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TMI Blog2022 (10) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... Services LLP, as approved by the Shareholders at their Extra Ordinary General Meeting held on 25.02.2022. 2. An Affidavit in support of the above application has been sworn by Mr. Chandan Lakhwani, the Company Secretary and authorized signatory of the applicant company, and the same is annexed with the application, duly authorized vide Board Resolution dated 24.02.2022. 3. It is submitted that Article 43 of the Articles of Association empowers the company to reduce its share capital from time to time. The said Article is reproduced as under: "43 The Company may, subject to provisions of the Act, reduce in any manner and with, and subject to any, any incident authorised and consent required by law,- (a) Its share capital; (b) any capital redemption reserve account; (c) any share premium account; (d) any other reserve in the nature of share capital." 4. It is stated that the authorised share capital of the Company as on 31.12.2021 is Rs. 1,60,00,00,000/-. The issued, subscribed and Paid Up Share Capital of the Company as on 31.12.2021 is Rs. 110,05,00,000/-. 5. It is submitted that the company passed a Board Resolution dated 24.02.2022 resolving for reduction of the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dice to the creditors of the Company. 10. It is also observed from the certificate issued by the Statutory Independent Auditor that the scheme of reduction of share capital has complied with the accounting standard as prescribed by section 133 of the Companies Act, 2013. 11. The Company has filed declaration by the Director and auditor's certificate that there are no arrears in repayment of any deposit or interest thereon, in compliance of Proviso to section 66(1) of the Companies Act, 2013. 12. It is submitted that there are no proceedings/investigation against the company under any provisions of the Companies Act, 2013. It is further submitted that no winding-up/insolvency petition is pending against the company. It is also submitted that the shares of the company are not listed on any stock exchange. 13. This Tribunal by an order dated 31.03.2022 directed the company to issue notices to the Central Government through Regional Director, the Registrar of Companies and Income Tax Department. The Company was directed to publish notice in Form RSC-4 in English Newspaper "Indian Express" and Gujarati Newspaper "Financial Express" both Ahmedabad edition to call for any objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d would turn around its operations will have synergy with APSEZ's business and consequentially, the same would benefit all the shareholders of the Company including Adani Ports and SEZ Limited. 2) Basis the above, it is respectfully submitted that increase in shareholding of Adani Ports and SEZ Ltd and increase in its share in the future profits of the Company without any additional investment would be in the interest of Adani Ports and SEZ Ltd. Further, the Company is a closely held company. The rights and interests of the creditors are not even remotely affected. The requisite consents of the unsecured creditors are obtained and hence the reduction is not against the interest of the creditors of the company as well as not against the public interest. 3) The selective reduction of share capital is allowed by the various courts and there is no infirmity on the same." 18. The company also relied on judgment dated 19.04.2021 in the case of M/s. Brillio Technologies Pvt. Ltd., Company Appeal (AT) 293 of 2019 wherein the Hon'ble NCLAT has held that selective reduction in share capital is permissible. 19. In a recent judgment dated 28.07.2022 in the case of M/s. Precious E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 66(1) is reproduced hereunder for ready reference: "66(1) Subject to confirmation by the Tribunal on an application by the company, a company limited by shares or limited by guarantee and having a share 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 Us 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 unrepresented by available assets; or (ii) pay off any paid-up share capital which is in excess of the wants of the company, alter its Company Appeal (AT) No. 17 of 2021 memorandum by reducing the amount of its share capital and of its shares accordingly;" It is observed that section 66(1) permits the Company to reduce its share capital "in any manner". 20. It is submitted that the company is a 'going concern' having the sufficient arrangement of Cash Flows to undertake the reduction of Share Capital and that the Company's negative net worth is not linked to its liquidity position and should not have any a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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