JSD Western Garment And Apparel Pvt. Ltd. vs Registrar Of Companies And Ors.

Present appeal is filed by the company M/s JSD Western Garment and Apparel Private Limited,(for brevity the ‘Company’),through its

director Mr. Ashwini Kumar Gautam vide Board resolution dated 28th April, 2018, under Section 252 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.

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 23rd February 2011 having CIN U18104DL2011PTC214723.

The company is having its registered office at 2, TC Jaina Complex, 2nd Floor, Netaji Subhash Marg, Darya Ganj, New Delhi-110002.

Authorized share capital of the Company is Rs. 2,00,000/-divided into 20,000 equity shares of Rs. 10/- each and the paid-up share capital of the

Company is Rs. 1,00,000/-divided into 10,000 equity shares of Rs. 10/- each.

The main objects of the company are:

i. To carry on the business of manufactures processors, designers, fabricators, buyers, sellers, importers, exporters, agents, distributors, suppliers and

dealers in all kinds of readymade garments, fashion garments, High fashion garments, casual wear, hosiery goods, fabrics, furnishing, yarns,

clothing’s, dressing materials, wearing apparels, linens, bed sheets, raw materials, textile goods and articles of silk, cotton, woolen, nylon, polyester

and garment accessories.

And other main objects.

As per the notice of non- compliance of provisions of the Companies Act, 2013 in respect to filing of annual returns and financial statements for

years 31.03.2013 to 31.03.2017, 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 submitted that the company was in operation and the business activities were carried out by the company during the period of

striking off but the reporting of such activities through Annual Returns and Financial Statement had not been filed with Registrar of Companies due to

inadvertence on part of the management.

The Appellant has brought forward the following facts about it being in operation and functional during the period of striking off:

i. The copy of Bank Statement Punjab National Bank, from 01.01.2017 to 01.09.2017, reflecting various transactions done by the company during the

period of striking off and having closing balance of Rs. 41,192/- as on 01.09.2017.

ii. The copies of financial statements of the company for the financial years from 31.03.2016 to 31.03.2017. The Balance Sheet as on 31.03.2017

reflects Revenue from Operations of Rs. 25,33,814/- and Cash and cash equivalents of Rs. 1,22,49,988/-

iii. The copies of Income Tax Returns filed for the assessment years 2014-15 upto 2016-17. The tax paid for assessment year 2016-17 is NIL.

iv. The copy of Central and Sales Tax Registration Certificate vide Registration no. 07560406497 dated 05.10.2011.

v. The copy of Form DVAT 56 having TIN no. 07560406497 for the period 31.07.2015 to 17.08.2017.

vi. The copy of Form GSTR-1 having GSTIN no. 07AACCJ5985G1Z9 for September 2017 and December 2017.

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.

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 not submitted any report inspite of giving various opportunities.

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 thereof feels aggrieved by the company having its name struck off from 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 off from the register of companies.

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 during striking off 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.