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Judgment
This appeal is filed by the company along with its two Members under Section 252(3) of the Companies Act, 2013 (for brevity the Act') against the
order of striking off the name of the company passed by the respondent under section 248 (1) of the Act read with Rule 7 of Companies (Removal of
Names of Companies from the Register of Companies) Rules, 2016 published on 30.06.2017 vide notification no. ROC-DEL/248(5)/ STK-7 /2879 by
Registrar of Companies, the respondent herein.
The applicant was originally incorporated as Risin Financial Services Private Limited under the provision Companies Act, 1956. Subsequently, the
name of the applicant has been changed from Risin Financial Services Private Limited to Risin Commodities and Derivatives Private Limited on
22.03.2004 vide Certificate of Incorporation dated 22.03.2004 issued by Registrar of Companies, New Delhi pursuant to Rule 29 of the Companies
(Incorporation) Rules, 2014.
The appellant company, M/s Risin Commodities & Derivatives Pvt Ltd, (for brevity the Company') is incorporated as a Private Limited Company
with the Registrar of Companies, NCT of Delhi and Haryana on 04.02.1994 under the Companies Act, 1956 having CIN U4899DL1994PTC057245.
The company is having its registered office at 4, Paschimi Marg, Vast Vihar, New Delhi 110057.
The nominal share capital of the company is Rs.1,00,00,000/- and paid up capital of the company is Rs.48,00,000/- divided into 10,000 Equity Shares
of Rs.10/- each.
The main objects of the company are:
a. ""To carry on business as shares stock and brokers, underwriters, agents brokers and sub brokers for subscribing to and for the sale and purchase of
securities, stock, shares, debentures, debenture stock, bonds, units, cash certificates, saving certificates, commercial papers, Government Securities or
other financial instruments or obligations and securities issued or guaranteed by body corporate whether established in India or elsewhere authority
whether central, state or local, undertaking whether Public or Private, to act as manager to the issue of any securities aforesaid and to promote the
formation and mobilization of capital and to manage the funds of any person or company by instrument in various avenues like growth fund, income
fund, risk fund, tax exempt funds, pension/ Superannuation funds and to pass on the benefits of portfolio investments to the investors as dividends,
bonus, interest.
The appellants submit that the name of the company was struck off by the Registrar of Companies and dissolved with effect from 07.06.2017 for
the reasons mentioned in the show cause notice issued by Registrar of Companies, New Delhi bearing No. ROC-DEL/248/STK-5/721 dated
27.04.2017. Further the appellants have stated that the person in charge of affairs of the company, at the time when the alleged show cause notice
was issued, was travelling out of India because of which the show cause notice could not be replied by the appellants.
The appellants have further stated that the business of company was gravely affected due to the new circular issued under the Finance Act, 2015
which is narrated in details as under:
i. The company was carrying on the business of Commodity Trading and operated as a broker on the membership of NCDEX and MCX for the said
purpose and for activities of trading in commodities.
ii. As a requirement for obtaining such membership, a deposit of a deposit of Rs. 15,00,000/- in Base Capital and additional deposit of FDR for a value
of Rs. 15,00,000/- was maintained with NCDEX as admitted and which is evident vide letter of NCDEX dated 27.11.2016 and a deposit of Rs.
3,50,000/- was maintained with MCX.
iii. As on the date of strike off, the amounts maintained with NCDEX are Rs. 12,50,000/- in Base Capital, RS. 2,50,000/- in Base Minimum Capital
Deposit and a Fixed Deposit of Rs. 15,00,000/- as margin deposit and the amount of Base Minimum Capital Deposit maintained with MCX is Rs.
2,71,427.52/- as evidenced by the receipt of respective deposits.
iv. On 01.10.2015, as per circulars detailing the requirement of Finance Act, 2015, SEBI registration became mandatory for all the members of the
exchange as SEBI was made a regulator for the exchange. The net worth and the deposit requirements were also changed and substantially
increased.
v. The company had to temporarily suspend operating its membership till adequate capital could be inducted in the company to meet the revised net
worth and deposit requirements set by SEBI for all the members. Consequently, the said memberships with the two commodity exchanges effectively
remain non-operational owing to the revised rules till such time the company and its promoters could identify sources to raise capital financing to fulfill
the revised net worth and deposit requirements and other compliance requirements for the eligibility for trading and /or act as a broker in the
respective exchange be maintained.
vi. The company and its shareholders could not source any new investment or additional funds for increasing the net worth and deposits in the
exchanges and the company also did not have any surplus funds and the necessary permissions from exchange to monetize its memberships or do the
other deeds to create the cash capital required for the amended net worth and deposit requirements of the exchange. Consequently, the membership
of the company was suspended with Commodity Stock Exchanges.
vii. There were several subsequent circulars which periodically increased the requirement of the net worth and/or other deposits, making the efforts of
the company to raise the capital requirement as an onerous task. Additionally, the requirements for sale of existing membership of the company was
also severely hindered by MCX as the rules for transfer of membership mandated substantial charges to be levied on such transfer by MCX. This
made it extremely unattractive and unviable for the membership to be sold on 'as is' basis to third party for capital raising or to introduce a new
investor into the company as both would have resulted in hefty charges.
viii. Therefore, the efforts of the company over last two financial years did not bear any fruits there were limited primary operations in the company as
the same were restricted by stock exchange because of which they have defaulted in ensuring statutory compliances of filing Annual Return and
Audited Accounts with the Registrar of Companies.
As per the notice, due to non- compliance of provisions of the Companies Act, 2013 in respect to filing of annual returns and financial statements,
the name of the company was struck off in terms of provision of Section 248(1) of the Companies Act, 2013 read with Rule 7 and Rule 9 of the
Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
However, the Appellants have brought forward the following facts about it being in operation and functional during the period of striking off:
a. The copies of the deposits as on the date of strike off reflects the amounts maintained with NCDEX are Rs. 12,50,000/- in Base Capital, RS.
2,50,000/- in Base Minimum Capital Deposit and a Fixed Deposit of Rs. 15,00,000/- as margin deposit and the amount of Base Minimum Capital
Deposit maintained with MCX is Rs. 2,71,427.52/-.
b. The copy of Bank Statements of current account issued by HDFC Bank as on 30.06.2016 having balance of Rs. 20.13/- and ICICI Bank as on
31.03.2017 having balance of Rs. 295.50/-. Though no substantial deposit of cash in the preceding two financial year, entries like payment of requisite
fees of exchange and respective interest earned from fixed deposits with exchange are transactions in statement.
c. The copy of Balance Sheet for the financial year ending in 31.03.2012 to 31.03.2016. The company has incurred loss of Rs. 5,91,239/- in the
financial year ending on 31.03.2016.
d. The copies of income tax returns for the assessment year 2013-14 to 2015-16 filed through are NIL Return.
The appellants states that, since, the company was hopeful of reviving its operations with an interested co venture, it did not opt for the status of
Dormant Company despite having no operations in the company.
The appellants further submit that with no operations at the stock exchange, the company was also not utilizing its bank account for any disallowed
activities. Further the appellants have stated that no cash has been deposited during the period of demonetisation that is from 08.11.2016 to 31.12.2016
as evidenced by bank statements and placed on record.
The appellants have also submitted that the company is not a shell company and is not being used as a shell company for any money laundering
activities or any other activities in contravention of any laws. The company's main business was trading on the commodities exchange and by reason
of change in the qualifying norms, the Membership of the Company was suspended.
The Ld Counsel on behalf of the directors had made the statement during the final hearing stated that the management has plans of investing in the
company. Further it was stated that they are proposing to revive its operation as it is in the process of identifying interested parties to join hands with
the existing promoter to infuse capital and to revive operations.
The Registrar of Company has stated that it has no objection if the name of the Company is restored in the Register of Companies on proving by
the Company that it was carrying on business or was in operation and the Company be also directed to file financial statements up to date with
appropriate filing and additional fees. Thus, on perusal of abovementioned records produced by the company, the objection raised by the Registrar of
Company stands satisfied.
The Income Tax Department has not filed its reply in spite of several opportunities given by the Tribunal. The appellants have Income Tax Return
up to the assessment year 2016-17. Further the appellants have stated that no cash has been deposited during the period of demonetisation that is from
08.11.2016 to 31.12.2016.
The Appellants have submitted sufficient evidence that it has proposed to be in operation in near future and therefore in the interest of equity and
justice, this appeal deserved to be allowed. Thus, taking into consideration the provisions of Section 252(5) of the Companies Act,2013 which vests this
Tribunal with a discretion where the Company whose name has been struck off and such Company is able to demonstrate that there is a running
business as on the date when the name was struck off and also keeping in consideration that it is just to do so can restore the name of the Company in
the Register and in the interest of all stakeholders including the Appellant itself who seeks restoration of the name of the Company in the register
maintained by Registrar of Companies, the company deserved to be restored.
The Section 252(3) of the Act contemplates that one of the three conditions are required to be satisfied before exercising jurisdiction to restore
company to its original name on the register of the Registrar of Companies namely:
i. That the company at the time of its name was struck off was carrying on business.
ii. Or it was in operation
iii. Or it is otherwise just that the name of the company be restored on the register.
Even though the company as such has admitted not actively doing any business but for that also has brought forward sufficient plausible reasons
due to which the company was unable to function and do normal activities and has also assertively showin the sincere will of management to pick up
and restart the business of the company. It is fit case to bring this company to revival, under section 252(3) by exercising the ample discretion for
allowing the restoration of name of company 'as it is otherwise just'.
Accordingly, this appeal is allowed. The Public Notice of Registrar of Company striking the name of the company is hereby declared illegal and
set aside. The restoration of the company's name to the Register of Registrar of Company is ordered subject to its filing of all outstanding documents
with proper filing fees along with additional fees required under law and completion of all formalities, including payment of any late fee or any other
charges which are leviable by the respondent for the late filing of statutory returns, and also subject to payment of cost of Rs. 25,000/- to be paid to
Prime Minister's Relief Fund. The name of the Appellant Company shall then, as a consequence, stand restored to the Register of the Registrar of
Companies, as if the name of the company had not been struck off in accordance with Section 248(1) of the Companies Act, 2013.
The petition is disposed of accordingly.
Let the copy of the order be served to the parties.