The court considered the financial position of the company and the consents obtained from unsecured creditors in approving the reduction of share capital.

RAJIV SHAKDHER, J.

1. This is a petition filed under Section 78 read with Section 100 to 104 of the Companies Act, 1956 (in short the 1956 Act), to seek approval of this court for reduction of share capital. The petitioner company seeks to wipe off accumulated losses amounting to Rs. 110,00,00,000 against the total accumulated loss of Rs, 110,79,46,224/- by setting of the same against share capital account and securities premium account.

2. This petition has, thus, been filed in the background of the following facts:

2.1 The petitioner company was incorporated on 26.10.2005. It appears that in the financial year ending on 31.03.2011, the petitioner company had undertaken a similar exercise on account of having incurred losses to the tune of Rs. 101,10,52,216/-. On account of these losses the petitioner company approached this court for a similar relief. At that point in time, the petitioner company had sought approval of this court to wipe out (the aforementioned) accumulated losses by reducing its share capital by Rs. 10 crores and bringing about reduction in its securities premium account to the extent of Rs. 90 crores.

2.2 By an order dated 20.03.2012, passed in CP No. 480/2011, this court permitted reduction in the paid-up share capital by Rs. 10 crores. Resultantly, the paid up share capital stood reduced from Rs. 20.40 crores to Rs. 10.40 crores. The court further approved the reduction in the securities premium account by Rs. 90,00,00,000/-. Consequently, the securities premium account was reduced from Rs. 183.60 crores to Rs. 93.60 crores.

2.3 Evidently, the petitioner company thereafter increased its authorized share capital on 15.11.2013 by Rs. 6 crores. Consequent thereto, the authorized share capital stood enhanced from Rs. 20.40 crores to Rs. 26.40 crores.

2.4 It is averred that the petitioner company, on 28.03.2014, increased the paid-up share capital by Rs. 16 crores. As a result of this enhancement in the paid-up share capital, it stood increased from Rs. 10.40 crores to Rs. 26.40 crores. This increase in the paid-up share capital was brought about by the petitioner company by issuing and allotting 1600 shares to its promoters (i.e. the existing members). As a result thereof, as on 31.03.2015, the position with regard to authorized, issued, subscribed and paid-up capital of the petitioner company was as follows:

Authorized Share Capital 2640 Equity Shares of Rs. 1,00,000/- each	Rs. 26,40,00,000/-
Issued, Subscribed and paid-up share Capital 2640 Equity Shares of Rs. 1,00,000/- each	Rs. 26,40,00,000/-

 

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2.5 The petitioner company avers that in addition to the aforesaid, it has a balance sum equivalent to Rs. 2,37,60,00,000/- in its securities premium account, as on 31.03.2015.

3. It is because the petitioner company has accumulated losses to the extent of Rs. 110,79,46,224/-, as on 31.03.2015, (which, it has shown as “net deficit” in its profit and loss account, for the financial year 2014-2015) that, it seeks to move this petition for cancellation of its share capital and securities premium account.

3.1 The decision with regard to a reduction in the share capital account and the secutities premium account was taken at the Board of Directors (BOD) meeting held on 12.06.2015. A resolution to the same effect was passed on the said date.

3.2 As a result of the aforesaid decision taken by the BOD, on 15.06.2015, notices were sent, along with explanatory statements, to the shareholders informing them about the decision to convene an Annual General Meeting (AGM) on 17.07.2015, inter alia, for the said purpose.

3.3 The matter pertaining to reduction in share capital and securities premium account was thus, put to the shareholders at the said AGM, which was convened on 17.07.2015. At the said meeting, the shareholders gave their approval and passed the following resolutio