Ashish Jaiswal vs Registrar Of Companies Chhatisgarh & Anr.

14.11.2022: Heard Mr. Sandip Chilana, learned counsel for the appellant, Mr. Sagar Mehlawat, learned counsel who has appeared on behalf of Respondent No.1 and Mr. Sushrut Meena, learned proxy counsel for the Respondent No.2 (Income Tax Department).

The present appeal under Section 421 of the Companies Act, 2013 has been preferred against the order dated 28^th December, 2020 passed by the National Company Law Tribunal, Cuttack (hereinafter referred to as NCLT). By the said order the learned NCLT has rejected the application filed by the appellant which was filed under Section 252(3) of the Companies Act, 2013 for restoration of the company i.e. M/s Supertech Projects and Construction Pvt Ltd, (hereinafter referred to as the Company) having CIN No. U45201CT2011PTC001597. The company was struck off by the Registrar of Companies while exercising powers under Section 248(5) of the Act since continuously for three years no return was filed by the company i.e. for the financial year ending 31.03.2017, 31.03.2018 and 31.03.2019. While exercising powers to struck off the name of the company in question, notices was issued vide order dated 09.07.2019 and finally by order dated 9.11.2019 the name of the company was struck off. Subsequently an application was filed before the NCLT for restoration of the same.

Learned counsel for the appellant while assailing the impugned order has raised objection that the Learned NCLT erroneously in para 13 of the order has recorded that the counsel for the company had admitted that the company was not in operation during the said period. To substantiate his submission the learned counsel for the appellant has taken this Tribunal to certain documents particularly Page No.146 and other relevant documents to show that though the company was not earning profit but the company was in operation since they were receiving the money for purchasing the land and lending money as per Memorandum of Association.

As per learned counsel for the appellant the company was incorporated for carrying on business in India and elsewhere the business of builders, contractors, designers, architects, decorators, consultants, constructors, financiers, investors and brokers of all types of buildings and structures including houses, flats, apartments, offices, godowns, warehouses, shops, factories, sheds, hospitals, hotels, holiday homes/resorts, shopping cum residential complexes and to develop erect install, alter, improve, add, establish, renovate, recondition, protect, participate, enlarge, repair, demolish, remove, replace, maintain, manage, buy, sell, lease, let on hire, commercialize and to purchase, sale, deal in all types of movable and immovable properties for development, investment or for resale and to act as buyer, seller, importer, exporter, agent, distributor, stockiest, or otherwise to deal in raw materials, goods, fittings, parts, accessories, know how, consumables, plants and machineries, tools and tackles used for the foregoing purpose.

Learned counsel for the appellant submits that in terms of the Memorandum of Association besides taking steps for purchasing land for developing the same they were generating funds and also to some extent were lending money and earned interest. According to him though it is true that during the said financial years company in question has not earned benefit but company was operating and as such in terms of Section 252(3) of the Act the company was not liable to be restored. Accordingly it has been prayed to direct the ROC for restoration of the company.

Mr. Sagar Mehlawat, learned counsel for the ROC, of course, regarding restoration has not raised any objection but he has referred to certain conditions which were raised by the ROC in case restoration is allowed. Such condition have been reproduced by NCLT in its order at running page 43 and 44 of Memo of Appeal in para 7(i) to 7(vii) which are as follows:-

Proxy counsel for the Respondent No.2/Income Tax Department has also not raised any issue.

Besides hearing learned counsel for the parties we have minutely examined the material available on record. It is true that under Section 253(3), twenty years period has been given for approaching for restoration of company to ROC but at the same time provisions contained in Section 248 of the Companies Act, 2013 cannot be termed as redundant. If this Tribunal is satisfied on the basis of the material available on record that struck off company during the relevant period was in operation though not generating any revenue, it may approach for restoration of company on the roll of ROC.

In the present appeal we have noticed from the material on record that to some extent the company in question was in operation during the relevant period. It is not in dispute that Learned NCLT has rightly recorded that the company was not generating funds, but only on account of non-generation of fund, the prayer of a struck off company for its restoration under Section 252(3) of the Act may not be rejected if a company is in a position to satisfy that the company was in operation. Before the NCLT on behalf of the appellant following relevant documents were produced:-

Besides aforesaid information running page 146 of the Memo of Appeal and some other documents also to some extent exhibits about the operation of the company in question. However, in para 13 of the impugned order the learned NCLT has recorded the submissions of the learned counsel for the appellant regarding non operation of the company. We may not point out any fault in the said para, due to the reasons that if the order is contrary to record or submission made by the party, it was the same Court i.e. NCLT whichwas required to be approached for its rectification. It is true in Memo of Appeal in ground (h) it has been stated that it is error on record but we are not recording any opinion contrary to observation made in para 13. However, in view of other material which has been brought on record and reflects that company was in operation, we are of the considered opinion that appeal is required to be allowed and the company in question may be restored subject to condition as follows:-

With the above observation and conditions the appeal is allowed. The order be complied with within three months from today.