Sreegruha Chits Private Limited vs Registrar Of Companies

Telaprolu Rajani, Member (Judicial)

This is an appeal under Section 252 (3) of the Companies Act, 2013 (herein after called the Act) by a shareholder of the Company namely "M/s SREEGRUHA CHITS PRIVATE LIMITED" (herein after referred to as the Company) seeking restoration of its name in the Register of Companies (RoC), Vijayawada for the State of Andhra Pradesh. The Members/Directors of the Board in their Board meeting held on 7th October, 2020 at its Registered Office have resolved and further authorised Mr. Mare Devi Vara Prasad, to file this Appeal.

The Company was incorporated on 30.12.2013 vide (CIN: U67200AP2013PTC092015) as a Private Limited Company under the Act in the Erstwhile State of Andhra Pradesh.

The Authorised Share Capital of the Company is Rs. 10,00,000/- (Rupees Ten Lakh only) divided into 1,00,000 (One lakh) number of Equity Shares of Rs.10/- (Rupees Ten) each.- The Issued, Subscribed and Paid-up Share Capital of the Appellant Company is Rs. 10,00,000 (Rupees Ten Lakh only) divided into 1,00,000 (One Lakh) Equity Shares of Rs.10/- (Rupees Ten only) each.

The lsl Respondent has two Shareholders having 100% shareholding together (50,000 shares each). The Company was mainly engaged in the business of Chit fund including, conducting of daily, weekly and monthly chits and to act as foreman for all or any of the above chit series.

The Company did not file its Annual Returns and Annual Accounts with the RoC, Andhra Pradesh pertaining to the Financial years from 2016, 2017, 2018 -16 & 2018- 19. Consequently, the Registrar of Companies has initiated proceedings under Section 248 of the Companies Act, 2013, for the purpose of striking off the name of the Company from the Register maintained by the Registrar of Companies.

It also stated that the Appellant and the Company have not received any notices under Section 248(1) of the Companies Act, 2013 and the Respondent i.e., the RoC did not follow the provisions of the Section 248(1) of the Companies Act, 2013 and the Respondent has proceeded to issue notice under section 248(5) publishing the name of the petitioner company in the Official Gazette on 28th September, 2019. Further stated that the Appellant did not receive any show cause notice in Form STK-1. The RoC has displayed notice in STK Form -5 in the portal maintained by the MCA on 09.09.2019 and displayed another Notice in Form STK-7 in the Portal of MCA on 02.11.2019.Further stated that the Appellant Company did not receive any show cause notice nor was given any opportunity of being heard before the aforesaid action.

It is contended by the Appellant that the Appellant Company has been active since its incorporation and is carrying on the business activities and is also maintaining all the requisite documentation, as per the provisions of the Companies Act, 2013 and the Bank Account Statement of the Company shows that the Company was carrying on the business for the relevant periods (Annexure-3 of the Petition). Failure to respond to the notice(s) was an inadvertent mistake and was neither intentional nor deliberate. He has accordingly sought restoration of the name of the Company in the Register of Companies, Andhra Pradesh under the above said provision.

It is stated that the Company has been carrying on its business at the time its name was struck off. There are operations recorded and clearly reflected in Profit and Loss account Statement, which shows that the Company is carrying on its business and operations. The Appellant undertakes to file all the returns, statements and documents that are required to be filed under the Companies Act, 2013 within the prescribed time.

The Appellant has submitted copies of Balance Sheets of the Company for the periods from 2013-14 to 2018-19 together with its Bank statement maintained by the Company vide Account No.1512000100077101 at The Karnataka Bank Limited, Cuddapah. .He has also filed copies of Income Tax returns filed with the Income Tax Department for the Assessment Years 2014-15, 2015-16, 2016-17, 2019- 19 & 2018-19.

The Appellant requested that the Directors and all other persons may be ordered to be placed in the same position as nearly as may be at the time of the impugned striking off and restore their Directors Identification (DINs), as if the name of the Company had not been struck off from the Register of Companies.

The RoC, Andhra Pradesh, Vijayawada the Respondent herein, has filed a report wherein the details of the Company such as date of incorporation, address of the registered office and its main objects as per Memorandum of Association are mentioned. In its report the RoC stated that the Company has not filed statutory returns with RoC and hence the Company was identified for Strike off U/s 248 (1), and 248 (1) notice was issued to the Company and its Directors and STK-5 notice dt.22.09.2019 was issued and published in the Gazette and a paper publication was also issued for information to all the Stake holders about STK-5 notice published in MCA21 website. The name of the Company was marked as Strike off in MCA21 Portal and STK-7 notice also published in the Gazette on 02.11.2019. While submitting the above facts the RoC has stated that the application may be considered on merits and appellant may be directed to file all pending Financial Statements and Annual Returns with imposition of costs.

I have heard the Practicing Company Secretary (PCS) for the Appellant and perused the records. The materials available on record indicates that the failure of the Company to furnish the statutory returns with the RoC was not intentional. Apparently the Company has been carrying on its operations as the financial statements would indicate. Unless the Company's name is restored it will prejudicially affect its prospects and adversely influence the Directors in their future endeavours. The promoters of the Company as well as the Appellants are keen to carry on and perform the objects of the Company in right earnest. There has been substantial investments in the project. The Company is continuing its business. Unless the name of the Company is restored in the Register of Companies it would suffer financially and may go out of business. The Directors of the company would also face disqualification. I am satisfied that the name of the Company should be restored in the Register of Companies. Hence ordered.

ORDER

The Appeal be and the same is allowed. The impugned order dated 02.11.2019 against the Company is set aside. The name of the Respondent Company be restored in the Register of Companies, Andhra Pradesh, subject to the following.

i.  The Appellant shall within two months hence file all the pending Financial Statements and Annual and Statutory returns with the RoC, Andhra Pradesh as required under the Act and Rules made thereunder.

ii. The Appellant shall deliver a certified copy of the order to the Registrar of Companies, Andhra Pradesh within 30 days and pay a sum of Rs.25,000/- (Rupees Twenty Five Thousand only) towards cost payable in the account of the Prime Minister's Relief Fund (PMRF) within 10 days from the date of receipt of copy of this order. Consequently thereupon the Bank Accounts if freezed shall get defreezed and can be operated by the Company.

iii. Upon compliance, the RoC, Andhra Pradesh on receipt of the Order shall in his official name and stamp publish the order in the Official Gazette and restore the name of the Company in the Register of Companies forthwith.

iv. The Order however shall not fetter the authority of the RoC to take appropriate action against the Company for any other violation either prior to 02.11.2019 or in the interregnum.

v. Failure to comply with any of the above conditions would nullify the effect of this order.