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THE NATIONAL COMPANY LAW TRIBUNAL

CHANDIGARH BENCH, CHANDIGARH

(through web-based video conferencing platform)

CP No.138/Chd/Hry/2020

Under

Sections

55(3)

of

the

Companies

Act,

2013 read with

Rule 9 of the Companies (Share

Capital

and

Debentures)

Rules,

2014 along with Rule 69 of the

NCLT Rules, 2016

IN THE MATTER OF:

General Motors India Private Limited

with its registered office at

Office No.4-109B, 4-110, 4-103,

4th Floor, WeWork BlueOneSquare,

246, Phase-IV, Udyog Vihar,

Gurugram - 122016

CIN: U34100HR19994PTC073173

…Petitioner

Order delivered on: 22.08.2022

Coram: HON’BLE MR. HARNAM SINGH THAKUR, MEMBER (JUDICIAL)

HON’BLE MR. SUBRATA KUMAR DASH, MEMBER (TECHNICAL)

Present through Video Conferencing : -

For the Petitioner

:

Mr. G.S. Sarin, Practising Company Secretary

Per: Harnam Singh Thakur, Member (Judicial)

ORDER

The petitioner company General Motors India Private Limited (hereinafter

called as the “Company”) has filed the present application under Section 55(3) of the

Companies Act, 2013 read with Rule 9 of the Companies (Share Capital and

CP No.138/Chd/Hry/2020

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Debentures) Rules, 2014 along with Rule 69 of the NCLT Rules, 2016 praying for

grant of following relief:

“Issuance of 2,80,056 Cumulative Redeemable Preference Shares

(hereinafter referred as CRPS) of Rs.1000/- each, redemption term be

extended by 5 years and unredeemed Cumulative Preference Shares

shall be deemed to have been redeemed.”

2.

The brief facts of the case are as follows:-

2.1

The Petitioner Company Issued CRPS, 280000 @ 1000 each Series l dated

20.12.2000 to General Motors Asia Pacific Holding LLC (GMAPHLLC) in the

Board of Directors Meeting.

2.2

The Petitioner Company took approval for extension of 2,80,000 Cumulative

Redeemable Preference Shares (CRPS) of Rs 1000 each Series I to a later

date on 02.08.2006 in Board of Director Meeting and for this the approval of

the shareholders was taken in the Extra-Ordinary General Meeting of the

Company held on 20.09.2006. The written consent dated 12.09.2006 was

obtained from the Preference Holder namely -General Motors Asia Pacific

Holding LLC (GMAPHLLC) for the extension of the redemption period of

2,80,000 CRPS from 5(five) years to a later date subject to Section 80 of the

Companies Act, 1956 [maximum redemption period of 20(twenty) years].

2.3

Later on, General Motors Asia Pacific Holding LLC (GMAPHLLC) India

transferred its shareholding to General Motors Investment Limited (earlier

SAIC General Motors Investment Limited) on 01.02.2010 and the decision

CP No.138/Chd/Hry/2020

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was taken note of in the Board of Directors meeting of the company held on

23.03.2010, Vide Agenda ltem No 3.5.1.

2.4

The General Motors Investment Limited, a Foreign Company holding

2,80,000 CRPS is the only Cumulative Preference Shareholder and is also a

Holding Company of the Petitioner Company.

2.5

In terms of Section 55(2)(a), Preference Shares can only be redeemed out of

the profits of the Company which would otherwise be available for dividend

or out of the proceeds of fresh issue of shares made for such redemption.

But the Company has negative reserves (accumulated losses) amounting to

Rs.8480.53 Crores as per the latest audited Financial Statements for the

year ended 31.03.2020. Therefore, as per the Section 55(2)(a) read with

Section 123 (payment of dividends) of Companies, Act 2013, the Company is

not in a position to redeem the outstanding CRPS due to heavy accumulated

losses even in the Maximum maturity period of 20 years for the following

reasons:

a) Due to persistent losses and insufficient resources.

b) The Company has accumulated losses of around Rs.8480.53 Crores as

per

the

latest

audited

Financial

Statements

for the year ended

31.03.2020.

2.6

The Board of Directors in its meeting held on 27.08.2020 at Manufacturing

Plant Located At Plot No. A-16, MIDC, Talegaon Industrial Area, Taluka -

Maval, Phase Il Expansion, Talegaon, District Pune 410507, Maharashtra

passed a Resol