TaxTMI 
TaxTMI 
2014 (2) TMI 64
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....respondent No.3 i.e. Mr. D.C. Singhania for searching a suitable house in Delhi. Singhania identified a property known as "Jodhpur Gardens" in village Gadaipur, Tehsil Mehrauli. On his request, the petitioner remitted a sum of Rs.3,00,000/- in November, 1979 in favour of Singhania for the purchase of the aforesaid property. Singhania took possession of the property as agent of the petitioner and confirmed the same in writing to the petitioner. In January, 1980, the petitioner remitted further sums from England in favour of Singhania, being the balance of the purchase price of the property. In the same month, he visited Delhi with his family and stayed in the property. While at Delhi, he requested Singhania to give him the conveyance deed in respect of the property but was told by Singhania that it would take some time to get the original document. Trusting his word, the petitioner returned to England and between the years 1981 and 1986, repeatedly inquired about the conveyance deed with D.C. Singhania, who, under some pretext or the other kept deferring the issue and giving evasive answers. 3. His suspicion having been excited, the petitioner made inquiries in Delhi through pers....
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.... to lead evidence but the trial court rejected the request and closed the plaintiff's evidence. The suit was also dismissed on that date. The petitioner preferred an appeal before this Court in RFA No.42/2004 on 15.02.2012. This Court set aside the judgment and decree dated 14.05.2003 passed by the Civil Court and remanded the suit for trial. When the suit was taken up on 07.05.2012, counsel for the company, which was the first defendant in the suit (respondent No.2 herein) informed the trial court that the name of the company has been struck off the records by the Registrar of Companies and therefore the suit cannot proceed. 8. The present petition has been filed by M.A. Panjwani, the petitioner, under sub-section (6) of Section 560 of the Companies Act seeking restoration of the name of the company to the register of companies maintained by the ROC on the ground that it is "just" to do so having regard to the facts narrated above. It is pointed out that unless the name of the company is restored, the suit filed by the petitioner would be rendered meaningless or infructuous and there would be no effective remedy available to the petitioner to proceed against the company for the....
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....ation of the matter, I am of the view that the petition must succeed. 12. Under sub-section (6) of Section 560 of the Companies Act, 1956 the company court has the power to order restoration of the company's name to the register of companies on the application made by the company itself or its member or creditor. Such an application can be made at any time before the expiry of 20 years from the publication of the notice for striking off the name published in the official gazette. There are only two circumstances in which the company court can exercise the power. The first is when it is satisfied that the company was, at the time of the striking off of its name from the register, carrying on business or was in operation. The second circumstance is when it appears to the company court that it is "otherwise just" that the name of the company be restored to the register. Obviously the petitioner is not the company itself and, therefore, he has to be either a member or creditor. It was submitted on behalf of the ROC that the petitioner is neither a member nor a creditor of the company. 13. Section 2(27) of the Act defines "member", in relation to a company in a negative manner by ....
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....s pertinent to note that in the order passed by this Court on 27.03.2000 in Suit No.3340/1989, it was observed that the trial court and this court were "misled to believe there was in fact a settlement between the plaintiff and Mr. S.A. Quli with regard to the subject matter of the suit when there was none and as such not only the settlement was void but the said order passed by this Court was non est and nullity in the eyes of law". The transfer of shares from the petitioner to Quli having been held by this Court to be collusive and the orders under which it was done having been declared to be a nullity, the petitioner never ceased to be a member of the company. 14. Even if the petitioner cannot be considered as a "member" of the company, he is certainly a "creditor" who can file the petition. On this aspect of the matter I may refer to the judgment of a learned Single Judge (A.S. Pachhapure, J.) of the Karnataka High Court in Velu B. Pethi v. Kayesess Constructions Pvt. Ltd. & Ors. : (2011) 163 Comp Cas 176. In this case the essential facts are somewhat similar to the facts of the present case. In that case, the petitioner purchased a residential site from the respondent-compa....
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..... 15. Quite apart from the above position, the sub-section recognises that if the Court is of opinion that it is "otherwise just" that the company be restored to the register, restoration can be ordered. The argument addressed on behalf of the ROC to the effect that the word "just" has to be understood in the background of the specific language of the sub-section on the basis of the principle of ejusdem generis does not appeal to me. As I read the sub-section, there are two situations in which the company court can order restoration. One is when the company was carrying on business or was in operation at the time of striking off its name. The second situation, which is an alternative situation, is one where it appears "just" to the company court that the name of the company be restored to the register. I do not see any scope for the application of the rule of ejusdem generis because of the presence of the words "or otherwise" between the words providing for the two types of situations. The presence of the words "or otherwise" denotes that even if the company was not carrying on any business or was not in operation at the time of striking off, it is still open to the company cour....