Delhi High Court
B.J. Duplex Boards Limited vs ... on 29 August, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 919/2015
Reserved on 26th July, 2016
Date of pronouncement: 29th August, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Sections 101 to 104 of the
Companies Act, 1956 and other
applicable provisions of the Companies
Act, 2013
And
B.J. Duplex Boards Limited
.. Petitioner Company
Through Mr. P. Nagesh and Mr. Ashutosh,
Advocates for the petitioner
Ms. Aparna Mudiam, Assistant Registrar
of Companies for the Regional Director
SUDERSHAN KUMAR MISRA, J.
1. This petition under Sections 101 to 104 of Companies Act, 1956
and other applicable provisions of the Companies Act, 2013 has been
filed by B.J. Duplex Boards Limited (hereinafter referred to as the
'petitioner company') for confirming the reduction of its issued, subscribed
and paid-up share capital.
2. The registered office of the petitioner company is situated at New
Delhi, within the jurisdiction of this court.
3. The petitioner company was incorporated under the Companies
Act, 1956 on 13th March, 1995 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
4. The authorized share capital of the petitioner company, as on 31st
March, 2015, was Rs.12,00,00,000/- divided into 1,20,00,000 equity
shares of Rs.10/- each. The issued share capital of the company was
Rs.5,03,97,000/- divided into 51,81,200 equity shares of Rs.10/- each
aggregating to Rs.5,18,12,000/- less calls in arrears of Rs.14,15,000/-.
5. A copy of the Memorandum and Articles of Association of the
petitioner company has been filed on record. The audited balance sheet,
as on 31st March, 2015, of the petitioner company, along with the report
of the auditors, has also been filed.
6. It has been submitted that the petitioner company was carrying the
business of manufacturers and dealers in paper of all kinds and articles
made from paper or pulp etc. and due to unforeseen events, the business
suffered from huge losses and subsequent accumulation of huge losses
has an adverse effect on the company's financial health and business
operations. Hence, the Board of Directors of the petitioner company
decided that 90% of the existing equity share capital of the petitioner
company be written off and the reserves created out of the cancellation of
share capital shall be adjusted against the accumulated losses of the
company. It is claimed that this will help to bring the value of its equity
capital nearer to its real value.
7. It is pleaded that the petitioner company is authorized by virtue of
provisions of Article 50 of its Articles of Association to reduce its share
capital in any manner as permitted in law.
8. The Board of Directors of the petitioner company in their meeting
held on 9th April, 2015 have unanimously approved the proposed
reduction of the issued, subscribed and paid up share capital of the
petitioner company. A copy of the resolution passed at the meeting of the
Board of Directors of the petitioner company is placed on record.
9. A special resolution has been passed at the Annual General
Meeting of the equity shareholders of the petitioner company held on 30th
September, 2015 confirming the proposed reduction of the share capital.
A copy of the minutes of the special resolution passed at the Annual
General Meeting is placed on record.
10. The petitioner company has placed on record the fairness opinion
report provided by Corporate Professionals Capital Private Limited
stating that the proposed reduction in capital neither involves any
financial outlay/outgo on the part of the petitioner company nor does it
directly or indirectly involves any outflow of the petitioner company's
asset to its shareholders. It is further provided that the reduction of capital
also does not involve either the diminution of any liability in respect of
unpaid capital or the payment to any shareholders of any paid-up capital.
Consequently, such reduction will not cause any prejudice to the
shareholders of the applicant company.
11. In the aforesaid background, this petition is filed seeking approval
of the resolution passed at the Annual General Meeting held on 30th
September, 2015. The Form of Minutes proposed to be registered under
Section 103(1)(b) of the Act and annexed with the petition is as under:
"Resolved That ...... the issued, subscribed and paid-up
equity share capital of the company be and are hereby
reduced against the accumulated losses to the extent of
90% in the following manner:
a. The existing issues, subscribed and paid up capital of the
company of Rs.51,812,000/- consisting of 5,181,200
equity shares of Rs.10/- each less calls in arrears of
Rs.1,415,000/- totaling to Rs.50,397,000 be reduced to
Rs.5,181,200/- consisting of 5,181,200 equity shares of
Rs.1/- each less calls in arrears of Rs.1,415,000/- totaling
to Rs.3,766,200.
b. The debt balance of Rs.57,258,727.14/- of the Reserves
and Surplus being the accumulated losses as at March
31, 2014 shall be adjusted against the Reserve of
Rs.4,66,30,800/- arising on cancellation of the issued,
subscribed and paid up share capital aforesaid and
balance accumulated losses of Rs.10,627,927.14/- be
carried forward by passing necessary entries in the books
of accounts in this regard.
c. Every shareholder holding shares in the company shall
be allotted 01 equity share of face value of Rs.1/- each in
place of 01 equity share of face value of Rs.10/- each.
d. The existing share certificates shall stand cancelled and
the company shall issue fresh share certificates to the
shareholders as per the entitlements at their registered
address.
Resolved further that the capital clause of the Memorandum
of Association of the company be accordingly altered to read
as follows.............
The authorized share capital of the company is
Rs.12,00,00,000/- divided into 12,00,00,000 equity shares of
Rs.1/- each.
Resolved Further that ..... may be necessary to give effect to
the aforesaid resolution."
12. By order dated 7th December, 2015, notice of this petition was
directed to be issued to the Regional Director, Northern Region and
citations were directed to be published in the newspapers 'Business
Standard' (English) and (Hindi) in terms of the Companies (Court) Rules,
1959. The petitioner has filed an affidavit showing compliance regarding
service on the Regional Director, Northern Region as also publication of
citations in the aforesaid newspapers on 12th April, 2016. Copies of the
newspaper clippings containing the publications have been filed along
with the affidavit.
13. In response to the notice issued, Mr. Narender Kumar Bhola,
Regional Director, Northern Region, has filed his report dated 25th July,
2016 stating that the Regional Director has no objection to the proposed
reduction of share capital of the petitioner company subject to necessary
compliance of provisions of the Companies Act mentioned in paras 7 & 9
of his report.
14. The Regional Director in para 7 of his report has stated that the
petitioner company has violated the provisions of Sections 383A/215 of
the Companies Act, 1956/2013. The Regional Director in para 9 of has
stated that in para 12(d) of the petition, it has been stated that subject to
confirmation of reduction in share capital by the High Court, the face
value of the authorized share capital of the petitioner company shall be
sub-divided from Rs.10/- to Rs.1/- each. The Regional Director has
prayed that the petitioner company may be directed to comply with the
provisions of Section 61 of the Companies Act, 2013 and file relevant e-
form accordingly. In response, learned counsel for the petitioner
company submits that as regards the objection regarding non-
appointment of Company Secretary in terms of Section 383(A) of the
Companies Act, 1956, the petitioner shall take all relevant necessary
steps as per law in case it becomes necessary. In response to the
second observation, learned counsel for the petitioner has submitted that
once the appropriate orders for reduction of share capital, as proposed,
are passed, the petitioner will take all necessary steps for bringing about
the necessary amendments in the Memorandum and Articles of
Association of the company, inter alia, by passing the necessary
resolution in that behalf. In view of the aforesaid, the observations made
by the Regional Directors stand satisfied.
15. Despite publication of notice, no objection has been received from
any creditor or any member of the public. The petitioner company, in the
affidavit dated 13th May, 2016 of Sh. Ashutosh Gupta, counsel for the
petitioner company has submitted that they have not received any
objection pursuant to citations published on 12th April, 2016. Thus, there
appears to be no legal impediment in allowing the present petition.
16. In view of the averments made in the petition and there being no
objection from any creditor or any member of the public, the petition is
hereby allowed. The resolution passed by the petitioner company in its
Annual General Meeting held on 30th September, 2015 for reduction of its
share capital is approved. The 'Form of Minutes' proposed to be
registered under Section 103(1)(b) and annexed to the petition as
Annexure '5', is also approved.
17. A certified copy of this order be delivered to the Registrar of
Companies within thirty days from today. The Registrar of Companies, on
receipt of the certified copy of this order and minutes approved by this
Court, is directed to register the same and effect the necessary alteration
with regard to the company.
18. The notice of registration of this order and the resolution of the
company shall be published in the 'Business Standard' (English) and
(Hindi) within 14 days of the registration aforesaid.
19. The petition stands allowed in the above terms.
Dasti
SUDERSHAN KUMAR MISRA, J.
August 29, 2016
