to every creditor that either his consent to the reduction has been obtained or his debt or claim has been discharged or has determined or has been secured. 3. Counsel for the petitioner-company submits that the petitioner-company is engaged in the business of cutting tools. 4. Counsel for the petitioner-company submits that article 10 of the articles of association of the petitioner-company empowers the petitioner-company to reduce its share capital in any manner as per the relevant provisions of the Companies Act, 2013. 5. Counsel for the petitioner-company submits that the board of directors of the petitioner-company, at their meeting held on February 26, 2020 have deemed it appropriate, the reduction of share capital of....
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.... the minority shareholders by reducing the company's existing issued, subscribed and fully paid-up equity share capital from Rs. 1,84,44,500 (rupees one crore eighty four lakhs forty four thousand five hundred) consisting of 1,84,445 (one lakh eighty four thousand four hundred and forty five) equity shares of Rs. 100 (rupees hundred) each to Rs. 1,77,19,000 (rupees one crore seventy seven lakhs nineteen thou sand) consisting of 1,77,190 (one lakh seventy seven thousand one hundred ninety) equity shares of Rs. 100 (rupees hundred) each, and that such reduction be effected by cancelling and extinguishing 7,255 numbers (3.93 per cent.) of fully paid-up equity shares held by those pre-identified equity shareholders in the company having les....
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..... The applicant's response : The applicant has complied with section 12(3)(c) of the Companies Act, 2013 and has filed an affidavit dated July 1, 2021 confirming the same. (b) Regional Director's objection : The proposed reduction of share capital is selective as the applicant has proposed the reduction of equity shares of pre-identified minority equity shareholders only. The applicant's response : The proposed reduction of share capital is neither selective nor unfair/unjust to any shareholder, as can be seen from the following : (i) The proposed reduction does not target any individual share holder. The objective behind the reduction of share capital is to provide an exit to the minority sha....
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....air value of their shares, at no point of time it is even suggested by them that the amount that is being paid is any way less and that even overwhelming majority of the non-promoters shareholders having voted in favour of the resolution shows that the court will not be justified in withholding its sanction to the resolution." (c) Nirma Ltd., In re [2013] SCC Online Guj 8532 (paragraph 33) : "33. . . it may be noted that as the petitioner-company is already delisted the shares cannot be traded in the stock exchanges and therefore, it cannot be said that the resolution in question for reduction of share capital is not in the interest of public or shareholder." (d) RS Livemedia P. Ltd., In re [2014] 187 Comp Cas 243....
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....p equity capital in any financial year subject to compliance with sub-sections (2), (3) and (4). It does not supplant or take away any part of the per-existing jurisdiction of the company court to sanction a scheme for such reduction under sections 100 to 104 and section 391 . . . There is nothing in the provision of section 77A to indicate that the jurisdiction of the court under section 391 or 394 has been taken away or substituted . . . The conditions applicable to sections 100 to 104 and section 391 cannot be imported into or made applicable to a buy-back under section 77A. Similarly, the conditions for a buy-back under section 77A cannot be applied to a scheme under sections 100 to 104 and section 391. The two operate in indep....