1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL ORIGINAL ORIGINAL CIVIL JURISDICTION CIVIL JURISDICTION CIVIL JURISDICTION COMPANY COMPANY COMPANY PETITION PETITION PETITION NO.391 OF 2007 NO.391 OF 2007 NO.391 OF 2007 Ganesh Ganesh Ganesh Benzoplast Ltd Benzoplast Ltd Benzoplast Ltd ...... Petitioner Petitioner Petitioner Mr. Mr. Mr. Simil Purohit i/b Little & Co for Simil Purohit i/b Little & Co for Simil Purohit i/b Little & Co for Petitioner Petitioner Petitioner CORAM CORAM CORAM : : : DR.D.Y.CHANDRACHUD, J DR.D.Y.CHANDRACHUD, J DR.D.Y.CHANDRACHUD, J DATED DATED DATED : : : 15th June, 2007 15th June, 2007 15th June, 2007 P.C. P.C. P.C. 1.1.1. The petitioner has sought the approval of the The petitioner has sought the approval of the The petitioner has sought the approval of the Court Court Court to a reduction of share capital in terms of to a reduction of share capital in terms of to a reduction of share capital in terms of the the the following minutes: following minutes: following minutes: " The capital of Ganesh Benzoplast The capital of Ganesh Benzoplast The capital of Ganesh Benzoplast limited limited limited is henceforth Rs.2,92,84,294/- is henceforth Rs.2,92,84,294/- is henceforth Rs.2,92,84,294/- divided divided divided into into into 2,92,84,294 shares of Re.1 One) 2,92,84,294 shares of Re.1 One) 2,92,84,294 shares of Re.1 One) each each each reduced from Rs.29,28,42,940/- divided reduced from Rs.29,28,42,940/- divided reduced from Rs.29,28,42,940/- divided into into into 29,28,42,940 shares of Rs.10/- each. 29,28,42,940 shares of Rs.10/- each. 29,28,42,940 shares of Rs.10/- each. At At At the date of registration of the minutes the date of registration of the minutes the date of registration of the minutes 2,92,84,294 2,92,84,294 2,92,84,294 shares shares shares numbered 1 to 2,92,84,294 numbered 1 to 2,92,84,294 numbered 1 to 2,92,84,294 etc. etc. etc. have been issued and are deemed to be have been issued and are deemed to be have been issued and are deemed to be fully fully fully paid and the remaining 96,61,300 paid and the remaining 96,61,300 paid and the remaining 96,61,300 shares shares shares are are are unissued. " unissued. " unissued. " 2.2.2. In para 7 it has been averred that as a result In para 7 it has been averred that as a result In para 7 it has been averred that as a result of of of adverse business conditions, the petitioner had adverse business conditions, the petitioner had adverse business conditions, the petitioner had an an an accumulated loss of Rs.379.40 crores as accumulated loss of Rs.379.40 crores as accumulated loss of Rs.379.40 crores as reflected reflected reflected in the Profit and Loss Account and in the Profit and Loss Account and in the Profit and Loss Account and Balance Balance Balance Sheet as on 31st March, 2006. The fully Sheet as on 31st March, 2006. The fully Sheet as on 31st March, 2006. The fully paid paid paid up up up equity share capital as on 31st March, 2006 equity share capital as on 31st March, 2006 equity share capital as on 31st March, 2006 was was was Rs.29,28,42,940/- comprising of 2,92,84,294 Rs.29,28,42,940/- comprising of 2,92,84,294 Rs.29,28,42,940/- comprising of 2,92,84,294 equity equity equity shares each of Rs.10/-. The issued capital shares each of Rs.10/-. The issued capital shares each of Rs.10/-. The issued capital isisis Rs.3,03,38,700/- each and it has been stated Rs.3,03,38,700/- each and it has been stated Rs.3,03,38,700/- each and it has been stated 2 before before before the Court by counsel that the Court by counsel that the Court by counsel that shares worth Rs.10,54,406/- Rs.10,54,406/- Rs.10,54,406/- have been forfeited. have been forfeited. have been forfeited. 3.3.3. In paragraph 8 of the petition it has been In paragraph 8 of the petition it has been In paragraph 8 of the petition it has been averred averred averred that a special resolution was passed on that a special resolution was passed on that a special resolution was passed on 12th 12th 12th February, 2007 under section 189 of the February, 2007 under section 189 of the February, 2007 under section 189 of the Companies Companies Companies Act, Act, Act, 1956 at the general meeting by which 1956 at the general meeting by which 1956 at the general meeting by which " (a) (a) (a) an amount of Rs.188,09,50,397 standing in the an amount of Rs.188,09,50,397 standing in the an amount of Rs.188,09,50,397 standing in the Share Share Share Premium Premium Premium Account of the Petitioner as at April Account of the Petitioner as at April Account of the Petitioner as at April 1,1,1, 2006 be utilized for adjustment of the 2006 be utilized for adjustment of the 2006 be utilized for adjustment of the equivalent equivalent equivalent amount out of the balance standing to amount out of the balance standing to amount out of the balance standing to the the the debit of Profit and Loss Account which debit of Profit and Loss Account which debit of Profit and Loss Account which represents represents represents brought forward losses as recorded in brought forward losses as recorded in brought forward losses as recorded in the the the books of the Petitioner as on 1st April 2006 books of the Petitioner as on 1st April 2006 books of the Petitioner as on 1st April 2006 and and and (b) on the Record/Book Closure date as may be (b) on the Record/Book Closure date as may be (b) on the Record/Book Closure date as may be fixed fixed fixed by the Board of Directors of the Petitioner, by the Board of Directors of the Petitioner, by the Board of Directors of the Petitioner, the the the paid up Equity Share Capital of the Petitioner paid up Equity Share Capital of the Petitioner paid up Equity Share Capital of the Petitioner be be be reduced by cancellation of Rs.9/- per equity reduced by cancellation of Rs.9/- per equity reduced by cancellation of Rs.9/- per equity share share share of Rs.10/- each fully paid up resulting in of Rs.10/- each fully paid up resulting in of Rs.10/- each fully paid up resulting in reduction reduction reduction in the issued, subscribed and paid up in the issued, subscribed and paid up in the issued, subscribed and paid up equity equity equity share capital of the Petitioner from share capital of the Petitioner from share capital of the Petitioner from Rs.29,28,42,940 Rs.29,28,42,940 Rs.29,28,42,940 consisting of 2,92,84,294 equity consisting of 2,92,84,294 equity consisting of 2,92,84,294 equity shares shares shares of Rs.10 each to Rs.2,92,84,294 consisting of Rs.10 each to Rs.2,92,84,294 consisting of Rs.10 each to Rs.2,92,84,294 consisting of of of 2,92,84,294 equity shares of Re.1 each fully 2,92,84,294 equity shares of Re.1 each fully 2,92,84,294 equity shares of Re.1 each fully paid paid paid up by adjusting the amount of reduction in up by adjusting the amount of reduction in up by adjusting the amount of reduction in the the the paid up share capital amounting to paid up share capital amounting to paid up share capital amounting to Rs,.26,35,58,646/- Rs,.26,35,58,646/- Rs,.26,35,58,646/- against against against the debit balance in the the debit balance in the the debit balance in the profit profit profit & loss acocunt as on 1st April 2006 with a & loss acocunt as on 1st April 2006 with a & loss acocunt as on 1st April 2006 with a provision provision provision that such reduction shall mutatis that such reduction shall mutatis that such reduction shall mutatis mutandis mutandis mutandis be also applicable on forfeited shares. be also applicable on forfeited shares. be also applicable on forfeited shares. 3 4.4.4. Learned counsel appearing on behalf of the Learned counsel appearing on behalf of the Learned counsel appearing on behalf of the Regional Regional Regional Director has stated before the Court that Director has stated before the Court that Director has stated before the Court that all all all the statutory requirements under law have been the statutory requirements under law have been the statutory requirements under law have been fulfilled fulfilled fulfilled and there is no objection to the proposed and there is no objection to the proposed and there is no objection to the proposed reduction reduction reduction being granted. being granted. being granted. 5.5.5. The Company Petition is accordingly made The Company Petition is accordingly made The Company Petition is accordingly made absolute absolute absolute in terms of prayer clauses (a) and (b). in terms of prayer clauses (a) and (b). in terms of prayer clauses (a) and (b). (Dr.D.Y.Chandrachud, (Dr.D.Y.Chandrachud, (Dr.D.Y.Chandrachud, J) J) J)