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Judgment
ORDER
18.08.2023: Heard Ms Shaba Tarannum, learned counsel for the appellant and Mr. Durga Dutt, learned counsel who has appeared on behalf of Respondent/Registrar of Companies..
The present appeal has been preferred under Section 421 of the Companies Act, 2013 against an order dated 18.11.2022 passed by Learned National Company Law Tribunal, Court IV, Mumbai Bench in CP No.263/(MB)/2021 (hereinafter referred to as NCLT).
By the said impugned order, learned NCLT while allowing the appeal, which was filed under Section 252(1) of the Companies Act, 2013 on behalf of the appellant, directed the ROC Mumbai to restore the name of the company i.e. Vbuiltfine Properties Pvt Ltd, to the register of Registrar of Companies with imposition of cost of Rs. 5,00,000/- (Rupees Five lakhs only). Learned counsel for the appellant submits that exemplary cost has been imposed which requires to be set aside.
Learned counsel for the Respondent, Mr. Durga Dutt supports the impugned order and submits that since long the returns were not filed. The name of the company in question was struck off. He submits that the learned NCLT while passing the order for restoration has rightly impost the cost.
Before proceeding it is necessary to reproduce the impugned order:-
“1.Mr. Vipini Tiwari, learned Authorised representative for the petitioner present.
2.This company petition is filed by Mr. Krishan Mittal S/o Mr. Sriram Mittal on behalf of M/s Vbuiltfine Properties Private Limited (CIN: U70100MH1995PTC089510), under Section 252(1) of the Companies Act, 2013 praying for restoration of the name of the Company to the Register of Companies maintained by the Registrar of Companies, Mumbai.
3.The Petitioner submits that the company was incorporated on 13/06/1995 under the Companies Act, 1956 as a private company limited by shares with the Registrar of Companies, Maharashtra, Mumbai. There are two directors in the company viz. Mr. Kiran Babulal Mehta (DIN: 03640724) and Mr. Krishnan Mittal, (DIN: 03641587), as per MCA Data.
4.The grievance of the Petitioner Company is that the Respondent, Registrar of Companies, Maharashtra, Mumbai struck off the name of the Petitioner Company from the Register of Companies maintained by them by issuing notice in Form STK-1, STK-5 and STK-7 under section 248(4)(1) for removal of the name of the Company from the Register of Companies under section 248(1) of the Companies Act, 2013 and rule 3 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 due to defaults in statutory compliances, namely, failure to file Financial Statements and Annual Returns and failure to do business for more than two years. 5. The Petitioner Company submits that the Company has been functioning since its incorporation. As submitted by the Ld. Authorized Representative appearing for the Petitioner company, the Company did not file the Annual Returns and Balance Sheet of the company with the RoC from 2011-12 to 2021-22 onwards due to inadvertence. Even while considering the defaults as submitted by the Counsel, there is a default of Six (06) years till striking off the Company. Taking into consideration further delay of four (4) years in filing the present Petition, total years of default is 10 years.
6.The Petitioner Company has enclosed the Audited Accounts for the Financial Years from 2017-18 to 2019-20. 7. The Petitioner Company has also enclosed copies of the Acknowledgement of Income-Tax Returns filed with the Income-Tax Authorities for the Assessment years 2014-15 to 2017-18.
8.The Respondent has filed its report and reiterates that the name of the Company was struck off as the company was not carrying on any business or operation for a continuous period of more than two years. Also, confirms that no filing is done from 2011 of the Company. Also, observed that if the Petitioner proves that it is carrying business, this Tribunal at its discretion, may allow the petition imposing exemplary costs.
9.On hearing the submissions of the Ld. Authorized Representative appearing on behalf of Petitioner and on perusal of the Report of Registrar of Companies, Maharashtra, Mumbai, the Audited/Unaudited Accounts submitted by the Petitioner Company and other documents placed on record, the Bench is of the considered view that the company is fit for restoration.
10.Given the above facts and circumstances, we are satisfied that the prayer sought by the Petitioner company deserves to be allowed.
11.Accordingly, Company Petition bearing No.: CP/263(MB)2021 filed by the Petitioner, M/s Vbuiltfine Properties Private Limited, represented by its Director/Shareholder; Mr. Krishan Mittal, under section 252 of the Companies Act, 2013, seeking restoration of the Company’s name in the Register of Companies maintained by the Registrar of Companies, Maharashtra, Mumbai is allowed on the following terms:-
(a)The Respondent Registrar of Companies, Maharashtra, Mumbai, is directed to restore the name of the Petitioner Company, viz. Vbuiltfine Properties Private Limited, to the Register of Companies subject to payment of a sum of Rs.5,00,000/- (Rupees Five Lakhs only) as cost to be paid online through Bharatkosh in favour of “Pay and Accounts Officer, Ministry of Corporate Affairs, Mumbai” within thirty days from the date of receipt of a copy of this Order; and
(b)Upon such restoration, the Petitioner Company shall file all its pending financial statements and Annual Returns with all the applicable fees and late fees with the Respondent Registrar of Companies within thirty (30) days from the date on which the name of the Company is restored to the Register; failing which, this order will stand vacated automatically.
12.Upon restoration of the name of the Petitioner Company to the Register of Companies after complying with the terms mentioned above, the Registrar of Companies, Maharashtra, Mumbai, shall issue appropriate communications to the bank authorities for de-freezing the accounts of the Petitioner Company.”
On going through the aforesaid order it is difficult to infer as to under what circumstances the company petition was allowed and direction was issued for restoration of the name of the company alongwith imposition of costs.
It is evident from the impugned order that the company petition was preferred under Section 252(1) of the Companies Act, 2013. However, since the date of striking off the name of the company is not mentioned it is difficult to infer as to whether the petition was filed within three years from the striking off the name of the company or not. The order does not reflect any plausible reason for passing an order for restoration. Similarly nothing has been indicated as to under what circumstances the cost of Rs.5 lakhs was imposed. At this juncture, it is apt to reproduce Section 252 of the Companies Act, 2013 as follows:--
252.Appeal to Tribunal.— (1) Any person aggrieved by an order of the Registrar, notifying a company as dissolved under section 248, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar and if the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies:
Provided that before passing any order under this section, the Tribunal shall give a reasonable opportunity of making representations and of being heard to the Registrar, the company and all the persons concerned:
Provided further that if the Registrar is satisfied, that the name of the company has been struck off from the register of companies either inadvertently or on the basis of incorrect information furnished by the company or its directors, which requires restoration in the register of companies, he may within a period of three years from the date of passing of the order dissolving the company under section 248, file an application before the Tribunal seeking restoration of name of such company.
(2)A copy of the order passed by the Tribunal shall be filed by the company with the Registrar within thirty days from the date of the order and on receipt of the order, the Registrar shall cause the name of the company to be restored in the register of companies and shall issue a fresh certificate of incorporation.
(3)If a company, or any member or creditor or workman thereof feels aggrieved by the company having its name struck off from the register of companies, the Tribunal on an application made by the company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under sub-section (5) of section 248 may, if satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order, give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off from the register of companies.
On examination of aforesaid provision it is evident that from the date of striking off the name of the company from the register of Registrar of Companies, one can prefer an appeal within a period of three years from the date of striking off the name of the company. In the order impugned date of striking off under Section 248(5) of Companies Act, 2013 has not been mentioned. On examination of the impugned order it is evident that though date of striking off was not mentioned, the appeal was preferred after four years. The order on this issue appears to be completely vague. Moreover, if the NCLT was exercising its jurisdiction under Section 252(3) of the Companies Act, 2013, in such situation the appellant was required to satisfy the NCLT that on the date of striking off the company, the company was carrying on business or in operation. There was third condition for passing of the restoration order in case it was otherwise just for restoring the name of the company. The order does not meet either of the three criteria under Section 252(3) of the Act. Moreover, since the appeal was preferred under Section 252(1) of the Companies Act, 2013 the learned NCLT was required to examine the appeal strictly in accordance with the provision under Section 252(1) of the Companies Act, 23013. In absence of exact date of striking off it would be difficult to approve the impugned order. Moreover, learned NCLT has imposed cost of Rs. 5 lakhs but no plausible reason has been given for imposing such cost. In such view of the matter we are left with no option but to set aside the order and remit back the matter to the NCLT for passing order afresh after affording opportunity to both the parties i.e. Appellant and ROC.
With the above observation and direction the appeal is allowed and the matter is remitted back to the NCLT.
Let a copy of this order be sent to the NCLT for its needful.
The appellant as well as ROC are directed to ensure appearance before NCLT on the date fixed by the NCLT.