Kanodia Knits Pvt. Ltd. vs Registrar Of Companies

Present appeal is preferred u/s 252(3) of the Companies Act, 2013 by the Company against the order published on 13.06.2017 vide Public notice

No- ROC-DEL/248/ STK-5/2336 striking off the name of the Appellant Company. The Registrar by invoking the provisions of Section 248 of the

Companies Act has struck off the name of the Appellant Company from its register vide notification dated 13.06.2017 where the name of the

Appellant company ( for brevity 'the Company') figures at serial No. 11188.

The appeal is filed through its Mr. Ajay Kanodia who is a director of the Company.

The Company was incorporated under the Companies Act, 1956 on 12th July 1989 vide CIN:U63023DL1989P1C036937 as a Private Company

Limited by Shares with the Registrar of Companies, Delhi &Haryana having its registered office at 35, North Basti Harphool Singh, Sadar Thana

Road, Delhi, which is within the jurisdiction of this Tribunal and hence this Tribunal has jurisdiction to entertain and try this appeal. .

The Memorandum of Articles and the Association of Articles of the Company are placed on record as Annexure- 1.

The authorised share capital of the Company is Rs. 10,00,000/- (Rupees Ten Lakhs only) divided into 1,00,000 number of equity shares of Rs.10/-

(Rupees Ten each) and the Issued Subscribed and Paid Up Capital of the Company is Rs. 1,84,000/- ( Rupees One Lakh Eighty Four Thousand only)

divided into 18,400 number of equity shares of Rs. 10/-(Rupees Ten each).

The Company has two Directors namely: Mr. Ajay Kanodia (DIN: 06401245) and Ms. Anjana Kanodia (DIN: 06401270) who are the only two

shareholders who subscribe 100%shareholding of the Company as per Annexure 7 & 8respectively.

The main object of the Company are as follows:

(i) To establish factories, works, stores, warehouses, godowns, distributing centres, shop and depots for the manufacturing, processing, laminating,

converting, producing, designing, dying, bleaching, printing, importing, exporting, buying, selling and otherwise dealing in all types of hosiery goods,

cotton ,linen and silken cloth, jute, flax, hemp, cotton, wool and hosiery goods, rayon, nylon, staple fibres, synthetic fibres and to carry on the business

as wool combers, cotton spinners, worsted spinners, woollen spinners, yarn merchants, worsted stuff manufacturers, bleachers, dyers and dealers of

bleaching and dying materials of all types of hosiery and textiles goods, cotton, wool, rayon, staple fibres, synthetic fibres and silken cloth.

(ii) To carry on the business as traders, exporters, distributors, contractors, agents, stockists and otherwise dealers in all types of commodities, goods

and merchandise as referred to the paragraph above.

It is also submitted that the accounts of the company were prepared and audited. The company had engaged the services of a Company Secretary

to perform the task of filing the returns with the office of the Registrar of Companies, who did not file the same and also did not reveal this fact to the

Directors of the Company. It is further submitted that it was only in September 2017 the appellant came to know the fact of non-filing of the returns

and other documents with Respondents as well as the fact that the Company's name has been struck off the Register of Companies maintained by the

Registrar of Companies.

It is submitted that the Registrar of Companies has not followed the procedure prescribed under Section 248(1) of the Companies Act, 2013. The

notice required under Section 248(1) was not sent, and ROC has proceeded to issue notice under Section 248(5) by publishing the name of the

Company in the Official Gazette. A copy of the said publication is attached in the appeal as Annexure-2.

It is observed that due to non-compliance of the provisions of Companies Act,2013 with respect to filing of annual returns and financial statements

for the last two years, the name of the company was struck off. However, the Company has placed certain facts to prove it being in operation and

functional during the period of striking off:

(i) Copy of the audited Balance Sheets of the Company for the Financial Years 2012-13 to 2016-17.

(ii) The Bank statements are for the period March, 2013 to December, 2013.

(iii) Copy of the Purchase orders (April, 2016-March, 2017)

(iv) Copy of the Sales Invoice (April 2016-March2017)

(v) Copy of the Income Tax returns for the Financial Years 2016-17, 2017-18.

The Audited Balance Sheets of the Company are on record for the years March 2013 to March 2017. During the year 2017 at time of being

struck off i.e. 13.06.2017 the Company had no employees and no salary was paid. The profits after tax deduction is of Rs. 963/- only. The audited

balance sheet of the Appellant Company also does not reflect any bank balance for the said year. The profit earned during the year 2015-16 as per

balance sheet is only RS.294/- and no salary payment or bank balance is shown during the years 2015-2017. There are no purchase orders or sale

invoices beyond March, 2017. Thus during the period of striking off the name of the Company in June, 2017 there is no record to show the business in

operations.

However, the Company has not put on record the Bank Statements of the Company for the period when the name of the Company was struck

off. The bank statements submitted are for the period from 1st March, 2013 to 31st December, 2013. There are no bank statements brought on record

to show any transactions during the said period when the company's name was struck off and the company claimed that the account was not

functioning from 2013 since transactions were mostly carried out in cash, for small amounts.

The Income tax returns for the assessment year 2016-17 and 2017-18 put on record reflect the Total Income for the year 2016-17 as Rs.500/- and

the Tax with Interest payable as Rs. 172. Total Income for the assessment year 2017-18 is Rs. 1470/- and the Tax with Interest payable is Rs.439/-

respectively.

Thus there are no convincing documents on record to establish that the Company was doing business or in actual operation when its name was

struck from the Register of the Registrar of Companies. Therefore it could be said that the Company was non-operational at the relevant period of

striking off its name in June, 2017.

The Respondent ROC in its report has stated that it has no objection if the name of the Company is restored in the Register of Companies on the

undertaking that the Company be directed 'to prove' that it was carrying on business or was in operation with further direction to file financial

statements with appropriate filing fees and additional fees as leviable.

Provisions pertaining to restoration of the company u/s. 252 are to be applied. Sub section 3 of Section 252 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 Roc 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.

Applying the aforesaid principles to the facts of the present case, it can be seen from the audited balance sheets, the bank Statements and all other

documents brought on record by the Appellant Company that it was neither carrying on any business nor in operation when its name was struck off by

the register of Companies.

As a sequel to the aforesaid discussion, it is inferred that there is no just reason to restore the Company's name on Register of Registrar of

Companies.

Accordingly the appeal stands dismissed, as disposed of with no order to costs.