Balajee Developwell Private Limited vs Registrar Of Companies

L. N. Gupta, Member (T)

M/s Balajee Developwell Private Limited (the 'Appellant Company') has preferred the present Appeal by invoking the provision of Section 252(3) of the Companies Act, 1956 for restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana (the 'RoC').

As per the averments, the company was initially incorporated as a Private Limited Company in the name and style of "M/s Anjani Infra Private Limited" on 13.12.2007 with CIN U45400DL2007PTC 171400 and having its registered office at 1st Floor, A-14, Jhilmil Colony, Delhi -110095, which is within the jurisdiction of this Tribunal. In the year 2013, the name of the company was changed from "M/s Anjani Infra Private Limited to M/s Balajee Developwell Private Limited vide fresh Certificate of Incorporation dated 23.02.2013. The copies of Certificate of Incorporation are annexed with the application.

That as per its MoA, the Appellant Company was incorporated for furtherance of the following main objectives :

i) To engage in Real Estate Promoters. Developers & project Management Association including civil, mechanical, electrical and all other types erection, commissioning projects, project trading as well as consultant for execution of projects on turnkey basis for equipment of industrial domestic and other purposes.

ii) To carry on the business as builders, consultants, civil engineers, surveyors, town planners, estimators, valuers, interior and exterior decorators, general and government civil contractors of immovable properties, all types of structural and pilling engineering work, interior designing, land scaping and graphic.

iii) To buy, exchange, purchase, or otherwise acquire any interest in any immovable property, infrastructure projects such as houses, building, market, shops industrial sheds & lands within or outside the limits of municipal corporation or such other local bodies and to provided roads, drains, water supply, electricity and lights, within these areas, to divide the same into suitable plots and rent or sell the plots to the people for building, houses, bungalows farmhouse & colonies for workmen according to schemes approved by improvement trusts, development and municipal boards there on and to rent or sell the same to the public and relies cost in lump sum or on installments or by hire purchase system, or otherwise to start any housing scheme in India or abroad.

iv) To construct. execute, earn; out equip, maintain, improve, develop civil and constructional work relating to roads. electric power heat and light supply work, hotels buildings, godowns, pleasure grounds, parks, gardens, docks, jetties, embankments, bunds, bridges, wharves, canals, irrigation reclamations, improvements, sewage, sanitary telegraphic, telephone works, warehouses, markets, public building and all other such civil and related constructional work.

v) To develop the land for by providing roads & other facilities such as water supply and sale the same and to erect and construct buildings or work civil and constructional of even; description on any land of the company or upon any other such lands or immovable property and to pull down, rebuild enlarge, alter and improve such land into roads, highway, streets, squares, gardens and such other convenience related thereto and deal with and improve the immovable property of the company or any other immovable property ...."

It is submitted by the Appellant Company that the RoC Delhi and Haryana initiated proceedings under Section 248 of the Companies Act 2013 and struck off the name of the Appellant Company from its Register vide STK-7 Notice No. ROC-DEL/248(5)/STK-7/2879 dated 30.06.2017. The name of the Appellant Company appeared at serial no. 2679 of the list of companies. It is further added that the ROC struck off the Appellant Company's name from the register due to defaults in statutory compliances, namely failure to file Financial Statements & Annual Returns since FY 2011-12.

The Appellant Company has submitted that it tried to develop housing projects, which could not be commissioned due to global financial crisis that caused melt down in the construction sector but it kept complying with all the statutory liabilities including filing of Income Tax Returns  and  filing  of  returns  with  the  ROC  till  2011.  In  order  to corroborate its submission, the Appellant has placed the following documents:

a) Agreement to Sell (Without Possession) for purchase of the following 05 properties -

b) Copies of the Audited Balance Sheets for the following Financial Years from 2017-18 to 2019-20 reflecting 'NIL' Revenue from Operations as indicated in the table below :

Balance Sheet for the Financial

Revenue From

Year

Operations

2017-18

Nil

2018-19

Nil

2019-20

Nil

c) Copies of Form 26AS towards TDS deposits as follows :

i. for the Assessment Years from 2015-16, depicting TDS deposit of Rs. 67,000/-

ii. for the Assessment Years from 2016-17, depicting TDS deposit as 'Nil'

iii. for the Assessment Years from 2017-18 depicting TDS deposit of Rs. 4438/-

IV. besides, Form 26AS for the Assessment Years 2018-19 & 2019-20 depicting TDS deposits have also been placed.

d) Copy of Bank statement issued by Punjab National Bank from 04.04.2017 to 11.10.2019, depicting a credit balance of Rs. 16,410/-.

That the ROC has filed its report dated 02.09.2021. The relevant extracts of the ROC's report are reproduced below :

That  during  the  course  of  hearing  on  25.10.2021,  the  AROC submitted that the Appellant Company has not filed its Financial Statements for the two financial years preceding the date of strike off the name of the company and the Financial Statements submitted by the Appellant Company for the subsequent years show no revenue from operations.

After going through the averments, documents, replies and hearing submissions of both the parties, we observe that the Appellant Company has placed 05 Agreements to Sell (Without Possession) entered into by the Appellant Company in the year 2014 on record which only depict payment of certain amount paid by it as advance. The Appellant Company has neither produced any Sale Deed(s) to depict ownership over the properties nor any other document to indicate real estate development in furtherance to its objectives. Therefore, we are of the considered view that the Appellant Company is not holding any Fixed Asset, which could justify its case.

That the Bank Statements placed on record, pertains to the period post-30.06.2017 i.e. the post-strike off period. Therefore, no reliance can be placed on such statement to demonstrate that the Appellant Company was either in operation or carrying out its business at the time of its name was struck off from the register of RoC.

That the Appellant Company has failed to produce any Income Tax Returns filed, if any, by the Appellant Company. It has only placed the AS26 Forms towards TDS deposits on record. The same alone cannot be considered to indicate that it was either in operation or carrying out its business at the time of its name was struck off from the register of RoC .

As rightly objected by the RoC, the Appellant Company has not filed or placed on record the copies of the Financial Statements for the Financial Years 2015-16 and 2016-17 i.e., for the two years prior to the date of its striking off to depict that the Appellant Company was in operation or carrying out its business.

In the circumstances, it is worthwhile to refer to the Judgment of Hon'ble NCLAT in the matter of Alliance Commodities Private Limited Vs. Office of Registrar of Companies, West Bengal, Company Appeal (AT) No. 20 of 2019 :

"9. Section 252 (3) of the Companies Act, 2013 empowers the Tribunal to order restoration of a Company whose name has been struck off from the Register of Companies, if such company, any member or creditor or workman thereof feeling aggrieved by such striking off applies before the Tribunal seeking restoration of the struck off company to the Register of Companies before the expiry of twenty years from the publication in Official Gazette of notice under Section 248(5). The exercise of such power is properly regulated and depends upon satisfaction of the Tribunal that the Company at the time of its name being struck off was carrying on business -10- Company Appeal (AT) No. 20 of 2019 or in operation or otherwise it is 'just' that the name of company be restored. We do not find ourselves persuaded to agree with the proposition canvassed by learned counsel for the Appellant that inspite of Appellant's inability to demonstrate that the Company was at the relevant time carrying on business or in operation, the Tribunal had vast powers to order restoration of Company on the ground "or otherwise". This term "or otherwise" has been judiciously used by the legislature to arm the Tribunal to order restoration of a struck off company within the permissible time limit to take care of situations where it would be just and fair to restore company in the interest of company and other stakeholders. Such instances can be innumerable. However, this term "or otherwise" cannot be interpreted in a manner that makes room for arbitrary exercise of power by the Tribunal when there is specific finding that the Company has not been in operation or has not been carrying on business in consonance with the objects of the Company. A Shell Company or a Company having assets  but advancing loans to sister concerns or corporate persons for siphoning of the funds, evading tax or indulging in unlawful business or not abiding by the statutory compliances cannot be allowed to invoke this expression "or otherwise" which would be a travesty of justice besides defeating the very object of the Company...."

In sequel to the above, this Bench is of the view that the Appellant Company has failed to bring anything concrete on record, which could demonstrate that the Appellant Company was either in active operation or carrying out its business during the immediately preceding two financial years from the date of striking off or it is otherwise just and fair to restore the name of the Appellant Company in the register of RoC. Therefore, we are not inclined to interfere with the striking off action taken by the RoC against the Appellant Company under Section 248(5) of the Companies Act 2013.

The Appeal is accordingly Dismissed.

Let the copy of the Order be served upon the Parties.