The Tribunal approved the reduction of share capital under the Companies Act, affirming it would not adversely affect creditors and all statutory requirements were fulfilled.

ORDER

Per: Bidisha Banerjee, Member (Judicial)

1. The Court congregated through hybrid mode and the parties were heard. 2. This is a Petition filed under section 66 of the Companies Act, 2013 (‘the Act’) read with the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016. The petitioner company, PRAGTI AUTOMECH PRIVATE LIMITED (the Company) seeks approval of this Tribunal qua Special Resolution passed at the Extra-Ordinary General Meeting held on 15th February, 2024 for reduction of the issued, subscribed and paid-up equity shares capital of the company.

3. The Ld. Authorised Representative for the Petitioner Company submits that no objector has come before the Tribunal to oppose the Petition and nor has any party controverted any averments made in the Petition.

4. The Petitioner Company (‘the Company’) was incorporated on 12th May, 2021 under the provisions of the Companies Act, 2013 as a Company limited by shares. The registered office of the Company is situated at G2, 3 & 10, Phase 1 Adityapur, Saraikela Kharsawan, Industrial Area, Purba Singhbhum, Jamshedpur, Jharkhand, 832109, which falls within the jurisdiction of this Bench.

5. The Ld. Authorised Representative for the petitioner submits that the reason for the reduction of share capital are as follows:

The present Issued, Subscribed and Paid-up Share Capital of the company is Rs. 60,08,000/- divided into 6,00,800 Equity Shares of Rs. 10/- each, fully paid. The shareholders of the applicant Company have entered into the agreement dated 16th January, 2024, who were the 2 brothers i.e., Mr Balbir Bhatia Singh and Mr. Darshan Singh Bhatia to give effect to family settlement between them. That the holding of both the brothers alongwith their families in the Companies M/s. PRAGTI AUTOMECH PRIVATE LIMITED and M/s. PRITAM AUTOMECH PRIVATE LIMITED who are the confirming parties to the agreement, will get vanished once the shares will get transferred and will help in focusing the efforts of each group in separate activities thereby nullifying the scope of any future conflict and growth of each line of activity/company. Therefore, considering the said facts, the Directors of the Company has proposed to reduce its share capital by reducing the paid- up share capital of Rs. 59,08,000 (Rupees Fifty Nine Lakh Eight Thousand Only) held by the existing shareholders who holds 98% of the total shares of the Company. Further, the company does not require the capital of Rs. 60,08,000/- having 6,00,800 Equity Shares of Rs. 10/- each, so the other shareholders have demanded to decrease the capital of the Company.

6. The proposed restructuring of capital by reduction of capital under section 66 of the Companies Act, 2013 shall be reflected in the books of accounts of the company in the following manner as on effective date.Sr. Particulars As 31.03.2024 After No. Reduction

7. The Ld. Authorised Representative for the Petitioner Company submits that Article 40 of the Article of Association of the Company authorizes the Company to reduce its capital in any manner permitted by law.

8. It is submitted by the Ld. Authorized Representative for the Petitioner that there is no pending inspection, inquiry or investigation against the Petitioner Company under the Companies Act, 2013 . The Petitioner Company has been paying all its dues on time and has honoured its commitments and has not defaulted in any of its obligations.

9. Accordingly, the Board of Directors of the Company, at its meeting held on 24th January, 2024 subject to approval of the equity shareholders and subject to the approval of the National Company Law Tribunal, pursuant to section 66 of the companies Act, 2013 and the National Company Law Tribunal (Procedure for reduction of share capital of C