In re Max India Limited (Formerly Advaita Allied Health Services Limited) (NCLT Mumbai)
The National Company Law Tribunal (NCLT), Mumbai Bench, approved the petition filed by Max India Limited (formerly Advaita Allied Health Services Limited) under Section 66 of the Companies Act, 2013 for reduction of its equity share capital. The company proposed cancellation of up to 1,07,57,252 equity shares, representing approximately 20% of its issued equity share capital, at a consideration of ₹85 per share based on shares voluntarily tendered by eligible public shareholders. The proposal was approved through a special resolution passed by the requisite majority via postal ballot. The company stated that the capital reduction was intended to provide an optional exit to shareholders who did not wish to participate in its future growth while allowing those who retained their shares to benefit from a corresponding increase in their percentage holding without additional investment. The promoter group confirmed that it would not participate in the reduction so as to maximize cash availability for public shareholders.
The Tribunal noted that the Articles of Association authorized reduction of share capital by special resolution. The company explained that the consideration of ₹85 per share was based on a valuation report determining a fair value of ₹84.90 per share. The Regional Director raised observations concerning protection of creditors and stakeholders, tax implications, whether the proposal amounted to a buy-back under Section 68, the selective nature of the reduction, and the procedure adopted for obtaining shareholders’ approval. In response, the company submitted that Sections 66 and 68 prescribe separate and independent mechanisms, that Section 66 expressly permits reduction of share capital with Tribunal approval, and that the proposed transaction did not circumvent the buy-back provisions. It further explained that the reduction was designed to fulfil an earlier commitment to provide an exit option to public shareholders and was not compulsory, while confirming that creditors, stakeholders, government revenue, and statutory dues would remain protected. The company also detailed the process followed for electronic postal ballot and public notices in accordance with the applicable Ministry of Corporate Affairs circulars.
