M/S Kempty Konstructions Private Limited And Ors. vs Registrar Of Companies And Anr.

The present appeal is filed by the company M/s Kempty Konstructions Private Limited (for brevity the ‘Company’), through its Directors

Mr. Sunil Kumar Aggarwal (for brevity the ‘Appellant’), under Section 252 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 30.06.2017 vide notification no. ROC-DEL/248(5)/STK-7/2879 by

Registrar of Companies, the respondent herein.

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

29/10/1987 under the Companies Act, 1956 with CIN U74899DL1987PTC029597, having its registered office at M-1 Anupam Bhavan, Azadpur

Commercial Complex, Azadpur, Delhi- 110033.

The Authorized Share Capital of the company is Rs. 25,00,000/- divided into 25,000 equity shares of Rs.100/-each. The issued, subscribed and paid

up share capital of the Company is Rs. 1,02,000/- divided into 1,020 equity shares of Rs.100/- each.

The main objects of the company are:

To carry on the business of builders, colonizers, architects, civil contractors, sub- contractors, valuers, surveyors, underwriters, constructional

engineers, real estate agents and consultants in India or any part of the world.

And other main objects.

As per the notice of non-compliance of provision of the Companies Act, 2013 in respect to filing of annual returns and financial statements for

financial years 2011- 2012 to 2016-2017, 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 could not been filed with Registrar of Companies due

to the operation of the stay order passed by the Hon’ble Company Law Board as back as on 20.09.2011. It is submitted that one of the Ex-

Director and shareholder of the appellant company Mr. Shivraj Singh, after ceasing to be shareholder and director, had filed a Company Petition

bearing no. CP ND (104)/2011 under Sections 397/398 read with Sections 402, 403 and 111 of Companies Act 1956 on 11.09.2011 before the

Hon’ble Company Law Board, New Delhi Bench, thereby alleging oppression/mismanagement. It is further stated that the Regional Director,

Ministry of Corporate affairs and the Registrar of Companies, NCT of Delhi and Haryana were also a party to the said petition. The Hon’ble

Company Law Board vide its order dated 20.09.2011 directed the appellant company (Respondents therein) that â€

“no Board meeting shall be held in the company and status quo as on today on fixed assets and shareholding shall be maintained till

further order of the CLB"".

The aforesaid petition was transferred to NCLT Delhi in pursuance of the notification dated 01.06.2016 and finally dismissed on 10.07.2017.

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 the aforesaid stay/ injunction granted by the Hon’ble Company Law Board. Since in pursuance no board meetings

or AGMs could be convened and thus no statutory documents as required under the provisions of the Companies Act could be filed. There was no

wilful or mala-fide motive behind non-filing of the Financial Statements and Annual returns, but due to operation of court order.

Surprisingly Registrar of Companies suo moto vide its letter dated 27.01.2017 had intimated the company about the marking of the company as

‘DORMANT COMPANY’ under Section 455(4) of Companies Act, 2013. The appellant company replied vide letter dated 20.04.2017

annexing all relevant orders and documents and apprised ROC about the pendency of the Litigation and the operation of stay orders passed by the

Hon’ble Company Law Board and also informed ROC that they are party to said petition, thereby requested them not to take any coercive action

against the appellant company.

The appellants have further 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, before striking of the name of the company. When the appellant company came to know about the striking off

of its name after publication of STK-7 on 30.06.2017, the company made a representation dated

28.07.2017 to the ROC annexing all the documents with respect to the said stay order dated 20.09.2011 as well as the status of the company being

declared as ‘Dormant’ by ROC suo moto on 27.01.2017 which was duly received in the office of the ROC. Since no reply was received from

ROC to the representation made by the company, reminders vide E-mails dated 08.08.2017, 28.11.2017 and 06.12.2017 were again sent to the ROC

and Regional Director. Copies of said emails are annexed with the application.

It is further submitted by the appellant that due to unlawful striking off the name of appellant company from the register as maintained by the ROC

Delhi and Haryana, the Directors were also disqualified in terms of Section 164(2) of the Company Act and DIN of all directors are deactivated

which has caused lot of hardships to the Company and management, and no compliance can be made with respect to filing of any documents with

ROC till the name of the company is revived on the portal of MCA hence the appeal.

The Respondent no.1 has taken a stand that Notices STK-1 were issued to the appellant company along with all the directors vide letter dated

22.03.2017. The notice under Section 455(4) was issued by ROC on 27.01.2017 to which the company had replied on 20.04.2017 i.e. almost 3 months

after the receipt of the said notice. The company had not complied with requirement under section 455 (5), hence the ROC proceeded under Section

248 of the Companies Act, 2013. Hence, the said reply of the company remained unconsidered.

In this regard, the company have filed a rejoinder dated 18.10.2018 where they have stated that Deputy Roc has made a categorical statement

during the hearing that they have marked the Company as “Under Management Dispute†and on the date of hearing they have submitted that

they failed to take any cognizance of the Stay order while striking off the company’s name. Therefore, these statements are self- explanatory that

ROC was well aware of Stay Orders being party to proceedings. In view of the above the act of striking off the name of the company is illegal.

Though principally the Appellant has argued that the act of ROC of striking off the name of company is ultra vires and lacks force of law but

otherwise also the company is entitled and be considered for revival on it being in operation and doing business as required under Section 252. The

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

a) The copies of Income Tax Returns filed for the assessment years 2010-2011 and 2011-2012.

b) The copy of Sale deed, dated 09.11.1987 executed between Shri Sultan Singh Gupta in favour of the appellant company M/s Kempty Konstructions

Pvt. Ltd., for 5 bighas of barren land forming part of Waverley Convent Estate situated at Mussoorie Distt. Dehradun, U.P. for a total consideration

of Rs. 1,50,000/-.

c) Copies of Correspondence with ROC from 20.04.2017 to 06.12.2017 with respect to issues of dormant status, status of ‘under management

dispute’, change of registered office.

d) Copies of various orders of CLB of pending litigations and order of status quo where the ROC is also a party throughout having knowledge of the

same. The CLB petition which was then transferred to NCLT and finally dismissed on 10.07.2017. The copy of the said order is annexed with the

appeal.

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 Assesse and 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 and the Section 252(3) further contemplates that one of the above 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.

The Appellants have submitted sufficient evidence that it has been in operation though having management disputes since last few years and

therefore could not be termed as defunct company as per section 252 of the Act. Thus, taking into consideration the provisions of Section 252(1) 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 along with CA 133/2018 is allowed. The Public Notice of Registrar of Companies striking the name of the company is

hereby declared illegal and 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. The ROC is directed not to levy any additional charges, late fees and/or any penalty against

the company and to take on record the new registered office address as submitted by the company and to reflect the corrected registered office

address of the company on MCA portal. ROC is further directed to take all care/precautions before striking off the company’s name which has

fatal consequences, even when the mass drive is undertaken by ROC. Negligence/ carelessness on the part of Government agency, causing

unwarranted hardships & suffering to law abiding citizens will only lead to loss of trust and respect towards such agency which is not in the interest of

National integrity. The name of the Appellant Company shall on filing of all relevant documents 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.