Abhilasha Kumari, J.:— This is a petition filed under sections 100 to 103 of the Companies Act, 1956 seeking confirmation to the Scheme of Capital Reduction of the Company.
2. The petitioner Company was incorporated on 1st February 1980 as a public limited company under the provisions of the Companies Act, 1956 with the Registrar of Companies, Gujarat. The petitioner company was incorporated with the objective of carrying on the business of manufacturer of and dealer in sheet glass, plate glass, wired glass, figured glass, safety glass, toughen glass and mirrors and all sorts of glass and glassware and all other articles, things and ingredients which can, or may conventionally, be used for the manufacture of, or in connection with all such articles and things as aforesaid. The Petitioner Company is a closely-held public limited company and in order to simplify its holding structure, is in the process of internal restructuring. The same will also assist in succession planning through more efficient capital structure. Accordingly, the Company is considering reduction of its capital. The Board of Directors, therefore, thought it appropriate to reduce a part of its Equity Share Capital, by cancelling the said Equity Shares and transfer of the amount of such reduced Capital to its Capital Reserve Account.
3. For the purpose, the Sp ecial Resolution was passed in accordance with Section 189 of the Companies Act, 1956, at the respective Extra Ordinary General Meetings of the Equity Shareholders and Preference Shareholders of the petitioner company, held after due notice, as provided in the Act, on the 24th day of August 2016. It was resolved as follows:
“RESOLVED THAT pursuant to the Articles of Association of Gobind Glass & Industries Limited (‘the Company’), Sections 100 to 104 and such other applicable provisions of the Companies Act, 1956, subject to the sanctions and approvals of the appropriate authorities as may be required, and subject to the confirmation by the Hon'ble High Court of Gujarat at Ahmedabad and subject to such terms, conditions or modifications if any, as may be prescribed by such authorities while granting such approvals, consents or permissions and which may be agreed to by the Board of Directors of the Company (hereinafter referred to as ‘the board’), the Company's Issued, Subscribed and Paid Up Equity Share Capital of Rs. 3,57,99,525/- (consisting of 3,57,99,525 Equity Shares of Rs. 1/- each fully paid to be reduced to Rs. 1,72,67,205/- (consisting of 1,72,67,205 Equity shares of Rs. 1/- each fully paid up), by reducing the Issued, Subscribed and Paid Up Equity Share Capital of the Company, which shall be effected by way of extinction and cancellation of 1,85,32,320 (One crore eighty five lakh thirty two thousand three hundred twenty only) fully paid up equity shares of Re. 1/- (Rupees One) each held by Gopal Glass Works Limited and having an aggregate paid up value of Rs. 1,85,32,320/- (One crore eighty five lakh thirty two thousand three hundred twenty only) without any consideration”
“RESOLVED FURTHER THAT upon the reduction being confirmed by the Hon'ble High Court of Gujarat at Ahmedabad, the above mentioned Shareholder holding 1,85,32,320/- fully paid-up Equity shares of the Company, shall cease to be the shareholders of the Company.”
“RESOLVED FURTHER THAT consequential amendments be made in the capital clause of the Memorandum of Association and the Articles of Association of the Company after the said reduction becomes operative and effective.”
“RESOLVED FURTHER THAT the proposed reduction shall be effected by debiting the Equity Share Capital Account and crediting difference, being surplus, to the capital reserve account”
4. The present petition was admitted by this Court on 27 September 2016 and the same was ordered to be advertised in the English daily newspaper “Indian Express”, and the Gujarati daily newspaper “Sandesh”, both Ahmedabad editions, being the newspapers in circulation in Kadi. The said direction has been complied with by the company and the notice of the petition has been duly advertised in the aforesaid newspapers on 10 October 2016. This is confirmed by an affidavit dated 14 October 2016. Pursuant to the said advertisement, nobody has come forward to raise any objections opposing the sanction to the proposed Capital Reduction.
5. It is pointed out in the petition that the said petition proposes the reduction merely by cancellation of shares held by a single shareholder. The same is proposed without any repayment towards the said cancellation. As a result, there is no actual cash outflow and no impact on the Net Worth of the petitioner company In view of the above, the rights and interest of the Unsecured Creditors of the Company are not adversely affected. Therefore, while admitting the Petition this Court did not give any directions as required under section 101(2) of the Act and the same were dispensed with.
6. This Court has heard Mr. Bandish Soparkar, learned advocate appearing for Mrs. Swati Soparkar, learned advocate for the Petitioner. Having perused the Petition, more particularly the reasons given in support of the proposed reduction, in the view of the Court, there is no reason to refuse the confirmation of the proposed action of the Petitioner for the reduction of its capital. The said proposal, prima facie, does not prejudicially affect any person.
7. Accordingly, the reduction of Equity Share Capital of Gobind Glass & Industries Limited, the petitioner company, as proposed under the present petition and as approved by the Special Resolution dated 24 August 2016 is hereby confirmed.
8. The form of the minute proposed to be registered under Sec.103(1)(b) is as follows:
MINUTE UNDER SECTION 103(1)
“The Issued, Subscribed and Paid up Equity Share Capital Gobind Glass & Industries Limited is by virtue of a Special Resolution passed by the Equity Shareholders of the company at the Extra Ordinary General Meeting held on dt. 24 August 2016 and by virtue of the sanction granted by the High Court of Gujarat (NCLT) on day of 2016, be reduced from Rs. 3,57,99,525/- (consisting of 3,57,99,525 Equity Shares of Rs. 1/- each fully paid up to Rs. 1,72,67,205/- consisting of 1,72,67,205 Equity shares of Rs. 1/- each fully paid up.”
9. The same is approved.
10. The prayers made in terms of Para 11(A), 11(B) and 11(C) are granted.
11. The petitioner is directed to publish the Notice of Confirmation of Reduction of Capital and approving of Minutes in the English daily newspaper “Indian Express” and the Gujarati daily newspaper “Sandesh”, both Ahmedabad editions only. within a period of 14 days of the registration of the order with the Registrar of Companies.
12. The Petition is disposed of as above with no orders as to costs.
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