Ramanathan Bama And Ors vs Registrar Of Companies

R. Varadharajan, J

In case a person is aggrieved by the actions of the Respondent, namely, Registrar of Companies (RoC) in striking off the name of the Company from the Register of Companies maintained by the RoC, the recourse is made available under Section 252 (3) of the Companies Act, 2013 to approach this Tribunal. In the instant case, it is seen that in view of the striking off the name of Abachem Specialty Chemicals Private Limited (hereinafter referred to as the Company), a shareholder namely, Ramanathan Bama has approached this Tribunal aggrieved by the actions of Respondent vide Notification No. ROC/CNN/STK-7/2018 dated 09.08.2018.

From the submissions made in the Application/Appeal, it is evident that the Company is a Private Limited Company incorporated on 22.06.2012 under the Companies Act, 1956 having its Corporate Identity Number U24110TN2012PTC086449 in the State of Tamil Nadu. The Registered Office of the Company is situated at No. 14/20-A, Ground Floor, 5th Street, 1st Main Road, Thiruvalluvar Nagar, Chennai - 600 118, Tamil Nadu.

The Authorized Share Capital of the Company is Rs. 1,00,000/- consisting of 10,000 Equity Shares with a face value of Rs. 10/- each and the Paid-up Share Capital of the Company is Rs. 1,00,000/- consisting of 10,000 Equity Shares of Rs. 10/- each out of which it is represented that the Applicant/Appellant is holding 5,000 Equity Shares of Rs. 10/- each.

It is averred that the Company has been incorporated to carry on the business of manufacturing, producing, processing, making, converting, refining, importing, exporting, trading, buying, selling, retailing, wholesaling, supplying, indenting, packing, moving, preserving and dealing in all kinds and types of chemical and chemical compounds (organic and inorganic) in all forms. It is further averred in the Application that the Company is carrying on the said business and has been active since its incorporation.

The Applicant/Appellant would contend in the Application that the Company was regular in filing the Financial Statements and Annual Return till the financial year ended 31.03.2015, however, subsequently the Company was not in a position to file the Financial Statements and Annual Return from the Financial Year ended 31.03.2016, 31.03.2017 and 31.03.2018 due to lack of professional guidance, and in the said circumstances, the default has arisen.

It is required to be noted that the striking off the name of the Company is being objected by the Applicant/Appellant by stating that the due process of law has not been followed by the Respondent prior to the striking off. It is further stated that even though the Company has not been regular in filing the Financial Statements and Annual Returns as per the provisions of the Companies Act, 2013, however, the compliance of filing of VAT returns and obtaining GST certificates of the Company establishes that the Company has been carrying on its business at relevant time.

Taking into consideration the ground that the Company has been functioning all along since its incorporation and carrying on its business, this Application/Appeal has been filed by the Applicant seeking the relief for restoration of the name of the Company on the Register of Companies maintained by the RoC which had been struck off.

Subsequent to the notice issued to the Respondent/RoC, the Respondent has duly entered appearance through its Counsel and also filed the Report in this Tribunal on 12.03.2020.

A perusal of the Report filed by the RoC shows that even though a contention has been raised that the person who has preferred the Application before this Tribunal being a Director of the Company is not entitled to approach this Tribunal, it is required to be noted that the Applicant/Appellant also happens to be a shareholder of the Company. In the said circumstance, the contention raised by the Respondent/RoC in this regard is not sustainable.

It is also contended by the Respondent/RoC that the due process of law prior to striking off of the Company has been followed as stated in Paragraph 10 of the Report. Since the said contention has not been disputed by the Applicant /Appellant during the course of oral submissions, even though given as a ground in the Application, this Tribunal is not exercising itself as to whether the due process of law has been followed by the Respondent prior to the striking off the Company or not.

Further contention as has been raised by the Respondent in the Report is to give a direction to the Company to establish that the Company was carrying on its business or was in operation and that it is just that the name of the Company be restored to the Register. In relation to the said contention raised by the Respondent/RoC, the Learned Authorised Representative for the Applicant/Appellant drew the attention of this Tribunal to the Bank Statement filed along with the Application annexed as Annexure-3 at pages 28 to 186 and attention of the Tribunal was further drawn to the VAT Returns annexed as Annexure-5 at pages 223 and 224 and GST certificate issued by the Authority annexed as Annexure-6 at pages 225 to 227 of the typed set filed along with the Application to establish that the Company was in continuous operation immediately prior to the striking off. The Learned Authorised Representative for the Applicant/Appellant further drew the attention of this Tribunal to the Financials from the year 2015 to 2018 annexed as Annexure-7 at pages 228 to 326 of the typed set filed with of the Application in this regard. The Learned Authorised Representative for the Applicant/Appellant submits that taking into consideration all these evidences, clearly establishes that the Company has been in operation for the relevant period immediately prior to the strike off, as required under the provisions of Section 252 (3) of the Companies Act, 2013. Therefore, it is just that the Company should be restored on to the Register of Companies maintained by the Respondent, it is being stressed.

Even though notice seems to have been given to the Jurisdictional Income Tax Authority pursuant to the directions issued by this Tribunal vide Order dated 12.02.2020, however, the Income Tax Authority has neither chosen to respond nor appear before this Tribunal in relation to the Application and in the said circumstance, this Tribunal is constrained to proceed to decide the Application in the absence of Income Tax Authority or benefit of its report in relation to the Company.

A perusal of the Order of proceedings dated 16.06.2020 shows that during the course of submissions, the Learned Authorised Representative for the Applicant/Appellant drew the attention of this Tribunal to the Invoices as well as the Bank Statement filed by the Applicant and to a query addressed to the Learned Authorised Representative for the Applicant as to whether the amounts as stated in the Tax Invoices in relation to its Customers namely the Company Customers have been received in cash or through banking channel to which query the Learned Authorised Representative for the Applicant represented that all the payments were received by the Company only through the banking channel and in the said circumstance, the Learned Authorised Representative for the Applicant was directed to demonstrate by correlating the amounts raised in the Tax Invoices with that of the payment so received through Bank, and in response to the said query, the Learned Authorised Representative for the Applicant has filed an e-statement on 26.06.2020 wherein an attempt has been made by the Company to correlate the Tax Invoices amounts with that of the payments received through Bank namely the Indian Bank.

The Learned Authorised Representative for the Applicant has also taken us through the e-statement pursuant to the query made during the course of proceedings on 01.07.2020 and drew the attention of this Tribunal to the Invoice dated 26.10.2015 raised in relation to 'Trublu Technologies Private Limited,' and Invoice dated 29.02.2016 raised in relation to 'Medi Dove' and correspondingly demonstrated that both the amounts are reflected in the Bank Statement as enclosed with the Application at pages 59 and page 72 respectively of the typed set filed with the Application. The documents annexed along with the Application as well the endeavour made by the Applicant to establish before this Tribunal that the Company was in operation by correlating the Tax Invoices raised as well as the Bank Statement, shows that there has been a continuous operation of the Company during the period two years immediately prior to strike off, namely the financial year 2015-16 as well as 2016-17 in the year 2018. Therefore, we are of the view that it is a fit case for this Tribunal to exercise its power under Section 252 (3) of the Companies Act- 2013 for ordering the restoration of the name of the Company on the Register of Companies maintained by the Respondent. However, the same shall be subject to the following terms namely :

The Applicant/Appellant Company shall:

(i) Within a period of 15 days from the restoration of the Applicant Company's name in the Register being maintained by the RoC/ Respondent, the Applicant/Appellant will file inter-alia its Annual Returns and Balance Sheets as well other compliances statutorily required to be made under the Companies Act, 2013 for the period from which there has been default with requisite charges/fees as well as additional fee /late charges.

(ii) That the Applicant Company out of its funds, set apart a sum of Rs. 2,00,000/- (Rupees Two Lakhs Only) and deposit the same with the RoC / Respondent which amount shall be for the purposes of payment of all fees/charges as contemplated in clause (i) above as well as to defray the cost and expenses of Registrar of Companies incurred in striking off, within a period of one month from the date of this Order. In case of any amount payable in excess of the sum specified towards defraying the cost incurred by the RoC/Respondent and towards other amounts as are required to be paid by the Company statutorily, the same shall be remitted by the Company. Any excess amount left after appropriating for all the above shall be meticulously returned by RoC/Respondent to the Applicant.

(iii) Till all compliances are made by the Applicant Company, the Applicant Company shall not alienate or dispose of any of its valuable assets.

(iv) It is further observed that by virtue of this Order of restoration of the name of Applicant Company in the Register it will not entitle the Directors of the Company whose names in case have been disqualified by virtue of provisions of Section 164 of the Companies Act, 2013 by the RoC/Respondent automatically to be restored to directorship except in accordance with law.

(v) An affidavit of compliance of the aforesaid directions shall be filed by the Applicant /Appellant within a period of 2 months from the date of this Order.

(vi) Further this Order allowing the Application/Appeal shall also not circumscribe the power of the Respondent to proceed against the Applicant Company and its Directors as mandated for alleged late filing of any forms, documents, returns and such other compliance under the provisions of Companies Act, 2013.

The Application/Appeal is disposed of accordingly.