A company may selectively reduce its share capital in accordance with Sections 66 and 52 of the Companies Act, ensuring compliance with statutory requirements and approval of the majority shareholders.

ORDER

1. Heard Counsel for the Petitioner Company and the representative from the Regional Director (Western Region).

2. The present Petition has been filed by M/s. Upwards Fintech Services Private Limited (Petition Company) for confirmation of reduction of its equity share capital under Section 66 read with Section 52 of the Companies Act, 2013 (the Act) and in accordance with the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 and other applicable provisions.

3. The Petitioner Company is a private limited company incorporated on 09.01.2017 under the provisions of the Companies Act, 2013 . The registered office of the Petitioner Company is situated at Maharashtra and therefore, this Bench has the jurisdiction to entertain the petition. Nature of Business:

4. The main objects of the Petitioner Company as mentioned in Memorandum of Association as annexed as ‘Annexure-A’ is as follows:

“To own, manage and run computer software development and data processing center and to act as consultants, advisors, developers and traders in financial technologies, computer programming, system development, system design, system architecture, software designing, computer aided designs, data compilation and statistical analysis and to carry on the business of traders, developers, assemblers, repairs, importers, exporters of software packages, computer systems, computer peripherals, computer parts, computer consumables and electronic communication systems, data publishing and processing systems and other industrial automation systems and gadgets in the field of financial technologies, to carry on the business of developing, owning, managing and using a technology platform and software, to enter into agreements with non-banking financial companies or banking companies to source loan transactions, identify potential loan borrowers for such companies, verify personal financial background to enable such companies to disburse loans in bilateral arrangements with borrowers, processing loan applications, act as the front end for such companies with borrowers for completion of documentation and recovery of principal and interest amounts, providing repayment gateways and assist in recovery of amounts due with the assistance of the technology or software developed where feasible.”

Rationale:

5. The Learned Counsel for the Petitioner Company states that the rationale for reduction is as follows:

 “The Petitioner Company has sold its tech business under slump sale to LendingKart Technologies Private Limited (LKTPL). Consideration received by the Petitioner Company under slump sale is cash of INR 4.1 crores and 1038 Series 04 Preference Shares issued by LKTPL

 The Petitioner Company has transferred its entire business under slump sale, so currently in the books of the Petitioner Company there is an investments and surplus cash received as consideration against slump sale. The proposed capital reduction shall enable the Petitioner Company to optimally utilise surplus cash balances available with the Petitioner Company received as consideration from slump sale. This will thus be in the best interest of the shareholders

 The reduction shall also lead to utilisation of balance in the Securities Premium account in an effective manner for the benefit of the Petitioner Company

 The reduction will make company ready to evaluate for any new business or venture.”

6. The Board of Directors of the Petitioner Company at their meeting held on