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Judgment
[Per: Ajai Das Mehrotra, Member (T)]
The present Appeal has been filed under Section 421 of the Companies Act, 2013, (hereinafter referred to as the `Act’) against the Impugned Order dated 28.09.2021 passed by the NCLT (National Company Law Tribunal, Court – V, New Delhi) in Appeal 16/252/ND/2021. Before the NCLT, the Appeal was filed by the Directors of the Company namely Krishna Kumar Aggarwal and Chetan Aggarwal, for restoration of the name of the Company Garg Medical Solutions Private Limited in the register maintained by the Registrar of Companies (`RoC’). The registered office of the Company is situated at S-196, Shakarpur, Delhi – 110092 and the CIN No. is U241 00DL 2009 PTC1 93436.
The relevant facts, as reproduced in the Order of NCLT dated 28.09.2021 are reproduced below:
“2.The major facts are given below:
Strike off Date 08.08.2018 (Pg 135 of petition) Audited Financial Statements The Company has submitted audited financials for FY 2016-17 to 2018-19 (pg 56 and 89 of petition), which show nil Revenue form Operations. 3.A RoC in its reply dated 16.03.2021, objected to restoration of the name of the Company in view of the fact that the Company had not been in business as was evident from nil revenue from operations during the FY 2016-17 to 2018-19 (pg 3 of RoC reply), which resulted in striking of the name. In fact, the Company had nil revenue from operation since the FY 2016-17. Even after FY 2016-17, the Company had nil revenue from operation during FY 2016-17 to 2018-19 (pg 56 and 89 of petition).
4.On the perusal of the order dated 23.03.2021, we notice that an opportunity was given to the IT Dept to file the report but till 11.08.21, no report had been filed. The case was finally heard and order was reserved on 11.08.21. The Company had filed Financial Statements for FY 2016-17 to 2018-19 and has not produced any other evidence that it has been a going concern when the name of the Company was struck off.”
NCLT observed that the Company seems to be defunct Company as it has NIL revenue from operations during the Financial Year 2016-17 to 2018-19 and has not attached any evidence to show filing of any Income Tax Returns during the last decade and accordingly the Appeal was dismissed.
The Counsel for the Appellant submitted that Registrar has ignored the provisions of Section 248(6) of the Act whereby the Registrar had to satisfy himself that sufficient provisions has been made for realisation of all amount due to the Company and for payment of discharge of its liability and obligations. As on 31.03.2018, the Company had unsecured Creditors totalling Rs.21 Lakhs/- reflected in its Balance Sheet. It was further submitted that on the date when the Company was struck off i.e., 08.08.2018, the due date for filing of accounts for Financial Year ending on 31.03.2018 was not over, as the filing was due in September, 2018 onwards. The Appellant claimed that it had done all the Statutory Compliance and filing of the Financial Year ending 31.03.2017. Thus, the Appellant submitted that there was no ground for striking off the Company on 08.08.2018. The Counsel for the Appellant further submitted that the Company owns a Fixed Asset in the form of the Property situated at Flat No. 502, Unit-A, Block – I, Fourth Floor, Indraprastha Apartments – I, Residential Group Housing, situated at Indraprastha Colony, Sector 30-33, Faridabad, Haryana, for which payment of Rs. 48 Lakhs/- has been made in the period 03.12.2010 to 12.09.2014. The Counsel for the Appellant further submitted that their case is different from that of `Alliance Commodities Pvt. Ltd.’ Vs. `Office of Registrar of Companies, West Bengal in Comp. App. (AT) No. 20 of 2019, decided by this Tribunal as the Appellant is not a shell Company and is not indulging in any unlawful business. The Counsel for the Appellant submitted that it is equitable and just to restore the Company – Garg Medical Solutions Pvt. Ltd. and he is supported by the following Judgements by coordinate Benches of this Tribunal:
`Mr. Deorao Shriram Kalkar’ Vs. `Registrar of Companies, Pune’, Comp. App. (AT) No. 188 of 2019.
`Manmohan Singh Anand’ Vs. `The Registrar of Companies & Ors.’, Comp. App. (AT) No. 88 of 2020.
`Taru Projects Private Limited & Ors.’ Vs. `The Registrar of Companies & Ors.’, Comp. App. (AT) No. 15 of 2022.
`N K Jain Realbuild Pvt. Ltd.’ Vs. `The Registrar of Companies’, Comp. App. (AT) No. 147 of 2021.
`Sudesh Gupta’ Vs. `Registrar of Companies, NCT of Delhi & Haryana & Ors.’, Comp. App. (AT) No. 218 of 2020.
Learned Counsel representing the Office of the Registrar of Companies NCT of Delhi and Haryana submitted that the Company – Garg Medical Solutions Pvt. Ltd. was incorporated on 21.08.2009 and the last Annual Return of Balance Sheet submitted by the Company to the office before it was considered to be struck off pertains to Financial Year ending on 31.03.2017. It was submitted that no subsequent documents have been filed by the Company to obtain the status of `Dormant Company’ under Section 455 of the Act. The RoC had issued Notice in STK – 1 on 18.06.2018 and thereafter the name of the Company was struck off as per provisions of Section 248(1)(c) of the Act read with Rule 9 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 vide Notice in the form of STK – 7 dated 08.08.2018. It was submitted by the Learned Counsel for the Respondent that the Appellant had failed to demonstrate that they were carrying on any business operation before it was struck off. From the Auditor’s Report of 2016-17, 2017-18 and 2018-19 it is observed that Revenue from operations was NIL. The Respondent relied upon the decision of this Tribunal in the matter of `Alliance Commodities Pvt. Ltd.’ Vs. `Office of Registrar of Companies, West Bengal in Comp. App. (AT) No. 20 of 2019, which was confirmed by the Hon’ble Supreme Court vide Order dated 23.09.2019.
We have gone through the submissions of the Appellant and Respondent and have perused the records. The said Company was struck off on 08.08.2018. The Appellant had complied with the statutory filing for the Financial Year 2016-17 and statutory filing for Financial Year 2017-18 was not due. The said Company had outstanding payable to three Creditor totalling to Rs.21 Lakhs/-. The said Company is also owing one Immovable Property. We have also gone through the decisions of the coordinate Benches cited by the Appellant as also the decisions of the coordinate Bench in the case of `GRS Properties Private Limited’ Vs. `Office of Registrar of Companies, NCT of Delhi & Haryana’, in Comp. App. (AT) No. 165 of 2021 and `Calcutta Rubber Factory Pvt. Ltd. & Ors.’ Vs. `Registrar of Companies, Delhi and Haryana’, 2019 SCC OnLine NCLAT 851, wherein restoration of the Company was considered just and equitable on the grounds that the Company is having Assets.
The relevant portion of the Judgement of this Tribunal dated 08.02.2023, in Comp. App. (AT) No. 165 of 2021, in the matter of `GRS Properties Private Limited’ Vs. `Office of Registrar of Companies, NCT of Delhi & Haryana’, is reproduced below for reference:
“7.After hearing the parties, going through the pleadings made on behalf of the parties and in view of the fact that the Audited Financial Balance Sheets of the Year 2015-16, 2016-17, 2017-18, 2018-19 & 2019-20 of the Appellant /Company shows that the Appellant/Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant/Company is not carrying on any business or operations. Hence, we are of the view that the order passed by the National Company Law Tribunal (New Delhi, Bench-V) as well as Registrar of Companies, NCT Delhi & Haryana is not sustainable in law.”
The relevant portion of the Judgement of this Tribunal dated 06.12.2019, in the matter of `Calcutta Rubber Factory Pvt. Ltd. & Ors.’ Vs. `Registrar of Companies, Delhi and Haryana’, 2019 SCC OnLine NCLAT 851, is given below for ready reference:
“11.The company is having a lease hold plot allotted by HUDA and the appellant company undertakes to file the returns and the financial statements after the period 2012-13. The company was carrying on business but was running into losses which accumulated to Rs. 630589/- from the year ending 31st March, 2013 and loss of Rs. 3500/- and Rs. 3500/- from the year ending as on 2016-17, 2017-18. From these facts it cannot be said that the company is not carrying on any business.
12.From the above discussions and observations we have come to the conclusion that it would be just that the name of the company is directed to be restored………”
In the present case, the Company had complied with the statutory filings till Financial Year 2016-17 and the statutory filings for Financial Year 2017-18 were not due as on the date of striking off of the Company. The Company is having assets and liabilities. It owns one property and has liability to repay credits of Rs.21 Lakhs/- Since the Company has substantial assets and liabilities, it cannot be said that the Company is not carrying on any business for operations.
Considering the facts and circumstances of this case, we find that the Order passed by the NCLT (National Company Law Tribunal, Court – V, New Delhi as well as RoC, NCT of Delhi & Haryana is not sustainable in law.
In view of the aforesaid, we set aside the Impugned Order dated 28.09.2021, passed by the National Company Law Tribunal Court – V, New Delhi in Appeal No. 16/252/ND/2021. The name of the Appellant Company is restored to the Register of Companies subject to the following compliances:
Appellant/Company shall pay costs of Rs. 2,00,000/- (Rupees Two Lakh) to the Registrar of Companies, NCT Delhi & Haryana within eight (8) weeks from the passing of this Judgment.
After restoration of the Company's name in the Register maintained by the RoC, the Company shall file all their Annual Returns and Balances Sheets. The Company shall also pay requisite charges/fee as well as late fee/charges as applicable.
In spite of present orders, RoC will be free to take any other steps punitive or otherwise under the Act for non-filing/late filing of statutory returns/documents against the Company and Directors.
The instant Appeal is allowed to the above extent.