TMI Blog2018 (6) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 100 of the Companies Act, 1956 shows that this case is not covered under any of sub-clauses (a), (b) and (c) of Clause (1). As the appellant has opted to unwind the excess shares allotted, therefore, this will make a case of rectification of wrongful calculation of share capital and securities premium and not reduction of share capital because the security premium account is also to be treated as paid up share capital. This is a case where security premium amount will be increased and equal amount of paid up capital will be decreased and there will be no change in the overall amount allocated to paid up share capital and security premium account. The appellant shall take steps and cancel the excess shares 219658 allotted to 1st respondent and the total amount received for issuing CCDs will be utilised for issuing 209761 shares of ₹ 10/- each at a premium of ₹ 54.22 as on 6.8.2013. The amount of premium will be transferred to security premium account in the books of accounts. The balance sheets filed after 6.8.2013 will be refiled duly certified by a chartered accountant. For this process the company will comply with all other legal formalities as per law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 9th September, 2016 for contravening para 9(1)B of Schedule 1 to Notification No.FEMA 20/2000-RB dated 3rd May, 2000. In pursuance to the said letter of appellant the Reserve Bank of India vide their letter dated 1st March, 2017 advised the appellant as under; I) Unwind the excess shares allotted; or II) Bring in additional funds equivalent to the shares allotted and thereafter apply for compounding for the contraventions stated. 3. On receipt of letter from the Reserve Bank of India the company sought no objection from 1st respondent for rectification of register in the form of cancellation of 219658 equity shares of ₹ 10 each excess allotted to him. The appellant company, therefore, filed company petition under Section 59 of the Companies Act, 2013 thereby contending that the violation in question has taken place due to the circumstances beyond the control of the company and there is no malafide intention on their part and approaching the Tribunal voluntarily. 4. After hearing the parties, the Tribunal passed the order dated 5th October, 2017, relevant portion of which is as under:- 14. While the case is pending adjudication before the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f justice. 6. During the preliminary hearing, notice was issued to the 1st Respondent and 2nd respondent was also made a party to the appeal. Despite notice 1st respondent did not appear and it is apprised to the Appellate Tribunal that the 1st respondent had also not appeared before the Tribunal. However, no objection to rectification of the Register of Members was brought on record on behalf of 1st respondent. 7. The appellant has argued that the Tribunal is not justified in dismissing the application by contending that a Company cannot be the applicant seeking rectification of its register of members. 8. The appellant further argued that the Tribunal has committed a serious error by assuming that the company has not followed the procedure prescribed under its Articles and memorandum of Association, Companies Act and FEMA for increasing its authorised capital when there is no shred of any document to suggest ath the company has not followed the procedure so prescribed. 9. The appellant admitted that the only violation committed by the appellant under FEMA was to allot shares at ₹ 31.37 instead of ₹ 64.22 and that there was no other violation under FEMA and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of share capital not paid up; ( b) either with or without extinguishing or reducing liability on any of its shares cancel any paid-up share capital which is lost, or unrepresented by available assets; or ( c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company, And may, if an so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly. 16. Application of premiums received on issue of shares is defined in Section 78 of Companies Act, 1956 (Section 52 of Companies Act, 2013) which is as under:- 52. Application of premiums received on issue of shares (1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to a securities premium account and the provisions of this Act relating to reduction of share capital of a company shall, except as provided in this section, apply as if the securities premium account were the paid-up share capital of the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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