LAWS(NCLT)-2017-12-801

IN RE Vs. ARISHTANEMI ENTERPRISES LIMITED

Decided On December 22, 2017
IN RE Appellant
V/S
ARISHTANEMI ENTERPRISES LIMITED Respondents

JUDGEMENT

(1.) Heard the Ld. Pr.C.A. Representing the Petitioner Company.

(2.) Instant petition is filed under sub section (1) of Section 14 of the Companies Act, 2013 (Act, 2013) read with Rule 68 of the National Company Law Tribunal Rules, 2016, seeking approval of this Tribunal to the conversion by altering the Articles of Association, as sought to be effected by a Special Resolution passed at the Extra-Ordinary General Meeting (EOGM) held on 16.06.2016, for the change of status of the Company from "Public Limited Company" to Private Limited Company".

(3.) The brief facts that emerged from the petition are that the Company was incorporated as an unlisted Public Company limited by shares on 13.04.2012 under the provisions of the Companies Act, 1956 . The authorised share capital of the Company is Rs. 84,50,000/- (Rupees Eighty-four Lakhs Fifty Thousands only) divided into 8,45.000 (Eight Lakhs Forty-five Thousand only) equity shares of Rs. 10/- (Rupees Ten) each and the issued subscribed and paid-up capital of the Company is Rs. 84,50,000/- (Rupees Eighty-four Lakhs Fifty Thousands only) divided into 8,45.000 (Eight Lakhs Forty-five Thousand only) equity shares of Rs. 10/- (Rupees Ten) each. The Board of Directors of the Company comprises of 3(Three) Directors and Company has 08 (Eight) shareholders. The Board of Directors of the petitioner Company has passed a resolution at the meeting of the Board on 20.05.2016, approving the proposed alteration of the Articles of Association of the Company and decided to call an EOGM of the Members of the Company on 16.06.2016 to obtain consent on this line. After due notice to the members, EOGM has been called and held on 16.06.2016. A Special Resolution has been passed at the said said EOGM pursuant to the section 13 & 14 of the Companies Act, 2013 and other applicable provisions and rules made thereunder, for conversion of the Company into a "Private Limited Company" and name of the Company be changed from "Arishtanemi Enterprises Limited" to "Arishtanemi Enterprises Private Limited" addition of the word "Private" before the word 'Limited'. A new set of Articles of Association, as applicable to the Private Limited Company, has also been approved by the members and adopted the new set of Articles of Association of the Company. The reason for conversion into Private Limited Company, as mentioned in the petition, is that the company could hardly do any business in view of continued depressive capital / financial market conditions. Further, the company being a closely held public limited company and the marginal shareholding being held by the family members and associate companies, the company finds it difficult to comply with various provisions of public limited company, unnecessarily being applicable to the company. Moreover, the proposed conversion into private limited company shall not affect any debts, liabilities, obligations and contracts incurred or entered into by or on behalf of the company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such conversion had not been done. It is further stated that there is no amount outstanding in respect of undisputed Income Tax, Wealth Tax, Sales Tax and Custom Duty and Excise Duty and the company has no dues outstanding towards Govt, of West Bengal on account of Sales Tax. The company ha not taken any loan and/or subsidy from Government of West Bengal and/or State-run Financial Institution or any deposit or unsecured loan from public. It is further stated no one will be prejudiced by the proposed alteration of the Articles of Association and the proposed alteration will not prejudice the position of the creditors / shareholders of the company or adversely affect the rights of any other person. It has further stated that out of 8 (Eight) shareholders, 05 (Five) shareholders attended the EOGM and voted for and approved the resolution for conversion from Public to Private Company) . The Company has duly filed its Special Resolution with the Registrar of Companies, West Bengal, on 29.06.2016 in Form No. MGT-14 which has been approved by the said Registrar.