MITSU ENERGY PRIVATE LIMITED Vs. STATE

JUDGEMENT

(1.) This is a petition filed under Sections 100 to 103 of the Companies Act, 1956, seeking the confirmation of the Court to the proposed reduction of capital of the petitioner Company.

(2.) It has been submitted that the petitioner Company was incorporated on 12th October 2006, in the name and style of Mitsu Energy Limited, under the provisions of the Companies Act, 1956, with the Registrar of Companies, Gujarat. The name of the company was changed to Mitsu Energy Private Limited on conversion of the same to a private limited company, vide the fresh certificate dated 11th July 2007. The petitioner company was incorporated with the objective to carry on business in wind power generation. The company was promoted by Bilakhia Group and the entire Share Capital, in the form of Equity as well as Preference Shares was held by Bilakhia Holdings Private Limited. However, it was later realized that the said project of power generation through wind mills is not economically viable. Hence, the Company did not initiate the said project and surplus funds are lying in Bank deposits and the income from the same is generated in the form of interest. Since the company does not contemplate the implementation of the said project in the future, it is proposed that the entire Preference Share Capital and a substantial part of the Equity Share Capital, which has remained unutilized, be returned. Hence it was resolved by the Board of Directors of the Company to return such part of the excess capital.

(3.) Accordingly, the reduction of the Share Capital of the above named company is proposed. It is proposed that the Issued, Subscribed and Paid Up Preference Share Capital of the Company, being in excess of the requirements of the Company, be cancelled entirely. Whereas the Issued, Subscribed and Paid Up Equity Share Capital, being in excess of the requirements of the Company be cancelled to the extent of 95% and reduced from Rs.1,00,00,000/­ consisting of 10,00,000 Equity Shares of Rs.10/­ each fully paid­up to Rs.5,00,000/­ consisting of 50,000/­ Equity Shares of Rs.10/­ each fully paid up. The said reduction be effected by cancelling and extinguishing 5,00,0006.5% Non Cumulative Non Convertible Redeemable Preference Shares of Rs.100/­ each and cancelling and extinguishing 9,50,000/­ Equity Shares of Rs.10/­ each. Since all these shares are held by only one shareholder viz. Bilakhia Holdings Private Limited, it is further proposed that on the reduction being confirmed by this Court, the above mentioned Shareholder, be returned a sum of Rs.100/­ per preference share and Rs.10/­ per Equity Share for the extinguishment of the shares held by him, which is equivalent to the face value of the said Preference Share as well as the Equity Share.