IN RE Vs. R V TRUSTWELL LEASING LIMITED

JUDGEMENT

(1.) Heard the Ld. Pr.C.S. representing the Petitioner Company.

(2.) The 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 of the company into Private Limited Company, as sought to be effected by a Special Resolution passed at the Extra-ordinary General Meeting (EOGM) held on 27.04.2016.

(3.) Briefly the facts that emerged from the petition are that the Company was incorporated as unlisted Public Company limited by shares on 07.03.1991 under the provisions of the Companies Act, 1956 as M/s. R.V. Trustwell Leasing Limited and is engaged in the business of letting on rent its property and other allied activities.The authorised share capital of the Company is Rs.40,00,000/- (Rupees Forty Lakhs Only) divided into 4,00,000 (Four Lakhs only) equity shares of Rs.10/- each and the issued subscribed and paid up equity share capital of the Company is Rs 33,53,000/- (Rupees Thirty-three Lakhs Fifty Thousands only) divided into 3,35,300 (Three Lakhs Thirty-five Thousands Three Hundred only) equity shares of Rs.10/- each. The Board of Directors of the Company comprises of 3 (Three) Directors and the company has 07 (seven) shareholders. The Board of Directors of the petitioner Company has passed a resolution at the meeting of the Board on 05.04.2016, 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 27.04.2016, to obtain consent on this line. After due notice to the members, EOGM has been called and held on 27.04.2016. A Special Resolution has been passed at the 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 the name of the Company be changed from "M/s. R.V. Trustwell Leasing Limited" to "M/s. R.V. Trustwell Leasing Private Limited" by 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 petitioner company is closely held company with a very small number of shareholders with limited business activities and it does not intend to access public capital markets. The statutory compliances under the Companies Act, 2013 required by a public limited company is more onerous than in the case of a private limited company since the private limited companies were granted a number of exemptions and concessions, from time to time, under the various provisions of the said Act and since no purpose would be served by retaining the public limited character of the company. The conversion of the company into a private limited company would help the company to eliminate and streamline its corporate compliances and increase the efficiency in functioning. It is further stated that the proposed conversion into Private Limited Company would not prejudice the rights or interest of any creditors and shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by or on behalf of the petitioner company, if any. It is further stated that the Company is at present an Unlisted Public Company limited by shares and is not registered under section 8 of the Companies Act, 2013. The Company has duly filed its Special Resolution with the Registrar of Companies, West Bengal, on 07.05.2016 in Form No. MGT-14 which has been approved by the said Registrar.