- (1.) This is a Petition is filed by the Petitioner above-named for the purpose of confirmation of reduction of its equity share capital. The Petition was originally filed in the Hon'ble High Court of Delhi under the provisions of erstwhile Companies Act, 1956 and the matter was listed before it on 25.11.2016. The Hon'ble High Court on the said date was pleased to direct that notice of the Petition be issued to the Registrar of Companies as well as Regional Director; and also directed the Petitioner to carry out publication in the English daily "Statesman" and Hindi daily "Jansatta" both Delhi Edition returnable on 28th March, 2017. The proceedings were pending before the Hon'ble High Court of Delhi. However in view of Section 66 of the Companies Act, 2013 having been notified by the Central Government vide Notification No. 3677E : MANU / DCAF/0147/2016 dated 07.12.2016 effective from 15.12.2016 as well as the Rules titled as "National Company Law Tribunal (Procedure for Reduction of Share Capital of Companies) Rules, 2016" having also been notified; and taking into the consideration the notifications, the Hon'ble High Court vide its Order dated 25.01.2017 has transferred the instant Petition alongwith the connected records therewith to this Tribunal. This Tribunal is now vested with the powers to consider matters concerning Reduction of Share Capital as contemplated in this petition.
(2.) Subsequent to the transfer, the matter came up before us on 28.03.2017 for hearing and the Counsel for the Petitioner represented that the reports of the Regional Director/Registrar of Companies have been filed as directed by the Hon'ble High Court. Learned counsel represents that the existing Paid-up Share Capital of the Petitioner Company of Rs. 1,95,14,19,360/- (Rupees One Hundred and Ninety five crores fourteen lakhs nineteen thousand three hundred and sixty only) consisting of 19,51,41,936 (Nineteen crores fifty one lakhs forty one thousand nine hundred and thirty six only) equity shares of Rs. 10/- (Rupees ten only) each fully paid up shall be reduced to Rs. 1,40,14,19,360/- (Rupees One Hundred and forty crores fourteen lakhs nineteen thousand three hundred and sixty only) consisting of 14,01,41,936 (Fourteen crores one lakh forty one thousand nine hundred and thirty six only) Equity Shares of Rs. 10/- (Rupees Ten only) each fully paid up, the amount of Rs. 55 (K 00,000/- (Rupees 'A' Five Crores Fifty Lakhs only) Equity shares of Rs. 10/- each, fully paid up, which are held by the existing shareholders and excess capital being in excess of the requirements/wants of the Petitioner Company be paid back to the existing shareholders and in the ratio of their current shareholding in the Petitioner Company and that the rationale is stated in Paragraph 13 of the Petition which is extracted below:- "(a) The Board has considered the present business model, the future revenues and the other business factors and it is of the opinion that the present shareholders' funds available with the Petitioner Company are in excess of its wants/requirements and which cannot be effectively deployed in the business. The Board of Directors are of the view that the Petitioner Company does not require such excess capital for its business operations and such excess capital impacts the return on equity and earnings per share. Hence, the board has decided to return for the business purposes of the Petitioner Company back to its shareholders in terms of section 100(1)(c) of the Companies Act, 1956, after the sanction/approval of the Hon'ble High Court. (b) After the analysis of various options available to the Petitioner Company, the Board is of the view that the reduction of the equity share capital is the most practical option available to the Company, which is also statutorily permissible. That after reduction of the share capital of the Petitioner Company in the manner enumerated in the present petition, Shareholders would get back their investment in capital which is in excess of the wants of the Petitioner Company and not represented by existing assets required for the business operations of the Petitioner Company and the Petitioner Company's financial position will be better reflected after the reduction. (c) That thus an amount of Rs. 5,50,00,000/- (Rupees Five crores fifty lakh only) being the difference of the existing Paid-up capital and the reduced paid-up capital, and which will be refunded to the respective shareholders of the petitioner Company in compliance to the provisions of section 100 to 105 of the Companies Act, 1956 and accordingly the current/non-current assets of the Petitioner Company will be adjusted in accordance with law and accounting practices of the Petitioner Company. Thus, the Petitioner Company is filing the present Petition under Section 101 of the Companies Act, 1956 to obtain a sanction from this Hon'ble court to reduce the Paid-up Share Capital in accordance to the procedure established in accordance with the law."
(3.) A Perusal of the Petition shows that the company is reorganizing its share capital in order to distribute its surplus capital which it is stated to be in excess of its business requirements. The Board of Directors of the company is said to have approved the reduction of the paid up equity share capital of the Petitioner Company on 16.11.2016 and further it is also seen that the same has been approved by the Equity Shareholders in the Extra Ordinary General Meeting held on 18.11.2016 vide Special Resolution. Subsequently, the Company Petition before the Hon'ble High Court seems to have been preferred.;