Alpha Chemicals Ltd., a listed company, proposes a buy-back of 12% of its equity share capital from its free reserves under Section 68 of the…

As per Section 70 of the Companies Act, 2013, the company cannot buy back its own shares under the following conditions, all of which apply to Alpha Chemicals Ltd.: 1. Buy-back through Subsidiary – Prohibited Section 70 (1) (a): A company shall not buy back shares through any subsidiary, including wholly owned subsidiaries. 2. Default in Term Loan – Three-Year Cooling Off Required Section 70 (1) (c): A company that has defaulted in repayment of a term loan can buy back shares only after 3 years from the cessation of default.Alpha repaid the loan only 27 months ago — still short of the required 36-month period. Hence, not eligible. 3. Non-Filing of Annual Return and Financial Statements Section 70 (2) Buy-back is prohibited if the company has not complied with Sections:92 (Annual Return)129 (Financial Statements)Alpha has failed to file both which disqualifies it from buy-back. 4. Unpaid Dividend for More Than 30 Days Section 127 read with Section 70 (2) Non-distribution of declared dividend within 30 days is a punishable offence. Dividend unpaid for 35 days, this is a default. Alpha Chemicals Ltd. is not eligible to proceed with the buy-back under Section 70 due to multiple violations.