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2020 (10) TMI 781 - Tri - Companies LawReduction of share capital - Section 66 of the Companies Act, 2013 and NCLT (Procedure for Reduction of Share Capital of Company) Rules, 2016 - HELD THAT:- The present position of law, while dealing with the provisions of Section 66 is that if none of the shareholders are objecting for the proposed reduction, then after considering the merits of the case as also connected facts and circumstances such petition generally deserves to be admitted - Further, observed that while reducing the share capital, company can decide to extinguish some of its shares without dealing in the same manner as with all other shares of the same class. The company limited by shares is permitted to reduce the share capital in any manner, thereby a selective reduction is permissible within the framework of law. On the question of valuation as well, an observation was that valuation of shares is a technical matter, which requires considerable skill and experience. If the stakeholders are satisfied with the value, can approve the transaction of reduction of share capital which should not deemed to be inequitable or unfair transaction. In the present case, it can be seen that in the present case, exiting equity shareholders are being issued equivalent preference shares in order to fix their priority dividend over that of ordinary share dividend. Therefore, there is no need to furnish valuation report to the ROC because there is no change in the paid up share capital of the petitioner company post reduction of the capital in the present case. The petitioner company in the present case has already filed Form GNL-2 online on 04.05.2018 and the copy of the same is a part of Diary No. 7090 dated 13.12.2019. As the application for reduction of share capital under Section 66 of the Act has to be filed before this Tribunal, therefore, it is held that there is no need to file Form GNL-1 with the Registrar of Companies in respect of application of Reduction of Share Capital and filing of GNL-2 online would be sufficient in the present situation. It is hereby ordered to confirm the reduction of share capital of Petitioner Company by approving the minutes of the EOGM dated 30.05.2018, wherein the members of the Petitioner Company resolved for the reduction of share capital of the Company, as prescribed U/s 66 of the Companies Act, 2013, to reduce issued and paid up share capital from ₹ 61,67,000/- divided into 61670 equity shares of ₹ 100/- each to ₹ 37,17,000/- divided into 37,170 equity shares of ₹ 100/- each fully paid and simultaneously issue 24500 6% non-cumulative redeemable preference shares of ₹ 100/- each to the holder of equity share capital - the necessary alteration shall be made in the Memorandum of Association by the Petitioner Company for reduction of the amount of its share capital and of its shares. The issued, subscribed and paid-up share capital of Saraswati Offset Printers Private Limited as on 05.04.2019 is henceforth ₹ 1,66,00,770/-divided into 2,41,404 Equity Shares of ₹ 10/- each and 14,18,673 Preference Shares of ₹ 10/- each, reduced from ₹ 8,30,03,880/- divided into 12,07,022 Equity Shares of ₹ 10/- each and ₹ 70,93,366/- Preference Shares of ₹ 10/- each - Application allowed.
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