Kapil Tyagi vs Registrar Of Companies And Anr.

This appeal is filed by the erstwhile director of the company Prolific Constructions Private Limited (for brevity the ‘Company’), under

Section 252(1) 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 08.08.2018 vide notification no. ROC-DELHI/248(5)/STK-7/4865 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 22.02.2005 having CIN U70101DL2005PTC133238, and is having its registered office at 515, Tolstoy House, Tolstoy Marg,

Connaught Place, New Delhi-110001

Authorized share capital of the Company is Rs.1,35,20,000/- divided into 1352000 equity shares of Rs.10/- each and issued, subscribed and paid up

share capital of the Company is Rs.1,28,30,000/- divided into 1283000 equity shares of Rs.10/- each.

The main objects of the company are:

i. To colorizers, developers, promoters, proprietors, lessor, civil contactors, maintainers f residential, commercial and industrial buildings, colonies, mills

factory sheds and buildings, workshops building, cinemas house buildings and deal in all kinds of immovable properties whether belonging to the

company or not.

ii. 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, 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 appellants have stated that no notice under section 248(1) of the Act in the form of STK-1 was received by the Company or any of the

directors or any person on their behalf and hence not afforded any opportunity of being heard before striking of the name of the company.

However, without going into the controversy of the latches in following the due procedure of law by Registrar of Companies before the final act of

striking off the name of the company from the register of companies maintained by Registrar of Companies, for non-filing of statutory documents by

company for the relevant period, through publication of notice, the appellants have preferred to prove with documents and records that the company

was in operation and doing business during the period of striking off the name of the company as a better remedy.

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

i. The copies of Financial Statements of the company for the financial years 31.03.2016 & 31.03.2017. The Balance Sheet as on 31.03.2017 reflects

cash and cash equivalent assets of Rs.16,563/- and Loss of Rs.38,782/-

ii. The copy of Income Tax Returns filed for the assessment year 2017-18 as NIL return.

iii. The copy of sale deed dated 11.08.2006 executed between Mr. khoobram, Mr. Harisinh & Mr. Desram as sellers and the appellant company as

buyer for the property situated at Siwana Mauaj Village Odhi Tehsil Bawal, Rewadi admeasuring about 1 acre 1 kanal 10 marla for the total

consideration of Rs. 23,20,000/- as per the sale deed, which is also reflected in the balance sheet.

iv. The copy of sale deed dated 11.08.2006 executed between Mr. Khoobram, Mr. Harisinh, Mr. Desram, Ms. Ramdevi as sellers and the appellant

company as buyer for the property situated at Siwana Mauaj Village Odhi Tehsil Bawal, Rewadi admeasuring about 1 acre 3 kanal 10 marla for the

total consideration of Rs. 17,32,500/- as claimed in the sale deed, which is also reflected in the balance sheet.

v. The copy of sale deed dated 14.08.2006 executed between Mr. Sumer Sinh and Mr. Staish Kumara as seller and the appellant company as buyer

for the property situated at Siana Mauj Village Tankdi, Tehsil Bawal District Rewadi admeasuring about 3 acre for the total consideration for

Rs.40,46,000/-, as claimed in the sale deed, which is also reflected in the balance sheet.

vi. The copy of sale deed dated 14.08.2006 executed between Mr. Sandeep Kumar, Mr. Suresh Kumar & Smt. Rewati as seller and the appellant

company as buyer for the property situated at Siwana Mauj Village Mohanpur, Tehsil Bawal District Rewadi admeasuring about 7 Kanal 10 Marla for

the total consideration for Rs.10,80,000/-, as claimed in the sale deed, which is also reflected in the balance sheet.

vii. The copy of sale deed dated 14.08.2006 executed between Mr. Harisinh as seller and the appellant company as buyer for the property situated at

Siwana Mauj Village Odhi, Tehsil Bawal District Rewadi admeasuring about 2 Kanal 11 Marla for the total consideration for Rs.5,31,000/-, as claimed

in the sale deed, which is also reflected in the balance sheet.

viii. The copy of sale deed dated 14.08.2006 executed between Mr. Ramchandra as seller and the appellant company as buyer for the property

situated at Siwana Mauj Village Odhi, Tehsil Bawal District Rewadi admeasuring about 1 Acre 5 Kanal 10 Marla for the total consideration for

Rs.22,20,500/-, as claimed in the sale deed, which is also reflected in the balance sheet.

ix. The copy of sale deed dated 18.01.2007 executed between Mr. Lakhram, Mr. Chunnilal, Mr. Satbeer, Mr. Mukhtyar as sellers and the appellant

company as buyer for the property situated at Siwana Mauj Bhaiyrampur Bhagdi, Tehsil Bawal District Rewadi admeasuring about 12 Kanal 8 Marla

for the total consideration for Rs.32,55,000/-, which is also reflected in the balance sheet.

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 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 submitted in its report that there is no outstanding demand against the Assessee and has no objection if the

company is considered for revival.

The Appellants have submitted only evidence with respect to immovable property owned by the company that it has been in operation 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.

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 High Courts have time and gain decided that immovable property owned by the company should form sufficient ground to consider as

‘just’ and revival of the company be permitted. In the judgments of the Hon’ble High Court of Delhi in the matter M.A. Panjwani vs

Registrar of Companies & Anr being Company Petition No. 174/2013; the Hon’ble High Court of Bombay in the matter ofP urushottamdass And

Another vs Registrar of Companies, 1986 60 CompCas 154 Bom, which in brief reflects the following:

“The Court is of opinion that it is “otherwise just†that the company be restored to the register in case of an immovable property,

restoration can be ordered.â€​

Where immovable property rights are involved and in the instant case also the facts vouch for the similar decision, it is only proper that the name of

the company be restored to the Register of Companies.

Hence, there exists a “justâ€​ ground for the restoration of the name of the appellant company in the Register of Registrar of Companies.

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.