Reduction of share capital approved when statutory procedures followed and no objections raised.

ORDER

1. Heard Learned Counsel for the Petitioner Company and the representative from the Regional Director (WR).

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

3. The Counsel for the Petitioner Company submits that Article 1 of the Articles of Association of the Petitioner Company read with Table A of the Companies Act , 1956 (corresponding to Table F of Schedule 1 of the Companies Act , 2013) empowers the Petitioner Company to reduce its preference share capital in any manner permitted by law from time to time and utilize balance available in Securities Premium Account, Capital Reserve and General Reserve against the debit balance of Profit and Loss Account by passing a Special Resolution in any manner for the time being permitted by law.

4. The Counsel for the Petitioner Company submits that for the reasons set out in its Petition, the Board of Directors of the Company, at their meeting held on 26th April, 2023, approved the reduction of its preference share capital from existing Rs. 26,500/- (Rupees Twenty-Six Thousand Five Hundred) comprising of 2,650, 0.01% Cumulative Redeemable Preference Shares of Rs. 10/- each to NIL, by paying off to the Preference Shareholders, Rs. 10.50 Lacs in total and consequently cancelling and extinguishing the entire issued, subscribed and paid-up preference share capital of the Company And that the remaining balance in Securities Premium Account after adjustment of the amount paid and charged to Securities Premium Account on cancellation of the Preference Share Capital is henceforth ’NIL’ as reduced from INR 26,39,50,000/-, Capital Reserve is henceforth ’NIL’ as reduced from INR 12,15,52,300/- and the General Reserve is henceforth INR 1,86,41,511/- as reduced from INR 11,37,24,751/-and the Profit and Loss Account is henceforth ’NIL’ as increased entirely from negative INR 48,05,85,540/-.

5. Vide order dated 19.07.2023, the Company Petition i.e. CP- 167/2023 was admitted and the Petitioner Company had complied with direction passed by this Bench by way of an Affidavit. Pursuant to the said advertisement, no one has come forward to raise any objections opposing the sanction to the proposed capital reduction. None of the Creditors have raised any dispute regarding their claim or any objection to the proposal of Capital Reduction.

6. The Counsel for the Petitioner Company further submits that the shareholders of the Petitioner having passed a Special Resolution on 27^th May, 2023 have approved the said reduction of capital of the Petitioner Company. The report of the Regional Director was filed on 27^th October, 2023 with the NCLT Mumbai, Bench. The observation by the Regional Director are laid down in para 5 - 7 of his report, which are mentioned below:

7. That the Petitioner Company has filed reply in the Regional Director. After consideration of the reply of the Petitioner Company, the Regional Director appeared through its representative and submitted that their observations/ objections have been satisfactorily explained by the Petitioner Company or acceptable to them. Hence, the Regional Director does not have any objection to the proposed scheme of reduction.

8. Since the requisite statutory procedure has been fulfilled, the Company Petition is made absolute in terms of the prayer clause of the Petition.

9. From the material on record, the Scheme of reduction of share capital appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public interest/ policy.

10. Petitioner Company will publish the notices about registration of order and