Quikroute India Private Limited vs Registrar of Companies, Mumbai

K. R. Saji Kumar, Member (Judicial)

This Appeal is preferred on 09.10.2023 under Section 252(1) of the Companies Act, 2013 (Act) by Mr. Kaushik Mukund Shah, Director of Quikroute India Private Limited (Appellant Company/Company) against order of the Registrar of Companies, Mumbai (RoC), striking off the name of the Company from the Register of Companies, Mumbai, Maharashtra and dissolving the Company.

The name of the Appellant Company was struck off from the Register of Companies on account of the Company having failed to comply with the statutory obligation of filing its Financial Statements and Annual Returns for more than two years. The RoC initiated proceedings under Section 248 of the Act and finally struck off the Company from the Register of Companies vide Form No. STK-7 dated 14.11.2022 under Section 248(5) of the Act.

Contentions of Appellant

3.1 The Appellant Company submits that the Company was incorporated on 10.02.2021. The Company was carrying on the business of “e-commerce trading” to transact wholesale business vide business to business(B2B) model as importers, exporters, buyers, sellers, merchants, traders or in any other capacity in India or elsewhere and import, export, supply, buy, sell, barter, exchange, transport, store, promote, pledge, made advances upon or otherwise deal and trade in all types of e-commerce business in all goods, materials, commodities. It is submitted by the Appellant Company that it was only informed vide e-mail dated 14th November, 2022 that the Company has been struck off and dissolved on the ground that the subscriber to the memorandum has not paid the subscription which they had undertaken to pay at the time of incorporation of Company and a declaration to this effect has not been filed within 180 days from its incorporation. It is submitted that it was not given an opportunity of being heard before the decision to strike off the Company. The Company further submits that for the FYs 2021-2022 and 2022-2023, it was not having any business income as the business had not commenced since one of the shareholders of the Company is a foreign individual who was unaware of the legal requirement to file the declaration within the specified timeframe and was unable to remit the subscription money as required. The bank account of the Company was frozen by the relevant authorities. This resulted in inability to receive funds remitted by foreign shareholder and other shareholders and had a severe impact on ability to commence business operations.

3.2 It is also submitted that Company had positive net worth and its financial position is also good and sound, which is evident from the audited financials of the Company for Financial Year ended 31st March, 2022 and 31st March, 2023.

3.3 It is submitted that neither any notice was ever served on the Company nor any reply or opportunity of hearing was ever given before resorting to the disproportionate action of striking off the Company’s name from the Register.

3.4 It is also submitted that in the event of restoration of name of the Company in the Register of Companies and its revival, the Company would comply with all the statutory obligations. The Appellant Company has cited various judgments of the Hon’ble Supreme Court and various High Courts to substantiate its claim for restoration of name in the Register of Companies.

Contentions of Respondent/RoC

4.1 The Respondent / RoC submitted that although the Company was incorporated on 10.02.2021, it has failed to comply with the statutory compliance of filing of returns for a continuous period of more than two years, indicating commencement of business period, and hence, the Company was considered for striking off from the Register in a suo motu action under Section 10A of the Act as well as in accordance with the Circulars, as applicable, issued by the Ministry of Corporate Affairs (MCA).

4.2 The RoC stated that STK-1 Notice informing the intention of the RoC to strike off the Company was given to the Company. Further, STK-5 Notice was published on 01.10.2022 and the name of the Company was struck off on 14.11.2022 and was published on the website maintained by MCA and published in the Official Gazette on 17.12.2022 and in leading English Newspaper and a vernacular language newspaper. However, the RoC did not receive any representation from the Company against the striking off action, and that is the reason, subsequently, it was struck off from the Register and was dissolved on 14.11.2022. The RoC has also submitted that disqualification for appointment as Directors under Section 164(2)(a) of the Act cannot be cured even if this Appeal is allowed. The RoC concluded submissions praying for imposing maximum cost of the total fine for the defaults of various sections of the Act, if we are inclined to allow the present Appeal.

Analysis & Findings

5.1 This Appeal has been filed by the Company within one year from the date of the order of the RoC striking off its name and dissolving the Company under Section 248 of the Act. We have considered the reasons given by the Appellant due to which the name of company has been struck off and we find that there was no wilful failure on the part of the Appellant Company as such struck off was done on account of non-payment of the Subscription which they had undertaken to pay at the time of incorporation of a company and non-filing of declaration to this effect within one hundred and eighty days of its incorporation under sub-section (1) of Section 10A of the Act. The Company has attached balance sheet of FY 2021-22, 2022-23 and also attached the ITR of 2022-23 and 2023-24. We have heard both the Authorised Representative for the Appellant Company and the RoC, and considered all the documents on record. We find that the Company was conducting business and does have good business opportunities in future. The Company has filed audited financial statements for the year ending 31st March, 2022 and 31st March, 2023 as also Income-tax Returns for Assessment Years 2022-23 and 2023-24 have been filed. It had not filed the status of dormant company under Section 455 of the Act at any time since its incorporation. We feel that the relevant documents which are required to be filed, are ready with the Company and it is willing to file the same.

5.2 Hence, upon considering the facts and circumstances of this present Appeal, we are of the view that it would be just and fair to order restoration of the name of the Company in the Register of Companies maintained by the RoC.

5.3 Accordingly, this Appeal is allowed. The restoration of the Company's name to the Register of Companies maintained by the RoC is hereby ordered with a direction that the Company shall comply with all the provisions of the Act and the Rules made thereunder. Further, this Oder shall be subject to payment of cost of Rs. 25000/- imposed for each year of default until the current financial year, to be paid online through Bharat Kosh to the Respondent/RoC. The RoC is directed to restore the original status of the Company as if the name of the Company had not been struck off from the Register of Companies.

5.4 The RoC shall give effect to this Order after compliance of the costs imposed as above. The Company is directed to file all the required Financial Statements and Annual Returns along with the prescribed fee/fine as decided by the RoC. The Company shall fulfil other relevant statutory compliances within 30 days from restoration of its name in the Register of Companies maintained by the RoC.

5.5 After due compliance of the above directions, RoC is directed to publish the order in the Official Gazette by his office name and seal.

5.6 This order is confined to the violation which ultimately led to the impugned action of striking off the name of the Company and it will not come in the way of RoC taking appropriate action in accordance with law for any other violations/offences, if any, committed by the Company either prior to or during the period the name of the Company remained struck off.

The C.A. No. 147/2023 is allowed and disposed of in terms of above directions.

The Registry is directed to send copies of the order to all the parties concerned forthwith.