High Court corrects procedural flaw in striking off company from Register of Companies under Companies Act, 2013

The High Court held that the striking off of the petitioner company from the Register of Companies was procedurally flawed due to the absence of a mandatory order under Section 248(6) of the Companies Act, 2013. The Court exercised its jurisdiction under Article 227 of the Constitution to correct the error and directed the petitioner to take necessary steps. The civil revision petition was disposed of, emphasizing the Court's role in ensuring procedural compliance and justice.

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Issues Involved:
1. Validity of the striking off of the company from the Register of Companies.
2. Compliance with procedural requirements under Section 248 of the Companies Act, 2013.
3. Availability and appropriateness of alternative remedies.
4. Scope and exercise of jurisdiction under Article 227 of the Constitution of India.

Detailed Analysis:

1. Validity of the Striking Off:
The core issue revolves around whether the striking off of the company from the Register of Companies was valid. The petitioner company was struck off due to non-filing of statutory returns since 2010. The company argued that the failure was due to the negligence of a part-time accountant and not a willful default. The company had been operational, owning substantial agricultural land and having unsecured creditors. The Tribunal initially rejected the application for restoration, stating there was no plausible reason for revival and suggesting the company could explore winding up.

2. Compliance with Procedural Requirements:
The procedural compliance under Section 248 of the Companies Act, 2013, was scrutinized. The Registrar of Companies (RoC) issued notices under Section 248(1) and published the striking off notice in the Official Gazette. However, the High Court noted that there was no specific order passed under Section 248(6) before the publication under Section 248(5). The Court emphasized that an order under sub-Section 6 is mandatory before publication under sub-Section 5. The absence of such an order rendered the striking off process incomplete and procedurally flawed.

3. Availability and Appropriateness of Alternative Remedies:
The respondent argued that the petitioner should have appealed to the National Company Law Appellate Tribunal (NCLAT) as per Section 421 of the Companies Act, 2013. However, the High Court held that the existence of an alternative remedy does not oust its jurisdiction under Article 227 of the Constitution, especially when there is a clear procedural error apparent on the face of the record. The Court decided to exercise its supervisory jurisdiction due to the fundamental procedural lapse by the RoC.

4. Scope and Exercise of Jurisdiction under Article 227:
The High Court extensively discussed its powers under Article 227 of the Constitution, emphasizing that it can be invoked to correct jurisdictional errors, procedural irregularities, and to ensure justice. The Court cited several precedents affirming its supervisory role over tribunals and lower courts. It concluded that the Tribunal's rejection of the application for restoration was based on an incorrect assumption that the company had been validly struck off. Given the procedural lapse, the High Court deemed it appropriate to intervene and correct the error.

Conclusion:
The High Court found that the striking off of the petitioner company was procedurally flawed due to the absence of a mandatory order under Section 248(6) of the Companies Act, 2013. Consequently, the publication under Section 248(5) was invalid. The Court exercised its jurisdiction under Article 227 of the Constitution to address the procedural irregularity and directed the petitioner to take appropriate steps in light of the findings. The civil revision petition was disposed of, emphasizing the Court's role in ensuring procedural compliance and justice.

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