Reduction of share capital under the Companies Act requires compliance with statutory provisions and shareholder approval.

ORDER

1. Heard the Learned Counsel for the Petitioner Company. No objector has come before the Tribunal to oppose the Petition, nor any party has controverted any averments made in the Petition.

2. The Learned Counsel for the Petitioner Company submits that the Board vide its meeting held on 21/02/2022 proposed to carry out reduction of its equity share capital, after considering the cash flow, capital requirement and other business factors, decided to reduce its paid-up share capital which is more than the wants of the Company for its business operations.

3. The Learned Counsel for the Petitioner Company submits that this Petition is for confirmation of a special resolution passed by the Petitioner Company for reduction of the Issued, subscribed and paid- up equity share capital of the Company from existing INR 2,00,00,000/- (Rupees Two Crore Only) divided into 20,00,000 (Twenty Lakhs) equity shares of INR 10/- (Rupees Ten Only) each to INR 32,00,000/- (Rupees Thirty Two Lakhs Only) divided into 3,20,000 (Three Lakhs Twenty Thousand) equity shares of INR 10/- (Rupees Ten Only) each fully paid up, by cancelling and extinguishing the existing paid-up equity share capital of INR 1,68,00,000 (Rupees One Crore Sixty Eight Lakhs Only) divided into 16,80,000 (Sixteen Lakhs Eighty Thousand) equity shares of INR 10 (Rupees Ten Only) each fully paid up, being in excess of wants / requirements of the Company and by returning / paying-off to the identified Members an amount of INR 10/- (Rupees Ten Only) for each equity share held by them which is being cancelled. The said special resolution was approved unanimously by all the shareholders of the Petitioner Company in the Annual General Meeting held on 30.05.2022, which is annexed to the Company Petition as “Exhibit G”

4. The said Special Resolution was approved unanimously by all the shareholders of the Petitioner Company in the Annual General Meeting held on 03.05.2022, in the following manner to reduce the paid-up equity share capital:

Further, post capital reduction the Shareholding pattern and percentage of Shareholding of the Petitioner Company will remain same.

5. The Learned Counsel for the Petitioner Company submits that, the Article

4.10 of the Articles of Association of the Petitioner Company empowers the Petitioner Company to reduce its share capital in any manner for the time being authorized by law by passing a Special Resolution. Article 4.10 of the Articles of Association of the Petitioner Company is incorporated below:

The company may, by special resolution, reduce in any manner and with, and subject to, any incident authorised and consent required by law:

(a) its share capital;

(b) any capital redemption reserve account; or

(c) any share premium account.

6. The Learned Counsel for the Petitioner submits that pursuant to the reduction of Equity Shares, the shareholders of the Petitioner Company shall be paid INR. 10/- (Rupees Ten Only) per equity share cancelled. The valuation report dated 24.02.2022 issued by registered valuer, Sundae Capital Advisors Private Limited, which is in accordance with the applicable provisions of Foreign Exchange Management Act and Rules, issued by the Reserve Bank of India for determining value per share to be paid to the Equity Shareholder against the Equity Shares so cancelled and extinguished. The copy of said valuation report from registered valuer, Sundae Capital Advisors Private Limited is annexed to the Company Petition as “Exhibit E”

7. The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai has filed its Report dated 09.05.2023, (herein referred to as the “Report”), inter alia stating ther