MVS Real Estate Pvt Ltd vs Registrar of Companies

Manni Sankariah Shanmuga Sundaram, Member (Judicial)

The present appeal has been filed by Appellant Company under Section 252(3) of the Companies Act, 2013 for restoration of name of the company, which was struck off by the Registrar of Companies, NCT of Delhi and Haryana (Respondent) vide Public Notice ROC-DEL/248(1)/STK-7/6217 dated 29.10.2019.

Brief facts of the case, as mentioned in the instant company appeal, which are relevant to the issue in question, are as follows: -

a) That the subject company i.e., M/s MVS Real Estate Private Limited was incorporated on 07.06.1988 under the Companies Act, 1956 bearing CIN: U70109DL1988PTC031976, and is having its registered office situated at Villa-A Empire Estate Sultanpur, New Delhi-110030.

b) That the subject company was engaged in the business of real estate, immovable property dealers and to acquire, improve, manage, work, develop, exercise of all rights in respect of leases and mortgages and to lease, mortgagees and lease, sub lease, mortgage sell, dispose of or turn to account and otherwise deal with immovable property of all kinds.

c) That the subject company has two directors and 5 shareholders as on date and all the said shareholders have given their written consents to file the present appeal. The same is placed on record.

d) That the appellant no. 2 is the authorized representative of the appellant company and duly authorized by the board of directors of the appellant company to file the present appeal. The copy of board resolution is placed on record.

e) It is submitted by the appellant that the company is in possession of a plot at House No. KH No.-383 (350 sq. yards) and 384 (74 sq. yards) Vill Sultanpur, Colony Mehrauli, New Delhi-110030 of value of Rs. 7,00,000/- as the per the registered deed executed on 08.04.1991 measuring total 424 sq. yards on which stamp duty and corporation tax of total of Rs. 56,000/- has been paid to the government of Delhi. The sale deed executed in the Company’s favour evidencing the possession is placed on record.

f) The Appellant company submitted that the audited balance sheet and profit and loss statement for the F.Y.2015-16, 2016-17, 2017-18 and 2018-19, 2019-20, 2020-21, 2021-22 of the appellant company are also placed on record.

g) It is submitted on behalf of the appellant that though the company was in operation, the appellant company failed to file the statutory returns in time, due to which its name was struck off by the ROC. It is also submitted that such striking off of the name of the Appellant company from the Register of companies maintained by Respondent resulted in bringing the working of an operating company to a standstill, thereby adversely affecting not only the appellant company but its shareholders, creditors and other stakeholders and dealing parties.

h) It is also contented on behalf of the appellant that no notice has been received by the company or any other officer of the company in terms of Section 248 of the Companies Act, 2013 prior to the name of the appellant company being struck-off from the registrar of companies, by way of notification in the official gazette and the appellant came to know of this fact only after cessation of bank accounts of the company.

i) That the appellant company declares that no appeal pertaining to this matter has been filed before any Tribunal or pending before any other Tribunal.

The Tribunal vide order dated 21.03.2023 directed the Court Officer to issue e-notice to the Registrar of Companies and Income Tax Department. Pursuant to notice, Registrar of Companies, NCT of Delhi and Haryana (Respondent) had appeared and filed its reply dated 18.05.2023 to the instant appeal.

Vide order dated 28.09.2023 passed by this Tribunal, the Ld. Counsel for the ROC was present on that date and stated that they have no objection to the restoration of the name of the company in the register of companies subject to due compliance to all the provisions of law.

Vide order dated 30.05.2023 passed by this Tribunal, the Ld. Counsel for the Appellant was directed to file last three years’ Income Tax Returns along with affidavit-cum-undertaking clearly denoting the fact that the petitioner will pay the tax dues, if any, to the Income Tax Department as per law.

In compliance of order dated 30.05.2023, the appellant no. 2, director and Authorized Representative of the Appellant company filed an affidavit dated 20.07.2023 affirming that there are no pending dues against the company in favor of the Income Tax Department and also stated that since there was no business into the company, the Income Tax Returns were not filed after Financial Year 2014-2015.

Heard. Record has been thoroughly perused. We observe that the Applicant in order to sustain his case, has placed reliance on the following documents: -

a) Copy of audited financial statement and profit and loss for the Financial Year 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22

b) Copy of registration of a property executed on 08.04.1991

At this juncture, it will advantageous to examine the requirement of Section 252(3) of the Companies Act, 2013 insofar as grant of relief to the applicant is concerned. The Section 252 (3) of the Act is reproduced below for better appreciation:

“252. Appeal to Tribunal. –

(1) …………………………..

(2) …………………………..

(3) If a company, or any member or creditor or workmen 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 workmen before the expiry of twenty years from the publication in the Official Gazette of the notice under subsection (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.”

Thus, for seeking restoration under section 252(3) of the Companies Act, 2013, the applicant has to establish either (i) that the company was carrying on its business at the time its name was struck off or (ii) that it was in operation or (iii) that it would be otherwise just to restore its name to the Registrar of Companies. In the instant case, the applicants have submitted copies of audited financial statement for the financial year 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021- 22 to establish that the company was in operation during the time period when the public notice was issued by the ROC and the strike off order was issued and continued to carry out its business even thereafter. Copy of sale deed executed on 08.04.1991 has also been filed to substantiate the aforesaid claim. Thus, it appears to be a case of a company having operations during the relevant period but failing to file the statutory returns with the ROC.

In connection with the non-filing of statutory records, it is pertinent to refer to the findings of Hon’ble High Court of Delhi in the matter of Mace Platronics Pvt Ltd Vs ROC, reported in (2010) 104 SCL 277 (Del), wherein it was held that:

“When the name of the company was struck off after following the prescribed procedure for non-filing of statutory records, even though the contentions of the company that the officials entrusted with responsibility of filing documents had failed to do so cannot be accepted yet since the company was a running company and the application had been filed in time, the court had power to restore the name of the company.”

Hence, upon considering the facts and circumstances of this present petition, this Bench is of the view that, it would be just and proper to order restoration of the name of the Company in the Register of Companies maintained by the ROC.

Accordingly, this Petition is allowed. The restoration of the Company’s name to the Register of Companies maintained by the ROC, is hereby ordered, subject to the following directions namely-

a. The restoration of the Company’s name i.e., MVS Real Estate Private Limited is subject to the payment of cost of Rs. 50,000/- (Rupees Fifty Thousand Only) to be paid to the Registrar of Companies, NCT of Delhi and Haryana. The name of the Company M/s MVS Real Estate Private Limited shall then, as a consequence, stand restored to the Register of the Registrar of Companies, as if the name of the company has not been struck off in accordance with Section 248(1) of the Companies Act, 2013.

b. The Registrar of Companies, NCT of Delhi & Haryana (Respondent) is directed to restore the original status of the Appellant company as if the name of the company has not been struck off from the Registrar of Companies with resultant and consequential actions like changing status of the company from ‘struck off’ to “Active”.

c. The Applicant is directed to file all pending statutory document(s) including Annual Returns and Balance Sheets in default along with prescribed fee/additional fee/fine as prescribed under the Companies Act, 2013 within 45 days from the date on which its name is restored on the Register of Companies by the ROC, NCT of Delhi and Haryana (Respondent). Consequently, thereupon the bank account/s if any subject to freeze shall get de-freezed and to be operated by the company.

d. The Applicant is directed to submit a certified copy of this order to ROC, NCT of Delhi and Haryana within thirty days (30) of the receipt of this order.

e. This order is confined to the violations, which ultimately leads to the impugned action of striking of the name of the Company M/s MVS Real Estate Private Limited, and it will not come in the way of Respondent to take appropriate action(s) in accordance with law, for any other violations/offences, if any, committed by the said Company prior or during the striking off of the said Company.

f. Resultantly, the present appeal i.e., Company Appeal No.44/252/ND/2023 stands allowed with aforesaid terms.

Let the copy of the order be served to the parties.

File be consigned to records.