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Uttarakhand High Court · body

2014 DIGILAW 409 (UTT)

Jaimurthy Minerals & Chemicals Pvt. Ltd. v. .

2014-09-23

SUDHANSHU DHULIA

body2014
Judgment Sudhanshu Dhulia, J. (Oral) 1. The petitioner is a company registered under the Indian Companies Act, 1956. It seeks to reduce its share capital, for which it requires a confirmation from this Court. Hence, the present petition. 2. The petitioner company was incorporated as a private limited company on 25.11.1983 vide certificate of incorporation issued by the Registrar of Companies, U.P., Kanpur. 3. The main objects for which the Company was incorporated read as under:- “a) To undertake the manufacture of all grades of calcium carbonate and other chemicals and to construct, establish, promote, the setting up of units for manufacturing calcium, carbonate, lime calcium and lime based chemicals through processing of minerals and other materials or commodities. b) To conduct the business of processing and refining minerals for manufacturing calcium carbonate and calcium based chemicals, setting up or promoting industry, for its calcium based products and by products providing manufacturing, manipulating needs for limestone, lime-charcoal, coke, petroleum coke and other commodities needs for the manufacture of calcium carbonate and chemicals to produce and sell within the country or abroad products, and by-products resulting from mineral processing and manufacture of lime and calcium carbonate. c) To establish, promote, take on lease, contract any works, industry, mines, lands and any interest therein, with the main object of developing mineral processing and other industry for manufacturing chemical and related products.” 4. The authorised share capital of the company on the date of filing of the company petition was Rs.1,00,00,000/- (Rupees One Crore only) divided into Rs.1,00,000 (One Lakh) equity shares of Rs.100/- each (Rupees Hundred only) and the issued, subscribed and paid up equity share capital of the petitioner company is Rs.72,00,000 (Rupees Seventy Two lakhs only) divided into 72,000 (Seventy Two Thousands) equity shares of Rs.100/- each (Rupees One Hundred only). 5. According to the scheme of reduction of share capital, the petitioner company is desirous to provide an exit to the “Dodhia Group”, also known as the “Exiting Shareholders”, by way of cancelling and extinguishing 35,260 equity shares of the face value of Rs.100/- each out of the shares held by the exiting Shareholders in the applicant company on the terms and conditions more particularly mentioned in the scheme of reduction of equity share capital. According to the petitioner company its shareholding pattern on the date of filing of the petition, was as under:- Sr.No. Particulars Equity Shares Percentage (%) 1. Amir J.Dodhia 28,500 39.58 2. Zulekha A.Dodhia 7,500 10.42 3. Sadruddin Budhwani 28,500 39.58 4. Jarina Budhwani 7,500 10.42 Total 72,000 100.00 5. The Board of Directors of the petitioner company in its meeting held on 9th November, 2013 proposed to reduce the paid up equity share capital of the company under Section 100 (1) (c) of Companies Act, 1956. 6. Pursuant to the aforesaid meeting the applicant company sent a notice for calling an Extraordinary General Meeting along with explanatory statement, in due compliance of the provisions of the Companies Act to all the shareholders of the company at their respective last known addresses so that they may approve the scheme of reduction of equity share capital. 7. By a Special Resolution of the applicant company duly passed in accordance with Section 189 of the Act, at the Extraordinary General Meeting of the applicant company held on 2nd December, 2013 at its registered office at Dehradun, the shareholders of the applicant company approved the Scheme and accorded its consent to the extinguishment/cancellation of 35,260 (Thirty Five Thousand Two Hundred and Sixty only) equity shares of the applicant company, consequent to the passing of Special Resolution under Section 189 of the Act, a copy of the same was filed with the Registrar of Companies, on 3rd December, 2013, in the prescribed Form 23 of the Companies (Court) Rules, 1959. 8. The applicant company obtained “No Objection Certificate” from the sole working capital and term lending banker, namely, Bank of Baroda, Colaba Branch, Mumbai, which confirmed vide its letter dated 05.12.2013, that they have no objection to the reduction of share capital from Rs.72 Lakhs to Rs.36.74 Lakhs. According to the petitioner company, its Banker i.e. Bank of Baroda has fully supported the implementation of the re-organisation program, for reduction of share capital and they would agree to the Scheme of Reduction as presented to the Hon’ble High Court of Uttarakhand at Nainital. 9. The Company petition was filed on 02.01.2014 and vide order dated 04.01.2014, the Company Court directed the applicant/petitioner to file a list of creditors, in the prescribed Form No. 21 to whom the enquiry would extend. 9. The Company petition was filed on 02.01.2014 and vide order dated 04.01.2014, the Company Court directed the applicant/petitioner to file a list of creditors, in the prescribed Form No. 21 to whom the enquiry would extend. The petitioner was also directed to state the respective amounts due to the said creditors, in respect to Debts, claims or liabilities, as contemplated under Rule 49 & 50 of the Company Court Rules, 1959. 10. Thereafter, the petitioner company filed details of the list of creditors, details of secured loans, details of un-secured loans, statement of sundry creditors, details of bills awaited, details of other liabilities in the prescribed Form No. 21 and affidavit in Form No. 22 before this Court on 19.02.2014. 11. While hearing the matter on 21.02.2014, this Court directed the petitioner to issue notices to the creditors under Rule 46 and fixed the next date of hearing on 28.05.2014. The Court directed the petitioner company, to make a publication, informing the public at large, that the petition is fixed for hearing on 28.05.2014, in respect to the reduction of share capital. The said publication in the prescribed Form No. 19 was duly published by the petitioner in the Himachal Times, Dehradun and in The Dainik Tribune, Chandigarh on 19.03.2014. 12. An application was filed alongwith an affidavit enclosing copies of the name, addresses and description of creditors, to whom notices were issued, sample notices to creditors (Form No. 23), postal receipts and acknowledgments and true copies of the publication of notices (Form No. 24). 13. Thereafter, the petitioner company filed an affidavit dated 27.05.2014 (in Form No. 26 under Rule 55 of the Companies Court Rules, 1959), enclosing details of Debts and Claims wholly or partly admitted by the Company, against which the creditors of the Company claimed larger amounts and also enclosed copies of receipts and written consents, who consented to the Scheme for Reduction of share capital. 14. On 29.05.2014 on hearing the Advocate for the petitioner, the Court directed the petitioner to again advertise the final date of hearing of the petition fixed for 07.07.2014. The petitioner complied with the said direction and made publication of the advertisement for fixation of final date of hearing fixed for 07.07.2014 in two local News Papers, namely the Himachal Times (Hindi Edition) and the Himachal Times (English Edition) on 11.06.2014 respectively. 15. The petitioner complied with the said direction and made publication of the advertisement for fixation of final date of hearing fixed for 07.07.2014 in two local News Papers, namely the Himachal Times (Hindi Edition) and the Himachal Times (English Edition) on 11.06.2014 respectively. 15. The two important aspects such as reduction of share capital of the company being authorised by a Special Resolution of its shareholders, and the second being that such a reduction is authorised by the Articles of Association of the company has to be seen. In this regard company has already taken steps as per the Articles of Association, namely, Clause 5 of the Articles of Association of the petitioner company, which reads as under:- “Share Capital 5. The Authorised Share Capital of the Company is Rs.1,00,00,000/- (Rupees One Crore Only) divided into 1,00,000 (One lakh) Equity Shares of Rs.100/- (Rupees One Hundred Only) each, with the powers to increase or reduce the share capital in accordance with the provisions of the law.” 16. Therefore, in view of the above, there is a provision to reduce the share capital. The Articles of Association the petitioner company enables it to reduce its share capital, in accordance with provisions of Section 100 of the Companies Act, 1956. Consequent to the approval of the Directors, in the Board of Directors meeting held on 9th November, 2013, shareholders of the companies, in the Extraordinary General Meeting, held on 2nd December, 2013, unanimously approved the reduction of the share capital by a Special Resolution passed under Section 189 of the Companies Act, 1956. Consequent to the approval of the Directors, in the Board of Directors meeting held on 9th November, 2013, shareholders of the companies, in the Extraordinary General Meeting, held on 2nd December, 2013, unanimously approved the reduction of the share capital by a Special Resolution passed under Section 189 of the Companies Act, 1956. A copy of the Special Resolution is enclosed as Annexure No. 8 to the petition, which reads as under:- “RESOLVED THAT subject to Sections 100 to Section 103 of the Companies Act, 1956 and other applicable provisions, if any, confirmation of the Hon’ble High Court of Uttarakhand (“High Court”) and other regulatory authorities, if any and all such other approvals, permissions and sanctions, as may be necessary and in accordance with Article 5 of the Articles of Association of the Company, the Company hereby approves the Scheme of Reduction of Share Capital of the Company as per the draft of the Scheme of Reduction of Share Capital, I placed before the shareholders of the company; and initialed by the Chairman of the meeting, for the purpose of identification to reduce the existing paid-up Equity Share Capital of the Company from Rs.72,00,000/- consisting of 72,000 equity shares of Rs.100/- each to Rs.36,74,000/- consisting of 36,740 equity shares of Rs.100/- each. FURTHER RESOLVED THAT Mr. S.H. Budhwani and Mr. Sohil Budhwani, be and are hereby severally authorised to execute all such deeds, documents and writings, as may be necessary on behalf of the Company, including filing of the necessary forms and returns with the Registrar of Companies; and affixing digital signatures and all other relevant authorities; and do all such other acts, matters and things, necessary, proper or desirable, in connection with or incidental to giving effect to the purposes of the above resolution.” 17. Section 101 (1) enables the Company where it has passed a resolution for reducing its share capital, to apply, by petition, to the Court for an order confirming the reduction. Section 101 (1) enables the Company where it has passed a resolution for reducing its share capital, to apply, by petition, to the Court for an order confirming the reduction. Since, none of the creditors have filed any objection nor has any creditor personally appeared in person or through an Advocate contesting the scheme for reduction of share capital, in spite of due opportunities for appearance, consequent to public notices since this is also to the satisfaction of this Court that the requirements, for authorisation by the Articles for reduction in share capital and Special Resolution by the shareholders, having been passed in the General Meeting, held in this regard, and since the only Banker (secured creditor) namely Bank of Baroda having granted its approval for Reduction of share capital vide its letter dated 05.12.2013, this Court finds considerable force in the submissions of the learned counsel of the applicant company for reduction of share capital. This Court, therefore, directs that the Petitioner Company, post order, publishes reasons for reduction of share capital, as required u/s 102 (b) of the Companies Act, 1956, the Registrar of this Court is directed to provide a copy of the same to the learned Advocate of the petitioner company. After obtaining an approval of the Registrars of the reasons for reduction of share capital, the petitioner company is directed to make an advertisement of the same, in four local newspapers, namely, Times of India & Hindustan Times (English Edition) and Dainik Jagran and Amar Ujala (Hindi Edition) within 21 days of obtaining a copy of the prescribed Draft from the Registrar of the Uttarakhand High Court. 18. The Court directs the Registrar of Uttarakhand High Court, to provide a copy of the draft public advertisement to be made in four local newspapers, namely, Times of India & Hindustan Times (English Edition) and Dainik Jagran and Amar Ujala (Hindi Edition) in the prescribed Form Nos. 30, 31 & 32. The Petitioner Company is directed to file a copy of the Approved Form Nos. 30 & 31 with the Registrars of the Companies within 21 days of obtaining a certified copy of the same. 19. After registering the minutes with the Registrar of Companies, as per Rule 65 of the Companies Court Rule, 1959, the petitioner company, would advertise the copy of Form Nos. 30 & 31 with the Registrars of the Companies within 21 days of obtaining a certified copy of the same. 19. After registering the minutes with the Registrar of Companies, as per Rule 65 of the Companies Court Rule, 1959, the petitioner company, would advertise the copy of Form Nos. 30 & 31 in four local newspapers, namely, Times of India & Hindustan Times (English Edition) and Dainik Jagran and Amar Ujala (Hindi Edition) within 21 days of obtaining a certified copy of the same. 20. After the Registrar of Companies has carried out the alteration in the Memorandum of Association of the Petitioner Company, the petitioner shall make a publication of the minutes approved by the Registrar of Companies, in the prescribed Form No. 32 (under Rule 65 of the Company Court Rules, 1959) in four local newspapers, namely, Times of India & Hindustan Times (English Edition) and Dainik Jagran and Amar Ujala (Hindi Edition) within 21 days of the orders passed by the Registrar of the Companies, U.P. & Uttarakhand. 21. The petitioner company is further directed that after it has filed a copy of this order, along with approved minutes of reduction of share capital, with the Registrar of Companies, it shall forthwith, effect payment to the exiting shareholders within a period of 60 days of approval of the Registrar of Companies, U.P. &Uttarakhand, and the effective date of reduction of equity share capital, shall be deemed to be the date on which a certified copy of the order, sanctioning the scheme, is filed with the Registrar of Companies, U.P. & Uttarakhand, and as prayed for by the petitioner in its scheme for reduction of equity share capital. After doing the needful, compliance report must be filed on or before 24.02.2015. The confirmation of reduction of shares capital shall be subject to the satisfaction of this Court. 22. List this petition on 24.02.2015 in the daily cause list.