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TMI Blog2018 (9) TMI 1967X X X X Extracts X X X X X X X X Extracts X X X X ..... ated January 11, 2017 passed by the hon'ble Delhi High Court, the petition was transferred from High Court to this Bench. hon'ble Delhi High Court, the petition was transferred from High Court to this Bench. 2. The brief averments of the petitioner are that the petitioner-company was incorporated as a private limited company under the provisions of the Companies Act, 2013 on October 21, 2015 under the name of Nippon Signal India P. Ltd., with the Registrar of Companies, Delhi having incorporation number as U63030DL2015FTC286651. 3. It is pertinent to state that the petitioner-company is a subsidiary of a Japanese company, namely, Nippon Signal Co., Ltd., Japan which is holding 99 per cent. of the subscribed capital of the petitioner-company. The remaining 1 per cent. of the subscribed share capital of the petitioner-company is held by another Japanese company, namely, Nisshin Electronics Services Co. Ltd. 4. The petitioner-company was incorporated, inter alia, to carry on business of providing automated railway signaling system, automated fare collection systems, automated traffic information systems, parking systems and related mobility solutions for achieving safe, rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capital may, by a special resolution, reduce the share capital in any manner and in particular, may- (a) extinguish or reduce the liability on any of its shares in respect of the share capital not paid-up ; or (b) either with or without extinguishing or reducing liability on any of its shares,- (i) cancel any paid-up share capital which is lost or is un-represented by available assets ; or (ii) pay off any paid-up share capital which is in excess of the wants of the company, alter its memorandum by reducing the amount of its share capital and of its shares accordingly : Provided that no such reduction shall be made if the company is in arrears in the repayment of any deposits accepted by it, either before or after the commencement of this Act, or the interest payable thereon. (2) The Tribunal shall give notice of every application made to it under sub-section (1) to the Central Government, Registrar and to the Securities and Exchange Board, in the case of listed companies, and the creditors of the company and shall take into consideration the representations, if any, made to it by that Government, Registrar, the Securities and Exchange Board and the creditors within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the list of creditors, and after such reduction, the company is unable, within the meaning of sub-section (2) of section 271, to pay the amount of his debt or claim,- (a) every person, who was a member of the company on the date of the registration of the order for reduction by the Registrar, shall be liable to contribute to the payment of that debt or claim, an amount not exceeding the amount which he would have been liable to contribute if the company had commenced winding up on the day immediately before the said date ; and (b) if the company is wound up, the Tribunal may, on the application of any such creditor and proof of his ignorance as aforesaid, if it thinks fit, settle a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up. (9) Nothing in sub-section (8) shall affect the rights of the contributories among themselves. (10) If any officer of the company- (a) knowingly conceals the name of any creditor entitled to object to the reduction ; (b) knowingly misrepresents the nature or amount of the debt or claim of any creditor ; or (c) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable provisions, if any and article 41 of the articles of association of the company, each of the equity shares of the company of face value Rs. 10 (rupees ten only) each in the capital of the company be and is hereby subdivided into 2 (two) equity shares of face value Rs. 5 (rupees five only) per share and the revised capital clause 5 of the memorandum of association of the company shall be read as under : Clause V of memorandum of association The authorized capital of the company is INR 750,000,000 (rupees seven hundred and fifty million only) divided into 150,000,000 (one hundred and fifty million) equity shares of INR 5 (rupees five only)." 13. In compliance with the requirements of proviso to sub-section (1) of section 66 of the Companies Act, 2013 the petitioner has filed an affidavit dated April 20, 2018 affirming that the petitioner-company has no arrears of deposits because the company had not accepted any deposit from any person under the provisions of the Companies Act, 2013 or the erstwhile Companies Act, 1956. 14. Besides the certificate of statutory auditor dated August 23, 2017 has been placed on record which certifies that the accounting treatment used for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies, Delhi and Haryana vide paragraph 26 of its report has, inter alia, stated that the company has not attached certificate whether it is in arrears in the repayment of any deposits accepted by it, either before or after the commencement of this Act, or the interest payable thereon in terms of section 66(1)(b)(ii) of the Companies Act, 2013. It is also stated that the company has not attached auditor certificate regarding compliance of accounting treatment as specified in section 133 or any other provisions of this Act in terms of section 66(3) of the Companies Act, 2013. 6. It is humbly submitted that the petitioner-company vide letter dated February 22, 2018 has, inter alia, stated that the company has no arrears of deposits because it has not accepted any deposit from any person under the provisions of the Companies Act, 2013 orerst while the Companies Act, 1956. It is further confirmed by the company that the certificate from the statuary auditors of the company on the accounting treatment for the proposed reduction of capital to be in accordance with the provisions of section 133 of the Companies Act, 2013 has already been filed with the National Company Law Tribunal. Copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relief sought for by the petitioner-company seeking proposed reduction of share capital nor it will prejudicially affect the interest of any shareholder or creditor nor it will have any adverse effect on public at large. Further, the accounting treatment, as proposed by the company for such reduction of the share capital is in conformity with the accounting standards specified in section 133 and other provisions of the Companies Act, 2013. Hence, it may be seen that the petitioner-company has duly complied with all statutory requirements pursuant to the direction of the Tribunal and filed necessary affidavit of undertaking before this Tribunal. The petitioner-company further undertakes to comply with the statutory requirement, under the Companies Act, 2013 and Rules made thereunder, as applicable to the proposed reduction of its share capital. 26. In the matter of Hindusthan Commercial Bank Ltd. v. Hindusthan General Electrical Corporation [1960] 30 Comp Cas 367 (SC) ; AIR 1960 Cal 637, the Calcutta High Court held that the question of reducing capital is a domestic affair to be decided by the majority. The court further held that the Companies Act, 1956 leaves it to the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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