The court confirmed the reduction of share capital under Section 66 of the Companies Act, 2013, emphasizing compliance with statutory requirements and creditor protection.

The instant petition has been filed under Section 66 of the Companies Act 2013 (hereinafter referred to as the “Act”) read with Section 52 of the Act and read with Rule 2 of the National Company Law Tribunal (Procedure of Reduction of Share Capital of the Company) Rules, 2016 (hereinafter referred to as (“NCLT Capital Reduction Rules”) for obtaining confirmation from this Tribunal for the proposed reduction of the issued, subscribed and paid-up equity share capital of the company. The Petitioner Company was registered on 02.09.2008, under the provisions of the Companies Act, 1956, under the name ‘DMI Finance Private Limited’. The registered office of the Petitioner Company is currently situated at Express Building, 3rd Floor, 9-10, Bahadur Shah Zafar Marg, New Delhi-110002.

2. The Applicant Company is registered as a non-banking financial company engaged in providing financial services, including retail and corporate debt and the certificate issued by Reserve Bank of India is annexed hereto and marked as Annexure - "В". A certified true copy of the Certificates of Incorporation is attached with the main petition as Annexure-A.

3. The Petitioner Company further submitted that by Article 31 of the Articles of Association of the Company, it is provided that the Company may, by special resolution, reduce its share capital in any manner as permitted by law. The relevant extract of Article 31 of the AOA is reproduced hereunder:

"31. "The company may, by special resolution, reduce in any manner and with, and subject to, any incident authorized, and consent required by law, - (a) its share capital;

(b) Any capital redemption reserve account; or

(c) Any share premium account."

4. The background, reasons/rationale, and commercial justification of the reduction of share capital by the Petitioner Company is as under:-

“That on March 19, 2020, the Company had issued 5,73,15,400 (Five Crore Seventy Three Lakh Fifteen Thousand and Four Hundred) partly paid-up equity shares to Mr. Shivashish Chatterjee and Mr. Yuvraja Chanakya Singh partners of K2VZ (Partnership Firm) for an issue price of INR 101.87/- (Indian Rupees One Hundred One and Eighty Seven Paise Only) per share comprising of face value of INR 10/- (Indian Rupees Ten Only) and premium of INR 91.87/- (Indian Rupees Ninety One and Eighty Seven Paise Only). Mr. Shivashish Chatterjee and Mr. Yuvraja Chanakya Singh partners of K2VZ (Partnership Firm) had agreed to invest the monies for making such shares fully paid up over a period of time. As on March 31, 2022, Mr. Shivashish Chatterjee and Mr. Yuvraja Chanakya Singh partners of K2VZ (Partnership Firm) has paid INR 16,52,47,259 (Rupees Sixteen Crores Fifty Two Lakh Forty Seven Thousand Two Hundred and Fifty Nine) divided into INR. 1,62,21,386 towards face value and INR. 14,90,25,873 towards share premium. Total Unpaid capital of Mr. Shivashish Chatterjee and Mr. Yuvraja Chanakya Singh partners of K2VZ (Partnership Firm) as on Mar 31, 2022 stands at INR. 567,34,72,539 (Rupees Five Sixty Seven Crores Thirty Four Lakhs Seventy Two Thousand Five Hundred and Thirty Nine). Total Unpaid capital of Mr. Shivashish Chatterjee and Mr. Yuvraja Chanakya Singh partners of K2VZ (Partnership Firm) Yuvraja Chanakya Singh on behalf of K2VZ (Partnership Firm) K2VZ as on Mar 31, 2022 stands at INR 567,34,72,539 (Indian Rupees Five Hundred and Sixty Seven Crores Thirty Four Lakh Seventy Two Thousand Five Hundred and Thirty Nine only).

That, the Company has subsequently raised fresh share capital equivalent to INR 225,74,99,842 (Indian Rupees Two Hundred Twenty Five Crores Seventy Four Lakhs Ninety Nine thousand Eight hundred and forty two only) at higher valuation of INR 209.75 (Indian Rupee Two Hundred Nine and Seventy-five Paise Only) per share, from existing and new investors as compared to the price at which the partly paid-up shares were issued to Mr. Shivashish Chatterjee and Mr. Yuvraja Chanakya Singh partners of K2VZ (Partnership Firm). Therefore, as pa