NCLT Approves Realtime Taxsutra's Share Capital Reduction

Tribunal Affirms Fairness and Compliance with Legal Provisions, Ensuring No Creditor Compromise

In a significant ruling, the National Company Law Tribunal (NCLT) Mumbai Bench has granted approval to Realtime Taxsutra Services Private Limited for the reduction of its equity share capital. The decision, delivered by Shri. Prabhat Kumar and Shri Sushil Mahadeorao Kochey, follows a petition by the company seeking to reduce its issued, subscribed, and paid-up equity share capital from Rs. 1,61,480 to Rs. 1,46,140. This action involves cancelling 1,534 fully paid-up equity shares held by 14 identified shareholders, representing 9.49% of the company's total paid-up capital.

The reduction was unanimously approved by shareholders through a Special Resolution at an Extraordinary General Meeting held on August 2, 2025. The valuation of shares was conducted by an independent IBBI-registered valuer, Mr. Pruthvi Mota, setting the fair value at Rs. 31,728.70 per share. A premium was offered, fixing the total consideration at Rs. 32,000 per share, funded entirely from the company's internal accruals.

The NCLT found the reduction process to be fair and reasonable, with no compromise or arrangement with creditors. The tribunal emphasized that the interests of creditors and minority shareholders were fully protected, and all statutory requirements under Section 66 of the Companies Act, 2013, were met. The tribunal also noted that no objections were raised by any creditors, and all outstanding dues would be settled in the ordinary course of business.

Furthermore, the NCLT clarified that tax implications arising from the reduction would be subject to determination by the Income Tax Authorities, with provisions made for treating payments above face value as dividends or capital gains as per the Income Tax Act, 1961.

The tribunal's order mandates Realtime Taxsutra to file a certified copy of the order with the Registrar of Companies within 30 days and to publish notices of the registration of order in two newspapers, ensuring transparency and compliance with regulatory procedures.

This decision reinforces the principle that share capital reduction, when conducted in compliance with statutory processes and without affecting creditors' rights, is a matter of domestic concern for the company. The NCLT's ruling aligns with judicial precedents, affirming the company's right to undertake such corporate restructuring measures.

Bottom Line:

Reduction of share capital under Section 66 of the Companies Act, 2013, when unanimously approved by shareholders, complies with statutory requirements, involves no compromise with creditors, and is fair and reasonable, can be allowed by the Tribunal.

Statutory provision(s): Companies Act, 2013 Section 66, Income Tax Act, 1961 Sections 2(22)(d), 45

Realtime Taxsutra Services Private Limited, (NCLT)(Mumbai Bench) : Law Finder Doc Id # 2822526