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Judgment
This appeal is filed by the company, ARM Infosoft Private Limited (for brevity the 'Company), through its Director, Mr. Rajeev Sindhi, under
Section 252(1) of the Companies Act, 2013 (for brevity the Act') against the order of striking off the name of the company passed by the respondent
under section 248 (1) of the Act read with Rule 7 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016
published on 30.06.2017 vide notification no. ROC-DEL/248(5)/STK-7/2879 by Registrar of Companies, the respondent herein.
2 The company is incorporated as a Private Limited Company under the provision of Companies Act, 1956 with the Registrar of Companies, NCT of
Delhi and Haryana on 07.11.2008 having CIN U72200DL2008PTC184775.
The company is having registered office at 101, Mandakini Enclave, Alaknanda, New Delhi-110019
Authorized share capital of the Company is Rs.50,00,000/- and issued, subscribed and paid up share capital of the Company is Rs. 1,50,000/- divided
into 15,000 shares of Rs.10/- each.
The main objects of the company are:
i. To provide information Technology Enabled Services. To provide Business and Knowledge Process Outsourcing Services & Web Services
including and not limited to Digital Archiving solution and Media Archiving solution.
And other main objects.
As per the notice for non- compliance of provisions of the Companies Act, 2013 in respect to filing of annual returns and financial statements since
financial year ending on 31.03.2013, the name of the company was struck off in terms of provision of Section 248(1) of the Companies Act, 2013 read
with Rule 7 and Rule 9 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
The appellant has contended that the Registrar of Companies has not followed the procedure mentioned under section 248(1) of Companies Act,
2013 and Rules made there under. Further, no notice under section 248(1) of the Act in the form of STK-1 was received by the Company or any of
the directors or any person on their behalf, before striking of the name of the company, hence the discretion exercised by the Registrar of Companies
in striking off the Appellant is in violation of the audi alteram partem. The appellant has stated that it is a settled law that no order/ decision affecting a
party should be passed unless a reasonable opportunity has been given to such a party to be heard.
However, without going into the controversy of the latches in following the due procedure of law by Registrar of Companies before the final act of
striking off the name of the company from the register of companies maintained by Registrar of Companies for non-filing of statutory documents by
company for the relevant period, by Registrar of Companies through publication of notice on 30.06.2017, the appellant has preferred to prove with
documents and records that the company was in operation and doing business during the period of striking off the name of the company as a better
remedy.
The Appellant has brought forward the following facts about it being in operation and functional during the period of striking off:
i. The copies of financial statements of the company for the financial years ending on 31.03.2013 up to 31.03.2017. The Balance Sheet as on
31.03.2017 reflects intangible assets in the form of computer software of Rs. 87,71,404/-
ii. The copies of Income Tax Returns filed for the assessment years 2013-14 to 2017-18 as NIL Return.
The appellant has stated on affidavit that after its incorporation the company ventured into development of software for heath care industry and
finally developed software for health care industry called `myhealthrecords' that provides Electronic Health Record (EHR) service is a user-friendly
service with state of the art features in built for the users. Further, `myhealthrecords' is developed with highest levels of security and performance and
it took about three years to develop the software and make it completely functional and was even covered by the news channel Aaj Tak in January,
2012. However, few more updates towards the development of aforementioned software were required before it could be used pliably for business
purposes and which needs more investment.
The appellant has stated that in the initial stages borrowed money from its directors and shareholders. After the total investment of around Rs. 87
lakh and during the year 2012, due to some dispute among management further addition to the development of software could not be arranged and
development of the software version and its operations came to stand still. Further, the software developed by the company has high promises
functioning and future values and the management has amicably resolved their issues and has taken call put to use the said software ""as it is"" and
make it commercially operational.
The appellant has further stated that the company by all its means and in bonafide manner seeks to run the said business with full effectiveness
and diligence and further states that non-performance of the business is because of the above-mentioned facts and was not intentional or deliberate
action on the part of the said company to carry out any activity detrimental to the society or the rule of law.
It is further submitted by the Appellants that the failure to file financial statements and annual returns with the Registrar of Companies, NCT of
Delhi and Haryana was due to inadvertence on part of the management and due to lack of professional guidance and as such there was no wilful or
mala-fide motive behind non-filing of the Financial Statements and Annual returns. Therefore, it is humbly prayed by the appellant that an opportunity
be granted to the appellant by of revival of the company so that the put in effort to develop the abovementioned software, which is for social benefit of
the society, could be put to use.
The Ld. Counsel for the appellant has contended that the grounds contemplated under section 252 of Companies Act, 2013, namely, that of the
company carrying on business or was in operation at the time of striking off its name, and where it appears ""just"" to the adjudicating authority that the
name of the company is to be restored to the Register of Companies. It is also seen from the perusal of the provisions under Section 252(3), that if
Tribunal is of the opinion it is just"" that the name of the company is to be restored to the register of companies maintained by Registrar of Companies,
such orders can be passed for the name of the company to be so restored. For reference, the provisions of Section 252(3) of the Companies Act, 2013
is extracted hereunder:
252(3) ""If a company, or any member or creditor or workman thereoff eels aggrieved by the company having its name struck off ffrroomm
the register of companies, the Tribunal on an application made by the company, member, creditor or workman before the expiry of twenty
years from the publication in the Official Gazette of the notice under sub-section (5) of section 248 may, if satisfied that the company was,
at the time of its name being struck off carrying on business or in operation or otherwise it is just that the name of the company be restored
to the register of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order,
give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as
nearly as may be as if the name of the company had not been struck offf rom the register of companies.
Further, the Ld. Counsel has relied on the following Judgements, namely, order of the Honourable High Court of Guhati in Company Petition
24/2012 dated 05.06.2017; order of the NCLT New Delhi in Company Appeal No. 127/252//ND/2018 dated 25.04.2018; order of Honourable High
Court of Bombay in Company Petition No. 6 of 1981 dated 06.04.1994, order of Honourable High Court of Delhi in Company Petition No. 174/2013
dated 02.12.2013; and order of Honourable High Court of Delhi in Company Petition No. 200 of 2011 in support of their argument which in brief
reflects the following:
In aforementioned decisions, while construing Section 560(6) of the Companies Act, 1956 which is pani materia to present Section 252(3), as
extracted above of the Companies Act, 2013, it has been held that the word ""just"" has to be understood in the background of the specific language of
the sub-section not on the basis of the principle of ejusdem generis. Further, the aforementioned judgements therein elucidates that apart from the
situation in which the company court can order restoration namely (i) when the company was carrying on business or was in operation at the time of
striking off its name there exists an alternative situation (ii) where it appears ""just"" to the company court that the name of the company be restored to
the register and that the rule of ejusdem generis will not apply because of the presence of the words ""or otherwise"" between the words thereby
providing for the two types of situations. Further, the grounds for restoration as earlier provided Section 560(6) of Companies Act, 1956 has been
retained as such without any change by the Legislature from which the intention of Legislature can be clearly gathered in the present dispensation as
well. Furthermore, it is also seen that where litigations are pending and where immovable property rights are involved and in the instant case also the
facts vouch for the similar decision, it is only proper that the name of the company be restored to the Register of Companies. Hence, there exists a
just"" ground for the restoration of the name of the appellant company in the Register of Registrar of Companies.
The Registrar of Companies has stated that it has no objection if the name of the Company is restored on proving by the Company that it was
carrying on business or was in operation and the Company be also directed to file financial statements up to date with appropriate filing and additional
fees.
The Income Tax Department has submitted in its report that there is no outstanding demand against the Assesse and has no objection if the
company is considered for revival.
The Section 252(3) contemplates that one of the three conditions are required to be satisfied before exercising jurisdiction to restore company to its
original name on the register of the Registrar of Companies namely:
i. That the company at the time of its name was struck off was carrying on business.
ii. Or it was in operation
iii. Or it is otherwise just that the name of the company be restored on the register.
The Appellant have submitted sufficient evidence that it has been in operation since incorporation and therefore could not be termed as defunct
company. Thus, taking into consideration the provisions of Section 252(3) of the Companies Act, 2013 which vests this Tribunal with a discretion
where the Company whose name has been struck off and such Company is able to demonstrate that there is a running business as on the date when
the name was struck off and also keeping in consideration that it is just to do so can restore the name of the Company in the Register and in the
interest of all stakeholders including the Appellant itself who seeks restoration of the name of the Company in the register maintained by Registrar of
Companies, the company deserved to be restored.
Accordingly, this appeal is allowed. The Public Notice of Registrar of Companies striking the name of the company is set aside. The restoration of
the company's name to the Register of Registrar of Companies is ordered subject to its filing of all outstanding documents with proper filing fees along
with additional fees required under law and completion of all formalities, including payment of any late fee or any other charges which are leviable by
the respondent for the late filing of statutory returns, and also subject to payment of cost of Rs. 25,000/- to be paid to Prime Minister's Relief Fund.
The name of the Appellant Company shall then, as a consequence, stand restored to the Register of the Registrar of Companies, as if the name of the
company had not been struck off in accordance with Section 248(1) of the Companies Act, 2013.
The appeal is disposed of accordingly.
Let the copy of the order be served to the parties.