M/s Khanna Towels Private Limited vs Registrar Of Companies And Anr.

The present appeal is filed by the company M/s Khanna Towels Private Limited (for brevity the ‘Company’), through its Director Mr. Sunil

Khanna, 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 01.09.2017 vide notification no. ROC-DEL/248(5)/STK-7/5071 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

20.04.2004 under the Companies Act, 1956 with CIN U18101DL2004PTC125910.

The company is having its registered office at E-57, Ashok Vihar, Phase I, Delhi -110052.

The Authorized Share Capital of the company is Rs. 1,00,000/- divided into 10,000 equity shares of Rs. 10/-each. The issued, subscribed and paid

up share capital of the Company is Rs. 1,00,000/- divided into 10,000 equity shares of Rs. 10/- each.

The main objects of the company are:

To carry on the business as manufacturers, processors, importers, exporters, retailers, wholesalers, sellers, buyers, dealers, stockists, merchants,

agents and otherwise deal in all kind of towels, textiles, fabrics, napkins, sheets, covers of all sorts and description.

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 since

incorporation till 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 had not been filed with Registrar of Companies due to

inadvertence on part of the management.

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

a) The copy of Bank Statements of the Company of Axis Bank for the period 01.02.2015 to 15.12.2017 showing various transaction details of the

company and reflecting closing balance of Rs. 14,831/- as on 15.12.2017.

b) The copies of financial statements of the company for the financial years from 31.03.2006 to 31.03.2017. The Balance Sheet as on 31.03.2016

reflects Revenue from Operations of Rs. 70,55,565/-and Employee Benefits expenses of Rs. 5,91,000/-.

c) The copy of Conditional Deed of Conveyance dated 09.03.2005 executed between Rajasthan Financial Corporation, Bhiwadi and the appellant

company M/s Khanna Towels Pvt. Ltd. for property situated at plot no. G1-221 & 222, Industrial Area, Behror, District Alwar, Rajasthan for total

consideration of Rs. 11,05,000/-.

d) The copy of Demand Notice dated 03.07.2018 issued by Rajasthan State Industrial Development & Investment Corporation Ltd. to the appellant

company M/s Khanna Towels Pvt. Ltd. regarding payment of annual charges in respect of the said plot.

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 not submitted its report inspite of various opportunities given. Learned counsel for the Income Tax Department

states that instructions from the assessing officer is not received since the company has not filled any Income Tax Returns since 2004 i.e. the date of

incorporation. In this regard, an affidavit has been filed by the appellant stating that there are no pending dues/ outstanding demand towards the

Income Tax Department and if any demand arises from Income Tax Department, then Appellant Company shall co-operate with the Department for

the same.

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 Appellant has submitted sufficient evidence mainly of the possession of immovable property by the company and that it has been in operation

since incorporation 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 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 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.