Delhi High Court
In The Matter Of H & B Stores Ltd. vs ................ on 8 December, 2014
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*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CO.PET. 629/2014
IN THE MATTER OF H & B STORES LTD.
......Petitioner
Through: Mr. Rajeev Kumar, Advocate for
the Petitioner.
Mr. Rajneesh Kumar Singh,
Assistant Registrar of
Companies.
CORAM:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
ORDER
% 08.12.2014
SANJEEV SACHDEVA, J (ORAL)
1. This is petition under Section 100 to 104 of the
Companies Act, 1956 ("Act") read with Rule 46 and 47
of the Companies (Court) Rules, 1959 ("Rules") by H
& B Stores Limited (hereinafter referred to as
Petitioner Company) seeking approval of this Court to
the proposed reduction of capital.
2. The Petitioner Company was incorporated on 14 th May,
2007. Objects of the Petitioner Company have been
detailed in the Petition and the Share Capital of the
Petitioner Company as on March 31, 2014 was Rs.
43,10,61,873/-
3. The registered office of the Petitioner Company is
situated at New Delhi, within the jurisdiction of this
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Court.
4. Details with regard to the date of incorporation of the
Petitioner Company, its authorized, issued, subscribed
and paid up capital have been given in the petition.
5. Copies of the Memorandum and Articles of Association
of the Petitioner Company as well as the latest audited
balance sheet of the Petitioner Company for the year
ended 31 st March, 2014 have also been enclosed with
the petition.
6. A copy of the Resolution passed by the Board of
Directors of the Petitioner Company on September 12,
2014 proposing the reduction of capital has been placed
on record.
7. Learned Counsel for the Petitioner Company submits
that the Share Capital Account of the Petitioner
Company as on March 31, 2014 is being reduced from
Rs. 43,10,61,873/- to Rs. 19,14,93,165/- and that such
reduction is to be utilised for writing-off Deficit in the
statement of Profit and Loss Account as on March 31,
2014 of Rs.23,95,68,708/-.
8. Further learned Counsel for the Petitioner Company
submits that that the Petitioner Company has incurred
significant losses in preceding years as on March 31,
2014 and the Petitioner Company has accumulated
losses amounting to Rs. 23,95,68,708/- represented as
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"Deficit in the statement of Profit and Loss Account" as
on March 31, 2014. Further, the Petitioner Company
has balance in the Share Capital Account amounting to
Rs. 43,10,61,873/- as on March 31, 2014. It is
submitted that the Petitioner Company intends to carry
out financial restructuring by writing-off the debit
balance in Profit and Loss Account amounting to
Rs.23,95,68,708/- by cancellation of 23,95,68,708
Equity Shares of Rupee 1/- each amounting to Rs.
23,95,68,708/-, other than Equity shares held by
individual Shareholders of the Petitioner Company in
the capacity of nominee Shareholders of Dabur India
Limited so as to give a true and fair view of the
financial statements of the Petitioner Company.
9. Learned Counsel for the Petitioner Company further
submits that Article 9 of the Articles of Association of
the Petitioner Company authorizes Petitioner Company
to reduce its capital/Securities Premium in any manner
for the time being authorized by law.
10. It is submitted that the Board of Directors has approved
the reduction of under Section 100 to 104 of the
Companies Act, 1956 by a resolution passed on 12 th
September, 2014.
11. Further, learned Counsel for the Petitioner Company
submits that the reduction of capital does not involve
either diminution of liability in respect of the unpaid
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share capital or payment to any shareholder of any paid
up Share Capital, and hence, there is no requirement to
comply with Section 101(2) of the Act.
12. In view of the same, the requirement to comply with
Section 101(2) of the Act has been dispensed with vide
order dated 14.10.2014. Vide order dated October 14,
2014, notice was directed to be issued to the Registrar
of Companies, NCT of Delhi and Haryana. Notice was
accepted by Mr. Rajneesh K. Singh, Deputy Registrar
of Companies on behalf of the Registrar of Companies.
Further, it was also directed that the notice of hearing
of the Petition be published in "Business Standard"
(English edition) and "Business Standard" (Hindi
edition).
13. Affidavit of service and publication has been filed by
the Petitioner Company showing compliance regarding
service of the petition on the Registrar of Companies
and the Regional Director, Northern Region, and also
regarding publication of citations in the aforesaid
newspapers on November 12, 2014.
14. The Regional Director, Northern, Ministry of Corporate
Affairs has filed his Affidavit dated December 4, 2014.
In response to notice, the learned Regional Director in
his affidavit has submitted that the present reduction of
capital has been consented by the Equity Shareholders
of the Petitioner Company by a Special Resolution duly
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passed at Extra Ordinary General Meeting on October
7, 2014. In addition, he has also submitted that under
Clause 9 of the Articles of Association of the Petitioner
Company, it may by Special Resolution reduce its
Share Capital/Securities Premium Account in any
manner for the time being authorized by law and the
reduction of capital also does not involve any
diminution of the liability in respect of unpaid capital
or the payment to any shareholder of any paid up
capital. Further, it is submitted that Learned Regional
Director has no observation with respect of said
reduction.
15. Learned Counsel for the Petitioner Company submits
that no objection has been received to the proposed
reduction of capital from any other party. Mr. Alok
Seth, Authorized Signatory of the Petitioner Company
has filed an affidavit dated December 3, 2014
confirming that no objection has been received
pursuant to the notice of hearing published in the
aforesaid newspapers.
16. In view of the facts and circumstances of the present
case, the reduction of capital as resolved by the
shareholders of the Petitioner Company by passing a
special resolution on October 7, 2014 is hereby
confirmed. Henceforth, the Share Capital Account of
the Company as on March 31, 2014 be reduced from
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Rs. 43,10,61,873/- (Rupees Forty three crore ten lakh
sixty one thousand eight hundred and seventy three
only) to Rs. 19,14,93,165/ (Rupees Nineteen crore
fourteen lakh ninety three thousand one hundred and
sixty five only) and that such reduction to be utilized
for writing off Deficit in the statement of Profit and
Loss Account as on March 31, 2014 of Rs.
23,95,68,708/- (Rupees Twenty three crore ninety five
lakh sixty eight thousand seven hundred and eight
only). The form of the Minute as proposed to be
registered under Section 103 (1) (b) of the Act as given
in Para 20 of the Petition, is also approved.
17. The order passed today and the minute approved by this
Court shall be registered in accordance with Section
103 of the Act by the Registrar of Companies and shall
be published in terms of sub-Section (3) of Section 103
in the "Business Standard" („English edition‟) and
"Business Standard" („Hindi edition‟) by the Petitioner
Company.
18. The formality of adding the words „AND REDUCED‟
to the name of the Company is dispensed with.
19. The petition is allowed in the above terms.
SANJEEV SACHDEVA, J
DECEMBER 08, 2014
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