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2022 (7) TMI 1282 - AT - Companies LawRejection of confirmation of scheme for reduction of share capital proposed by the Appellant Company - reduction of this Share Capital was approved unanimously by the Shareholders by way of a Special Resolution - Section 421 of the Companies Act, 2013 - HELD THAT:- It is seen from the record that the Reduction of the Share Capital was approved by the Shareholders of the Appellant Company unanimously by way of a Special Resolution with the objective of reducing the overall weighted average cost of Capital and improving the earnings per share. In IN RE: RECKITT BENCKISER (INDIA) LIMITED [2005 (5) TMI 665 - DELHI HIGH COURT], the Hon’ble Delhi High Court has upheld the view that the question of reduction of Share Capital will be treated as a matter of domestic concern i.e., it is the decision of the majority which prevails. If majority by Special Reduction decides to reduce the Share Capital of the Company, which also has the right to decide as to how this reduction should be carried into effect - This Tribunal in RHI INDIA PRIVATE LIMITED, RHI CLASIL PRIVATE LIMITED, ORIENT REFRACTORIES LIMITED VERSUS UNION OF INDIA [2021 (1) TMI 725 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI], has held that it is not for the Courts to reject Schemes on grounds not required to be delved into for the determination of the Scheme In the instant case, admittedly, the reduction of this Share Capital was approved unanimously by the Shareholders by way of a Special Resolution. It is seen from the record that the Company has complied with all the statutory requirements as per the directions of the Tribunal and has also filed necessary Affidavits to that effect. It is also pertinent to mention that none of the Creditors objected to the reduction of the Capital. Section 66(1)(b) of the Act enables a Company to reduce its Share Capital ‘in any manner’ provided it is approved by the majority of Shareholders through a Special Resolution. The Appellant Company operates a 15MW power generating station and supplies electricity to GUVNL under a long-term PPA and is a ‘going concern’. Having regard to the fact that the Appellant had deposed in a Clarificatory Affidavit regarding its financial position which is not in the negative and also that the reduction of the Share Capital was approved by the Shareholders of the Appellant Company unanimously by way of a Special Resolution and that the Creditors of the Company have also not objected to the same and further that this reduction does not cause any prejudice to any class of Creditors, it is opined that the ratio laid down by the Hon’ble Madras High Court in IN RE: PANRUTI INDUSTRIAL CO. (PRIVATE) LTD. [1959 (9) TMI 59 - MADRAS HIGH COURT], and is applicable to the facts of the attendant case and hence, this Tribunal is of the considered view that the reduction of the Share Capital, as approved by the majority of Shareholders by way of a Special Resolution, be confirmed and the proposed Minutes be approved. This Appeal is allowed and the Order of the NCLT is set aside.
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