Taru Projects Private Limited vs Registrar of Companies

Justice Anant Bijay Singh;

The present Appeal under Section 421 of the Companies Act, 2013, has been filed by the Appellants being aggrieved and dissatisfied by the order dated 12.11.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) in Appeal 78/252(ND)/2021 whereby and whereunder appeal filed by the Appellants for restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana was dismissed by the Tribunal.

The facts giving rise to this Appeal are as follows:

i) The Appellant No. 1 - Trau Projects Private Limited was incorporated under the provisions of the Companies Act. 1956 ("Act") as a Private Limited Company with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi on 03.05.2011. The Appellant No. 1 has filed the present appeal through authorized representative Shri Pramendra Singh/Appellant No. 2. The Appellant Company has been carrying on the Real Estate Business since its incorporation. The main objects in the memorandum of association of the Appellant Company are as hereunder:-

“1. To construct, execute, carry out, the business of infrastructure development, equip, maintain, improve, develop civil and constructional work relating to real estates, roads, electric power, heat and light supply work, hotels, building, g0downs, pleasure grounds, parks, gardens, docks, jitries, embankments, bridges, wharves, canals, dams, flyover, roads, tunnels, blasting, transportation, irrigation, reclamations, improvement, sewage, sanitary telegraphic, telephone works, warehouse, markets, public buildings and all other such civil and related constructional works and convenience of public utility.

To carry on the business as builders, consultants, civil engineers, architects, surveyor, designers, town planners, estimators, valuers, interior and exterior decorators, general and goven1ment civil contractors of immovable properties, all types of structural and piling engineering work, interior designing, land Scaping and graphic.

To construct, execute, carry out, equip, maintain, improve, develop civil and constructional work relating to roads, electric power, heat and light supply work, hotels, building, godowns, pleasure grounds, pars, gardens, docks, jitries, embankments, buds, bridges, wharves, canals, irrigation reclamations, improvement, sewage, sanitary telegraphic, telephone works, warehouse, markets, public buildings and all other such civil and related constructional works and convenience of public utility.

To develop the land for Jann houses by providing roads & other facilities such as water supply and sale the same and to erect and construct farm houses buildings or work civil and construction of every description on any land of the company or upon any other such lands or immovable property and to pull down, rebuild, enlarge, alter and improve such lands into roads, highways, streets, squares, gardens and such other convenience related thereto and deal with and improve the immovable property of the company or any other immovable property of all types.

To undertake or direct the design development, construction, supervision and/ or the management of the property, buildings, lands and estates (of any tenure or kind of any person and wherever located whether in India or elsewhere)”

ii) That  the  authorized,  issued,  subscribed  and  paid-up  capital  of  the Applicant Company as on 31.03.2020 is as hereunder:

Authorized Share Capital

Rs.

50,000/- Equity Shares of Rs. 10 each

5,00,000

Issued    subscribed    and    Paid-up-Share Capital:

10,00,000/-  Equity  shares  of  Rs.  10  each

fully paid.

1,00,000

iii) In terms of Section 252 of the Act, the Respondent No. 1 struck off the name of the Appellant company from the Register of Companies maintained by the Respondent No. 1 on 30th June, 2017 without any show cause notice. Due to various factors, such as the illnesses of its directors, paucity of funds, severe recession, as well as a general slump in the market, the Company’s business was not very successful after incorporation and thereafter it was unable to file the necessary statutory documents with the Respondent No. 1 since the accounting year 2013-14.

iv) The aforementioned inadvertence, the Appellant Company has not had the opportunity to justifying to the Respondent No. 1 that the name of the Appellant Company should not be struck-off from the Register of Companies maintained by them. Further, Section 252 of the Act itself provides ample time to a company to show reasonable cause that the Company is carrying on business or is in operation, however, that time has not been made available in the present case for the aforementioned reasons. The Appellant Company has been carrying on its operations on a going concern basis since its incorporation and hence for the sole reason that inadvertently the Appellant Company failed to file the statutory returns in time, striking off of the name of the Appellant Company from the register of Respondent would result in bringing the working of a running company to stand still, thereby adversely affecting not only the Appellant Company but its shareholders, creditors and other stakeholders. Further, the Appellant Company has been regular in preparing Annal Accounts and also holding its Board meetings, General meetings or the Shareholders as and when required, maintain proper records, registers.

v) Thereafter, being aggrieved by the notice of the Respondent No. 1 of “Striking Off”, the Appellant Company approached the Tribunal under Section 252 of the Companies Act, 2013 for revival of the Appellant Company and after hearing both the parties, the Tribunal passed the order impugned which led to filing of this Appeal.

The Ld. Counsel for the Appellants during the course of argument and grounds mentioned in the memo of appeal, submitted that the Company was in operation at time of striking off by the Respondent No. 1 vide order dated 30.06.2017 and thereafter has continued in operation till date. The Appellant Company has been kept operative and has been following essential corporate procedures and has been conducting its Annual General Meetings. The landed property (Inventory) which has market value of approximately Rs. 77,25,400/-.

It is further submitted that the principles of natural justice and the curative nature of Section 252 cast an obligation upon the Tribunal not to reject an application on technical reason but instead to give opportunity upon petitioner to provide further documents and/or affidavits as required to substantiate that the company as in operation at time of striking off.

It is further submitted that the Appellant company doing real estate project and also has firm plans to enhance its business. The assets in the form of real estate and is undertaking real estate project development. In order to corroborate the submissions, the Appellants have also filed before the Tribunal copies of audited financial statements for the financial years from 2013-14 to 2019-20 and Audited balance sheets for the financial years 2015-16, 2016-17 & 2017-18 as also the Copies of acknowledgment Receipt of Income tax Return for the Assessment Year 2020 reflecting a business loss and particulars of agricultural land, which the Appellants intend to buy for the projects being carried out at Gurgaon, though it has admitted that it has yet to execute conveyance deeds and sale deeds.

It is further submitted that the Appellant company will suffer irreparable loss, injury, damage and will be greatly prejudiced and the livelihood of all the Directors, Shareholders, Creditors and the employee of the company would be at stake in case of non-restoration of the status of the Appellant company.

In view of the above submissions, the impugned order fit to be set aside and the instant Appeal may be allowed.

On the other hand, the Respondent No. 1/Registrar of Companies in his reply stated that as per available records on MCA 21 portal, the last Directors of the Appellant company were found namely Pramendra Singh, Raj Chaudhary and Ajay Singh. The Company was incorporated on 03.05.2011 and the last Annual Return and Balance Sheet submitted by the company to this Office, before it was considered to be struck off, pertain to the financial years ended on 31.03.2013. Moreover, no subsequent documents had been filed by the company with this office to obtain the status of a “Dormant Company” under Section 455 of the Companies Act, 1956. Hence, this office had reasonable cause to believe that the company was not in operation and therefore, the name of the company was considered for striking off from the Register of Companies. Thereafter, the Registrar of Companies issued the notice in the form of STK-1 in March, 2017 intimating the company and the directors of the company at their registered office about the aforesaid defaults, providing them a fair opportunity to respond. Subsequently, this office also issued public notice for the same in the form of STK-5 in May, 2017. Thereafter, the name of the company was struck off as per the provisions of section 248(1)(c) of the Companies Act, 2013 read with Rule 9 of the Companies (Removal of Names of Companies from the register of Companies) Rule, 2016 vide notice in the form of STK-7 dated 07.06.2017.

It is further stated that the Appellant Company was not carrying out any operation for a period of 2 immediately preceding financial years. The Company was unable to produce before the Tribunal any just and equitable grounds for restoration, therefore, their petition was dismissed. Since the company was neither able to prove that it was carrying any business before it was struck off nor produced any just and equitable grounds for restoration before the Tribunal.

In view of the above, the Appeal may be dismissed.

On the other hand, the Respondent No. 2/Income Tax Department in his reply stated that the Income Tax Department has no objection with regards to revival of the Company-Taru Projects Pvt. Ltd.

After hearing the parties, going through the pleadings made on behalf of the parties and in view of the fact that the Audited Financial Statements for the Financial Years from 2013-14 to 2019-20 and Audited Balance Sheets for the Financial Years 2015-16, 2016-17 & 2017-18 shows that the Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, we are of the view that the order passed by the National Company Law Tribunal (New Delhi Bench, Court-II) as well as Registrar of Companies, NCT of Delhi & Haryana is not sustainable in law.

In view of the aforenoted, we set aside the impugned order dated 12.11.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) in Appeal 78/252(ND)/2021. The name of the Appellant Company be restored to the Register of Companies subject to the following compliances.

i) Appellant Company shall pay costs of Rs. 1,00,000/- (Rupees One Lakh) to the Registrar of Companies, NCT of Delhi & Haryana within eight (8) weeks from the passing of this Judgment.

ii) After restoration of the Company's name in the Register maintained by the Registrar of Companies, the Company shall file all their Annual Returns and Balances Sheets. The Company shall also pay requisite charges/fee as well as late fee/charges as applicable.

iii) Inspite of present orders, Registrar of Companies will be free to take any other steps punitive or otherwise under the Companies Act, 2013 for non-filing/late filing of statutory returns/documents against the Company and Directors.

The instant Appeal is allowed to the above extent.

Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the National Company Law Tribunal (New Delhi Bench, Court-II), forthwith.