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Judgment
Para,Observation by the Regional Director,"Undertaking of the Petitioner Company/
Rejoinder
6,"R O C , Mumbai in his Report No. ROC/STA(S)/48117/U/Sec.66/13 27 dated 10.02.2021 inter-alia mentioned that there is no pending inspection, investigation, inquiry, complaints, prosecution pending against the company. Further the ROC, Mumbai has made his observation in para
no. 23 of his report and stated that, “As per Balance sheet as on 31.03.2020, the company has accumulated losses of Rs. 8105
crores”.
“May be decided on its merits”","In so far as the observation made in paragraph 6 of the report of the Regional Director is concerned, the Petitioner Company states that the contents being matter of facts, do not require any comments.
7(a),"Applicant to submit an Affidavit to the effect that the Interest of the creditors and all stakeholders and Government Revenue are protected as well as statutory dues are paid off.","In so far as the observation made in paragraph 7
(a) of the report of Regional Director is concerned, the Petitioner Company states that an affidavit to the effect the interest of the creditors and all stakeholders and Government Revenue are protected as well as statutory dues are paid off is submitted with the Regional Director on 27
January 2021.
7(b),"The tax implications if any arising out of the proposal for reduction is subject to final decision of Income Tax Authorities. The approval of the Company Petition by this Hon’ble NCLT may not deter the Income Tax Authority to scrutinize the tax return filed by the Company after giving effect to the proposed reduction. The decision of the Income Tax
Authority is binding on the petitioner Company","In so far as the observation made in paragraph 7
(b) of the report of Regional Director is concerned, the Petitioner Company undertakes that the approval of the Company Petition by this Hon’ble Tribunal may not deter the Income Tax Authority to scrutinize the tax return filed by the Petitioner Company after giving effect to the proposed reduction. The decision of the Income Tax Authority is binding on the Petitioner
Company.
7(c),"I t is respectfully submitted that, the Petitioner Company is proposing to reduce 7,94,14,43,903 equity shares of Rs. 10/- each, fully paid up to 7,94,14,43,903 equity shares of Rs. 0.5 each, fully paid up, on a proportionate basis and that such reduction
shall be adjusted against the Retained Earning.
Therefore, the petitioner company to place on record, how it will give effect to the above reduction, if company has accumulated losses of Rs. 8105 crores,
and its future plans for accumulated losses.","In so far as the observation made in paragraph 7
(c) of the report of Regional Director is concerned, the Petitioner Company submits that the proposed reduction of equity share capital will have the effect of reducing the share capital and the accumulated losses by approximately Rs. 7544 crores. Since the past accumulated losses have wiped off the value represented by the share capital, the proposed reduction of equity share capital would enable the Petitioner Company to present a true and fair financial position which would enhance the value and confidence of the stakeholders. In addition, the proposed reduction of equity share capital does not in any way affect the operations of the Petitioner Company. Further, as regard the future plans, the Petitioner Company is currently expanding its business by opening new stores and supermarket due to which the management is expecting a turnaround in the business and which will help in wiping out the balance accumulated losses.