TMI Blog2016 (11) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... ered Articles within a period of 15 days to the Registrar. - Company Petition No. 18/14(1)/NCLT/MB/MAH/2016 - - - Dated:- 4-10-2016 - Shri M.K. Shrawat, Member (Judicial) For The Applicant : Nrupang B. Dholakiya, Practising Co. Secretary ORDER 1. Petition under consideration was filed on 16.08.2016 under the provisions of Sec. 14 of Companies Act, 2013 (herein below referred as the Act ). At the outset, it is worth to reproduce the relevant portion of the Section as under:- Alteration of Articles. 14. (1) Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for conversion of a public company into a private company. The relevant provisions of Companies Act, 2013 (second proviso to sub-section (1) and sub-section (2) of section 14) have not been notified. In view of this, the corresponding provisions of Companies Act, 1956 (Proviso to sub-section (1) and sub-section (2A) of Section 31) shall remain in force till corresponding provisions of Company's Act, 2013 are notified. The Central Government has delegated such powers under the Companies Act, 1956 to the Registrar of companies (ROCs) vide item No. (c) of the notification number S.O. 1538(E) dated the 10th July, 2012 and this delegated power remains in force. Applications for such conversions, therefore, have to be filed and disposed as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate order in connection of proposed conversion had superseded the old provisions. Therefore, the operation of Rule 33 of the Companies (Incorporation) Rule 2014 shall be limited to give effect of the order of NCLT by the Registrar within Fifteen days on receipt. (b) Second reason to proceed with the matter is that once the provision of Section 14(2) (now stood notified supra) has enshrined power to NCLT; hence, the Statute prevails over the Rules. There are no two opinions in respect of this accepted position of interpretation of statute. 5. The outcome of the above discussion is that the issue of conversion of Private company into Public Company and vice-versa is to be dealt with by NCLT within the ambits of Section 14 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished in Gazette of India on 22.08.2016 GSR 716 (E)) also framed National Company Law Tribunal Rules, 2016. The Rule connected to conversion of Public Company to Private Company is Rule 68 which has laid down the guidelines for the implementation of such conversion. A company is, therefore, expected to undertake the compliances as framed in Rule 68 of NCLT Rule, 2016. Herein below the compliance made by this Petitioner shall be examined. 7. A Petition for conversion of Public Company to Private Company is required to accomplish the conditions laid down under Rule 68 of NCLT Rules 2016. For the purpose of disposal of this Company Petition the conditions accomplished by this Petitioner as prescribed in the Rule are examined as under:- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... version. v. The Company has not issued any Debentures. vi. The Related parties of the Company will not be affected by the conversion. vii. No prejudice will be caused to member, creditor or third party if the conversion is sanctioned by your good selves. (c) The Company is stated to be Unlisted Public Company and not registered u/s. 8 of the Act with the following Capital Structure:- Capital structure of the Company as on date is as under:- a. The Authorized Share Capital: The Authorized Share Capital of the Company as on date is ₹ 20,00,000/- (Rupees Twenty Lakhs only) divided into 20,000 (Twenty Thousand) Equity Shares of ₹ 100/ (Rupees Hundred only) each. b. Issued Share Capital: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal position, it is hereby summarised that the Petitioner has complied with provisions of Section 14 to be read with Rule 68 of NCLT Rules, 2016. Therefore, having regard to all the circumstances, the conversion from public to private is in the interest of the Company which is being made with a view to comply efficiently with the provisions of Companies Act, 2013 causing no prejudice either to the members or to the creditors of the Petitioner. Therefore, the conversion is hereby allowed. The Petitioner is hereby directed to give effect of the conversion by alteration in its Articles which is hereby addressed and communicate the altered Articles within a period of 15 days to the Registrar. C.P. No.18/2016 is, therefore, allowed. No order as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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