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Judgment
Per: Kanthi Narahari Member (T)
Brief Facts of the Case:
The present Appeal is filed against the Order dated 29.09.2020 passed by the NCLT, Division Bench-1. Chennai whereby the NCLT dismissed the application filed by the Appellant under Section 252(1) of the Companies Act, 2013.
Appellant’s Submissions:
Shri S. Palanikumar, PCS appearing for the appellant submitted that the Appellant filed application before the NCLT, for order and direction to set aside the striking off the name of the Appellant company from the Registrar of Companies, Coimbatore.
It is submitted that the ROC Coimbatore struck off the appellant’s company’s name from the Register maintained by the ROC due to defaults in statutory compliances, namely failure to file financial statements and annual return for the period from financial year 2013-2014 onwards. Consequently, the ROC Coimbatore had 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 ROC, Coimbatore.
It is submitted that the Hon’ble NCLT hold that the appellant failed to establish or place on record any document to show that the Company for the immediately preceding two years from the date of strike off that it has been active and doing business. On the said ground the application of the appellant was dismissed.
The Learned Counsel submitted that the Company could not file the financial statements on time even though it was approved in the respective AGM’s by shareholders but the same could not be filed due to clerical oversite on the part of the legal consultants and there was no intentional delay in the filings of e-forms. For the aforesaid reasons, the Learned PCS prayed this Bench to set aside the order of the NCLT and allow the appeal directing the ROC, Coimbatore to restore the name of the Company on the Register of Companies maintained by the ROC.
APPRAISAL/ANALYSIS:
Heard the Learned PCS appeared for the appellant. From the Memo of Parties, it is seen that the ROC Coimbatore is only the Respondent in the appeal. This Tribunal vide order dated 24.09.2021 ordered notice through speed post to the Respondent returnable by 29.11.2021 and the notice was delivered on the Respondent on 10.12.2021. However, none appeared for the Respondent. This Bench heard the matter on 29.11.2021 and directed to list the matter on 28.01.2022. In spite of opportunity afforded none appeared for the Respondent nor present in person. Having served notice on the Respondent, this Tribunal proceeded to hear the matter on merits and on the basis of records available.
The NCLT after hearing the Appellant passed the following order at Paras 9 and 10 which is extracted hereunder:
“9.The Learned Authorised Representative has miserably failed to establish or place on record any document to show that the Company, for the immediately preceding two years from the date of strike off that it has been active and doing business, however on the contrary it has been pleaded in the Application itself that the Company has closed its operations as early as in the year 1998 itself, which goes on to show that the Company has been inactive since 1998. An opportunity was afforded to the Learned Authorized Representative to substantiate on the ‘just’ ground as available under Section 252(3) of the Companies Act, 2013 in order to revive the name of the Company; however, the Learned Authorized Representative has failed to establish that it is just to restore the name of the Company, on the said count also. No evidence whatsoever has also been placed on record to establish that the Company intends to revive its business or operations in consonance with its object clause as reflected in the Memorandum of Association annexed along with the typed set and the road map for future activities and documents to support thereof as held by the Jaipur-Bench of NCLT in the matter of M/s Meritlines Learner Private Limited in Appeal No.579/252(3)/ND/2018 dated 02.11.2018. The reason for seeking restoration can also be achieved during the course of winding up the Company as contemplated under Section 248(8) of the Companies Act, 2013.
10.In the circumstances, this Tribunal is of the considered view that the order passed by the Respondent does not warrant any interference and the Respondent is right in striking off the name of the Company since the Company was not active since the year 1998. Hence, we are constrained to dismiss the Appeal filed by the Applicant Company and accordingly the Application stands dismissed, however without costs.”
From the Memorandum and Articles of Association of the Company, it is evident that the Company was incorporated on 05.04.1957 and its objects are to carry on the business namely Cotton Spinners and Doublers, Flax hemp and Jute Spinners, Linen Manufactures, Woollen Merchants, etc.
While so, the Respondent issued Public Notice in Form No.STK-5 dated 08.06.2018 under Section 248(1) of the Companies Act, 2013 stating that the Companies as mentioned in Annexure have not been carrying on any business or operation for a period of two immediately preceding financial years and have not made any application within such period for obtaining the status of Dormant Company under Section 455 of the Companies Act, 2013. Further it is stated that the ROC proposes to remove/strike off the name of the Company from the Register of Companies and dissolve them unless a cause is shown to the contrary, within 30 days from the date of the Notice. From the annexure it is seen that the name of the Appellant Company stands at Sl. No.907.
Further, it is seen that the company has not given any reply to the show cause notice issued to the company nor applied for the status of Dormant Company under Section 455 of the Companies Act, 2013. Having not received any reply from the Appellant company the Respondent vide order in Form No.STK-7 under Sub Section 5 of Section 248 of the Companies Act, 2013 total 915 Companies including the appellant company have been struck off from the Register of Companies and the said companies are dissolved. From the list of companies, the Appellant company stands at Sl. No.828, thus the Appellant Company stands dissolved.
From the Order of the NLCT, it is seen that the Respondent i.e. the ROC filed its report by e-mail to the Registry of NCLT on 15.07.2020 and stated that the Appellant company has not filed its annual return and balance sheet since 2014 and hence the Respondent has initiated action under Section 248 of the Companies Act, 2013 and finally struck off the name of the Appellant company.
The Appellant in the facts of the Appeal has not denied that the Appellant Company failed to file the Financial Statements and Annual Returns for the period of six financial years starting from the financial year ended 31.03.2014. Further, the Appellant also accepts that the Respondent 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 ROC. However, the Appellant in the facts of the Appeal stated that the Appellant company for the financial year 2013-14 to 2018-19, the financial statements were prepared on time and duly approved in the respective Annual General Meetings by the shareholders, but the same could not be filed within the respective time frames due to clerical oversight on the part of the legal consultants and that there was no intentional delay in the filings of e-Forms on part of the appellant company.
The Appellant Company failed to state that the company was carrying on its business prior to issuance of show cause notice. However, the Appellant company states that the company has property having value of Rs.15,77,314. No documents have been shown or placed to establish that the Respondent company is carrying on business and filed the forms even belatedly. Further the appellant failed to establish that it has shown any bona fides to revive the company with any plans. During the course of arguments, this Tribunal pointed out the PCS regarding the functioning and carrying on the business by the Respondent Company and any steps taken by obtaining necessary permissions from the Authorities for revival of the Company. The Learned PCS stated that the company has not applied for any approvals. Further the PCS admits that the Company has not taken any steps for its revival.
The ROC in its Show Cause Notice dated 08.06.2018 specifically stated and given a time of 30 days for the objections, if any, to be submitted/given to the Respondent. However, the Appellant company has not given any objections nor taken any action in that regard. In view of failure to give any reply/reasons, the Respondent rightly struck off the name of the company under Sub Section 5 of Section 248 of the Companies Act, 2013. The NCLT had observed the above legal position in its order lucidly. For the reasons as stated hereinabove, this Tribunal do not find any infirmity in the order passed by the NCLT dismissing the application filed by the Appellant. No substantial case has been made out by the Appellant to interfere with the order passed by the NCLT. Hence, the Appellant miserably failed to establish any case in its favour. Accordingly, the Appeal deserves to be dismissed and the same is dismissed. However, no orders as to cost.