In CP No. 68/Chd/Hry/2025, In the matter of One Qube Realtors Private Limited (order dated 26.02.2026), the NCLT Chandigarh Bench confirmed the reduction of share capital of a foreign-owned private company under Section 66 read with Section 52 of the Companies Act, 2013, permitting it to utilise Rs. 99,59,14,810/- from its securities premium account to set off accumulated losses of an equivalent amount.
The Proposal
One Qube Realtors Private Limited, a real estate company originally incorporated as Ashkit Properties Limited in 2008 and subsequently converted from a public company to a private company in 2022, had accumulated losses of Rs. 99.59 crores appearing as a debit balance in its retained earnings. The Company also had Rs. 165.01 crores standing in its securities premium account. The proposed reduction sought to adjust the securities premium against the accumulated losses, thereby bringing the retained earnings to nil and reducing the securities premium to Rs. 65.42 crores.
The key feature of the proposal was that it was purely an accounting adjustment. No cash was to be paid out to shareholders, no shares were to be cancelled, the shareholding pattern remained unchanged, and the paid-up equity share capital of Rs. 13,52,060/- was to remain untouched. The total shareholder funds of Rs. 65,56,34,250/- remained the same before and after the reduction.
Procedural Compliance
The Board of Directors approved the proposal on 06.10.2025, and the shareholders unanimously passed a special resolution at the EGM held on 08.10.2025. The Company’s Articles of Association (Article 40) authorised the reduction of share capital and securities premium. Notices were published in Business Standard (English) and Jansatta (Hindi), and all 34 unsecured creditors were served. No objections were received from any creditor.
The Regional Director and Registrar of Companies filed their reports, raising observations on FEMA compliance (given the Company’s foreign ownership), cash losses in FY 2024-25 and the preceding year, audit trail limitations in accounting software, and MSME dues. The Company responded to each observation, and the Tribunal found that none of them presented any impediment to sanctioning the reduction.
The Income Tax Department filed a no-objection report, with a prayer that the Department’s interests be protected. The Company filed an undertaking to comply with all applicable provisions of the Income Tax Act, 1961.
The Order
The Tribunal confirmed the reduction, noting that the Company was solvent, no creditor interests were prejudiced, and the adjustment would enable the balance sheet to reflect a true and fair view of the Company’s financial position. The order directed that a certified copy be delivered to the ROC within thirty days and that an NOC from the Income Tax Department be obtained vis-a-vis taxability or TDS before any payout is made to shareholders.
Mr. Vaibhav Sharma, Advocate, appeared for the Petitioner Company, i.e., M/s One Qube Realtors Private Limited.