Case Note & Summary
The petitioner, Starwood Capital India Advisors Private Limited, a company incorporated under the Companies Act, 1956, filed a Company Scheme Petition under Sections 100 to 104 of the Companies Act, 1956 seeking reduction of its share capital. The company had passed a special resolution in an Extraordinary General Meeting held on 11 February 2014 approving the reduction of its issued and paid-up equity share capital from Rs. 1,71,30,000/- (divided into 17,13,000 equity shares of Rs. 10 each) to Rs. 1,00,000/- (consisting of 10,000 equity shares of Rs. 10 each) by paying off an aggregate sum not exceeding Rs. 91,11,050/- (Rs. 5.35 per share) as determined by the valuer proportionately to the holders of 17,03,000 equity shares. The company stated that there were no secured, unsecured or trade creditors, and therefore the procedure under Section 101(2) of the Companies Act, 1956 had been dispensed with by an order dated 9 May 2014 in Company Summons for Direction No. 388 of 2014. The court admitted the petition and fixed it for hearing on 13 June 2014. The court directed the petitioner to publish notice of the hearing in two local newspapers, 'Free Press Journal' in English and 'Navshakti' in Marathi, at least 14 days before the hearing, and dispensed with publication in the Maharashtra Government Gazette. The petitioner was also directed to file an Affidavit of Service as per Rule 30 of the Company (Court) Rules, 1959.
Headnote
A) Company Law - Reduction of Share Capital - Sections 100-104 Companies Act, 1956 - Petition admitted - The petitioner company sought reduction of its issued and paid-up equity share capital from Rs. 1,71,30,000/- to Rs. 1,00,000/- by paying off shareholders at Rs. 5.35 per share as per valuer's report. The court admitted the petition and directed publication of notice in newspapers, dispensing with gazette publication and creditors' meeting as there were no creditors. (Paras 1-6)
Issue of Consideration
Whether the petition for reduction of share capital filed by Starwood Capital India Advisors Private Limited should be admitted and directions issued for hearing.
Final Decision
The petition was admitted and fixed for hearing on 13 June 2014. The court directed publication of notice in two newspapers, dispensed with gazette publication, and required filing of an Affidavit of Service.
Law Points
- Reduction of share capital
- Special resolution
- Valuation
- Dispensation of creditors' meeting
- Publication of notice
