Lico Food Products Pvt. Ltd vs Registrar Of Companies

Justice Anant Bijay Singh;

The present Appeal under Section 421 of the Companies Act, 2013, has been filed by the Appellants being aggrieved and dissatisfied by the order dated 08.10.2021 passed by the National Company Law Tribunal (Court-V, New Delhi) in Appeal 109/252/ND/2021 whereby and whereunder appeal filed by the Appellant No. 2 being Director of ‘M/s Lico Food Products Pvt. Ltd.’ / ‘Appellant No. 1 herein’ for restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana was dismissed by the Tribunal.

The facts giving rise to this Appeal are as follows:

i) M/s Lico Food Products Private Limited (Struck Off) (hereinafter referred to as the ‘Company’) was incorporated on 23.12.1987 as a Private Limited Company, limited by shares under the provisions Companies Act, 1956 in the name of M/s Lico Food Products Private Limited (Struck Off). The name of the company has been “struck off” by the Registrar of Companies from 23rd June, 2007.

ii) The company was carrying business at the time of striking off the name of the company and its turnover in the Financial Year 2004-05 was INR 97,214/-, 2005-06 was INR 1,04,664/- and 2006-07 was INR 1,11,514/- (audit report of financial statement are attached as proof and company intends to further carry-on business activities. The company has property/assets in its book INR 10,48,230/- as per the financial statements.

iii) The authorized share capital of the company is Rs. 6,57,000/- divided into 6570/- equity shares of Rs. 100/- each. The issued, subscribed and paid-up equity share capital of the company is Rs. 6,57,000/- divided into 6570/- equity shares of Rs. 100/- each. The Financial Statement for the Financial Year of 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 are evident of the financial position of the company.

iv) The  Appellants  checked  Ministry  of  Corporate  Affairs  Portal  (MCA21 Portal) for electronic filing of statutory documents. The Appellants came to learn that the status of the Company was showing “Strike Off”. Thereafter, the representative of the company had engaged a Company Secretary in whole time practice to advice for the aforesaid matter. The Company Secretary in hole time practice informed that the name of the said company has already been struck off from the file/register maintained by the Registrar of Companies, New Delhi and Haryana. However, the Company Secretary handed over a copy of the Notice under Section 248 (5) of the Companies Act, 2013 to the representative of the said company.

v) There  were  some  internal  disputes  among  the  shareholders  and management of the company. However, after such disputes were resolved the Company took steps to file the same with the Respondent No. 1 in March, 2018 but the Respondent No. 1 refused to accept it on the ground that the name of the Company has been “Struck Off” from the Registrar. The Appellant company intends to carry on its business and operation and has not made any application within such period for obtaining the status of a dormant company under Section 455 of the Act.

vi) Thereafter, being aggrieved by the notice of the Respondent No. 1 of “Striking Off”, the Appellant Company approached the Tribunal under Section 252 of the Companies Act, 2013 for revival of the Appellant Company and after hearing both the parties, the Tribunal passed the order impugned which led to filing of this Appeal.

The Ld. Counsel for the Appellant during the course of argument and grounds mentioned in the memo of appeal, submitted that the Tribunal while passing the impugned order has erred in law and fact by not considering that the Appellant Company was shown as “Strike Off” without following due procedure. Further, the Tribunal did not appreciate that the Appellant herein after resolving all internal disputes among the shareholders and management of the company, approached the Respondent No. 1 to restore the status of the Company of the Appellant but the Respondent No. 1 refused to accept it on the ground that the name of the company has been struck off from the register.

It is further submitted that the without restoring the name of the Appellant company in the register of the Registrar of Companies, the Appellant company is losing the legal status/entity of the company to run or deal day to day operations/business activities. The delay in filing of Balance Sheets and Annual Returns were unintentional and without any willful or deliberate action bonafide to the reasons of. The Appellant company was unaware of the notification regarding striking off the name of the company. The Appellant came to know about the same only when the representative of the company want to file the statutory documents as per the requirements of the Act and immediately the representative of the Appellant company visited to the Registrar of Companies and requested to change the status of the company from “Strike Off” to “Active” so that the statutory compliances can be made as per the requirement of the Act. But the Respondent No. 1 expressed his helplessness to make any correction or modification in the master data and in accepting the Audited Accounts and Annual Returns as the name of the Company has already been struck off from its record. Thus, striking of process from the Respondent No. 1 is against the principle of natural justice.

It is further submitted that the Appellant company will suffer irreparable loss, injury, damage and will be greatly prejudiced and the livelihood of all the Directors, Shareholders, Creditors and the employee of the company would be at stake in case of non-restoration of the status of the Appellant company.

In view of the above submissions, the impugned order fit to be set aside and the instant Appeal may be allowed.

On the other hand, the Respondent No. 1/Registrar of Companies in his reply stated that as per available records on MCA (back portal), no Signatory/Directors of the Company were found. Since launching of MCA-21 portal in 2006, no records of the Annual returns & Balance Sheet submitted by this Company to this office as per the records exist. Moreover, no subsequent documents had been filed by the company with this office to obtain the status of a “Dormant Company” under Section 455 of the Companies Act, 1956. Due to pending audited financials this office had reasonable cause to believe that the company was not in operation and therefore, the name of the company was considered for striking off from the Register of Companies. The name of the company was struck off as per the provision of Section 560(5) of the Companies Act, 1956 dated 31.05.2007. However, the company has submitted pending audited financials with application which are hereunder:

Sr.

No.

Particulars

Remarks

1.

Revenue from Operations.

As per Profit & Loss A/c attached.

F.Y.2002-2003 Rs. 34,570.00/-

F.Y.2003-2004 Rs. 28,000.00/-

F.Y.2004-2005 Rs. 30,000.00/-

F.Y.2005-2006 Rs. 34,550.00/-

F.Y.2006-2007 Rs. 33,500.00/-

F.Y.2007-2008 Rs. 31,500.00/-

2.

Audited  Financial Statements

Submitted with petition for the F.Y. 2003-04 to 2015-16.

It is further stated that the Office of the Registrar of Companies has no objection in the restoration of the Company, if this Tribunal choose to consider the application for restoration the name of the company, this Tribunal may please issue directions to the Appellant company to file all the pending Annual Returns and Balance Sheets of the subject company with the Registrar of Companies within such time as specified by this Tribunal.

After hearing the parties, going through the pleadings made on behalf of the parties and in view of the fact that the Financial Statements for the Financial Years of 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 & 2017-18 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 (Court-V, New Delhi) as well as Registrar of Companies, NCT of Delhi & Haryana is not sustainable in law.

In  view  of  the  aforenoted,  we  set  aside  the  impugned  order  dated 08.10.2021 passed by the National Company Law Tribunal (Court-V, New Delhi) in Appeal 109/252/ND/2021. The name of the Appellant Company be restored to the Register of Companies subject to the following compliances.

i) Appellant Company shall pay costs of Rs. 1,00,000/- (Rupees one Lakh) to the Registrar of Companies, NCT of Delhi & Haryana within eight (8) weeks from the passing of this Judgment.

ii) After restoration of the Company's name in the Register maintained by the Registrar of Companies, 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.

iii) Inspite of present orders, Registrar of Companies will be free to take any other steps punitive or otherwise under the Companies Act, 2013 for non-filing/late filing of statutory returns/documents against the Company and Directors.

The instant Appeal is allowed to the above extent. I.A., if any, stands disposed of.

Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the National Company Law Tribunal (Court-V, New Delhi), forthwith.