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Judgment
O R D E R
[Per; Justice Rakesh Kumar Jain (JM)]
17.04.2023 This Appeal is directed against the Order dated 22.07.2021 passed by the National Company Law Tribunal, New Delhi Bench, Court II, by which, the Appeal filed by the Appellant under Section 252(1) of the Companies Act, 2013 (for short ‘The Act’), has been dismissed.
Brief facts of the case are that the Appellant is the Director and Shareholder of ‘M/s. Swastik Finbuild India Private Limited’, a Company incorporated under the Companies Act, 1956 (‘the Act of 1956’). The name of the Company, which was registered with the Registrar of Companies was struck-off by the RoC after publishing a Notice in Form-STK 5A dated 01.09.2017.
It is submitted that the Company is doing the business of developing Real Estate Projects, and has purchased 100 Sq. Yards of land for a sum of Rs.2 Lakhs/- in Gurgaon in the year 1996. On the basis of this, it is submitted that since the Company has the land, therefore, it is still carry on its business and therefore the name of the Company be restored to the Register of the Registrar maintained for this purpose.
No one appears on behalf of the Respondent.
We have heard Counsel for the Appellant and perused the record with his able assistance.
Before we proceed with the facts of the merits of the case it would be relevant to refer to certain provisions of the Act. Section 2(20) of the Act defines the Company which means the Company incorporated under this Act or under any previous Company law. Section 2(74) of the Act defines “Register of Companies” means the Register of Companies maintained by the Registrar on paper or in any electronic mode under the Act. Section 7 of the Act deals with the incorporation of Company and Section 9 of the Act deals with the effect of registration which says that “from the date of incorporation mentioned in the certificate of incorporation, such subscribers to the memorandum and all other persons, as may, from time to time, become Members of the Company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name”.
Chapter XVIII of the Act deals with the removal of the name of the Company from the Register of the Registrar of Companies in which Section 248 provides four grounds for the purpose of removal of the name which are reproduced as under:
(a)where the Registrar has reasonable cause to believe that a Company has failed to commence its business within one year of its incorporation; or
(c)a Company is not carrying on any business or operation for a period of two immediately preceding Financial Years and has not made any Application within such period for obtaining the status of a Dormant Company under Section 455;
(d)the subscriber to the memorandum has not paid the subscription, undertaking the plea at the time of incorporation of a Company and a declaration to this effect has not been filed within 180 days of its incorporation under sub-Section (1) of Section 10-A or;
(e)the Company is not carrying on any business or operation as reveal after the physical verification carried out under sub-Section 9 of Section 12.
The effect of removal of the name of the Company is in Section 250 which reads as under:
“250.Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.”
If any person is aggrieved against the removal of the name of the Company from the Register of the Registrar, the Appeal is provided under Section 252(1). In the present case, this Appeal has been filed under Section 252(1). The Sine-Qua-Non for restoration of a Company whose name is struck-off from the Register of Company is that either the Company is in business or it is in operation or ‘it is otherwise just’ to restore the name of Company. It has come in the Impugned Order that though the Company was incorporated in the year 1996 but since then it has never filed its Financial Statements and Annual Returns. The Report of the RoC confirms that only Balance Sheet filed for the Financial Year 2016-17 which also depicts NIL as revenue from its operation. The Appellant has also not brought anything on record either before the Tribunal or before us which could substantiate that it was in operation or doing any significant business at the time when its name was struck-off from the Register of the RoC.
The only argument thus raised by the Appellant is that since the Company is having 100 Sq. Yards of land and is doing the business of the Real Estate Project, therefore, the name of the Company may be restored.
In this regard he has relied upon the Sale Deed which is attached as Annexure A-2.
Besides the Sale Deed, no substantial ground has been taken since either in Appeal or before us during the course of hearing. The ground “otherwise just” is not meant for this purpose that it could be used in such type of case. In the case of ‘M/s. Alliance Commodities Pvt. Ltd.’ Vs. ‘Office of Registrar of Companies – WB’, CA No.7258/2019, it has been held that the Order of Restoration cannot be passed as a matter of routine. Therefore, in view of the aforesaid facts and circumstances, we find no error in the approach of the Tribunal in dismissing the Appeal of the Appellant.
No other point has been raised.
In view of the aforesaid facts and circumstances, the Appeal is found without any merit and the same is hereby dismissed. No costs.