Mukesh Kumar Gupta vs The Registrar Of Companies

Justice Anant Bijay Singh;

The present Appeal under Section 421 of the Companies Act, 2013, has been filed by the Appellant being aggrieved and dissatisfied by the order dated 08.11.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) in Appeal 106/252(ND)/2021 whereby and whereunder appeal filed by the Appellant Company 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:

The Ld. Counsel for the Appellant during the course of argument and grounds mentioned in the memo of appeal, submitted that the impugned order is contrary to both law and facts. Section 248 of the Act, the name of the company can be struck off on the ground that it has done no business or operation for two immediately preceding financial years from the date of notice. In the present matter, the date of notice is 30.06.2017 and the two preceding years are 2014-15 and 2015-16. The impugned order erroneously records that no substantial activity has been done in the financial year 2014-16 (within the preceding two years) however, brushed aside the vital fact that during the said time period, properties worth around Rs. 6 crores were purchased by the company vide registered Sale Agreements which clearly shows that the company was/is in operation when the name was struck off. The company had also made an advance payment of approximately Rs. 1.90 crores towards the purchase of the said assets through Bank Accounts. As on 31.03.2016, the company had Financial Creditors of Rs. 17,12,12,450/- and Debtors of Rs. 10,73,88,000/-

It is further submitted that the Tribunal while passing the impugned order failed to appreciate that due to market recession, the development of the land was struck and only when the demand emerged, the company could have further developed the projects. Further also failed to appreciate the numerous Judgments of this Tribunal wherein if the company has substantial assets on record, then the name of the company cannot be struck off.

It is further submitted that Section 248(1) of the Act, specifically provides that statutory notice has to be issued to all the Directors of the company as well as the company, to ensure that no solvent/functional company be struck off. However, in the instant case, the said procedure has not been followed and accordingly, the name of the company has been struck off in violation of the law of the land and in gross violation of the principles of natural justice. In absence of personal notice, the company/its directors could not submit a representation and place on record the relevant facts which clearly prove that striking off the name from Registrar of Companies records is not warranted in the present case. It is accordingly gross violation of Act.

It is further submitted that the impugned order runs contrary to the law laid down by the court wherein the name of the company was restored in view of the fact that due to non-compliance of Section 248(1) of the Act, the Directors could not send their representations along with relevant documents before the Registrar of Companies and further, before passing the order Registrar of Companies had not recorded its satisfaction as per Section 248(6) of the Act.

It is further submitted that the company has many creditors which have to be settled after the restoration of the name of the company in Registrar of Companies records and the Bank Account of the company becoming operational. The non-compliance is inadvertent, non-deliberate and unintentional and the Appellant has been/is ready to comply with all the statutory provisions in the further, if the name of the company is restored by the Registrar of Companies.

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

On the other hand, the Respondent/Registrar of Companies in his reply stated that as per available records on MCA 21 portal, the last Directors of the Appellant Company were found namely Jitender Kharbanda and Mukesh Kumar. The Company was incorporated on 13.12.2007 and the last Annual Return and Balance Sheet submitted by the company to this Office, before it was considered to be struck off, pertain to the financial years ended on 31.03.2011. 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. Hence, 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. Thereafter, the Registrar of Companies issued the notice in the form of STK-1 in March, 2017 intimating the company and the directors of the company at their registered office about the aforesaid defaults, providing them a fair opportunity to respond. Subsequently, this office also issued public notice for the same in the form of STK-5 in May, 2017. Thereafter, the name of the company was struck off as per the provisions of section 248(1)(c) of the Companies Act, 2013 read with Rule 9 of the Companies (Removal of Names of Companies from the register of Companies) Rule, 2016 vide notice in the form of STK-7 dated 07.06.2017.

It is further stated that the Appellant Company was not carrying out any operation for a period of 2 immediately preceding financial years. The Company was unable to produce before the Tribunal any just and equitable grounds for restoration, therefore, their petition was dismissed. Since the company was neither able to prove that it was carrying any business before it was struck off nor produced any just and equitable grounds for restoration before the Tribunal. In view of the above, the Appeal may be dismissed.

After hearing the parties and going through the pleadings made on behalf of the parties, we observed that the Audited Financial Statements for the Financial Years from 2014-15 to 2015-16 shows that the Appellant Company is having substantial movable as well as immovable assets and the Company was/is in operation when the name was struck off. 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, Court-II) 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 08.11.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) in Appeal 106/252(ND)/2021. The name of the Appellant Company be restored to the Register of Companies subject to the following compliances.

The instant Appeal is allowed to the above extent.

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 (New Delhi Bench, Court-II), forthwith.