Kimti Lal Jain vs Registrar Of Companies

Sumita Purkayastha (Member Technical)

This Appeal has been filed by the Company named "Kimti Lai Jain shareholder of M/s. Jain Spares Auto Private Limited" hereinafter referred to as "the Appellant-Company" invoking the provisions of Section 252 (3) of the Companies Act, 2013 (the Act) for restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi & Haryana. The company has authorised capital of the Appellant-company is Rs.5,00,000/- and paid up share capital of Rs. 1,28,000/-.

As per the averments M/s. Jain Spares Auto Private Limited was incorporated on 11.11.1997 as a private limited company and has its registered office at 2779, Lothian Road, Kashmiri Gate, Delhi 110006 having CIN No.U34399DL1997PTC090646.

Since incorporation, the appellant-company has been carrying on business of Dealers in manufacturer, Traders ,importer, exporter, hirers, converters, stockists, dealers, distributors, wholesalers, retailers, brokers, fabricators, engineers, contractors, service and repairs in all kind of automobiles including but not limited to motor cars, vans, truck, lorries, tractors, motor cycle, motors, scootters, carriages, and or other vehicles used for transport or conveyance of passengers and goods of every description and of engines, diesel oil, engines, generator, generator parts, tractor parts and all kind of machinery parts, classic, bodies parts, spare parts, components, accessories, tools, implement, attachment, batteries, decorative tyres, tubes, glasses and other goods used for in connection with all kind of automobiles and vehicles and other machineries."

A sweeping action was initiated by the ROC at the instance of MCA in striking off the names of several Companies who had failed to file their Statutory Returns. The appellant had failed to file its Financial Statements and Annual Returns from Financial Year ending 31.03.2017 onwards thereby giving rise to the surmise that the business of the company was not in operation. Consequently, its name was struck off by the Respondent from the Register of Companies under Section 248 of the Companies Act, 2013 vide Notice No.ROC-DEL/248/STK-5/2019/3789 dated 09.08.2019 followed by struck off Notification No. ROC/DELHI/248(5)/STK- 7/6217 dated 29.10.2019 at Sr.No.3475.

The appellant -company admitted their default in carrying out the statutory compliances but submits that the same was due to financial and personal difficulties. The appellant has submitted copies of its Financial Statements and Annual Returns for 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 with the petition and original submitted to the respondent.

The Appellant admitted for failing to file the Annual Returns, Balance Sheets with the RoC since 2017 and submits that the only for the period of last few years the requisite documents were not filed for carrying out the company's activities.

In order to corroborate above submissions the petitioner has placed before us the following evidence:

i)  The Appellant-Company has submitted Copies of Audited financial statements for the period ended 31.03.2017 to 31.03.2021.

ii)  Bank statement of Company's Account with Union Bank of India, Kashmiri Gate Branch, Delhi for the period 27.03.2017 to 14.09.2019 (opening balance: Rs. 10,447/- and closing Balance: Rs.2,97,45,38/-) along with the petition and submitted to the respondent. Appellant has also undertaken to file the pending reports.

iii)  The appellant-company also attached copy of Rent Receipt and Receipt of Municipal Corporation of Delhi (North) .

iv)  Copy of PAN Card and copy of Income-tax Return Acknowledgement for the A.Y. 2020-21 (Tax paid Zero).

v)  The Current Assets, Revenue from Operations, Cash & Cash equivalent, and Cash & Bank balance of the company from 2017 - 2019 have been given as follows in the Audited Financial statements:-

Assets

Revenue

from

operations

Employees

Benefit

Scheme

Cash & Bank Balance

Ending

31.03.2017

44063970

23970

Ending

31.03.201S

44063922

23922

Ending

31.03.2019

44040000

29759213

The matter came up for hearing before the Bench on 11. 11.2021 and the Order was reserved.

The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act, 2013 which includes that, if it is just and equitable to restore the name of the company in the Registrar of Companies, it may direct the RoC to restore the name in its Register.

The appellant has been able to satisfy this Bench that it has complied with the statutory requirements and has certain assets which necessitate and justify restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable. As per several decisions of various Courts it should only be in exceptional.

Accordingly, the appeal is allowed subject to payment of costs of Rs.50,000/- to the Prime Minister Relief Fund alongwith Rs.50,000/- to the Ministry of Corporate Affairs, New Delhi. The restoration of the Appellant Company's name in the Register will be subject to their filing all outstanding documents for the defaulting years as required by law and completion of all formalities, including payment of any late fee or other charges which are leviable by the respondent for the late filing of statutory returns. The name of the petitioner company shall then stand restored in the Register of the Registrar of Companies (RoC), as if its name of the company had not been struck off.

The direction for freezing the Bank Account(s) of the Appellant company, if on this ground, shall consequently be also set aside immediately to enable the company carry out its business operation. Compliance of this order for restoration shall be made by the respondent with all its consequential effects within one week of compliance by the appellant.

The appeal is allowed and disposed of accordingly.

Let the copy of the order be served to the parties.