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2020 (11) TMI 532 - NATIONAL COMPANY LAW TRIBUNAL — BENGALURU BENCHReduction of capital - repayment of excess capital - sections 66 and 52 of the Companies Act, 2013, read with the National Company Law Tribunal (Procedure for Reduction of Share Capital of the Company) Rules, 2016, and the applicable provisions of the National Company Law Tribunal Rules, 2016 - HELD THAT:- Section 66 of the Companies Act, 2013, deals with reduction of share capital of a company limited by shares or guarantee, after applying to the Tribunal, and based on a special resolution passed by the board of directors in this regard. This section provides for reduction of share capital either through extinguishment or reduction of the liability on any of the shares of a company in respect of the share capital which is not paid-up, or on cancellation of any paid-up share capital which is lost or is unrepresented by available assets, or on payment of any paid-up share capital which is in excess of the wants of the company, subject to the conditions enumerated therein. The reduction of paid-up share capital does not involve the diminution of any liability in respect of unpaid share capital. No prejudice is caused to any of the creditors or other stakeholders with the proposed reduction as there is no reduction in the amounts payable to them, no compromise or arrangement is contemplated with the creditors and there is no reduction in the security, if any. The company also has sufficient funds even after the reduction, and hence neither its business operations would be adversely affected, nor its ability to honour its commitments or to pay its debts in the ordinary course of its business. Hence it appears that the impugned action will not cause prejudice to any of the stakeholders, if the reduction of capital is approved. On a perusal of the material brought on record, it appears that the applicant fulfils the conditions laid down in section 66 of the Companies Act, 2013 and the proposed reduction is conformity with the accounting standards specified in section 133 of the Companies Act, 2013 - the company petition is disposed off by according approval to the proposed reduction of capital. Application allowed.
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