Raj Nandani Buildtech Ltd vs Registrar of Companies

Justice Anant Bijay Singh

The present Appeal has been preferred by the Appellants under Section 421 of the Companies Act, 2013 against the Impugned Order dated 07.01.2021 passed by the National Company Law Tribunal (Court-V, New Delhi) in Company Appeal No. 293/252/ND/2020 whereby and whereunder the Appeal filed by the Appellants invoking the provisions of Section 252 of the Companies Act, 2013 for restoration of the name of the Company in the Register maintained by the Registrar of Companies was allowed by the Tribunal subject to payment of costs of Rs. 75,000/- to the Prime Minister Relief Fund along with Rs. 75,000/- to the Ministry of Corporate Affairs.

The fact of the case is that the Appellant No. 1 was incorporated on 25.10.2005 under the provisions of Companies Act, 1956 and engaged in the business of real estate. The Appellant No. 1’s authorized share capital is Rs. 2,00,00,000/- and the paid-up share capital of Appellant No. 1 is Rs. 9,65,000/-. The Appellant No. 1 was incorporated to develop real estate project to achieve the object of its incorporation, huge sum was infused in the Appellant No. 1 which is evident from the balance sheet filed with the record of Registrar of Companies. The Appellant No. 1 has continued to operate its business even during the difficult times which still persists due to huge slack in the real estate market. The Appellant No. 1 through its Promoters and Directors are trying hard to arrange for the funds and to revive the business of Appellant No. 1 to its past glory.

Further case is that the annual account for the financial year 2010-11 to 2017-18 were made and duly audited by the auditor of Appellant No. 1. However, Appellant No. 1 annual filing since the financial year 2010-2011 was not done due to oversight/inadvertent error of the professional Company Secretary. In the month of August 2020, Mr. Ravinder Kumar was informed by a professional (practising Company Secretary) that the name of Appellant No. 1 has been struck off from the records of Registrar of Companies, NCT of Delhi. Mr. Ravinder Kumar, through the said professional, checked the master data at the MCA portal which showed that the name of Appellant No. 1 was actually struck off.

Thereafter, the Appellants filed an appeal dated 16.08.2020 before the Tribunal under Section 252 of the Companies Act, 2013 read with Rule 87A of National Company Law Tribunal (Amendment) Rules, 2017 seeking restoration of the name of the Company on the file of Registrar of Companies maintained by the Registrar of Companies, NCT of Delhi and Haryana. After hearing the parties, the Tribunal passed the impugned order which led to filing of this Appeal.

The Ld. Counsel for the Appellants during the course of argument and in his memo of Appeal submitted that the imposing costs on the Appellants, is bad in law and is contrary to CFSS, 2020 initiated by Ministry of Corporate Affairs. It is further submitted that the Appellants are undergoing severe financial hardships due to slump in the real estate sector, especially in the Delhi NCR region and further due to the halt in the regular conduct of business due to COVID-19. Based on these submissions the impugned order is deserves to be set aside and the Appeal be allowed.

The Ld. Counsel for the Respondent No. 1 during the course of argument and in his reply affidavit submitted that Appellant Company has filed its Financial Statements till financial year 31.03.2010, due to which the Respondent had reasonable cause to believe that the Appellant Company was not in operation and in terms of provisions of Section 248(1) Notice was sent to the Appellant Company and also to its directors by invoking the provisions of Section 20 of the Companies Act, 2013.

It is further submitted that the said order has been passed in due consideration of the relevant facts, the Company has submitted audited financial statements for 2 years latest being financial year 2017-18 and has an office complex, the appeal to restore the name of the Company to the Register of RoC is allowed under Section 252 subject to payment of costs of Rs. 75,000/- to the Prime Minister “Relief Fund along with Rs. 75,000/- to the Ministry of Corporate Affairs. The restoration of the name of the Company in the Register will be subject to cost imposed by the Tribunal or this Appellate Tribunal as may be deemed just and necessary in the facts and circumstances of the present case.

After hearing the parties, we allow the instant Appeal with modification of the cost imposed by the Tribunal to the extent that the Appellant shall pay cost of Rs. 25,000/- to the Prime Minister Relief Fund and Rs. 25,000/- to the Ministry of Corporate Affairs.

With the modification of the impugned order to the above extent, the instant Appeal is disposed of accordingly.

Registry to upload the Order on the website of this Appellate Tribunal and send the copy of this Order to the National Company Law Tribunal, (Court-V, New Delhi), forthwith.