NCLT Chennai Directs TVS Holdings' Shareholders' Meeting for Surplus Reserve Scheme

On 18 March, the National Company Law Tribunal, Chennai directed TVS Holdings Ltd to hold a meeting of its equity shareholders to approve a plan for using surplus reserves. It also dispensed meetings for unsecured creditors and debenture holders as they had already given their consent.

A Bench of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam heard the company's application under Sections 230–232 of the Companies Act, 2013, which sought approval for a scheme to distribute surplus reserves to shareholders. It held:

“Meeting of the Equity Shareholders of the Applicant Company is directed to be held on 24.04.2026 at 11.00 AM at the registered office of the Applicant Company or through video conferencing or if not convenient, at any other suitable place for which prior approval shall be sought from this Tribunal within a period of 7 days from the date of this order and prior to the issue of notices.”

TVS Holdings Ltd, a listed core investment company, wanted to use its extra reserves to issue bonus non-convertible redeemable preference shares to its equity shareholders. The Tribunal noted the company had more reserves than needed for its business and wanted to reward shareholders.

Since the company has over 30,000 equity shareholders, the Tribunal ordered a shareholders' meeting.

For creditors and debenture holders, the Tribunal noted that all of them had submitted consent affidavits representing 100% of their claims. The company had no secured creditors, so no meeting was needed for that category.

The Tribunal also gave instructions on how the shareholders' meeting should be conducted, including quorum, appointing a chairperson and scrutinizer, issuing notices, and publishing announcements.

Finally, since the company is in investment activities, the Tribunal said that at the second stage, the company must confirm whether it is registered with the Reserve Bank of India and has obtained any required approvals for the scheme.

Accordingly, the Tribunal disposed of the application.

For Applicant: Senior Advocate P.H Arvindh Pandian and Advocate Pawan Jhabakh