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Tribunal upholds Registrar's decision to strike off company name, dismisses challenge on procedural grounds. The Tribunal dismissed the petition challenging the striking off of the petitioner company's name, ruling that the Registrar of Companies acted lawfully, ...
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Tribunal upholds Registrar's decision to strike off company name, dismisses challenge on procedural grounds.
The Tribunal dismissed the petition challenging the striking off of the petitioner company's name, ruling that the Registrar of Companies acted lawfully, followed proper procedures, and did not violate principles of natural justice. The petitioners' claim to be directors and shareholders was found invalid due to discrepancies and lack of evidence. The company's failure to comply with statutory requirements and its prolonged inactivity led to the rejection of the restoration request. The petition was dismissed with no costs awarded to the petitioners.
Issues Involved: 1. Legality of the striking off of the petitioner company's name by the Registrar of Companies. 2. Alleged violation of principles of natural justice. 3. Validity of the petitioners' claim to be directors and shareholders. 4. Compliance with statutory requirements under the Companies Act, 1956. 5. Justification for the restoration of the company's name on the register.
Detailed Analysis:
1. Legality of the Striking Off: The petitioner company, M/s Rastogi Enterprises Private Limited, challenged the Registrar of Companies' decision to strike off its name from the register, claiming the action was taken without serving a show-cause notice as required under Section 560 (1) and (2) of the Companies Act, 1956. The Registrar countered that notice under Section 560 (5) was issued, and all preceding notices are deemed served as per the statutory procedure.
2. Alleged Violation of Principles of Natural Justice: The petitioner argued that the striking off violated the principles of natural justice due to the lack of notice. However, the Tribunal held that the entire procedure under Section 560 (1) to (4) was followed, and the record, though old and untraceable, indicated no lapse on the Registrar's part. The Tribunal also cited the Supreme Court's principle that quashing an order on natural justice grounds should not revive an illegal order, referencing cases like Gadde Venkateswara Rao v. Govt. of A.P. and Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar.
3. Validity of the Petitioners' Claim to be Directors and Shareholders: The Registrar raised objections regarding the petitioners' claim to be directors and shareholders, noting discrepancies in the registered office address and the absence of proof of their directorship. The Tribunal found these objections unrebutted, further weakening the petitioners' case.
4. Compliance with Statutory Requirements: The petitioner admitted to not filing statutory returns from 2001 to 2014, which the Registrar highlighted as a significant violation of Section 159 of the Companies Act, 1956. The Tribunal noted that the company had not carried out any operations for twelve years, which disqualified it from the grounds for restoration under Section 560 (6).
5. Justification for Restoration: The Tribunal emphasized that the provisions for restoration are intended for companies that were active at the time of being struck off or had discovered unknown assets. Given the petitioner's admission of inactivity and the existence of another company with the same name, the Tribunal found no justification for restoring the petitioner's name.
Conclusion: The Tribunal dismissed the petition, concluding that the striking off was lawful, there was no violation of natural justice, the petitioners failed to prove their directorship, and the company did not meet the criteria for restoration. The petition was dismissed with no costs.
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