Pahuja Law Academy Private Limited vs Registrar Of Companies

Rahul Bhatnagar, Member (Technical)

This Appeal has been filed by the Company named “M/s. Pahuja Law Academy Pvt Ltd”, hereinafter referred to as “the Appellant-Company” invoking the provisions of Section 252 (3) 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.5,00,000/- and paid up share capital of Rs.5,00,000/-.

As per the averments M/s. Pahuja Law Academy Pvt Ltd., was incorporated on 21.12.2015 as a private limited company and has its registered office at D-1, Virat Bhawan, 212 D, North West, New Delhi 110019 having CIN No. U74999DL2015PTC288735.

Since incorporation, the main objects of the Appellant-company as set out in Memorandum of Association are :-

i) "To establish, setup, and run in any part of India coaching institutes, Study center, oral coaching classes, where in professional, technical, vocational or higher education in every field of science, commerce, arts, management, engineering, law, banking, insurance, finance, medicine, hospitality, tourism, computers, or any other type of education be imparted by conducting regular , part time classes."

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 –company failed to file their statutory returns for F.Y. 31.03.2017 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 struck off Notice STK-1 dated 17.11.2021 and ROC-DEL/248(1)/STK-5/2022/535 dated dated 30.01.2022 followed by Struck off Notification No.ROC/DELHI/248(1)/STK-7/2341 dated 20.04.2022 at Sr.No.6525 published in the official Gazette.

Upon notice to the Registrar of Companies, (“RoC”), ROC filed their report dated 31st July, 2023. 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.

The appellant –company in their petition admitted that the Appellant -Company could not file its Annual Returns and Financial Accounts for the F.Y. years 31.03.2018 to 31.03.2022 which they have annexed with their petition and undertaken to take due care in future to ensure that provisions of Companies Act are thoroughly complied with in true law and spirit and such defaults are not repeated/ reoccur in future.

The ROC submitted its affidavit cum Report dated 31.07.2023 and Ld. Counsel appearing for Income-tax Department stated that Income-tax Department has no objection if the name of the Appellant- company is restored in the register of the ROC. The ROC in their report submitted the following :-

Particulars

Revenue from operations

As per Profit & Loss A/c attached.

F.Y.2017-18: Rs. 1,91,75,578

F.Y.2018-19: Rs. 2,94,23,632

F.Y.2019-20: Rs. 1,11,56,897

F.Y. 2020-21:Rs.79,42,90

F.Y.2021-22: Rs. 1,39,83,091

Audited

Financial statement

Submitted with petition for

F.Y. -2017-18, 2018-19 ,2020-21

& 2021-22.

Bank Statement

Submitted with petition 01.04.2017 - 31.12.2017;

01.01.2018 - 31.12.2018;

01.01.2019 - 31.12.2019;

01.01.2020 - 31.12.2020;

01.01.2021 - 31.12.2021;

01.01.2022 - 23.12.2022

Income    Tax Returns Acknowledge ments

Acknowledgement copy of ITR submitted with Petition for the following Assessment Year:

A.Y. 2017-18 showing Rs. 90,821 as tax paid A.Y.2018-19 showing Rs.1,52,390 as tax paid A.Y.2019-20 showing Rs.1,28,288 as tax paid

A.Y. 2020-21 showing NIL as tax paid

A.Y. 2021-22 showing NIL as tax paid

A.Y. 2022-23 showing NIL as tax paid.

Non filing of above statutory documents with ROC is 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.

We have considered the plea of the Appellant and the representations of RoC. The Appellant is seeking restoration of Pahuja Law Academy Pvt Ltd., 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.

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 Registrar of Companies. 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.

13 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 to 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.