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Judgment
Avinash K. Srivastava (Member Technical)
The present Petition has been filed by the company for reduction of its share capital. The Petitioner Company having CIN No. U93000DL2012PTC233677 was registered on March 29, 2012 under the Companies Act, 1956, as a Private limited Company and having its registered office at C5/52, FIRST FLOOR, VASANT KUNJ, NEW DELHI-110070 Floor, which falls within the territorial jurisdiction of this Bench. The objects of the company are to make investments in the purchase of or upon the security of and to buy, sell or otherwise deal in shares, stocks, units, debentures, debenture stock bonds, mortgages, obligations and securities of any kind issued or guaranteed by any company, undertaking or corporation of whatever nature.
The share capital of the Company as on 31st March, 2020 is given as under:
Particulars
Amount
Authorized Capital
Equity Shares
50,00,000 Equity Shares of Rupees 10/- each
5,00,00,000
Total
5,00,00,000
Issued, Subscribed and Paid Up Share Capital
25,72,500 Equity Shares of Rupees 10/- each
2,57,25,000
Total
2,57,25,000
The Applicant has filed this application under section 66 of the Companies Act, 2013 for obtaining sanction for the Scheme of Reduction of Share Capital of the Petitioner Company. The Board has considered the present business model, the future revenues and the other business factors and it is of the opinion that to write off all accumulated losses and fictitious assets and pay off idle fund available with the company. Therefore, the Share capital of the Petitioner Company be reduced in the following manner ("Proposed Capital Reduction"):-
A. The Paid- Up Share Capital of the Petitioner Company be reduced from Rs. 2,57,25,000 consisting of 25,72,500 equity shares of Rs 10/- each fully paid up to Rs. 37,25,000 consisting of 3,72,500 equity shares of Rs. 10/- each fully paid up.
B. That, Rs. 2,22,00,000/- (consisting of 22,00,000 equity shares of Rs. 10/- each fully paid up) is the amount by which the Share Capital, of the Company will be reduced, and shall be utilized to write off the accumulated debts and fictitious assets and pay off idle fund with the company.
The Board of Directors has passed the resolution in the Board meeting dated 19.11.2020 vide which they have accorded approval for reducing the Paid-up share capital of the company subject to the sanction of Hon'ble Tribunal. Pursuant to the above notices dated 19.11.2020 along with the Explanatory Statement for convening the Extraordinary General Meeting of all the members of the Petitioner Company were sent.
i. At the Extraordinary General Meeting held on 21.12.2020, the members of the Petitioner Company have unanimously approved the proposed Capital reduction by passing a special resolution.
ii. Certified true copy of the Notice along with the Explanatory Statement sent to the equity shareholders of the Petitioner Company have been filed on record.
iii. In lieu of extinguishment of Share Capital, the Paid-up Share Capital of the Company shall stand reduced to the extent of the face value of the shares so extinguished on the record date.
That as on 19.11.2020, company had no creditor viz. Secured or Unsecured. The Petitioner Company in this regard had made a declaration to the same effect that they had no creditor to the company as on 19.11.2020 and is on record.
It is further submitted that the company had obtained a Certificate issued by ASRT & ASSOCIATES CA FIRM ( Registration No. 026481N) dated 23.01.2021 that as on 23.01.2021, the company had NIL Creditors which included all Secured Loans, Unsecured Loans and trade creditors and the same is found on record.
That, as the company had no creditors, so the question of the written consent of the creditors does not arise since the proposed reduction of capital will involve only diminution of liability of promoters and there shall be no prejudice caused to creditors.
That, the Company has attached certificate dated 23.01.2021 from RK Raman & Co., CA that the Company has no outstanding deposit and interest thereon.
The Articles of Association of the Petitioner Company, in Article 5 provides for reduction of the share capital by way of special resolution be passed. Hence, the reduction of share capital is as per the Articles of Association of the Petitioner Company.
Vide order datedl8.03.2021 this bench directed the petitioner to issue Notice to ROC via all modes and to other statutory bodies and also make the publication of the notice which was complied and the compliance affidavit dated 17.07.2021 was filed on 19.07.2021.
The Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi, after receiving the report dated 16.07.2021 from the Registrar of Companies has filed his report dated 28.09.2021. On
i. That, ENERWON INVESTMENT AND SERVICES PRIVATE LIMITED a Private Limited Company having its registered office at C5/52, first Floor, Vasant kunj, New Delhi-110070 is within the jurisdiction of this Bench. The Company is engaged in the business of investment into shares and other securities.
ii. As proposed in the scheme, the excess capital (amounting to Rs. 2,20,00,000 by way of reduction of 22,00,000 equity shares for Rs. 10 each) shall be used to enable the company to write off the accumulated losses and pay off the surplus capital not utilized in the company which is equivalent to Rs. 2,20,00,0007- in the books of the accounts.
iii. That, the equity shareholders agreed to accept Rs 5 per equity share as against Rs. 10 paid up to 22,00,000 shares, thereby sacrificing Rs. 5/-per share.
iv. That as per the report of the Registrar of Companies, the Petitioner Company has filed Annual Return and Balance sheet upto 31.03.2020. against the paid up capital of Rs. 257.25 lacs and it has accumulated losses of Rs. 22.17 lacs. No prosecution has been filed and no inspection or investigation has been conducted in respect of the Petitioner Company.
That, all the statutory requirements pertaining to the Certificate by Statutory auditor for accounting treatment as per section 133 of the Companies Act is complied with and is found on record. That, the company had obtained certificate dated 23.01.2021 declaring that there is no arrear of repayment of deposit and same is on record.
Taking into consideration the above and in respect of prayer made for reduction of capital as contemplated by the Petitioner Company, this Tribunal directs :
i. That the reduction of the share capital of the above company as resolved by the special resolution passed at the Extra Ordinary General meeting held on the 21.12.2020 as follows is allowed.
ii.
· The Paid- Up Share Capital of the Petitioner Company is reduced from Rs. 2,57,25,000/- consisting of 25,72,500 equity shares of Rs 10/- each fully paid up to Rs. 37,25,000/- consisting of 3,72,500 equity shares of Rs. 10/- each fully paid up.
· That, Rs. 2,22,00,000/- (consisting of 22,00,000 equity shares of Rs. 10/- each fully paid up) is the amount by which the Share Capital, of the Company will be reduced, and shall be utilized to write off the accumulated debts and fictitious assets and pay off idle fund available with the company
iii. That, a certified copy of this order including the minute as approved by the shareholders of the company be delivered to the Registrar of Companies within thirty days of receipt of the order and paper publication confirming the reduction of Paid up share capital by this Tribunal and also be issued in the English and Hindi Edition of the newspaper "The Business Standard" in the prescribed format within a period of thirty days from the date of this order.