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Madras High Court · body

2016 DIGILAW 2041 (MAD)

Indeco Ventures Limited v. .

2016-06-29

RAJIV SHAKDHER

body2016
ORDER : 1. This Company Petition is filed under Sections 100 to 105 of the Companies Act, 1956 seeking an approval of the reduction of paid-up equity share capital of the petitioner company duly approved by the equity shareholders of the petitioner at the Extra-ordinary General Meeting thereof held on 28.08.2015 at Chennai; to this end all inquiries and directions necessary and proper be made and given; to approve the form of minute and to dispense with the words "And Reduced" pursuant to the reduction. 2. It is seen that the petitioner company is carrying on business of generation of energy from wind using Wind Mills, Wind Turbines, Biomass Solar, Municipal Waste, Bio-diesel and other equipments to sell, distribute, supply and share the energy to Governments, Companies, Industries, Electricity Boards and individuals according to law for the time being in force and also for self-consumption. It is further stated that the petitioner company provides for all kinds of services in connection with the power generation and they are doing import and export also. Further the petitioner company provides for consultancy and technical know how related to projects in the fields of power generation. A copy of the latest audited balance sheet 2014-2015 is marked as Annexure B. The nature of business carried on is detailed in the Memorandum and Articles of association, which is marked as Annexure-A. 2.1. It is stated that the petitioner company issued Class II Shares to shareholder, who were the group captive consumers of the company to comply with the Tamil Nadu Electricity Regulatory Commission Rules. Since in the present scenario there is no need for such arrangement, the petitioner company decided to cancel the Class II Share by paying off the amount of Class II Shares to the Class II shareholder. 2.2. Accordingly, the Board of Directors of the petitioner company at their meeting held on 28.08.2015 have decided to cancel the 29,50,000 Class II Equity Shares of Rs.10/- each by paying off Rs.2,95,00,000/- to Class II Shareholder. It is stated that there is only one shareholder holding Class-II shares of 29,50,000 equity shares of Rs.10/- each. The Class I shareholders and Class II Shareholder have given their consent for the proposed reduction of share capital in the Extra-ordinary General Meeting held on 28th August, 2015. 3. The share capital of the petitioner company as on 31.3.2015 are as follows: Authorised Figures in Rs. The Class I shareholders and Class II Shareholder have given their consent for the proposed reduction of share capital in the Extra-ordinary General Meeting held on 28th August, 2015. 3. The share capital of the petitioner company as on 31.3.2015 are as follows: Authorised Figures in Rs. 2,20,90,000 Class I Equity Shares of Rs.10/- each 22,09,00,000 45,00,000 Class II Equity Shares of Rs.10/- each 4,50,00,000 TOTAL 26,59,00,000 Issued, Subscribed and paid-up Capital 88,60,638 Class I Equity Shares of Rs.10/- each 8,86,06,380 29,50,000 Class II Equity Shares of Rs.10/- each 2,95,00,000 TOTAL 11,81,06,380 4. On 28.08.2015, an Extra-ordinary General Meeting was held and the following special resolution was passed unanimously. The Minutes of the Board Meeting dated 28.08.2015 and the Extra General Meeting are marked as Annexures C and D. RESOLVED that pursuant to provisions of Section 100 and other applicable provisions of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) and Article 10 of the Articles of Association of the Company, subject to the sanctions and approvals of the appropriate authorities as may be required, subject to the confirmation by the Hon'ble High court of Madras and subject to such terms, conditions and modifications if any, as may be prescribed by such authorities while granting such approvals, consents or permissions 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 share capital of Rs.11,81,06,380 (consisting of 88,60,638 Class I equity shares of Rs.10/- each fully paid up and 29,50,000 Class II equity shares of Rs.10/- each fully paid up) be reduced to Rs.8,86,06,380/- (consisting of 88,60,638 Class I equity shares of Rs.10/- each fully paid up) the amount by which the equity capital is so reduced being in excess of the requirements of the Company and that such reduction be effected by cancelling and extinguishing 29,50,000 Class II equity shares. RESOLVED FURTHER THAT consequential amendments be made in the capital clause of the Memorandum and Articles of Association of the Company after the said reduction in capital of the company becomes operative and effective. RESOLVED FURTHER THAT consequential amendments be made in the capital clause of the Memorandum and Articles of Association of the Company after the said reduction in capital of the company becomes operative and effective. RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board be and is hereby authorized to do all such acts, deeds, matters and things as they may at their absolute discretion deem necessary or desirable for effectively implementation of the resolution and to settle any questions, difficulties or doubts that may arise in this regard as they may in their absolute discretion deem fit. 5. The resolution passed in the minutes of the said meeting are also enclosed to this petition. It is stated that Article 10 of the Articles of Association of the company provides for reduction in share capital. It is also stated that the reduction in capital involves payment of Class II Shareholder out of accumulated profits. In the light of the resolution passed unanimously approving the reduction of Class II Equity shares, this petition is filed before this Court for approval of the same as per the resolution. The petitioner also seeks liberty of this Court for dispensing with the words and reduced as contemplated in Section 102(3) of the Act. 6. It is seen from the averments in the petition that to comply with the Tamil Nadu Electricity Regulatory Commission Rules, the arrangement was made and now there is no need for such arrangement and hence the petitioner has proposed reduction in the share capital. The total amount sought to be reduced is a sum of Rs.2,95,00,000/-. Pertinently, after adjustment, the equity share capital will stand reduced to Rs.8,86,06,380/-. 7. The Regional Director has filed his report dated 09.06.2016, stating, amongst other things as follows : "4. It is respectfully submitted that as per records of ROC, Chennai, the company is regular in filing the statutory returns and there is no Investigation is pending against the company. 5. The petitioner company in para 11 of the petition has stated that it does not have any Secured or Unsecured creditors and furnished a certificate from a Chartered Accountant to this effect." 8. 5. The petitioner company in para 11 of the petition has stated that it does not have any Secured or Unsecured creditors and furnished a certificate from a Chartered Accountant to this effect." 8. Considering the fact that the reduction in share capital sought has the approval of the shareholders, and that such reduction does not involve any cash outflow to the prejudice of the rights of the creditors, I do not find any impediment in granting the relief prayed for herein. Consequently, this petition seeking approval of reduction in share capital, as reflected in the special resolution dated 28.08.2015, passed in that behalf, is hereby granted. 9. Furthermore, Clause (a) of sub Section (2) of Section 102 of the Companies Act, 1956, provides that the Court may, for any special reason, if it thinks proper, direct the company to add the words and reduced to its name as the last words thereof during the period commencing from the date of the Court’s order till such time, as the Court specifies in its order. The purpose of such inclusion is only to put to notice the investing public the state of affairs of the company and the fact that it has approached the Court for reduction of its equity share capital. Having regard to the fact that in the instant case there is no cash outflow and given the fact that there are no creditors, there is, to my mind, no impediment in granting the other prayer made in the petition, which is, that the petitioner should not be called upon to use the words and reduced as a suffix to its name. It is ordered accordingly. 10. In the light of the above-said facts, the prayers sought are granted. Consequently, the proposed minutes are extracted hereafter are approved. It is ordered accordingly. 10. In the light of the above-said facts, the prayers sought are granted. Consequently, the proposed minutes are extracted hereafter are approved. "pursuant to Sections 100 to 104 of the Companies Act, 1956 and Rules 46 and 47 of Companies (Court) Rules, 1959, the paid up Equity Share Capital of Rs.11,81,06,380 (Rupees Eleven Crores Eighty One Lakhs Six Thousand Three Hundred and Eighty only) consisting of 88,60,638 Class I equity shares of Rs.10/- each fully paid up and 29,50,000 Class II equity shares of Rs.10/- each fully paid up shall stand reduced by Rs.2,95,00,000/- (Rupees Two Crores Ninety Five Lakhs only) and the Fully Paid up capital of the said Company is henceforth Rs.8,86,06,380/- (Rupees Eight Crores Eighty Six Lakhs Six Thousand Three Hundred and Eighty only) consisting of 88,60,638 (Eighty Eight Lakhs Sixty Thousand Six Hundred and Thirty Eight) Class I equity shares of Rs.10/- each 10.1. Resultantly, the petition is ordered, approving the resolution passed on 28.08.2015 for reduction of Class II Equity Share and dispensing with the words and reduced pursuant to the adjustment sought. 11. The learned Senior Central Government Standing Counsel will be entitled to a fee of Rs.5,000/-, which shall be paid by the petitioner company.