- (1.) Petition under consideration was filed on 27th September, 2017 under the provisions of Sec. 14 of Companies Act, 2013 (herein below referred as "the Act") . At the outset, it is worth to reproduce the relevant portion of the Section as under:- "Alteration of Articles" 14. (1) Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of ' (a) a private company into a public company:or (b) a public company into a private company: Provided that......... Provided further that any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit. (2) Every alteration of the articles registered under subsection (2) shall, subject to the provisions of this Act, be valid as if it were originally in the articles"
(2.) The issue of conversion of Private Company into Public Company and vice-versa is to be dealt with by NCLT (henceforth referred as "Tribunal") within the ambits of Section 14 of the Act. This Section prescribes that a company, either a Public Company or a Private Company, can alter its Article if such condition is comained in its Memorandum, but by a special resolution. Such alteration, for the purpose of this section, has the effect of conversion of a Public Company into a Private Company. The issue in hand is dealt with by second proviso to Section 14 (c) which says that any alteration having the effect of conversion of a Public Company into a Private Company shall not come into operation except with the approval of the Tribunal. The Tribunal shall make such order as it may deem fit. Further, a procedure is also laid down to give effect of the order of the Tribunal in sub-section (2} of Section 14 of the Act. This subsection has prescribed that a copy of such alteration of the Articles along with a copy of the order of the Tribunal, approving the alteration, is required to be filed with the Registrar of Companies, within fifteen days. The Registrar thereupon shall register the change. The Companies Act, 2013 has further made it clear to remove any ambiguity by legislating sub Section 3 of Section 14 that any such alteration of the Articles registered shall be valid as if it were originally in the Articles, meaning thereby, the change so incorporated of "Conversion" shall be in supersession of the old clauses of an Article.
(3.) In addition to the introduction of Section 14 in Companies Act, 2013, the MCA vide a Notification dated 21st July, 2016 (published in Gazette of India on 22nd August, 2016 GSR 716 (E) J also framed National Companv Law Tribunal Rules, 2016. The Rule connected to conversion of Public Company to Private Companv is Rule 68 which has laid down the guidelines for the implementation of such conversion. A Petition for conversion of Public Company to Private Company is required to accomplish the conditions laid down under Rule 68 of NCI-T Rules 2016. For the purpose of disposal of this Company Petition the conditions accomplished by this Petitioner as prescribed in the Rule are examined as under:- A) The Board of Directors of Global Ispaat Limited (Petitioner) have decided in their meeting held on 1st August, 2017 to convert the Petitioner Company "Global Ispaat Limited" to Private Limited Company by the name j.nd style of "Global Ispaat Private Limited". Thereafter, at the Extraordinary General Meeting held on 26th August, 2017 at the Petitioner Company's registered office at Plot No. M-18/19, Cuncolim Industrial Estate, Cuncolim, Salcete, South Goa - 403703, Maharashtra, India, a Special Resolution has been passed for conversion of the Petitioner Company from Public Limited Company to Private Limited Company. The Members have voted in favour of the resolution. B) The reason for conversion into a Private Company [Rule 68 (2) (e) as set out in the Petition is specified as under:- "IV. FACTS OF THE CASE ARE GIVEN BELOW" a) The Company was originally incorporated on 28lh September, 1993 as a company limited by shares with the name of G. R. Ispat Limited at RoC, Karnataka under the Companies Act, 1956. Subsequently Petitioner company changed its name to Global Ispat Limited on 06.03.2002 and also change its registered address from state of Karnataka to state of Goa vide order no. 834/17/SRB/2003, dated 03.12.2003 and issued fresh certificate bv the RoC, Goa, dated 22.01.2004. Further changes its name to Global Ispaat Limited on 03.08.2016 vide CIN no. 122GA2004PLC003373. The Board of Directors considered that, since the capital is procured through private subscription of equity, especially from Directors and shareholders and their friends and associated, hence no purpose would be served by retaining the public limited status of the company. The conversion of the company into private limited will eliminate a lot of paper work and also streamline its functioning in any case." b) On 1 August, 2017 the Board approved the conversion of the Company into Private Company and for alteration of Articles of the Company. c) The members approved the proposed alteration in the Extra Ordinary General Meeting held on 26 August, d)s on 21 September, 2017 the Companv has 91 Creditors and no Debentures outstanding as certified by the Directors of the Company. And same has been enclosed as Annexure A8 dated 21st September, 2017. e) To give effect of the proposed conversion, Memorandum of Association (MOA) and Articles of Association (AOA) of the Company shall undergo a change. c) As shown in their Company Petition the capital structure of Petitioner Company is as under:- 1.PARTICULARS OF COMPANY: i. The Authorized Share Capital of the Company is Rs. 5,00,00,000/- (Rs. Five Crores only) divided into 50,00,000 (Fifty Lakh) equity shares of 10/- each. ii. The current issued, subscribed and paid-up share capital of the Company is Rs. 4,99,58,330/- (Rs. Four Crores Ninety-Nine Lakhs Fifty-Eight Thousands Three Hundred and Thirty only) divided into 49,95,833 (Forty-Nine Lakhs Ninety-Five Thousands Eight Hundred and Thirtv-Three) equity shares of 10/- each. iii. The compilation consists Publication of Notification depicting intention of conversion in compliance of Rule 68 (5) of NCLT Rules, 2016.;