Tmeic Power Electronics Systems India Private Limited vs Nil

A.S. Bopanna, J.—The petitioner is before this Court seeking approval of the reduction of paid up equity share capital and Securities Premium Account as per the Special resolution dated 30.06.2014.

The petitioner was formerly known as AEG Power Solutions India Private Ltd. which has subsequently changed its name to TMEIC Power Electronic System India Pvt. Ltd. Since the change of name has been made subsequent to the filing of this petition, an application had been filed before this Court seeking amendment to the petition which had been permitted. Hence, the petitioner with its present name is before this Court seeking the relief as noticed herein.

The petitioner with its former name was incorporated on 10.10.2006. The petitioner company is engaged in the business of manufacturing and trading of all kinds of AC, DC, Power Suppliers and related power products. During the course of its operation, the petitioner company has accumulated loss to the tune of Rs. 78,97,76,628/- as on 31.05.2014. It is in that view, the petitioner company has proposed to restructure its financial position by reducing the paid up equity share capital and Securities Premium Account by adjustment and set off of the said amount against the balance amount standing to the debit of the company in the profit and loss account.

The authorised share capital of the petitioner-company is Rs. 400,000,000 divided into 4,000,000 equity shares of Rs. 100 each. The Issued, Subscribed and Paid up capital is Rs. 346,672,200/- divided into 3,466,722 equity shares of Rs. 100/- each. The Board of Directors of the petitioner-company through their resolution dated 04.06.2014 have considered this aspect and resolved to reduce its paid up share capital and Securities Premium Account subject to the approval of the share holders of the company and confirmation by this Court. In that view, the General Meeting of the share holders was held on 30.06.2014 whereunder it was resolved to reduce the share capital in the manner as had been proposed. Pursuant thereto, the instant petition has been filed before this Court.

At the first instance, this Court had dispensed the settling of the list of creditors by its order dated 14.08.2014 passed in CA No. 1356/2014. Simultaneously the petitioner was directed to take out notice of this petition in The Hindu'' English Daily and ''Udayavani" Kannada news papers which had been published on 22.08.2014. The same has been taken on record and thereafter to provide an opportunity to any person who may have any say in the matter to appear, the petition had been adjourned to this date. Despite the same, no shareholder of the company or any person interested in the affairs of the petitioner-company has approached this Court opposing the petition.

In that view, having considered the averments made in the petition and having perused the decision taken by the Board of Directors and also the resolution passed in the Annual General Meeting of the petitioner company, I am of the opinion that the prayer made in the instant petition is liable to be granted.

In the result, the following:

ORDER

(i) The petition is allowed and reduction of capital as resolved at the Annual General Meeting held on 04.06.2014 which reads as under is confirmed.

"RESOLVED THAT pursuant to Section 100 and any other applicable provisions, of the Companies Act, 1956 and the Articles of Association of the Company and subject to the confirmation of the Hon''ble High Court of Karnataka or any other appropriate authority as required under the Companies Act, 1956 the issued, subscribed and paid-up equity capital of the Company be reduced from Rs. 346,672,200, divided into 3,466,722 equity shared of Rs. 100 each to Rs. 7,667,500 divided into 76,675 equity shares of Rs. 100 each by adjustment and set-off of Rs. 339,004,700 against the debit balance in the Profit and Loss Account of the Company.

RESOLVED FURTHER THAT pursuant to the provisions of Section 52 of the Companies Act, 2013/Section 78 read with Section 100 of the Companies Act, 1956 and any other applicable provisions of the Companies act, 2013 and Companies Act, 1956 and subject to the confirmation of the Hon''ble High Court of Karnataka, the Securities Premium Account be reduced by a sum of Rs. 450,771,928, from Rs. 450,772,000 to Rs. 72 by adjustment and setoff of the said amount against the debit balance in the Profit and Loss Account after adjustment of Rs. 339,004,700 of the paid-up equity share capital against the debit balance in the Profit and Loss account."

(ii) The minutes as set out in the schedule here below is approved.

SCHEDULE

"Approval is hereby accorded pursuant to Section 100 of the Companies Act, 1956, to the Special resolution of TMEIC Power Electronics Systems India Private Limited dated June 30, 2014, approving the reduction of the issued, subscribed and paid-up equity capital of the Company from Rs. 346,672,200, divided into 3,466,722 equity shares of Rs. 100 each to Rs. 7,667,500 divided into 76,675 equity shares of Rs. 100 each by a sum of Rs. 339,004,700 by adjustment and set off of the debit balance in the Profit and Loss Account of the Company.

Approval is also hereby accorded pursuant to provisions of Section 52 of the Companies Act, 2013/Section 78 read with Section 100 of the Companies Act, 1956, to the Special resolution of AEG Power Solutions (India) Private Limited dated June 30, 2014, approving the reduction of the Securities Premium Account by a sum of Rs. 450,771,928, from Rs. 450,772,000 to Rs. 72 by adjustment and setoff of the said amount against the debit balance in the Profit and Loss Account after adjustment of Rs. 339,004,700 of the paid-up equity share capital, against the debit balance in the Profit and Loss account of the Company."

(iii) Certified copy of the order including minutes is ordered to be delivered by the petitioner company to the Registrar of Companies within 21 days from the date of receipt of the certified copy of this order.

(iv) The notices of reduction of share capital and the scheduled minutes be published in ''Hindu'' English daily and ''Udayavani'' Kannada daily within 14 days from the date of registration of the order and the minutes of the Registrar of Companies and a copy of the said publication shall be filed in this petition in the registry.