Mansingh Steels Pvt. Ltd. And Anr. vs Registrar Of Companies And Anr.

The appellant company M/s. Mansingh Steels Pvt. Ltd. (for brevity “the companyâ€) has filed this appeal under section 252 of the Companies

Act, 2013 (hereinafter called as ‘the Act’) through and along with its Director Mrs. Nirmal against the order of the Registrar of Companies

(ROC), NCT of Delhi and Haryana dated 07.06.2017. The order mentioning the name of the Company at Serial No. 12605 with CIN

U27106DL1999PTC098667 was duly published in Official Gazette on 30.06.2017. The name of the company has been struck off from the Register of

Companies maintained by the respondent ROC, under section 248(5) of the Act read with Rule 7 and Rule 9 of Companies (Removal of Name of the

Companies from the Register of the Companies) Rules, 2016.

It is stated that the company is incorporated as a Private Limited Company with the Registrar of Companies, NCT of Delhi and Haryana on 14th

March, 1999 under the Companies Act, 1956 having U27106DL1999PTC098667.

The registered office of the company is situated at GG. 2, Hans Apartments, East Arjun Nagar, Near Karkarduma Courts, Shahdra, New Delhi.

Authorized share capital of the Company is Rs. 30,00,000/-divided into 3,00,000 equity shares of Rs.10/- each and issued, subscribed and paid up

share capital of the Company is Rs.9,50,000/- divided into 95,000 equity shares of Rs.10/-each.

The main objects of the company are:

a. To carry on the business of manufacturing ferrous or non-ferrous iron and steel of all kinds including stainless steel, steel balls, cycle parts, sheet

metal, alloys and special steels from melting scrap and sponge iron or any other material with the help of furnaces of all kinds or by any other method

and to deal in iron and steel of all kinds.

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 since

incorporation, 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 on 30.06.2017, 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 from 31.03.2000 to 31.03.2017. The Balance Sheet as on 31.03.2017

reflects fixed assets of Rs. 1,73,43,310/- and Loss of Rs. 8,534/-

ii. The copy of sale deed of agricultural land, dated 20.09.1999 executed by Mr. Prem Singh Sardhanand in favour of the appellant company, situated

at Khata No. 63, 34/9 Vakardava Mauja Kawali, Kharkhauda admeasuring about 8 kanal 8 Marla for total consideration of Rs. 2,00,000/-, which is

also reflected in the bank statement.

iii. The copy of lease deed, dated 01.04.2014 executed by the appellant company in favour of Mr. Sehdev Doon, for the property situated at Kila No.

34/9, Village Kanwali, Kharkhoda, Sonipat admeasuring about 3500 square feet for the term of three years for annual rent of Rs. 1,32,000/-, although

the lease has been expired now, but was subsisting during the period of striking off.

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 due to lack of professional guidance 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 before this Hon’ble Tribunal that the company does not have any PAN Card and thus no details

about the company could be obtained and further states that Department may if required, will take action under Section 272(b) of the Income Tax Act

but has no objection if the company is considered for revival.

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.

Further, relying on the following Judgement, namely, order of Honourable High Court of Delhi in Company Petition No. 174/2013 dated

02.12.2013, 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.

The Section 252(3) contemplates that one of the three conditions are required to be satisfied before exercising jurisdiction to restore company to its

original name on the register of the Registrar of Companies namely:

a. That the company at the time of its name was struck off was carrying on business.

b. Or it was in operation

c. Or it is otherwise just that the name of the company be restored on the register.

The Appellant have submitted sufficient evidence that it has been in operation since incorporation 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.

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.