NCLT Mumbai Approves Reduction of Share Capital of Batot Hydro Power Limited

Background

The National Company Law Tribunal, Mumbai Bench (Court-IV) has approved the reduction of equity share capital of Batot Hydro Power Limited, allowing the company to restructure its balance sheet by writing off accumulated losses. Batot Hydro Power Limited had approached the Tribunal under Section 66 of the Companies Act, 2013 seeking confirmation of a reduction in its paid-up equity share capital. The company proposed to reduce its paid-up capital from ₹55 crore to ₹20.90 crore by cancelling ₹34.10 crore of equity share capital, corresponding to accumulated losses reflected in its books. The proposal was approved by the Board of Directors through a resolution dated 16 September 2024, followed by a special resolution passed by shareholders on 8 October 2024. The company stated that the reduction was aimed at restructuring the balance sheet and presenting a true and fair view of its financial position.

The Regional Director (Western Region) filed a report raising certain procedural and compliance-related observations, including quorum requirements for the shareholders’ meeting, accounting treatment, service of notices to creditors, and disclosures relating to beneficial ownership. The company furnished detailed undertakings and supporting documents in response, including an auditor’s certificate confirming that the proposed accounting treatment complied with Section 133 of the Companies Act, 2013. The Tribunal noted that there were no secured creditors and only two unsecured creditors, whose interests were duly protected. It was also recorded that the company was not in arrears of statutory dues or deposits.

Finding that all statutory requirements had been complied with and that no objections had been raised by creditors or stakeholders, the Bench allowed the petition.

Outcome

The NCLT approved the reduction of share capital and directed the company to publish notices of registration of the order and minutes of reduction in Business Standard (English) and Navshakti (Marathi). The reduced paid-up equity share capital of Batot Hydro Power Limited now stands at ₹20.90 crore, comprising 2.09 crore equity shares of ₹10 each.