Delhi High Court
H & B Stores Ltd. vs .............. on 14 October, 2014
$~43
*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 K.
Singh, Deputy Registrar of
Companies.
CORAM:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
ORDER
% 14.10.2014
SANJEEV SACHDEVA, J (ORAL)
1. This is a 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") for
confirming reduction of capital of Petitioner Company.
2. The Petitioner Company was incorporated on 14th 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. It is submitted 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/-.
4. It is submitted 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 "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.
5. 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.
6. It is submitted 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.
7. 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 12th
September, 2014.
8. The Equity Shareholders have also passed a Special
Resolution at the Extra-Ordinary General Meeting held
on 12th September, 2014 approving the reduction of
capital, as under:
"RESOLVED THAT pursuant to the
provisions of Sections 100 to 104 and other
applicable provisions, if any, of the
Companies Act, 1956, read with Article 9 of
the Articles of Association of the Company
and pursuant to the relevant provisions of
the Companies (Court) Rules, 1959 and
subject to the confirmation of the Hon'ble
High Court of Judicature at New Delhi
(High Court) and other appropriate
authorities, if any, in this regard the:
Issued and Paid up Capital of the Company
of Rs. 43,10,61,873/- consisting of
43,10,61,873 equity shares of Rupee 1/-
each fully paid up as on March 31, 2014 be
and is hereby reduced 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 Company in the capacity
of nominee shareholders of Dabur India
Limited and shall stand reduced to
Rs.19,14,93,165/- consisting of
19,14,93,165 equity shares of Rupee 1/-
each fully paid up.
And to effect such reduction by writing off:
Deficit as per statement of Profit & Loss
Account as on March 31,2014 of Rs.
23,95,68,708.
Post the above cancellation, the issued and
paid-up equity share capital shall stand
reduced to Rs.19,14,93,165/- consisting of
19,14,93,165 equity shares of Rupee 1/-
each fully paid up ....."
9. The Petitioner Company submits that such reduction is
to be utilised for writing off Deficit in the statement of
Profit and Loss Account as on March 31, 2014 against
the Share Capital Account as under Sections 100 to 104
of the Companies Act, 1956.
10. The Petitioner Company has 7 (seven) shareholders of
the company on 1st September 2014 out of which 6
equity shareholders are individual shareholders in the
capacity of nominee shareholders of Dabur India
Limited. The Equity Shareholders of the Petitioner
Company have passed a Special Resolution for the said
reduction. Copy of the Special Resolution passed at the
Extra-Ordinary General Meeting held on 7 th October
2014 by the Shareholders has been annexed as
Annexure G of the Petition.
11. Learned counsel for the Petitioner submits that the
Scheme of reduction of share capital has been approved
by the Shareholders of the Petitioner Company. It is
further submitted that there are no Secured Creditors
and 439 Un-secured Creditors of the Petitioner
Company as on August 31, 2014. Certificate of the
Chartered Accountant is enclosed with the Petition.
12. The Petitioner Company further submits that the
proposed reduction of capital neither involves any
financial outlay/outgo on the part of the Petitioner
Company nor does it directly or indirectly involved any
outflow of the Petitioner's assets to its Shareholders.
Further, the Petitioner Company has submitted that the
said reduction does not involve either the diminution of
any liability in respect of un-paid capital or the
payment to any Shareholders of any paid-up capital.
13. The Petitioner Company submits that the provisions of
Section 101(2) of the Act will not be invoked since
there is no payment to any shareholder of any paid-up
Share Capital or diminution in the liability in respect of
un-paid capital.
14. Issue notice to the Regional Director (Northern
Region), Ministry of Corporate Affairs. Mr. Rajneesh
K. Singh, Deputy ROC accepts notice on behalf of the
Regional Director and ROC.
15. Let a copy of the petition be also served on the
Registrar of Companies within one week from today.
Publication be carried out in Business Standard,
English and Hindi Editions.
Renotify on 8th December, 2014.
Co.Appl. No. 2368/2014
It has been stated that the proposed reduction
does not involve either the diminution of any liability
in respect of un-paid capital or the payment to any
shareholders of any paid-up capital. The proposed
adjustment would not in any way adversely affect the
ordinary operations of the Applicant Company or the
ability of the Applicant Company to honour its
commitments or to pay its debts in the ordinary course
of business.
The procedure under Section 101(2) of the
Companies Act is accordingly, dispensed with.
With these directions, the application stands
disposed of.
SANJEEV SACHDEVA, J
OCTOBER 14, 2014
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