2022 (4) TMI 266 - AT - Companies Law

Tribunal restores Appellant Company's name in Register, stresses compliance & notice provision.

The Tribunal allowed the appeal, set aside the impugned order, and directed the restoration of the Appellant Company's name in the Register of Companies. ... Seeking restoration of name of the Appellant Company in the Register of Companies, New Delhi - Section 252(3) of the Companies Act, 2013 - sufficient notice under Section 248(1(c) of the Act was not sent - proper opportunity to hear the case not provided - violation of principles of natural justice - HELD THAT:- Section 248 of the Act deals with the powers of Registrar to remove name of the company from register of companies. Section 248(1)(e) of the Act provides that a notice shall be sent to the Company and all the Directors of the Company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days of notice. The importance of the ‘date’ cannot be undermined keeping in view that Section 248(1)(c) provides that a company should be carrying on business or operation for two immediately preceding financial years. On a query from the Bench to the Learned Counsel appearing for the First Respondent/RoC as to which ‘Mode of Despatch’ the aforenoted ‘Notice’ was sent, it was informed to the Bench that the Notice was sent by ‘ordinary’ process. Hence there is no ‘Proof of Service’ which could be ascertained. However, a general notice with respect to all the names which have been struck off from the RoC has been said to be listed on the website of Ministry of Corporate Affairs (MCA) - Having regard to the fact that the publication in the newspaper only refers to the link of the website of the MCA but it does not state anywhere the names of the companies, which are only reflected/specified in the website, and admittedly a general notice relating to thousands of companies, this Tribunal is of the considered view that notice in the proper form which is ‘dated’ and sent by a ‘Mode of Despatch’ establishing a ‘Proof of Service’ would be considered ‘sufficient notice’, keeping in view the facts and circumstances of the attendant case on hand. A perusal of the Notices given for conducting AGM Meeting are 2.9.2015, 2.9.216, both which fall within the relevant period of two years prior to the 30.06.2017. This Tribunal is of the earnest view that there is reasonable cause to believe that the Company is carrying on business for the relevant period of two years keeping in view the Income Tax Returns filed between 2015-2020. The MOU, LOI entered into by the Appellant Company, notices of AGM which also fall within the relevant period, this Tribunal is of the considered opinion that it is otherwise ‘just’ that the name of the company be restored. It is directed that the name of the Appellant Company be restored in the Register of Companies - application allowed. Issues Involved:1. Whether the Appellant Company was carrying on business or in operation at the time of its name being struck off.2. Whether the Appellant Company had any assets/immovable property at the time the name was being struck off.3. Whether sufficient notice under Section 248(1)(c) of the Companies Act, 2013 was sent to the Appellant Company.4. Compliance with the provisions of the Companies Act, 2013 by the Registrar of Companies (RoC).5. Justification for the restoration of the Appellant Company's name in the Register of Companies.Issue-wise Detailed Analysis:1. Whether the Appellant Company was carrying on business or in operation at the time of its name being struck off:The Tribunal found that the Appellant Company had filed Income Tax Returns for the assessment years 2016-17 and 2017-18, showing business losses of Rs. 29,315 and Rs. 26,081, respectively. The Tribunal noted that the NCLT's observation that the figures were shown as 'zero' was incorrect. Additionally, the Appellant Company had entered into agreements for business operations, including a Letter of Intent with Isquare Properties Pvt Ltd and a Memorandum of Understanding with Kshitij Infratech Pvt Ltd. The Tribunal concluded that there was reasonable cause to believe that the Company was carrying on business during the relevant period.2. Whether the Appellant Company had any assets/immovable property at the time the name was being struck off:The Appellant Company owned a piece of land bearing Municipal Nos. 2119 to 2121 built on plot/khasra No. 494-495 in Block J, Gali No. 58, Naiwala, Karol Bagh, Delhi. The registered office of the Company was also situated on this property. The Tribunal found that this evidence supported the claim that the Company had immovable property and was in operation.3. Whether sufficient notice under Section 248(1)(c) of the Companies Act, 2013 was sent to the Appellant Company:The Tribunal examined the notice sent by the RoC and found it to be 'undated' and sent by 'ordinary' process, lacking proof of service. The Tribunal emphasized the importance of a 'dated' notice sent by a 'mode of dispatch' establishing proof of service. The Tribunal concluded that the general notice published on the MCA website and in newspapers was insufficient, and the Appellant Company was not given a proper opportunity to present its case.4. Compliance with the provisions of the Companies Act, 2013 by the Registrar of Companies (RoC):The Tribunal highlighted that Section 248(1) requires the RoC to send a notice to the Company and its Directors, allowing them to send representations within thirty days. The Tribunal found that the RoC did not comply with this requirement, as the notice was undated and sent by ordinary process without proof of service. The Tribunal noted that the RoC's actions did not follow the due process of law, causing prejudice to the Appellant Company's rights.5. Justification for the restoration of the Appellant Company's name in the Register of Companies:The Tribunal referred to Section 252 of the Companies Act, 2013, which allows for the restoration of a company's name if it was carrying on business or in operation at the time of striking off, or if it is otherwise just to restore the name. The Tribunal considered the business activities, ownership of immovable property, and compliance with AGM requirements. The Tribunal concluded that it was just, reasonable, equitable, and fair to restore the Appellant Company's name in the Register of Companies, subject to the payment of outstanding tax dues to the Income Tax Department.Conclusion:The Tribunal allowed the appeal, set aside the impugned order, and directed the restoration of the Appellant Company's name in the Register of Companies. The Tribunal emphasized the importance of compliance with legal procedures and the provision of sufficient notice to the Company. The Tribunal also directed the Registry to upload the judgment on its website and send a copy to the NCLT, New Delhi.