TMI Blog2021 (9) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... sale/transfer of Brand Value of Brook Bond Estates India Ltd./Assambrook Ltd. on winding up or Resolution and distribute the proceeds among the Creditors and Shareholder. The prayer made by the Applicant to confirm the resolution passed is rejected - Petitioner is hereby directed to send the copy of this Order to all shareholders having shares of 5% and above as on 31.03.2020 including the SASF besides uploading the Order at the Company's Website and file the proof of delivery of the Order to such shareholders with the Registry within 15 days from today. - C. P. No. 14/66/GB/2020 - - - Dated:- 23-8-2021 - Hari Venkata Subba Rao, Member (J) And Prasanta Kumar Mohanty, Member (T) For the Appellant : Dhrupad Das and Maitreyee Das, Advocates ORDER [Per se: Prasanta Kumar Mohanty, Member (T)] 1. This application under Section 66 of the Companies Act, 2013 has been filed by the applicant Assambrook Limited (CIN: U70109AS1947PLC009386), having its registered office at Tinkharia Tea Estate, P.O. Dhekiajuli-784110, Dist. Sonitpur, Assam for confirming its resolution for reduction of share capital. 2. The Petitioner Company was incorporated on 8th August, 1947 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Company as at 31 March, 2019 together with the report of the Auditors thereon is annexed herewith and marked as Annexure-F. 8. The Petitioner states that as against the paid up share capital of approximately ₹ 1566 lacs, the audited financial statements reflect a debit balance of approx. ₹ 3226 lacs in the Profit and Loss Accounts, of that relevant financial year. The Petitioner most humbly submits that the said debit balance in the Profit Loss Accounts has been provisioned for due to cumulative losses suffered by the Company during last several years for the reasons stated hereinafter. 9. It is also submitted that the equity shares of the Company were listed in Bombay Stock Exchange. In July 2018 the equity shares of the Company were compulsorily delisted from BSE Limited and soon thereafter equity shares of the Company were also delisted from CSE. Post delisting, the equity shares of the Company are not currently tradable securities at the Stock Exchanges. True copy of the master data available on the website of the Ministry of Corporate Affairs confirming that the Company is not listed is annexed herewith and marked as Annexure-G. 10. The rationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. In view of the cumulative losses suffered by the company over the past several years together with the sale of assets, the Board of Directors of the Company keeping in-line with the best corporate management practices advised that it would be commercially prudent and in best interest of the Company to substantially reduce its share capital which had been permanently lost or is unrepresented by available assets. 11. It is submitted that by a special resolution of the Company duly passed in accordance with Section 66(1) of the Companies Act, 2013 at the Annual General Meeting of the Company held after due notice as provided in the Act on 4th day of September, 2019 it was resolved as follows:- RESOLVED THAT in supersession of the earlier resolution passed in the Annual General Meeting held on 29th Sept, 2018 and pursuant to Section 66 and other applicable provisions of the Companies Act, 2013, (including any statutory modification(s) or re-enactment thereof for the time being in force) and the rules made thereunder (the Act ), read with Articles of Association of the Company; and the confirmation by the Hon'ble National Company Law Tribunal ( NCLT ); and as such other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all costs, charges and expenses of such sale shall distribute the net sale proceeds to the shareholders of the Company in proportion to their fractional entitlement. The Company Secretary of the Company, if any, shall be the Secretary of such Trust and shall assist the Trustees in managing the affairs of the Trust. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all acts, deeds, matters and things which may be required or necessary for effecting the Capital Reduction including obtaining confirmation of NCLT to such Capital Reduction and to delegate all or any of the powers conferred upon it by this resolution to any Committee of Directors or any other director or officer of the Company as it may think fit and proper. 12. It is submitted that the said Annual General Meeting of the Company for the year ended 31 March, 2019 was attended by thirty-four (34) shareholders of the Company and voting on 55,00,564 equity shares. At the said Annual General Meeting of the Company, the shareholders, present and voting, voted unanimously in favour of the said resolution for reduction of the share capital of the Company. 13. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inguished as amount of ₹ 15,56,12,420/-. 18. This Hon'ble Tribunal vide order dated 25th November, 2020 had directed the petitioner to clarify the below mentioned points in the form of an Affidavit under Rule 43 of NCLT Rules:- a. The Company was incorporated on 08.08.1947 and the Company started incurring loss from 2002-2003. Whether the Company has incurred loss after sale of reported two Tea Estates i.e. Dhullie Tea Estate and Tinkhara Tea Estate. b. As reported, the Share Capital shall be reduced from ₹ 15,66,12,420.00 to ₹ 10,00,000.00 by cancelling and extinguishing an amount of ₹ 15,56,12,420.00. Thereafter, the capital will be only ₹ 10.00 lacs by way of 10,000 shares with the face value of ₹ 100.00. Then whose shares will be cancelled and who will be holding these 10,000 shares. c. There are Five entities holding shares of 79.39% including the shares of Allahabad Bank 42,50,800. Whether all the above entities participated in the Annual General Meeting in which the decision was taken to reduce the value and number of shares by 99.37%. d. Shares are held by the Allahabad Bank 42.50 lacs, Bank of India 12.00 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the equity share capital of the Petitioner Company from ₹ 15,66,12,420/- to ₹ 10,00,000/- by cancelling and extinguishing an amount of ₹ 15,56,12,420/-. c. That as per the proposed scheme of reduction duly annexed with the Special Resolution dated 04.09.2019 filed along with the main Application, shareholders holding 10000 or more shares would be allotted shares in proportion to their shareholding as per the scheme and they will remain shareholders of the Petitioner Company after reduction of capital. That the shareholders holding less than 10000 shares would be entitled to fractional shares which will be transferred to a Trust to be formed for this purpose and the fractional shares will be consolidated to a face value of ₹ 100 each. The trust shall offer the consolidated shares to the existing shareholders of the Petitioner Company. It is pertinent to state that the aforementioned scheme for reduction of capital has been approved by a special resolution by the shareholders of the Petitioner Company in the Annual General Meeting held on 4th September, 2019. d. That in response to the query No. (c), the Deponent most humbly states that the Annual Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies Act, 2013. The Petitioner further begs to reiterate that the reason for reduction of share capital is that in view of mounting losses and the sale of two tea estates of the Petitioner Company, the paid-up equity share capital as reflected in the Memorandum of Association is lost or unrepresented by the available assets of the Petitioner Company. i. That in response to the query No. (g), the Deponent most humbly states that the Petitioner Company is not in operation at present and is exploring new avenues of business. The Deponent most humbly submits that given the current state of accounts, it is imperative for the Company to reduce its share capital as prayed for to make the Company viable to seek fresh infusion of funding whether institutional or otherwise. j. That in response to the query No. (h), the Deponent most humbly states that the details of the movable and immovable assets of the Petitioner Company and its net worth are provided in the Annual Report for the financial year ended 31.03.2020 and the same had been annexed and marked herewith as Annexure-A. 20. This Hon'ble Tribunal vide order dated 22nd February, 2021 had directed the petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 18.02.2021 extended its interim orders till 19.03.2021 restraining the Defendants from exercising voting rights with the said equity shares. c. It is submitted that it is important to note that till date, neither Bank of India nor SASF nor Allahabad bank have attended any General Meetings of the Company since becoming shareholders of the company despite notices being duly served upon them as per law. It is reiterated that all General Meetings of the company have been duly conducted as per the procedure prescribed under law. It is further reiterated that the special resolution for reduction of the paid-up equity share capital of the Petitioner Company was passed unanimously by the shareholders present and voting. d. That in response to the query No. (c), the Deponent humbly states that the query has already been answered in the affidavit filed by the Petitioner Company on 12.01.2021. For the convenience of this Hon'ble Tribunal, the Deponent reiterates that 42,50,000 shares held by the Allahabad bank and the 12,00,000 shares held by the Bank of India were issued and allotted upon conversion of loans given by the respective banks to the Petitioner Company. The sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt untouched, with the continuous accumulated loss of the company for the last 18 years to the extent of approximately ₹ 32.26 crores, is not to be confirmed in the interest of all Stake Holders, Public and Corporate Governances on account of the following: 24.2. The Company was incorporated on 08.08.1947 and started incurring loss for last 18 years from 2002-2003. The Two Estates, the Company was having, Dhullie Tea Estate and Tinkhara Estate have been sold in the year 2014 - 2015 to reduce the Loss but the position did not improve. There is no asset at all. There is no staff, company is not in operation and the loss is increasing every year mainly for payment of remuneration to the Managing Director of the company. The loss has gone up to ₹ 32.26 crores in spite of sale of the two Tea Estates. When the company has been incurring loss for last 18 years, no assets, no operation, no staff, shares compulsorily delisted from the BSE Limited and the CSE Limited and the Management failed to keep the company in operation and earn profit, then the resolution passed to cancel and adjust 99.37% of share value with the loss is certainly in no way in the interest of the shareho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated loss retaining the Share Premium amount lying intact. But it may be considered as mala fide one. It is a complete misuse of system and an attempt to get further loan/investment without paying the existing FC/OC/Shareholders. 26. As per the balance sheet and submissions, the company sold its Dhullie Tea Estate to Dhullie Tea Plantation Pvt. Ltd. Now Dhullie Tea Plantation holds 16.92% of shares of the Petitioner Company and the said company has filed a case in the City Civil Court, Kolkata against SASF with respect to the ownership of the shares of SASF. 27. The Hon'ble Supreme Court in Asian Resurfacing of Road Agency Pvt. Ltd. Vs. CBI dated 15.10.2020 held that- 35. ... .... In cases where stay is granted in future, the same will end on expiry of six months from the date of such order unless similar extension is granted by a speaking order. The speaking order must show that the case was of such exceptional nature that continuing the stay was more important than having the trial finalized. The trial Court where order of stay of civil or criminal proceedings is produced, may fix a date not beyond six months of the order of stay so that on expiry of period of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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