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2007 (6) TMI 292 - HIGH COURT OF BOMBAYReduction of Share capital - manufacture of lightening arresters - Company seeks to reduce its share capital, constituting 25 per cent of its issued and paid up share capital - HELD THAT:- In the present case, there are two aspects to the resolution proposed by the Company which are as follows: (i) An affirmative or negative vote in respect of the resolution proposing reduction and (ii) An objection to giving up one’s shares in the proposed reduction thereby dealing with the mechanism of the reduction. In the present case, both these facets are covered by the same resolution. 3723 shareholders who did not object to the scheme by casting their votes are not counted towards the votes required to approve the decision to reduce per se. In other words, the assumption made on account of abstention in respect of the persons who did not vote is only in respect of the mechanism of reduction. This is, therefore, not a case where the Company has assumed that such persons who abstained from voting were in favour of the resolution that was resolved per se. Consequently, the question as to whether such abstention can be assumed to be in favour of the resolution will not arise in the facts of this case. Having considered the petition of the Stock Exchange, it is not possible for the Court to come to the conclusion that the exit opportunity that was offered was inequitable or unjust. The material placed on the record provides data of the share price movements. The price of Rs. 183 per share was well above the price at which the shares of the Company were traded on the date on which a resolution was passed by the Board of Directors. In fact, as the Company has pointed out to the Court, the price per share as offered was higher than the price prevalent on the date on which the result of the postal ballot was declared as well as on the date on which a draft petition was filed before the Stock Exchange for its approval. The speculative variation in the price of the shares of the Company will not operate, as suggested, to invalidate a resolution which has been validly passed. None of the shareholders have objected to the proposed reduction. Thus, there is no reason why the prayer for reduction should not be allowed. However, before proceeding to do so, it would be appropriate for the Court to clarify that the orders passed in this petition, shall not preclude the Bombay Stock Exchange and the Pune Stock Exchange from taking recourse to their rights on the question as to whether there has been any violation of the listing agreement either with reference to the provision of clause 24(f) or otherwise. The Stock Exchanges would be at liberty to take recourse to such powers as are conferred upon them in accordance with law. Subject to the aforesaid, the Company Petition is made absolute in terms of prayer clauses (a) to (d).
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