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Judgment
Rahul Bhatnagar (Member Technical)
This Appeal has been filed by the Company “M/s. Newport Construction Private Ltd” hereinafter referred to as “the Appellant-Company” invoking the provisions of Section 252 (1) of the Companies Act, 2013 (the Act) for restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi & Haryana. The authorized capital of the Appellant-company is Rs.2,00,000/- and paid up share capital of Rs.100,000/-.
As per the averments M/s. Newport Construction Pvt Ltd., was incorporated on 24.12.2003 as a private limited company and has its registered office at E-35, Lajpat Nagar-III, South Delhi, New Delhi 110024 having CIN No. U45201DL2003PTC123688.
Since incorporation, the Appellant-company is engaged to carry on business as Engineers, owners, builders, colonisers, developers, promoters, proprietors, occupiers, lessors, civil contractors, maintainers and mortgagers of residential, commercial and industrial buildings, colonies, mills and factory’s sheds and buildings, workshop building, cinema houses, buildings and to deal in all kinds of immovable properties whether belonging to the Company or not.
To undertake and to carry on the business of purchasing selling and developing any type of land or plot whether residential, commercial, industrial, rural or urban that may belong to Company or any other person of whatever nature and to deal in land or immovable properties of any description or nature on commission basis and to deal in building material and electrical and civil material. To acquire land for construction of multi-storied buildings and to license the flats therein on suitable terms and conditions.
A sweeping action was initiated by the ROC at the instance of MCA in striking off the names of several Companies who had failed to file their Statutory Returns. The appellant had failed to file its Financial Statements and Annual Returns from Financial Year ending 31.03.2016 onwards thereby giving rise to the surmise that the business of the company was not in operation. Consequently, its name was struck off by the Respondent from the Register of Companies under Section 248 of the Companies Act, 2013 vide Notice No. ROC-DEL/248/STK-5/721 dated 27.04.2017 followed by struck off Notification No. ROC/DELHI/248(5)/STK-7/2879 dated 30.06.2017 at Sr.No.13367.
Upon notice to the Registrar of Companies, (“RoC”), ROC filed their reply. The RoC in their affidavit stated that the action of striking off the present Company was legal and justified and was the result of the operation of the Law, as the company was not carrying on any operations for a period of two immediately preceeding financial years.
Notice was duly served to the Income-tax Department but no one appeared on behalf of the Income-tax Department thus they were proceeded ex-parte. ROC in their affidavit submitted that they have no objection if the Appellant –Company’s name is restored in the Register of RoC.
The appellant –company in their petition submitted that the Company relied upon professionals and employees of the Company for compliance of statutory provisions. However, due to unknown reasons they did not acted in a proper manner. The appellant-company submitted that non-compliance of provisions of the Act was inadvertent and not a wilful one.
Non filing of above statutory documents with ROC was an inadvertent mistake on the part of the management of the company but it was not deliberate. The Appellant company submitted that they are ready to file the above statutory documents now with payment of additional fees.
In order to corroborate above submissions the petitioner has placed before us the following evidence:-
i) Revenue from operations: As per unaudited Profit & Loss account:
F.Y. 2020-21 Nil
F.Y. 2019- 20 Nil
F.Y. 2018-19 Rs.7,50,000
F.Y. 2017-18 Nil with Nil revenue figure in the corresponding year 2016-17.
Audited Fin. statements: Appellant-Company submitted unaudited financial statement for F.Y. 2017-18 to 2020-21.
ii) Bank Statement: Submitted with the petition for following period:01.03.2017 to 25.09.2018, 01.04.2020 to 21.03.2021. and from 16.11.2021 to 16.11.2021
iii) ITR Acknowledgements The Appellant –company submitted copiesofIncome-tax Returns Acknowledgement with Petition for Assessment Year: A.Y. 2016-17 showing Nil as tax paid. For A.Y. 2017-18
showing Nil as tax paid. For A.Y. 2018-19 showing Rs. 1000/- as tax paid.
iv) The Appellant-company also submitted photocopy of Sale Deed dated 27.03.2006 showing purchase of Plot No.257 in Block B, measuring 250 sq. metres of land in Gurugram, Haryana from Ansal Properties & Industries Ltd., 115, Ansal Bhawan, K.G. Marg, New Delhi for a consideration of Rs.28,40,500/- and paid Stamp Duty of Rs.1,71,000/-. ROC and also submitted that they have no objection if the Appellant –Company’s name is restored in the Register of RoC.
We have considered the plea of the Appellant and the representations of RoC. The Appellant is seeking restoration of the name of the Company namely Newport Construction Private Limited in the Register as maintained by RoC relying on the ground that the Appellant Company is actively doing business and is in the possession of certain assets.
The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act, 2013 which includes that, if it is just and equitable to restore the name of the company in the Registrar of Companies, it may direct the RoC to restore the name in its Register.
The appellant has been able to satisfy this Bench that it has complied with the statutory requirements and has certain assets which necessitate and justify restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable. As per several decisions of various Courts it should only be in exceptional circumstances that Courts should refuse restoration where the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight.
Accordingly, the appeal is allowed subject to payment of costs of Rs.25,000/- to the Prime Minister Care Fund, New Delhi. The restoration of the Appellant Company’s name in the Register will be subject to their filing all outstanding documents for the defaulting years as required by law and completion of all formalities, including payment of any late fee or other charges which are leviable by the respondent for the late filing of statutory returns. The name of the petitioner company shall then stand restored in the Register of the Registrar of Companies (RoC), as if its name of the company had not been struck off.
The direction for freezing the Bank Account(s) of the Appellant company, if on this ground, shall consequently be also set aside immediately to enable the company carry out its business operation. Compliance of this order for restoration shall be made by the respondent with all its consequential effects within one week of compliance by the appellant.
The appeal is allowed and disposed of accordingly.
Let the copy of the order be served to the parties.