ORDER
S.J. Mukhopadhaya, J.
1. Upon the above petition of Tata Yodogawa Limited (hereinafter referred to as the Company), above named, presented to this Court on 22nd August, 2004 (sic–2003?) for adjustment of miscellaneous expenditure (to the extent not written off or adjusted) of Tata Yodogawa Limited in terms of the special resolution passed at their Extra-ordinary General Meeting held on 18th August, 2003 and Upon going through the petition and hearing on 2nd September, 2003, it was ordered to publish the notice in two leading National newspapers; one in English and another in Hindi, informing the concerned persons the decision of the share-holders of the Company taken in its Extra-ordinary General Meeting held on 18th August, 2003. The Notice of hearing of petition was published in the newspapers ‘Hindustan Times’ (English), Ranchi and Patna Editions on 5th September, 2003 and another in ‘Hindustan’ (Hindi), Ranchi, Dhanbad and Jamshedpur Editions on 5th September, 2003, calling for objections from amongst the interested persons and upon reading the petition and affidavit of Mr. G. Vaidyanathan, Company Secretary of the petitioner-Company dated 22nd August, 2003 filed on behalf of the petitioner-company, verifying the petition and upon reading the Company IA No. 1757 of 2003 and the affidavit of Mr. G. Vaidyanathan dated 22nd August, 2003 and upon perusing the annexures, including the special resolution passed at the Extraordinary general meeting of the petitioner-Company held on 18th August, 2003, dispensing with the procedure under Section 101(2) of the Companies Act, 1956, being not applicable in view of the special resolution passed at the Extra-ordinary General Meeting of the share-holders of petitioner-Company held on 18th August, 2003, approving the deductions of Securities Premium Account of the petitioner- Company and upon reading the affidavit in support of publication of notice of hearing of the petition in the newspapers, namely, ‘Hindustan Times’ (English), Ranchi, and Patna Editions on 5th September, 2003; ‘Hindustan’ (Hindi), Ranchi, Dhanbad and Jamshedpur Editions on 5th September, 2003; ‘Hindustan Times’ (English), Jamshedpur, Dhanbad and Bokaro Editions dated 6th day of September, 2003 and upon reading the affidavit of Mr. Vaidyanathan dated 30th September, 2003, along with the form of minute annexed thereto as Annexure-8 and upon hearing Mr. B. Poddar, Senior counsel for the petitioner-Company and one of the objector namely Mr. S.P. Roy, Ex-employee of the petitioner-Company and one of the small share holders of the petitioner-Company and upon reading the show cause filed by him that the decision of the Extra-ordinary General Meeting held on August 18, 2003, is a minority decision of the share-holders, who hold major shares, the majority of the small share holders like him, having remained outside the meeting being not in a position to attend the Extra-ordinary General Meeting and that there is a prohibition to divert the Securities Premium Account under Section 78 of the Companies Act, except for the ground mentioned under Sub-section (2) of Section 78, which the petitioner-Company does not fulfil and taking into consideration the reply of Mr. Binod Poddar, senior counsel for the petitioner-company that the small share holders like Mr. S.P. Roy who hold less than 1% share, failed to attend the Extra-ordinary General Meeting in spite of notice informing them the schedule date as August, 18, 2003, for Extra-ordinary General Meeting. And taking into consideration the resolution passed at the Extra-ordinary General Meeting of the share-holders of the Company on August 18, 2003, wherein it was decided to treat the Securities Premium Account, as if it is a paid up share capital and then to reduce it as per Section 100 of the Companies Act. And the submission made by Mr. Binod Poddar, learned Senior counsel for the Company and the affidavit filed on behalf of the petitioner-Company that the proposed reduction in the share capital will not involve any financial outlay/outgo on the part of the petitioner-Company; such reduction will also not cause any prejudice to the creditors of the Company. The deductions of the capital will not involve either the diminution of any liability in respect of unpaid capital or the payment to any share holder of any paid up capital, nor it will waive or in any way will be affected by the proposed reduction of the share capital as there is no reduction in the amount payable to any of the creditors; no compromise or arrangement is contemplated with the creditors and there is no reduction in the security, which the creditors may have in the Company; the proposed adjustment would not, in any way, adversely affect the ordinary operations or ability of the Company to honour its commitment or to pay its debts in the ordinary course of business and that after proposed reduction of the share capital, no extra profit has been shown by the Company in the explanatory statement, as contained in Annexure-3 to the petition, while this Court rejects the objection raised by the objector, Mr. S.P. Roy, doth hereby order that the reduction of the Securities Premium Account of the petitioner-Company resolved on and affected by its special resolution passed at the Extraordinary General Meeting of Tata Yodogawa Limited (the Company), held on August 18, 2003, which resolution reads, as follows :
1. “Resolved that pursuant to Section 31 and other applicable provisions, if any, of the Companies Act, 1956, the Articles of Association of the Company be altered as follows :
In Article 194–
(a) For the words “Share Premium Account” the words “Securities Premium Account” shall be substituted.
(b) The following new proviso shall be added after the existing proviso to Sub-clause (1)(b)
“Provided further that notwithstanding anything contained hereinabove, any amount standing to the credit of the Securities Premium Account or the Capital Redemption Reserved Account may also be utilized (other than for Capitalization), in accordance with the provisions of law.”
2. “Resolved that pursuant to the provisions of Section 78 read with Section 100 and other applicable provisions, if any, of the Companies Act, 1956, Articles 71 and 194 of the Articles of Association of the Company and subject to the confirmation of the Hon’ble High Court of Judicature at Ranchi and/or any other regulatory authority as may be prescribed under the Companies Act, 1956, an amount of Rs. 297,34,500 (Rupees two crores ninety seven lakhs thirty four thousand five hundred only) standing in the Securities Premium Account (Known as Share Premium Account in the books of accounts) of the Company as at March 31, 2003 be utilized or adjustment of the balance of Miscellaneous Expenditure (to the extent not written off or adjusted) as at March 31, 2003.”
“Resolved Further that for the purpose of giving effect to this Resolution and for removal of any difficulties or doubts, the Board of Directors of the Company (hereinafter referred to as ‘the Board’ which term shall be deemed to include any Committee or any person which the Board may nominate/constitute to exercise its powers, including the powers conferred by this Resolution) be and is hereby authorized to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient usual or proper and to settle any question or difficulty that may arise with regard to utilization/adjustment of the Securities Premium Account including passing such accounting entries and/or making such other adjustment in the books of accounts as are considered necessary to give effect to this resolution or to carry out such modifications/directions as may be ordered by the Hon’ble High Court of Judicature at Ranchi and/or any other regulatory authority as may be applicable to implement this resolution.”
2. Be and the same is hereby confirmed and this Court doth Further order that the form of minute as drawn from Annexure-4 to the Company Petition affidavit by Mr. G. Vaidyanathan, Company Secretary of the petitioner-Company on 22nd August, 2003, and set forth in the Schedule hereto be and is hereby approved and this Court Doth Further order that the certified copy of the order including minute as approved be delivered to the Registrar of the Companies, Jharkhand within 21 (twenty one) days from the date of sealing of this order and this Court Doth Further Order that notice of registration by the Registrar of the Companies of this order and of the said minute be published once each in ‘Government of Jharkhand Gazette’ and ‘Hindustan Times’ (Ranchi, Dhanbad and Bokaro Editions) in English and Hindustan (Ranchi Edition) in Hindi within 14 days of the aforesaid registration.