Abinav Shankar Narayan Member vs Registrar Of Companies, Karnataka

Rajeswara Rao Vittanala, J

C.P. No. 61/BB/2020 is filed by Abinav Shankar Narayan Member of OX Human Performance Private Limited ('Applicant/Petitioner'), U/s. 252 (1) & 3 of Companies Act, 2013, by inter alia seeking to restore the name of the Petitioner Company, namely OX Human Performance Private Limited, on the Register of Companies maintained by the Registrar of Companies, Karnataka etc.

Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows:

(1) M/s. OX Human Performance Private Limited, (which is referred to as Company) was incorporated under the Companies Act, 1956 on 21.06.2010, vide CIN:U92412KA 2010PTC054143. Its Authorised Share Capital of the Company is Rs. 75,00,000/- (Rupees Seventy Five Lakhs Only); and Paid-up Capital of the Company is Rs. 1,00,000/- (Rupees One Lakh only). The main objects of the Company is carrying on the business of Consultants, Facilitators, Advisors, and act as Service providers on all aspects of Training and Coaching solutions to impact, increase etc.

(2) Abinav Shankar Narayan (the Applicant/Petitioner herein) is Member of the Company. The Board of Director of the Company has authorised the Petitioner to file instant Application/Company Petition. The name of the Company has been struck off by the Registrar of Companies (ROC), Karnataka for not filing the Annual Returns for 3 years. The Company has commenced its business operation from the date of incorporation but failed to file the Balance Sheet and Profit and Loss Account to Ministry of Corporate Affairs.

(3) Since the non filing of financials due to clerical mistake by the concerned Department within the Company. The ROC has made the status of the Company as "Strike off', now the Company has made up their accounts and ready to file the statement and to file the Annual Returns. Therefore, the Company wanted their status to be as "Active" to commence their business.

The Registrar of Companies, Karnataka, has filed a Counter by way of Affidavit dated 01.05.2020, wherein, not opposing the main Company Petition, has inter alia stated as follows:

(1) In pursuant to the verification of the MCA 21 portal, when action under Section 248(1) of the Companies Act, 2013 was initiated against the eligible Companies, it was seen that the Petitioner Company has not filed Balance Sheet for the Financial Year 2017-2018 and Annual Return for the Financial Year 2017-2018. Therefore, the Respondent had reasonable cause to believe that the Petitioner Company is not carrying on any business or operation and therefore a notice in Form STK-1 dated 28.06.2019 was sent to the Company and its Directors.

(2) In the said STK-1 notice that was sent to the Company and to the Directors of the Company, it was inter alia mentioned that the Petitioner Company has not been carrying on any business or operations for two immediately preceding financial years nor has filed Application under Section 455 of the Companies Act, 2013 and that the Respondent proposes to strike off the name of the Company from the Register of Companies as per Section 248 of the Said Act, unless a cause is shown to the contrary within 30 days from the date of receipt of the STK-1 notices.

(3) Since no cause was shown either to the physical notices or to the website, Gazette and newspaper notices either by the Company or its Directors, and also since no Balance Sheet or Annual Return was filed by the Petitioner Company till the day on which the list of defaulting Companies were crystallized, the Respondent proceeded to strike of the name of the Company from the Register of Companies and published a Notice in STK-7 in the Official Gazette on 09.11.2019 stating that from 23.10.2019 names of the Companies mentioned therein including the Petitioner Company have been struck off from the Register of Companies as per Sec. 248(5) of the Act.

(4) It is declared that there is no inquiry, investigation and Complaints against this Company and expressed no objection to restore the name of Company, as prayed for, however, subject to payment of cost and complying with pending statutory returns.

Heard Ms. Sheela Arvind, learned PCS for the Applicant/Petitioner, through Video Conference. We have carefully perused the pleadings of the Party and extant provisions of the Companies Act, 2013 and the Rules made thereunder.

Ms. Sheela Arvind, learned PCS for the Applicant/Petitioner, while reiterating averments already made in the Petition, as briefly stated supra, that the Company is active and non-filing of Annual Returns and Balance Sheet in question was neither intentional nor deliberated, but is was due to clerical mistake made by the concerned Department within the Company, who have been entrusted with the job of complying with the statutory requirements. She has further submitted that in view of pandemic situation prevailing in the Country, the Tribunal may consider to restore the name of Company, as prayer for, in the interest of justice.

It is not in dispute that the Registrar of Companies is conferred with power U/s. 248(1) to strike off the Company, if the Company has failed to commence its business within one year of its incorporation or a Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any Application within such period for obtaining the status of a dormant Company U/s. 455. However, Section 248(6) states that the Registrar of Companies, before finally striking off Company, has to satisfy himself that sufficient provision has been made for the realization of all amounts due to the Company and for the payment or discharge of its liabilities and obligations by the Company within a reasonable time, and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company. Though the impugned striking off the Company was in accordance with law, the Tribunal has to take into consideration of bona fide contentions of Petitioner seeking to restore name of Company, by taking a lenient view of the issue in the interest of justice and ease of doing business, instead of rigidly interpreting the law on the issue. It is also not in dispute that the instant Company Petition is filed in accordance with law; there are no investigations pending against the Company; the Respondent has not opposed the Petition; and left the issue to Tribunal to consider the case subject terms and conditions.

It is true, the Tribunal, while exercising its jurisdiction, under the provisions of Companies Act, 2013, has to take into consideration the gravest economic condition prevailing in the Country due to pandemic conditions, while considering the issue especially in imposing costs. Therefore, we are of the considered opinion that interest of justice would be met, if the name of Company is restored as prayed for, however, subject to conditions mentioned below.

Hence, by exercising the powers conferred upon this Tribunal, U/s. 252 (3) of the Companies Act, 2013 and following the principle of ease of doing business, C.P. No. 61/BB/2020 is hereby disposed of with the following directions:

(1) The Registrar of Companies, Karnataka, the Respondent herein, is ordered to restore the name of the Company in the Register maintained by the Registrar of Companies, Karnataka as if its name had not been struck off from the rolls of the Register, with restoration of all consequential action taken by Registrar of Companies, which includes restoration of DINs of its Directors.

(2) The Company is directed to file all the statutory document(s) along with prescribed fees/additional fee/fine as decided by Registrar of Companies within 30 days from the date on which its name is restored on the Register of Companies by the Registrar of Companies;

(3) The Company's representative, who has filed the Company Petition, is directed to personally ensure compliance of this order;

(4) The restoration of the Company's name is also subject to the payment of cost of Rs. 15,000/- (Rupees Fifteen Thousand Only) to be paid online to the account of Central Government in favour of the Pay & Accounts Officer, Ministry of Corporate Affairs, Southern Region, Chennai, within three weeks from the date of receipt of this order, failing which the order will lapse.

(5) The Petitioner is permitted to deliver a certified copy of this order to the Registrar of Companies;

(6) On such delivery and after duly complying with above directions, the Registrar of Companies, Bengaluru is directed to, on his office name and seal, publish the order in the official Gazette;

(7) This order is confined to the violations, which ultimately led to the impugned action of striking off the Company, and it will not come in the way of Registrar of Companies to take appropriate action(s) in accordance with law, for any other violations/offences, if any, committed by the Company prior or during the striking off the Company.

(8) The Company is directed to resume its operations, as expeditiously as possible, after the name of Company is restored, in terms of this order.