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Judgment
Justice Anant Bijay Singh;
The present Appeal under Section 421 of the Companies Act, 2013, has been filed by the Appellant being aggrieved and dissatisfied by the order dated 03.02.2022 passed by the National Company Law Tribunal (Court-V, New Delhi) in Appeal 85/ND/2021 whereby and whereunder appeal filed by the Appellant for restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana was dismissed by the Tribunal.
The facts giving rise to this Appeal are as follows:
The company, M/s. Bramec Suri Pvt. Ltd., was incorporated under the Companies Act, 1956, on 4th May, 1962, as a private company limited by shares with its CIN No. being U34300DL1962PTC003199. Its authorised share capital was Rs. 50,00,000/- (Rupees Fifty lakhs only) and paid-up share capital was Rs. 20,00,000/- (Rupees Twenty lakhs only). The affairs of the said company were being managed mainly by the Appellant when the appeal against the first Respondent's action under Section 252(3) of the Companies Act, 2013, was filed, since two of its other directors, Shri Harnam Singh Suri and Sardarni Wiranwali Suri are deceased. iv. The Respondent No. 1 herein had struck off the name of the company, Bramec Suri Pvt. Ltd., from the Register of Companies, and it was the Appellant's contention before the National Company Law Tribunal that the Respondent No. 1 did not seem to have followed the procedure prescribed in law before doing so. Notices as required seemed not to have been sent and / or published in the official Gazette. That in any case, the company, Bramec Suri Pvt. Ltd., did not receive any show cause notice, nor was it afforded any opportunity of being heard before the aforesaid action was taken by the Respondent No. 1. It was also the contention of the Appellant that notice of striking off seemed not to have been published in the Official Gazette.
ii) The Appellant had averred before the National Company Law Tribunal that the company, M/s. Bramec Suri Pvt. Ltd., was active and functional after its incorporation as a company. It had obtained on lease for a period of 90 (Ninety) years, a large plot of land having approximate area of 27,822 square yards, from the U.P.S.I.D.C., being Plot No. 2/l, in Sahibabad Industrial Area, Sahibabad, Ghaziabad, U.P. The lease deed in question was executed on 15th July, 1972. After obtaining requisite permissions from the concerned authorities, the said company had set up a manufacturing plant for clutch lining and tractor parts on its plot of land at Sahibabad. It was also following all dues processes and procedures as prescribed under the Companies Act, and other laws, as well as maintaining the documentation required of it.
iii) The company was carrying on its operations and its factory was fully functional, a recovery certificate was suddenly issued by the Regional Director, E.S.I. on 13th December, 1991, to the Collector, Ghaziabad, for the alleged non-payment of dues by the company, M/s Bramec Suri Pvt. Ltd., under the ESI Act. A series of unlawful actions on the part of some authorities and some land mafia had followed, and the plot of land belonging to the company had come to be grabbed, and then purchased by one Rakesh Kumar Goel in an auction sale held by the revenue authorities of the state government. It is pertinent that the company had filed a writ petition, being Writ Petition No.22295 of 1992, before the Allahabad High Court seeking quashing of the sale proclamation fixing the auction sale of the plot of land belonging to the company and vide its order dated 12th June 1992, the Hon'ble High Court was pleased to stay the auction sale of the property. Considerable further litigation had ensued with respect to the plot of land owned by the company and eventually, vide order dated 7th September, 2006, passed in another writ petition that had come to be filed, being Civil Misc. Writ Petition No. 3790 of 2000, the Hon'ble High Court of Allahabad was pleased to set aside the auction sale of the said plot of land (Annexure-A-3 of the Appeal).
iv) Against the setting aside of the auction sale of the plot of land belonging to the company, Bramec Suri Pvt. Ltd., the auction purchaser, Mr. Rakesh Kumar Goel, had filed a Special Leave Petition, being S.L.P. (C) No. 15873 of 2006, before the Hon'ble Supreme Court. Vide a detailed judgment dated 8th July, 2010, passed in Civil Appeal No. 5177 of 2010 arising out of S.L.P. (C) No. 15873 of 2006, the Hon'ble Supreme Court of India held the auction sale of the plot of land leased by the U.P.S.I.D.C. to the company, Bramec Suri Pw. Ltd., as being “thoroughly illegal” and dismissed the appeal of the auction purchaser, Rakesh Kumar Goel (Annexure A-4 of the Appeal).
Further case is that eventually, possession of the plot of land in question, i.e., Plot No. 2/1, in Sahibabad Industrial Area, Sahibabad, Ghaziabad, reverted back to the company, Bramec Suri Pvt. Ltd. During the period of illegal possession, however, the land-grabber, Rakesh Kumar Goel, had dismantled the factory building on the land leased to the company, and removed all machinery and equipment therefrom, and started running a marriage hall at the premises. All papers are records pertaining to the company which were primarily being maintained at its office on the said land had been destroyed by him.
vi) Subsequent to its crucial records being destroyed, and illegal possession being taken of the land leased to it, the company, Bramec Suri Pvt. Ltd., was unable to strictly adhere to, and comply with, requirements such as the filing of balance sheets and annual returns. Its employees had largely left, as had other professionals previously engaged by it for providing various services. The Appellant hereto was managing its affairs, but focusing principally on the litigation involving the land leased to it. Moreover, so as to recommence the work that it had previously been doing, the company, Bramec Suri Pvt. Ltd., would have had to reconstruct the building for the factory. To be able to do so however, it was required by the Regional Manager of the U.P.S.I.D.C. to obtain a fresh sanction, and to obtain a No Objection Certificate. Though it was the contention of the company that it was fully entitled to reconstruct the factory building again, in accordance with the previous building plan, it was nevertheless forced to run from pillar to post to obtain the demanded No Objection.
vii) The execution of an agreement between the Delhi Metro Rail Corporation Ltd. and the Ghaziabad Development Authority for extension of metro from Dilshad Garden to New Bus Add a, Ghaziabad, the plot of land leased to M/s Bramec Suri Pvt. Ltd., being Plot No. 2/l, in Sahibabad Industrial Area, Sahibabad, Ghaziabad, U.P., was requisitioned by the GDA, since the Delhi Metro Rail Corporation Ltd. required the same for casting yards. The company, through the Appellant hereto, had therefore entered into a lease & license agreement with the Ghaziabad Development Authority for a two years' tenure commencing from 27th September, 2014. Since the lease tenure has now lapsed the land in question has reverted back to the company, as evidenced by the communication dated 1st January, 2020, addressed by the Appellant on behalf of the company to the Vice Chairperson of the GDA (Annexure A-9 of the Appeal). The appellant had also averred in the appeal before the National Company Law Tribunal, that though he was taking steps in his individual capacity, including making payments and effecting compliances on behalf of the company, to keep it active and functional, it was however becoming increasingly difficult for him to do so. The company had engaged the services of professionals to perform the task of filing its returns with the office of the Registrar of Companies. However, in the long years of litigation over its valuable asset, i.e., the land obtained by it on lease from the U.P.S.I.D.C., most of the employees of the company and other service-providers engaged by it, had left. Some essential compliances were therefore neglected as a consequence. In the meantime, interested buyers have approached the appellant for the transfer of the company's lease hold rights over the land in question, which is its principal asset. It was therefore contended that to be able to enter into transactions that may prove beneficial for the company, and enable it to stand on its feet and recommence business in right earnest, it is imperative that the name of the company, Bramec Suri Pvt. Ltd., unlawfully struck off by the Respondent No. 1 from the register of companies from STK-5 dated 13th June, 2017 and from STK-7 dated 1st September, 2017.
viii) Thereafter, being aggrieved by the notice of the Respondent No. 1 of “Striking Off”, the Appellant approached the Tribunal under Section 252 of the Companies Act, 2013 for revival of the Appellant Company and after hearing both the parties, the Tribunal passed the order impugned which led to filing of this Appeal.
The Ld. Counsel for the Appellants during the course of argument and grounds mentioned in the memo of appeal, submitted that the Tribunal below failed to note that both the Form STK - 5 and STK - 7 were issued / published with respect to a company known as Brames Suri Pvt. Ltd., and not the company known as Bramec Suri Pvt. Ltd., and hence the company was not in fact put to notice of the impending action on the part of the Respondent No. l or put to notice of the fact that its name had been struck off.
It is further submitted that the impugned order deserves to be set aside because it has been held that where immoveable property rights are involved, it is otherwise just that the name of the company be restored to the register of companies, and because in any case the Tribunal below has not dealt with or discuss the judgments of courts and tribunals cited by the Appellant, and also mentioned in his rejoinder, and the written submissions filed by him. The impugned order suffers from an error apparent on the face of the record to the extent that it has held that the company, Bramec Suri Pvt. Ltd., failed to establish it was carrying on business and in operation at the time of striking off, when in fact the Appellant had affirmed that it was not carrying on business or in operation at the time of striking off, but in the facts and circumstances of this case otherwise it is just that the name of the said company be restored on the register of companies. The impugned order has been passed without due application of mind because the Tribunal failed to appreciate that the company, Bramec Suri Pvt. Ltd., was constrained to halt operations since its land, and hence its office and manufacturing facility, was grabbed by land mafia, and only after twenty years of litigation, culminating with an order of the Hon'ble Supreme Court on 8th July, 2010, was its most valuable asset, i.e., the large plot of land having approximate area of 27,822 square yards, at Sahibabad Industrial Area, restored to its possession.
It is further submitted that the impugned order is perverse also because its fails to appreciate that after its land was restored to the company's possession in year 2010, it had been making payments with respect to the land, such as rental and other dues of the U.P.S.I.D.C., in furtherance of its effort to recommence operations. The Tribunal below failed to appreciate that for no fault of its own, the company, Bramec Suri Pvt. Ltd., had to halt operations, but after the wrong done was corrected by the order passed by the Hon'ble Supreme Court, it was making all efforts to resume the work that it was previously doing. The Tribunal below also failed to appreciate that in the facts and circumstances, this is a fit case in which a chance must be given to the company, its members and creditors to revive the company struck off by the Registrar of Companies. Despite the submission by the Appellant that in the event of revival of the company and restoration of its name, it shall file all remaining / outstanding statutory documents, and pay all pending dues and fees. In view of the above submissions, the impugned order is bad in facts and in law, and passed without due application of mind, and therefore deserves to be set aside and the instant Appeal be allowed.
On the other hand, the Ld. Counsel for the Respondent No. 1/Registrar of Companies during the course of argument submitted that he does not propose to file the Reply Affidavit as he has adopted the Reply which was filed before the NCLT which is annexed in the memo of Appeal. In the Reply (at page 223 to 235 of the Appeal), the Registrar of Companies stated that the Company was incorporated on 04.05.1962 and the last Annual Return and Balance Sheet submitted by the company to this Office, before it was considered to be struck off, pertaining to the financial years ended on 31.03.2002 and since launching of MCA-21 portal in 2006, no records of the Annual Return & Balance sheet submitted by this Company to this office as per the records exist. Moreover, no subsequent documents had been filed by the company with this office to obtain the status of a “Dormant Company” under Section 455 of the Companies Act, 2103. Hence, this office had reasonable cause to believe that the company was not in operation and therefore, the name of the company was considered for striking off from the Register of Companies. Thereafter, the Registrar of Companies issued the notice in the form of STK-1 in the month of March, 2017 intimating the company and the directors of the company at their registered office about the aforesaid defaults, providing them a fair opportunity to respond. Subsequently, this office also issued public notice for the same in the form of STK-5 dated 24.06.2017 and public notice published in Hindustan Times newspaper on 28.06.2017. Thereafter, the name of the company was struck off as per the provisions of section 248(1)(c) of the Companies Act, 2013 read with Rule 9 of the Companies (Removal of Names of Companies from the register of Companies) Rule, 2016 vide notice in the form of STK-7 dated 07.06.2017.
It is further stated that the action of striking off of the present Company was legal and justified and was the result of the operation of the law, as the company was not carrying on any operations for a period of two immediately preceding financial years (as indicated by non-filing of the financial statements of the Company for two or more years). The Company has not attached any Financial Statements which further fails to support the claim of the company that it was carrying on any business at the time of strike off.
It is further stated that this Tribunal may please issue directions to the Appellant to file all the pending Annual Returns and Balance Sheets of the subject company with the Registrar of Companies within such time as specified by this Tribunal and also may award cost in favour of the Respondent No. 1/ ROC as the Appellant failed to file its Statutory Returns with the Respondents under the Companies Act, 2013.
On the other hand, the Respondent No. 2/Income Tax Department in his Reply stated that the Company i.e. M/s. Bramec Suri Pvt. Ltd. may not have registered for PAN with the Income Tax Department and therefore, this Tribunal may direct the Appellant to provide information as to whether the Company has registered for PAN or not.
After hearing the parties, going through the pleadings made on behalf of the parties and in view of the fact that the Company is having a large plot of land approximate area of 27,822 square yards, from the U.P.S.I.D.C., being Plot No. 2/l, in Sahibabad Industrial Area, Sahibabad, Ghaziabad, U.P. vide lease deed dated 15th July, 1972 shows that the Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Company is not carrying on any business or operations. Hence, we are of the view that the order passed by the National Company Law Tribunal (Court-V, New Delhi) as well as Registrar of Companies, NCT of Delhi & Haryana is not sustainable in law.
In view of the aforenoted, we set aside the impugned order dated 03.02.2022 passed by the National Company Law Tribunal (Court-V, New Delhi) in Appeal 85/ND/2021. The name of the Company be restored to the Register of Companies subject to the following compliances.
Appellant shall pay costs of Rs. 11,00,000/- (Rupees Eleven Lakhs) to the Registrar of Companies, NCT of Delhi & Haryana within Twelve (12) weeks from the passing of this Judgment.
ii) After restoration of the Company's name in the Register maintained by the Registrar of Companies, the Company shall file all their Annual Returns and Balance Sheets. The Company shall also pay requisite charges/fee as well as late fee/charges as applicable.
iii) Inspite of present orders, Registrar of Companies will be free to take any other steps punitive or otherwise under the Companies Act, 2013 for non-filing/late filing of statutory returns/documents against the Company and Directors.
iv) After restoration of the Company’s name, the Appellant shall submit the copy of Company’s PAN to the Income Tax Authorities.
The instant Appeal is allowed to the above extent.
Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the National Company Law Tribunal (Court-V, New Delhi), forthwith.