Venice Marketing And Finance Private Limited And Anr. vs Registrar Of Companies, Mumbai

This present Petition has been filed under Section 252 (1) of the Companies Act, 1956 (Act) by VENICE MARKETING AND FINANCE PRIVATE LIMITED through its Director Mr. MANISH PADWAL GOPAL praying for restoring the name of the company in the Register maintained by the Registrar of Companies, Mumbai (RoC).

The Petitioner submits that the Petitioner company has been incorporated to carry out the following objects:

"The Company is engaged to carry on business as dealers, merchants, exporters, hirers, commission agents, stockists, mercantile agents, machinery, plastic materials, cements and scientific instruments, hardware, metals, minerals and coal. "

The Petitioner submits that the company was incorporated on 27.11.1990 under the Companies Act, 1956. The Company has failed to file its Financial Statements and Annual Returns for the Financial Years from 2016-2017 to 2018-2019. (3 years)

The Petitioner submits that the Respondent failed to send the notices required under section 248(1). The Petitioner submits that the Petitioners were trying to file the Annual Returns and Financial Statements with the Registrar of Companies, the Petitioner were unable to file the forms. The Petitioners checked the Master data of the Company which showed the status as struck-off. The Petitioners submits that with the Professional help the Petitioners came to know that the Registrar of Companies, Mumbai vide public notice under section 248 (5), published the name of the Petitioner Company in the Official Gazette on 12.09.2018.

The Petitioner submits that the representative of the Petitioner Company in 2019 went to the MCA website to enquire about the filling of the Balance sheet and Annual Returns of the Petitioner Company. Later it was found that the name of the said Company had already been struck off from the file of Register maintained by the Registrar of Companies Mumbai. The Petitioner was shocked and surprised to know that the name of the Company was already struck off. The Petitioner submits that the Company is active in operation and carrying on its business and is not a defunct Company.

The Petitioner submits that without the name of the Company being restored, the Company is losing its legal status to run its operations and business activities.

The Petitioner submits that the Company is having an active business and the Company is in the process of achieving its revenue from operations and also projects in hand for which Service Agreement and work order is attached to the petition. The Petitioner further submits that since the Company is working on projects and is in the process of establishing the business, the Company is expected to earn revenue from financial year 2019-2020 onwards.

The Petitioner submits that the delay in filing the Balance sheet and Annual Returns of the Company for the Financial Year 2016-2017 to 2018-2019 was unintentional due to lack of knowledge of the Compliance of the Company. The Petitioner further submits that the Annual Returns and Financial Statements could not be filed due to inadvertence and was not done on time. The Petitioner Company submits that the Company is active and is maintaining all the documents as per the provisions of the Companies Act, 1956/2013.

The Petitioner Company has enclosed the audited accounts for the Financial Years 2016-2017 to 2018-2019 to show that it is actively involved in the business and operations.

The Petitioner Company has also enclosed copies of the Acknowledgement of Income-Tax Returns filed with the Income-Tax Authorities for the Assessment Years 2016-2017 to 2018-19.

The Respondent, Registrar of Companies submitted his Affidavit in reply on 08.09.2020 explaining the following sequence of events leading to the striking of the name of the company:

(a) The Respondent side issued Notice in Form STK-1 to the company and its directors informing the intention of the Registrar to strike off the name of the Company and requesting them to submit a cause contrary to the said action within thirty days.

(b) Further, as required under rule 7 of the Companies (Removal of Name) Rules, the name of the Company was published on the website maintained by the Ministry vide STK-5 dated 19.07.2018 and issued notices not only to the Company and the Directors of the company, but also to all stakeholders concerned so as to receive their objections to the said intention of the Registrar to remove the name of the company.

(c) In addition to the publication of the name of the Company on the website of the Ministry, the name was also published in the Official Gazette on 04.08.2018 and in leading English newspaper "Times of India" and a widely circulated regional language in Marathi newspaper "Maharashtra Times" on 21.07.2018.

(d) Respondent further submits that in the absence of any representation against the proposed strike off action, the Registrar struck off the name of the company on 11.09.2018 and the dissolution order was published on the website of the Ministry vide STK-7 on 12.09.2018.

Though the Petitioner submits that the Respondent failed to send the Notices, it may be added that the Respondent issued Notice in Form STK-1, STK-5 dated 19.07.2018. the name of the Company was also published on the website of Ministry and also on Official Gazette on 04.08.2018 and in leading newspaper "Times of India" and in vernacular language in Marathi "Maharashtra Times" on 21.07.2018 and finally the dissolution Order was also published on the website of the Ministry vide STK-7 on 12.09.2018. Therefore, the contention of the Petitioner does not hold much water.

Upon perusal of the audited accounts submitted by the Petitioner Company, it is observed that the Petitioner Company has Unsecured Loan amounting to Rs. 1,87,900/- as on 31.03.2019. The Company has Current Liabilities amounting to Rs. 1,80,306/- as on 31.03.2019. The Company has Cash and Bank Balance amounting to Rs. 71,330/- as on 31.03.2019.

On hearing the submissions on behalf of the Petitioner and on perusing the report of the Registrar of Companies, Maharashtra, Mumbai and the documents filed, it is clear that the Company has failed to file its statutory returns for the Financial year 2016-2017 till 2018-2019 (for 3 years) contrary to the provisions of the Companies Act, 2013 and the Company is not carrying on business or operation as defined u/s 248 (1)(c) of the Companies Act 2013. Further, at the time of hearing the Bench had posed query to the Petitioner to show any proof whether the Company has any existing Business but the Appellant was unable to show any proof of existing or prospective business in the Company and also the Company had no turnover for past five years.

Therefore, in light of the above observations, this Bench is of the view that the Company is not carrying on any business or operations and there is no infirmity in the order of the Respondent for striking off the name of the Company from the Register of Companies maintained by it. Hench this appeal is liable to be rejected.

ORDER

Company Appeal CP No. 1055/252(1)/MB/C-II/2020 filed by Appellant/Petitioner Venice Marketing And Finance Private Limited through its Director Mr. Manish Padwal Gopal, seeking restoration of the company's name in the Register of the Companies maintained by the Registrar of Companies, Mumbai is REJECTED in view of the following :-

All the above factual details substantiate the criteria that the company is not carrying on any business or operation as defined under section 248 of the Companies Act 2013, therefore, the action taken by Registrar of Companies, Maharashtra, Mumbai is justified, and the Bench did not find any ground to interfere with the action of striking off the name of the Company by Registrar of Companies, Maharashtra, Mumbai. The Bench is also of the considered view that this type of companies only put the burden on the system, Government/ROC, by way of record keeping, ensuring compliance by these companies and at times these companies may be used for various purposes other than the purpose/object for which the company was originally incorporated. It also puts a burden on the company to comply with various regulatory/statuary compliances.

Considering the above facts and circumstances, practical aspects, the Bench has not found any justifiable/ reasonable grounds to interfere with the action taken by the Government of India/ROC in striking off names of Lakhs of companies including the petitioner company.