Yeti Exports Private Limited And Ors. vs Registrar Of Companies

Dr. V.K. Subburaj, Member (T)

This is an appeal which has been preferred u/s 252 of the Companies Act, 2013 by the Appellant Company in relation to an order of striking off the name of the Appellant Company passed by the Respondent with effect from 07.06.2017 under the provisions of Section 248 of the Companies Act, 2013. Learned counsel for the Appellant represents that the Appellant Company was incorporated under the provisions of Companies Act, 1956 and has its registered office at 33, Busrurkar Market, Moti Bagh, New Delhi-110021. The Company is engaged in the business of dealers, stockists and distributors of all kinds of automobiles. Learned counsel for the Appellant represents that the Appellant company has been active since incorporation and has also been maintaining all the requisite documentation, as per the provisions of the Companies Act, 1956/2013. However, compliance in relation to the provisions of Companies Act, 2013 with the Respondent RoC by filing annual returns and financial statements has been omitted to be complied with but the said omission is not mala fide, but due to a pending dispute with the partner of the company in Hon'ble CMM Court, Saket.

Upon notice to the Registrar of Companies ("RoC"), the RoC has filed its affidavit on 19.12.2019 and pleaded that the company may kindly be directed to prove that it was carrying on business or was in operation and that it is just that the name of the company be restored to the register. However, the Ld. AROC for the RoC appeared and conveyed RoC's no objections to restoration of the Appellant Company subject to terms.

We have considered the plea of the Appellant and the representations of RoC. It is evident from the plea of the Appellant that it admits the default and does not question the due process undertaken by the RoC in striking off the name of the Appellant Company as envisaged under Section 248 of the Companies Act, 2013. However, the Appellant is seeking restoration of its name in the register as maintained by RoC relying on the ground that the Appellant as of date is in business and in having huge reserves and surplus and is having a dispute with the partner in Hon'ble CMM Court, Saket and in the circumstances, it is just that the name of the Company should be restored on the register of RoC as maintained by the Respondent. In order to sustain the said plea, the Appellant has placed before us the following documents:

i. Copies of TDS certificates for the years 2008-2009 to 2018-2019 with substantial payment.

ii. True Copies of Financial Statements and Balance Sheet for the Financial Years 2011- 2012 to 2018-19 with details of Reserves and Surplus to an extent of Rs. 60,06,233/- and interest income of Rs. 5,93,392/- as on 31.03.2019. The company has earned a profit of Rs. 4,21,311/- as on 31.03.2019.

iii. Copy of the complaint filed in the year 2011 with the Joint Commissioner of Police, Economic Offences Wing, Malviya Nagar, New Delhi and Copy of the FIR.

iv. Certified copy of Charge Sheet under Section 406/420/471, 120B of IPC and 66(C)/66(D)/71/74 of I.T. Act.

A perusal of the documents referred to in the paragraph above, reflects that the appellant has business operations which necessitate restoration of its name in the Register of Companies. The assumption of RoC that the company was not in operation was merely on grounds of non-filing of the Statutory Returns. The Act itself provides for redressal of these defaults. 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 and Rs. 25,000/- to the Ministry of Corporate Affairs. 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 Appellant Company shall then stand restored in the Register of the RoC, as if the 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 to 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 petition is disposed of accordingly. Let the copy of the order be served to the parties.