Classic Combustions India Private Limited vs Registrar Of Companies

R. Varadharajan, J

Under consideration is an Application which has been filed under Section 252 of the Companies Act, 2013 by the Company viz. M/s. Classic Combustions Private Limited, represented by one Mr. G. Ashok, holding 50% shares in the Applicant Company, in relation to an order of striking off the name of the Applicant Company passed by the Respondent under the provisions of Section 248 of the Companies Act, 2013.

It is represented that the Applicant Company was incorporated on 04.06.2014 under the provisions of Companies Act, 2013 with CIN: U74900TN2015PTC100814. The Main object of the Applicant Company is to carry on the business of process, produce mix, pack, preserve, freeze, extract, refine, manufacture, import, export, buy, sell, trade, supply, retail and wholesale distribution of Oil and Gas Burners, and spare parts, (Weishaupt and Bentone), Boiler accessories, Paint booth accessories. The details of the main object are set out in the Memorandum of Association, which is filed along with the typed set.

The Authorized Representative for the Applicant submitted that the Respondent has issued public notice under Form No. STK - 5 on 02.08.2019 for striking off the name of the Company and subsequently issued Form No. STK - 7 on 29.10.2019 by striking off name of the Applicant Company from the Register of Companies. The Authorized Representative for the Applicant Company submitted that upon inspection of the records of the Company in the public domain maintained by the Ministry of Corporate Affairs, it was found that the name of the Company has been struck off.

The Authorized Representative for the Applicant submitted that the Company has commenced its operations on 04.06.2015 and the first financial year for filing the returns became due in the year 2016. It was further submitted that the Company was regular in complying with the provisions of the Companies Act, and due to frequent change in staff and inadvertent omission, the Company could not file the Financial Statement and the Annual returns for the year 2016 - 2017, 2017 - 2018 and 2018 - 2019 with the Respondent.

The Authorized Representative for the Applicant submitted that the Company went into serious financial problems and various business related issues due to change in governmental policies to carry on its business and the Company is carrying on its business inspite of incurring losses. Further, it was also submitted that since the Company is in the field of a very competitive industry, it will have its competition, which would have long gestation period.

The Authorized Representative for the Applicant submitted that the Company could not file the annual returns and financial statements, due to lack of professional guidance and assistance and now the Company is ready to file all its financials with the Respondents.

Upon notice to the Respondent, the ROC has filed its Report via email to the Registry of this Tribunal and has stated that-

(A) The Company may kindly be directed to prove that it was carrying on business or was in operation and that it is just that the name of the company be restored to the register.

(B) The company may kindly be directed to file the financial statements and annual returns up to date in case if the prayer is granted.

(C) The shareholders of the subject company may be kindly be directed to give an undertaking stating that the accounts of the company were not used as means to transact tainted money during the period of demonetization.

(D) To pass such other orders as deemed fit and proper in the circumstances of the case.

It is seen from the records, that the Applicant has issued notice to the Income Tax department, which was delivered on 18.06.2020 and the Applicant has also filed an Affidavit of Service to this effect vide Diary No. 248 dated 22.07.2020. Despite notice being served to the Income Tax department, there was no representation being made on their side.

We have considered the plea of the Applicant Company and the Respondent/RoC as well. It is evident from the plea of the Applicant that the Applicant has not questioned the process undertaken by the RoC in striking off the name of the Appellant Company as envisaged under Section 248 of the Companies Act, 2013 read with attendant Rules. However, the Applicant is seeking restoration of its name in the register as maintained by RoC by relying up on the ground that the Applicant Company as of date is carrying on the business for which it was incorporated and it is in operation and in the circumstances, it is just that the name of the Company should be restored on the Register of Companies as maintained by the Respondent. In order to sustain the said plea, the Applicant has placed the following evidences:

i) Copy of the Bank Statement of the Company for the period from March 2020.

ii) Copy of the Income Tax Return filed for the Financial Year 2015 - 2016 to 2018 - 2019.

iii) GST Returns in Form GSTR - 3B for December 2019 and January, February - 2020.

As submitted by the Authorized Representative for the Applicant, it is seen from the records as listed above that the Company has been functioning and paid tax as follows;

S. No.

Assessment Year

Tax paid

1

2016 - 2017

Rs. 6,111/-

2

2017 - 2018

Rs. 20,940/-

3

2018 - 2019

Rs. 1,71,213/-

Further, a perusal of the GST Returns and the bank statement of the Company also goes on to show that the Company has been doing business. However, even though it will not absolve the Company from filing the necessary returns and documents and adhere to the provisions of Companies Act, 2013 as an onus is placed on the Company to strictly comply with the provisions of Companies Act, 2013 without any let, in the instant case the Company has demonstrated mitigating circumstances. Thus, taking into consideration the provisions of Section 252 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 the stakeholders including members of the Company, its employees as well as the revenue and the Applicant itself who seeks restoration of the name of the Company in the register being maintained by RoC and in the above said circumstances the Application is allowed subject to the following directions namely:

The Company shall:

(i) Within a period of 15 days from the restoration of the Applicant Company's name in the register being maintained by the RoC, the Applicant/petitioner will file inter alia its annual returns and balance sheets as well other compliances statutorily required to be made under the Companies Act, 2013 for the period from which there has been default with requisite charges/fees as well as additional fee/late charges.

(ii) That the Company out of its funds, set apart a sum of ` 2,00,000/- (Rupees Two Lakhs Only) and deposit the same with the Respondent/RoC which amount shall be for the purposes of payment of all fees/charges as contemplated in clause (i) above as well as to defray the cost and expenses of Register of Companies incurred in striking off, within a period of one month from the date of this order. In case of any amount payable in excess of the sum specified towards defraying the cost incurred by the Respondent/ROC and towards other amounts as are required to be paid by the Company statutorily, the same shall be remitted by the Company. Any excess amount left after appropriating for all the above shall be meticulously returned by Respondent to the Applicant.

(iii) Till all compliances are made by the Company, the Company shall not alienate or dispose of any of its valuable assets.

(iv) It is further observed that by virtue of this order of restoration of the name of Company in the register it will not entitle the Directors of the Company whose names in case have been disqualified by virtue of provisions of Section 164 of the Companies Act, 2013 by the Respondent/RoC automatically to be restored to directorship except in accordance with law.

(v) An affidavit of compliance of the aforesaid directions shall be filed by the Applicant within a period of 2 months from the date of this order.

(vi) The shareholders of Applicant Company shall jointly submit an Undertaking to the Registrar of Companies stating therein that the accounts of the Company were not used as means to transact tainted money during the period of demonetization.

(vii) Further, this order allowing the Application shall also not circumscribe the power of the respondent to proceed against the Applicant Company and its Directors as mandated for alleged late filing of any forms, documents, returns and such other compliance under the provisions of Companies Act, 2013.

The Application stands allowed on the aforementioned terms.