Kapil Jain vs Registrar Of Companies, Gwalior

Jarat Kumar Jain: J.

The Appellant "Kapil Jain" filed this Appeal under Section 421 of the Companies Act, 2013 (the 'Act') against the order dated 04.06.2020 passed by National Company Law Tribunal, Indore Bench, at Ahmedabad (the 'Tribunal') in (M.P) Co. Appeal No. 03/252(3)/NCLT/AHM/2019, whereby dismissed the Appellant's Appeal.

Brief facts of this case are that the M/s Rahul Steel Forging Pvt. Ltd. was originally incorporated on 10.01.1969 as a Pvt. Ltd. Company and Registered with Registrar of Companies, Gwalior (MP) vide CIN: U27101MP196PTC00146 under the provisions of Companies Act, 1956. The Registered Office of the Company is situated at 19, Mukti Marg, Dewas, Madhya Pradesh. The main object of the Company was to carry on the business as manufactures and dealers in all kinds of forging, castings and forged components, ferrous and nonferrous or otherwise. Also to carry business as iron-masters iron-founders, iron- founders, iron-workers, steel-makers etc.

The Registrar of Companies, Madhya Pradesh (Respondent No. 1 herein) (ROC) issued notice 560(5)/2008/171 dated 30.04.2008 followed by a final notice and struck off name of the Company (Respondent No. 2) from its register w.e.f 17.05.2008 due to non-filing of annual returns, balance sheet, profit and loss account since 31.03.1999 and the Company was not carrying on any business or operations since 31.03.1999.

The  Appellant  contended  that  the  action  of  Respondent  No.  1  for striking off the name of Respondent No. 2 Company is highly prejudice to the interest of the Appellant being Creditor of Respondent No. 2. The Appellant is a genuine small contractor and had supplied consultancy service for construction of forging and heat treatment furnaces and its engineering work and also provided ancillary services with respect to forging of steel and heat treatment plant for a total amount of Rs.6,90,500/- and submitted bill No. 21 dated 08.07.2007 to the Respondent no. 2 and the Respondent No. 2 has paid part payment for an amount of Rs. 40,000/- after deducting Rs. 5,500/- for quality issues and balance amount of Rs. 6,45,000/- is still outstanding/due towards the Respondent No. 2 Company. It is also stated that the Respondent No. 2 vide its letters dated 14.08.2007, 24.12.2007, 18.03.2008, 15.06.2008, 28.12.2012, 21.06.2014, 16.11.2016, 05.06.2019 has acknowledged its liability to pay Rs. 6,45,000/-. Therefore, the Appellant has filed an Application under Section 252(3) of the Act before the Tribunal to restore the name of the Respondent no. 2 company for taking steps to recover the dues Rs. 6,45,000/-.

The Respondent No. 1 (ROC) filed affidavit before the Tribunal and justified its action by contending that the company has not filed Financial Statements and annual returns with Registrar of Companies, Gwalior since 31.03.1999 which are mandatory requirement under Section 159, 92 and 137 of the Act, because of such lapses on the part of the Company, its name got struck off.

The Tribunal considering the material on record held that there is no reliable evidence that the Appellant is a Creditor of the Respondent No. 2 Company. It is also observed that when the Respondent No. 2 Company's name was struck off, at that time who was the director of the Respondent No. 2 Company. It appears that there is malafide intention for restoration of the name of the Company. Therefore, rejected the Appeal.

Being aggrieved with this order the Appellant "Kapin Jain" has filed this Appeal under Section 421 of the Act.

Ld.  Counsel  for  the  Appellant  submitted  that  the  Appellant  had produced valid invoice raised for his due alongwith various communication with the Respondent No. 2. The Respondent No. 2 has also acknowledged the debt of the Appellant and filed affidavit before the Tribunal. The Tribunal has ignored the fact presented before it and doubted on the status of the Appellant as a Creditor.

It is also submitted that the Ld. Tribunal has rejected this Appeal on the ground that when the Company's name was struck off at that time who was the director of the Company is not on record. The RoC in its representation dated 08.01.2020 has mentioned that Harsha Choudhary and Aparna Choudhary were directors of the Company. However, the Tribunal has overlooked this fact and erroneously rejected the Appeal.

Ld. Counsel for the Appellant submitted that the ld. Tribunal without assigning any reason rejected the Appeal on the ground of malafide intention. Such finding is not sustainable in law. Hence, the impugned order is liable to be set aside.

Per Contra, the Respondent No. 1 RoC in the Reply of the Appeal stated the facts and requested to decide the Appeal on merit subject to filing of Balance Sheets since 31.03.1999 onwards with additional fees as per the Act.

The  Respondent  No.  2  Company's  Director  filed  Reply  before  this Appellate Tribunal and submitted that the Respondent No. 2 Company and its directors are ready and willing to comply all the provisions of the Income Tax Act and Company Law and also ready to comply the conditions imposed by the Tribunal for revival of the Company. Ld. Counsel for the Respondent No. 2 submitted that Mr. Giriraj Singh Choudhary was the Chairman and Managing Director of the Company. He suffered a serious set-back to his health during the period from 2000 and has been undergoing treatment for over 20 years. The Company did not receive any notice from the Registrar of Company regarding its striking off. Further, when the directors gained knowledge of the same Mr. Giriraj Singh Choudhary was already 75 years old and was hit with sudden vision loss due to Glaucoma and other neurological health issues. Therefore, the Company could not at the relevant time take appropriate actions for revival of its name in the register. Currently the Respondent No. 2 Company has new set of Directors viz Harsha Choudhary and Aparna Choudhary, who are now in a position to continue the work of the Respondent Company. It is also submitted that the Respondent No. 2 having its land and machinery. Thus, the Respondent Company in a position to restart its manufacturing upon its revival. The Respondent Company has got its lease renewed for a period of 30 years which is valid till 2028. In such a situation the order passed by the Tribunal as well as RoC may be set aside and direct the name of the company may be restored to the Registrar of the Companies.

After hearing Ld. Counsel for the parties, we have gone through the record.

The Appeal filed before the Tribunal under Section 252 (3) of the Act, the Appellant was required to satisfy that the Company was at the time of its name has struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the Registrar of the Companies.

In this matter, the name of the Company was struck off on 30.04.2008, the Appellant was required to satisfy that on date the Respondent No. 2 Company was carrying on business or in operation. The RoC in his response stated that the Respondent No. 2 Company has not filed annual returns, balance sheet and profit loss account since 31.03.1999, the Respondent No. 2 in Para 6 of the reply submitted before this Tribunal admitted that Mr. Giriraj Singh Choudhary, Managing Director suffered a serious set-back to his health during the period from 2000 and has undergoing treatment for over 20 years. Thus, it is admitted that from the year 2000 onwards the Respondent No. 2 Company not in business or in operation. The Respondent No. 2 has not placed on record any document in support that the Company was carrying on business or in operation when it was struck off on 30.04.2008.

The Respondent Company was not carrying on any business or in operation since 2000. Then the Appellant had supplied consultancy service to Respondent Company in the year 2007, no one can believe such story. As per record of RoC, Harsha and Aparna Choudhary were the Directors of the Company and Mr. Giriraj Singh was not the Director of the Company. Then in what capacity he has acknowledged the debt. Particularly, when Mr. Giriraj Singh aged 75 years and suffered a serious his health problem during the period from 2000 and has been undergoing treatment for over 20 years and also suffered sudden vision loss due to Glaucoma and Neurological health issues, it is doubtful that in such a health condition Mr. Giriraj Singh Choudhary acknowledged the debt through various letters dated 14.08.2007, 24.12.2007, 18.03.2008, 15.06.2008, 28.12.2012, 21.06.2014, 16.11.2016, 05.06.2019.

Now, we have considered whether the Tribunal has rightly rejected the Appeal on the ground of malafide intention?

It is apparent that the Respondent No. 2 Company "Rahul Steel Forging Pvt. Ltd." the name of the Company has struck off on 30.04.2008 and there was a gazette notification on 17.05.2008. The Company can file the Appeal under Section 252 (1) of the Act against the order of the Registrar of Companies within a period of three years from the date of order of the Registrar of the Companies. Admittedly, the directors have not filed any appeal against the order of Registrar of the Companies. As the Company has not filed the Appeal within a period of three years from the date of order of the Registrar of the Companies which was lapsed in April, 2011. Therefore, it can be safely presumed that at the instance of the Respondent No. 2 Company the Appellant has filed the Appeal before Tribunal for taking advantage of 20 years' limitation from the publication in official gazette as per section 252(3) of the Act. Thus, Ld. Tribunal has also rejected the Appeal on the ground of malafide intention.

With the aforesaid, we are of the view that the impugned order does not require any interference by this Appellate Tribunal. There is no merits in this Appeal. Thus, the Appeal is dismissed, however, no order as to costs.