TMI Blog2019 (4) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (Act, 2013) seeking approval of this Tribunal to the conversion by altering the Articles of Association, as sought to be effected by a Special Resolution passed at the Extra-Ordinary General Meeting (EOGM) held on 08.02.2018, for the change of status of the Company from Public Limited Company to Private Limited Company . 2. Rule 68 of the NCLT Rules, 2016 stipulates filing of a petition under sub-section (1) of section 14 of the Companies Act, 2013 for the conversion of a public company into a private company, in the prescribed format and the manner accompanied by such documents/information and requisite filing as mentioned in the said Rule. The instant Company Petition has been filed in terms of the said Rule. 3. The brief facts that emerged from the Petition are that the company was incorporated on 04.01.1995 as a Public Company Limited by shares under the name of AKG Finvest Limited having its registered office at Kolkata in the State of West Bengal. The Company is an unlisted Public Limited Company and is not registered under Section 8 of the Companies Act, 2013. The Authorized Share Capital of the Company as on 31.03.2017 is ₹ 3,50,00,000/- comprising of 35, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and its shares are closely held. The Company have neither issued shares to public and nor have any intention in future to offer shares to the public. iii) Formalities to be complied with by a Public Limited Company are much greater than the formalities to be complied with by a Private Limited Company. No purpose would be served by retaining the Public Limited character of the company. iv) This conversion from public limited company to private limited company is aimed to carry on the business of the Petitioner Company more economically, efficiently, conveniently, and smooth functioning of various operations of the Company with better management. It is also stated that the present petition would not, in any manner, prejudice or affect the rights and interests of the directors, shareholders, creditors, debenture holders and other related parties of the Petitioner Company. It is further stated that the conversion of the Petitioner Company into a Private Company shall not affect any debts, liabilites, obligations or contracts incurred or entered into, by or on behalf of the Company before conversion and such debts, liabilites, obligations and contracts may be enforced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral Meeting held on 08.02.2018 and the relevant e-form of MGT-14 has been filed. iv. There is no investor s complaint against the Company and also there is no prosecution proceeding launched against the company. No Technical Scrutiny/Inspection/Investigation process is initiated against the Company for the last three years. v. The company has reported net profit of ₹ 3,60,64,136 and of ₹ 60,07,285 for the financial years 2015-16 and 2016-17 respectively. The RoC, WB in his report, has not raised any objection to the proposed conversion of the status of the Petitioner Company from Public Limited to Private Limited Company. 7. As per further directions issued by this Tribunal on 03.09.2018, the Petitioner has filed an affidavit dated 14.09.2018 stating that: a) a copy of the Petition has been served upon the statutory authorities, namely, the Registrar of Companies, West Bengal, the Regional Director, Eastern Region, Kolkata and the Securities and Exchange Board of India by a notice dated 17.07.2018, 17.07.2018 and 25.07.2018 respectively and the notice of Petition has also been published in Financial Express (English Daily) and Aajkal (Vernacular la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding alterations having the effect of conversion, if such conditions contained in its memorandum as also subject to the provisions of the Act. Such alteration, for the purpose of the said section, has the effect of conversion of a public company into a private company. Second proviso to sub section (1) of section 14 provided that any alteration having the effect of conversion of a Public Company into a Private Company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit. Rule 68 of the NCLT Rules, 2016 has laid down a procedure for the filing of a petition before the Tribunal for approval to conversion of a status of the Company from Public to Private and vice versa. A company desirous of converting its status is, therefore, required to comply with and follow the requirements as framed under Rule 68 of the NCLT Rules, 2016. Second proviso to Sub-Section (1) and Sub-Section (2) came into force w.e.f. 01.06.2016. 12. Heard Ld. Pr.C.S. appearing for the Petitioner Company and perused the case record and also the report of RoC, WB. It transpires from the materials on record that the proposal for conversion of the status of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be noted that the company has published notice of the petition both in English and Bengali newspapers on 05.09.2018, indicating the intention of conversion from Public to Private status; the company has not received any objection / representation from any person in response to the public advertisement, as confirmed by the Petitioner in its affidavit dated 14.09.2018. The Minutes of proceedings of EOGM held on 08.02.2018 (Annexure 6 to petition) show that all the seven equity shareholders holding 4,69,165 shares of the Company had attended the meeting and voted in favour of passing the Special Resolution pertaining to the change of status of the company from Public to Private and they also approved the new set of Articles of Association, in place of the existing Articles of Association of the Company. The Petitioner Company has also filed no objection from its only creditor as on 26.03.2018 by an affidavit dated 14.09.2018. The Registrar of Companies, West Bengal has not raised any objection to the instant petition for change of status of the company from public to private. 14. Having regard to the facts and circumstances of the above case and since all the requisite statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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