V.G. Infratech Pvt. Ltd. And Anr. vs Registrar Of Companies And Anr.

This Appeal has been filed by the Company named "V.G. Infratech Private Limited" having its Regd. Office at Statesman House, 8th Floor, Barakhamba Road,New Delhi 110001 hereinafter referred to as "the Company" invoking the provisions of Section 252 (3) of the Companies Act, 2013 (the Act) for restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi & Haryana. The company has authorised capital of the Appellant-company is Rs.1,00,000/- and paid up share capital of Rs.1,00,000/-.

As per the averments, M/s. V.G. Infratech Private Limited was incorporated on 30.12.2009 as a private limited company and has its registered office at Statesman House, 8th Floor, Barakhamba Road, New Delhi 110001 having CIN No.U70102DL2009121C197407. Since incorporation as per Memorandum of Association, the appellant-company has been carrying on business to erect and construct, sell, purchase Houses, multistory building, residential apartments, commercial flats, building or take up civil and construction work of every description on any land or immovable property of the company or upon and other land immovable property. To pull down, rebuilt, enlarge, alter, improve and maintenance of existing houses, building or civil construction work thereon to convert and appropriate any such land into and for roads, streets, gardens and generally to deal with and improve the immovable property of the company or any such immovable properties."

A sweeping action was initiated by the ROC at the instance of MCA in striking off the names of several Companies who had failed to file their Statutory Returns. The appellant had failed to file its Financial Statements and Annual Returns since Financial Year ended 31.03.2016 thereby giving rise to the surmise that the business of the company was not in operation. Consequently, its name was struck off by the Respondent from the Register of Companies under Section 248 of the Companies Act, 2013 vide notice STK-1 dated 28.05.2018 which was replied by the Appellant vide letter dated 21.07.2018 which was not considered by the Respondent -ROC as the company was required to file financial statements on MCA portal, therefore, due to which the respondent had reasonable cause to believe that the appellant-company was inactive and in terms of provision 248(5) of the Companies Act, 2013 r/w Rule 9, the name of the Company had been struck off vide Notice STK-7 dated 08.08.2018 striking off the name of the Appellant-company.

The appellant -company admitted their default in carrying out the statutory compliances in filing Financial Statements and Annual Returns since 31.03.2016, but submits that the notice was replied to by the Appellant-company submitting financial details of the company reflecting that the Appellant -company has been in operations prior to date of stricking off notice shopwing investment, creditors and the Company was engaged in the business activities through its Associate companies. However, the appellant has submitted certified copies of its Annual Accounts for the F.Y. ended 2015-16 and 2016-2017 with the petition and original submitted to the respondent.

The Appellant submits that the Appellant Company has been in continuous business operation, has been regular in preparing its annual returns and balance sheets and filing income tax returns with the competent authorities and has certain assets which necessitate restoration of its name in the record of ROC. In order to corroborate this submission the petitioner has placed the following evidence:

i) The Company has submitted Copies of Audited financial statements for the period ending 31.3.2015- 21.03.2016 and 31.03.2017 and Acknowledgements of ITRs for 2014-15 and 2015-16 with the petition and submitted to the respondent.

ii) That the company filed the Balance Sheets and Annual Returns till the financial year ending 31.03.2015 and 31.03.2016 and 31.03.2017.

iii) The revenue from operations, Current Assets, Cash and Bank balance and Reserves & surplus for the company from 2016-2017 have been given as follows in the Audited Financial statements :-

Reserves & surplus

Other expenses

Non-Current Assets

Cash & equi.

Ending 31.3.2016

288051

96289

112484200

18083

Ending 31.3.2017

385754

97589

112584200

20780

Ending 31.3.2018

489337

103583

113959397

167197

The matter came up for hearing before the Bench on 02.03.2021 and the Order was reserved.

The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act, 2013 which includes that, if it is just and equitable to restore the name of the company in the Registrar of Companies, it may direct the RoC to restore the name in its Register.

The appellant has been able to satisfy this Bench that it has certain assets which necessitate and justify restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable. As per several decisions of various Courts it should only be in exceptional circumstances that Courts should refuse restoration where the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight.

Accordingly, the appeal is allowed subject to payment of costs of Rs. 25,000/- to the Prime Minister Relief Fund. The restoration of the Appellant Company's name in the Register will be subject to their filing all outstanding documents for the defaulting years as required by law and completion of all formalities, including payment of any late fee or other charges which are leviable by the respondent for the late filing of statutory returns. The name of the petitioner company shall then stand restored in the Register of the Registrar of Companies (RoC), as if its name of the company had not been struck off.

The direction for freezing the Bank Account(s) of the Appellant-Company, if on this ground, shall consequently be also set aside immediately to enable the company carry out its business operation. Compliance of this order for restoration shall be made by the respondent with all its consequential effects within one week of compliance by the appellant.

The appeal is allowed and disposed of accordingly.

Let the copy of the order be served to the parties.