Motorola Solutions India Private Limited vs Registrar of Companies

,Particulars,"As At 31st March 2020

(Amount in Million)",

,"EMPLOYEES STOCK

COMPENSATION RESERVE",,

,Opening Balance,407,

,Addition during the year,6,

,Closing Balance,413,

,"CAPITAL REDEMPTION

RESERVE",,

,Opening Balance,752,

,Closing Balance,752,

,RETAINED EARNINGS,,

,Opening Balance,340,

,Add: Profit for the year,(25),

,Closing Balance,315,

Particulars,Current,Proposed capital reduction,"Proposed (post

capital reduction)

Authorized share

capital","34,61,00,000Â Â Â Â Â

equity shares of INR 10 each

â€" INR 346,10,00,000",,"34,61,00,000

equity shares of INR

10    each   Â

â€"    INR

346,10,00,000

Paid up share

capital","25,33,69,545Â Â Â Â Â

equity shares of INR 10 each

â€" INR 253,36,95,450","8,11,43,740 equity shares of

INRÂ Â Â Â Â 10Â Â Â Â Â

each     â€"     INR

81,14,37,400","17,22,25,805

equity shares of INR

10    each   Â

â€"    INR

172,22,58,050

,,,

2020, notice has been dispatched upon each of the respective persons whose names, addresses and description appear in the list of creditors as on the",,,

30th June, 2020 filed with the Company Petition by sending such copies by speed post to their respective addresses appearing the said list. The",,,

summary of delivery status, copies of the notices with the postal receipts and tracking reports available on www.indiapost.gov.in  are attached with",,,

the compliance affidavit and marked as Annexure-A. It is further submitted that a true copy of the notice marked as Annexure-B (along with typed,,,

and translated copies) has been published in the issue of Indian Express (English) and Jansatta (Hindi) both Delhi-NCR Edition on 09.11.2020.,,,

It is averred in the compliance affidavit that in pursuance to the order of this Tribunal dated 28.10.2020, the notice in form-RSC 3 along with",,,

copies of the order and complete Company Petition have been served on the Registrar of Companies-NCT of Delhi and Haryana and the Regional,,,

Director-Northern Region on 09.11.2020 by hand delivery. Copies of RSC-3 along with acknowledgement is enclosed in compliance affidavit as,,,

Annexure C. The copy of Petition has been filed in form GNL-2 with Registrar of Companies within the statutory prescribed time and the copy of the,,,

filing receipt is attached with the compliance affidavit and marked as Annexure D.,,,

It is submitted that the Petitioner Company does not have any deposits as covered under the provisions of Sections 73 to 76 of the Companies Act,",,,

2013 and the Rules made thereunder. Hence the Petitioner Company has no arrears in the repayment of any deposits, either before or after the",,,

commencement of the Companies Act, 2013, or the interest payable thereon, as on the date of filing of this Petition before this Hon'ble Tribunal. The",,,

certificate issued by the Statutory Auditor of the Petitioner Company further confirms that there are no deposits issued by the Company attached as,,,

Annexure-L.,,,

The Petitioner Company states that as on 30th June, 2020 there are Nil secured creditors of the petitioner company and 75 (Seventy-Five)",,,

unsecured creditors of the Petitioner Company having a value of INR 39,93,41,963/- (Indian Rupees Thirty-Nine Crores Ninety-Three Lakhs Forty",,,

One Thousand Nine Hundred Sixty Three Only). A certified list of unsecured creditors of the Petitioner Company as on 30th June, 2020 is annexed",,,

with the main petition and marked as Annexure K. A Certificate issued by Statutory Auditors of the Petitioner Company confirming list of Unsecured,,,

creditors is annexed with the main petition and marked as Annexure L.,,,

As per the Certificate issued by the Statutory Auditors of the Petitioner Company, the accounting treatment proposed by the Petitioner Company",,,

for the reduction of share capital is in conformity with Accounting Standards specified in Section 133 or any other applicable provisions of the,,,

Companies Act, 2013 and is annexed with the main petition and marked as Annexure-L.",,,

The RD Report has been submitted vide Diary No. 00542/4 dated 22.07.2021 that as per report of ROC, Delhi and Haryana the applicant",,,

company has filed its annual return and balance sheet upto 31.03.2020. No prosecution has been filed against the Applicant Company and no,,,

complaints are pending and no inspection or investigation has been conducted in respect of the applicant company. As per MCA Portal, there are no",,,

secured charges against the applicant Company.,,,

It is further submitted in the RD Report that as per para 26 of the report of ROC dated 23.02.2021 the following observations was made:,,,

It has been observed that the entire equity capital of the Petitioner Company is held by foreign entities, hence, it is submitted that the Petitioner Company may be",,,

asked to give an undertaking in regard to requisite compliances, if any, from the Reserve Bank of India as required under FEMA for payment of such",,,

consideration to the said foreign company/entities and under Income Tax Act, 1961 for payment to shareholders out of reserved including TDS from these entities.",,,

It has been submitted in reply affidavit of Mr. Subodh Vardhan, Director to the response received from the office of the Regional Director vide",,,

Diary No. 00542/5 dated 20.07.2021 at paragraph 5,6, 7, 13,14 and 15 that:",,,

In response to the aforesaid, I state that in terms of Annexure 2 of the consolidated FDI Policy (effective from October 15, 2020) issued by Government of India,",,,

Ministry of Commerce and Industry Department for promotion of Industry and Internal Trade (FDI Division) general permission has been given for transfer of shares,,,

by a non-resident to an Indian Company under capital reduction scheme of the company. The relevant provision is extracted below for ready reference.,,,

“4(g) The above General Permission also covers transfer by a resident to a non-resident of shares/convertible debentures of an Indian Company, engaged in",,,

an activity earlier covered under the Government Route but now falling under Automatic Route, as well as transfer of shares by a non-resident to an Indian",,,

Company under buyback and/ or capital reduction scheme of the company.â€​,,,

I state that the Petitioner Company will comply all provisions of FEMA and reporting norms in relation to payment of the consideration amount to the non-resident/,,,

foreign shareholders.,,,

With regard to Income Tax and TDS, I state that the Petitioner Company will comply all provisions of the Income Tax Laws and deduction of TDS in connection",,,

with payment to the consideration amount to the non-resident/ foreign shareholders.,,,

I further undertake on behalf of the Petitioner Company to discharge all creditors in the normal course of business and will be processed in accordance with the,,,

payment terms agreed with respective vendors.,,,

I state that the proposed capital reduction is not to write off losses and the company being profitable, is intended to pay off the paid-up share capital which is in",,,

excess of the wants of the company. In other words, the company has sufficient resources to discharge its liabilities even after remittance of monies to the",,,

shareholders pursuant to confirmation of capital reduction by this Hon’ble Tribunal.,,,

I state that neither the Regional Director nor the Registrar of Companies have objected to the proposed capital reduction.,,,

The present position of law, while dealing with the provisions of Section 66 of Companies Act, 2013 is that if none of the shareholders are",,,

objecting for the proposed reduction, then after considering the merits of the case as also connected facts and circumstances such petition normally",,,

deserves to be admitted. In the case of Elpro International Limited (Company Petition No.288 of 2007) order dated 22.06.2007 reported in,,,

MANU/MH/1414/2007 : [2009] 149 Comp Cas 646 (Bom), Hon'ble Bombay High Court has expressed that the question of reduction of share",,,

capital is the matter of domestic concern. Further observed that decision for reduction is based on commercial consideration undertaken by the,,,

businessmen who are in the best position to know of the necessities and interests of the company concerned, in the absence of serious allegations as",,,

regards the bona fides of the proposed Scheme, the Courts are of the view that no interference in such decisions are acquired. It has also been",,,

observed that considering the commercial aspect of the decision it is not permissible for the Court to come to the conclusion that the exit opportunity,,,

offered is inequitable and unjust.,,,

In the light of discussion above, it is ordered to confirm the reduction of share capital of Petitioner Company by approving the minutes of the",,,

EOGM dated 06.07.2020, wherein the members of the Petitioner Company resolved for the reduction of share capital of the Company, as prescribed",,,

U/s 66 of the Companies Act, 2013, to reduce issued and paid up share capital from Rs.1,72,22,58,050/-(Rupees One Hundred Seventy Two Crores",,,

Twenty Two Lakhs Fifty Eight Thousand and Fifty Only) comprising of 17,22,25,805 equity shares of INR 10/-(Indian Rupees Ten Only) each",,,

reduced from INR 2,53,36,95,450 (Indian Rupees Two Hundred Fifty Three Crores Thirty Six Lakhs Ninety Five Thousand Four Hundred and Fifty",,,

Only) comprising 25,33,69,545 fully paid up equity shares of INR 10/- (Indian Rupees Ten Only) each.",,,

In terms of the above, the necessary alteration shall be made in the Memorandum of Association by the Petitioner Company for reduction of the",,,

amount of its share capital and of its shares, the copy of the altered Memorandum of Association and the minutes approved along with the order shall",,,

be delivered to the RoC by filing the E form INC, within 30 days of the receipt of copy of the Order. Accordingly, the Registry shall prepare an Order",,,

in FORM No. RSC-6 as per the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 and issue to",,,

the Applicant.,,,

Ordered Accordingly. To be consigned to the Records.,,,

Form of Minutes,,,

The paid up capital of Motorola Solutions India Private Limited is henceforth, INR 1,72,22,58,050/- (Rupees One Hundred Seventy Two Crores",,,

Twenty Two Lakhs Fifty Eight Thousand and Fifty Only) comprising of 17,22,25,805 equity shares of INR 10/-(Indian Rupees Ten Only) each",,,

reduced from INR 2,53,36,95,450 (Indian Rupees Two Hundred Fifty Three Crores Thirty Six Lakhs Ninety Five Thousand Four Hundred and Fifty",,,

Only) comprising 25,33,69,545 fully paid up equity shares of INR 10/- (Indian Rupees Ten Only) each. Â Â Â Â",,,

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