The central legal point established in the judgment is the importance of fulfilling procedural requirements, obtaining shareholder approval, creditor consent, and publication of reasons for reduction of share capital, as mandated by the Companies Act, 1956.

Sudhanshu Dhulia, J. (Oral)

1. The petitioner is a company registered under the Indian Companies Act, 1956. It seeks to reduce its share capital, for which it requires a confirmation from this Court. Hence, the present petition.

2. The petitioner company was incorporated as a private limited company on 25.11.1983 vide certificate of incorporation issued by the Registrar of Companies, U.P., Kanpur.

3. The main objects for which the Company was incorporated read as under:-

“a) To undertake the manufacture of all grades of calcium carbonate and other chemicals and to construct, establish, promote, the setting up of units for manufacturing calcium, carbonate, lime calcium and lime based chemicals through processing of minerals and other materials or commodities.

b) To conduct the business of processing and refining minerals for manufacturing calcium carbonate and calcium based chemicals, setting up or promoting industry, for its calcium based products and by products providing manufacturing, manipulating needs for limestone, lime-charcoal, coke, petroleum coke and other commodities needs for the manufacture of calcium carbonate and chemicals to produce and sell within the country or abroad products, and by-products resulting from mineral processing and manufacture of lime and calcium carbonate.

c) To establish, promote, take on lease, contract any works, industry, mines, lands and any interest therein, with the main object of developing mineral processing and other industry for manufacturing chemical and related products.”

4. The authorised share capital of the company on the date of filing of the company petition was Rs.1,00,00,000/- (Rupees One Crore only) divided into Rs.1,00,000 (One Lakh) equity shares of Rs.100/- each (Rupees Hundred only) and the issued, subscribed and paid up equity share capital of the petitioner company is Rs.72,00,000 (Rupees Seventy Two lakhs only) divided into 72,000 (Seventy Two Thousands) equity shares of Rs.100/- each (Rupees One Hundred only).

5. According to the scheme of reduction of share capital, the petitioner company is desirous to provide an exit to the “Dodhia Group”, also known as the “Exiting Shareholders”, by way of cancelling and extinguishing 35,260 equity shares of the face value of Rs.100/- each out of the shares held by the exiting Shareholders in the applicant company on the terms and conditions more particularly mentioned in the scheme of reduction of equity share capital. According to the petitioner company its shareholding pattern on the date of filing of the petition, was as under:-

Sr.No. Particulars Equity Shares Percentage (%)

1. Amir J.Dodhia 28,500 39.58

2. Zulekha A.Dodhia 7,500 10.42

3. Sadruddin Budhwani 28,500 39.58

4. Jarina Budhwani 7,500 10.42

Total 72,000 100.00

5. The Board of Directors of the petitioner company in its meeting held on 9th November, 2013 proposed to reduce the paid up equity share capital of the company under Section 100 (1) (c) of Companies Act, 1956.

6. Pursuant to the aforesaid meeting the applicant company sent a notice for calling an Extraordinary General Meeting along with explanatory statement, in due compliance of the provisions of the Companies Act to all the shareholders of the company at their respective last known addresses so that they may approve the scheme of reduction of equity share capital.

7. By a Special Resolution of the applicant company duly passed in accordance with Section 189 of the Act, at the Extraordinary General Meeting of the applicant company held on 2nd December, 2013 at its registered office at Dehradun, the shareholders of the applicant company approved the Scheme and accorded its consent to the extinguishment/cancellation of 35,260 (Thirty Five Thousand Two Hundred and Sixty only) equity shares of the applicant company, consequent to the passing of Special Resolution under Section 189 of the Act, a copy of the same was filed with the Registrar of Companies, on 3rd December, 2013, in the prescribed Form 23 o