TaxTMI 
TaxTMI 
2020 (11) TMI 1020
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....gister of the Companies) Rules, 2016 on 31.8.2018. The appellant company thereafter filed an appeal against the said order before the National Company Law Tribunal, Chennai Bench which was duly heard and disposed off vide the aforesaid order of the NCLT, Chennai Bench on 05.05.2020. 3. The brief facts of the case are as under:- (i) M/s. Shri Laxmi Spinners Private Limited was incorporated as a Company under the Companies Act, 1956 on 27.9.1978 and was carrying on business from its Registered Office at No. 55G, Ramasamy Naidu Nagar, Vilankuruchi Post, Coimbatore 641035 with CIN No.U17111TZ1978PTC011945. The Company manufactures and deals in textile including ginning, spinning and related activities and cultivating, selling, buying fibre, yarn, cotton etc. as well as its trade, import and export. (ii) The Appellant purchased the company in the year 2006 and is a Director on the Board of Directors of the Company. The Appellant has stated in the appeal memo that due to irregular power supply and manpower issues, enormous man hour and production possibility was lost resulting in huge losses for the Company and thus the production was stopped due to uncontrollable re....
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....ecause no cogent reasons or documents were produced by the appellant before the NCLT, Chennai Bench to support the proposition that the company was carrying on its business. Aggrieved by this order of the NCLT, Chennai bench, the Appellant has preferred this appeal before the NCLAT. 4. The appellant has claimed in the appeal memo that the notice was actually issued on 22.06.2018 by the Registrar of Companies Tamil Nadu, Coimbatore, which was antedated to 11.05.2018. He has also stated that he submitted his reply to the Registrar of Companies Tamil Nadu on 24.7.2018, whereas the name of the Appellant Company was actually struck off from the Register of Companies on 6.7.2018, much before the Company's reply was submitted and could be considered by the Registrar of Companies Tamil Nadu, Coimbatore. 5. The Appellant Company's appeal filed before NCLT, Chennai Bench was perused to see whether the appellant had raised the issue of antedating of the notice and issuing of order to strike off the name of the Company before expiry of 30 days from the date of receipt of notice before the NCLT, Chennai bench. It is clear from a perusal of the appeal memo filed before the NCLT, Ch....
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....ny business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12, he shall send a notice 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 from the date of the notice." 7. The Registrar of the Companies Tamil Nadu, Coimbatore has, on the basis of the fact that the Company was not carrying on any business or operation for the period of two financial years immediately preceding the year in which notice was issued and that it had not made any application within such period for obtaining the status of the dormant company under Section 455 of the Act, sent a notice to the Company as well as the Directors of the Company of the intention to remove the name of the Company from the Register of Companies. The notice was issued under Section 248(1) (c) and necessary action regarding issue of notice, obtaining representation along with copies of relevant documents within 30 days from the date of notice was done in accordan....
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....ssued under Section 248(1) (c) of the Companies Act, 2016. 11. Now let us examine the requirement of Section 252 (3) of the Companies Act, 2016 insofar as grant of relief to the appellant is concerned. The Section 252 (3) of the Act is reproduced below for better appreciation: "252. Appeal to Tribunal. - ............................................................ (3) If a company, or any member or creditor or workmen thereof feels aggrieved by the company having its name struck off from the register of companies, the Tribunal on an application made by the company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under sub- section (5) of Section 248 may, if satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order, give such other directions and make such provisions as deemed just for placing the company and all other persons i....
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....manner. 14. From the report of the Registrar of Companies Tamil Nadu, Coimbatore submitted to NCLT, Chennai Bench, it is seen that a submission has been made in paragraph 11.8 that Registrar of Companies Tamil Nadu, Coimbatore has no objection in restoring the name of the Company back to the Register of Companies, if the NCLT, Chennai Bench were to so order and the Company shall file pending financial statements and annual returns for the Financial years 2014-15 to 2019-20 with fees and additional fees as prescribed in the Act. The NCLT, Chennai Bench has considered the report of the Registrar of the Companies and the averments made by the Appellant before giving decision on the appeal. What can be made out of such a mention by the ROC is that he has merely stated a provision of law without giving any cogent or satisfactory reason for restoration of the name of the company in the register of companies. Hence we do not see much substance and reason in the mention of the Para 11.8 in the ROC's report. 15. In view of the legal provision in Section 248 of the Act (supra), the Registrar of the Companies has taken the step of striking off the name of the Company from the Regist....
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....dent / 'Registrar of Companies', Tamilnadu. In fact, the said Company is a Private Limited Company limited by shares doing business from its registered office at No. 55G, Ramasamy Naidu Nagar, Vilankuruchipost, Coimbatore, 641035. 3. The main objective for which the Company was incorporated are to manufacture and deal in textile including ginning, spinning and related activities and cultivating, selling, buying fiber, yarn, cotton etc. as well as its trade, export and import. The authorised Share Capital of the Company has been Rs. 10,00,00,000/- (Rupees ten crores only) divided into 156,000 /- equity shares and that the issued, subscribed and paid up capital of the Company is Rs. 2,78,10,000/-(Rupees Two Crores Seventy-Eight Lakhs and Ten Thousand only) divided into 7,80,100 equity shares of Rs. 10/- only. The Appellant purchased the Company in the year 2006. 4. It is the stand of the Appellant that they are interested to run the Company business and a sum of Rs. ten crores were invested in the Company and that the factory is situated at a piece of land of 5.6 acres and built up area is about 17,000 sq. ft. which is a valuable asset. In fact, the Company's operat....
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....icial to the business of the Company. 9. The other ground of the Appellant is that the action of the 'Registrar of Companies' while striking out the name of the Company from the register was not compliant to the Section 248(6) of the Companies Act, 2013. Moreover, the first Appeal for restoration of Company's name in the register of the 'Registrar of Companies' was filed within three years period as per Section 252 of the Companies Act. 10. The Appellant in the instant Appeal filed before this Tribunal has averred that the position of power supply has improved and that the Company is optimistic of carrying out operations and that the Company has Assets and ready infrastructure to start its operations. Besides these, the plea of the Appellant is that the present case on hand falls in the category where it would be 'just that the name of the Company be restored to the register of companies' as per section 252(3) of the Companies Act, 2013. 11. The Appellant in Appeal has comes out with a plea that great prejudice would be caused to the Appellant if the name of the Company of the Appellant is not restored to the register of the Registrar of Compani....
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....axmi Spinners Private Ltd.' is seen. 15. The 'National Company Law Tribunal', Division Bench-I, Chennai in CA/6/2020 while passing the impugned order dated 05.05.2020 at paragraph 9 to 10 had observed the following: - "9. As to the submissions made by the Ld. Counsel for the Applicant Company, it is seen from the records, that the company is not carrying on business, as on the date of striking off the company from the register maintained by the Respondent. Further, it may be seen from the records that the company was incorporated on 27.09.1978 and it is also brought to the notice of this Tribunal that the Applicant company has failed to file its balance sheet since its incorporation. 10. Upon perusal of the income tax acknowledgement which is filed along with the petition, would prove the fact that even though the company has been active during the period under scrutiny filing returns with income tax, however, had failed to file the same with the Respondent of any statutory returns from the documents submitted by the Appellant, it is evident upon its bare perusal which would prove that the company was not doing any business and remains to be dormant....
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.... Company and for the payment or discharge of its liabilities and obligations of the Company within a reasonable time and if necessary obtain undertakings from the managing director, director or other persons in charge of the management of the Company. This provision is subject to the proviso that notwithstanding the undertakings referred to in this Section, the assets of the Company shall be made available for the payment or discharge of all its liabilities etc. even after the date of order removing the name of the Company from the register of Companies. 18. At this juncture, it is pointed out that in the decision of Hon'ble High Court of Madras 'M.A. Rahim and Anr.' V. 'Sayari Bai' (DB) reported in (MANU/TN/0218/1973) it is held that the word 'just' connotes 'reasonableness' and something conforming to 'rectitude' and justice, something equitable and fair. 19. Moreover, in the decision of Hon'ble Supreme Court 'Helen C. Rebella' V. 'Maharashtra S.R.T.C.' reported in (1999) 1 SCC at page 90 it is observed that the word "just" denotes equitability, fairness and reasonableness having a large peripheral field. In un....
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....ttamdass and Anr.(Bulakidas Mohta Co. P. Ltd.) v. Registrar of Companies, Maharashta & Ors. (supra); it is only proper that the impugned order of the respondent dated 23.06.2007 which struck off the name of the petitioner from the Register of Companies, be set aside. At the same time, however, there is no gainsaying the fact that a greater degree of care was certainly required from the petitioner Company in ensuring statutory compliances. Looking to the fact that annual returns and balance sheet were not filed for almost fourteen years, the primary responsibility for ensuring that proper returns and other statutory documents are filed in terms of the statute and the rules, remains that of the management." 24. In the decision 'Mace Platronics Pvt. Ltd. V. ROC, reported in (2010) 104 SCL 277(Del), wherein it is observed as under:- "When the name of the company was struck off after following the prescribed procedure for non-filing of statutory records, even though the contentions of the company that the officials entrusted with responsibility of filing documents had failed to do so cannot be accepted, yet since the company was a running company and the application had ....
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....of Applicants itself, yet the Company can seek restoration of name under Section 560 of the Companies Act, 1956 (corresponding to Section 248 of the Companies Act) as per decision of Hon'ble High Court of Delhi in 'Intec Corporation P. Ltd.' V. 'Registrar of Companies' (2017) 201 Comp cases 18 (Delhi). 31. The 'Striking off' is an alternative to 'winding up'. Further, the order of restoration of the name of a Company to the register of Companies can also be passed by the Tribunal if it is that, it is just and proper to restore the name of the Company, then refusal to grant relief because some third party might be inconvenienced by it, will not be a proper, in my considered opinion. 32. It is to be borne in mind that the presence of the words 'or otherwise' signifies 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 Tribunal to order restoration if it appears to it to be 'otherwise' 'just'. 33. In case of an order being passed by the Tribunal restoring the Company to the register of 'Registrar of Companies' as regards the c....
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....ing was on 19.01.19. Waiting for further calls from TNEB Redressal forum. The company has to pursue the above for the hearings. (iii) The Regional Provident Commissioner, / Assistant Provident Fund Commissioner, Madurai had filed W.P. (MD)No. 9237 of 2010 and MP (MD) No. 2 of 2010 in Hon'ble Madurai Bench of Madras High Court. The company has to pursue the above and settle with the EPF." 36. The Respondent / Registrar of Companies, Tamilnadu, Coimbatore in his report filed before the 'National Company Law Tribunal', Division Bench-I, Chennai to the application No. CA/06/2020 had among other things mentioned that the Company had defaulted in filing its statutory returns since 2015 and for the notice issued u/s 248(1) of the Companies Act, 2013 in STK-5 to the Company and its Directors on 11.05.2018, no reply was received from the Company and its Directors and hence that the Company was struck off u/s 248(5) of the Companies Act. 37. Continuing further, the Respondent / Registrar of Companies, Tamilnadu, Coimbatore in his Report filed by the 'National Company Law Tribunal', Division Bench-I, Chennai had submitted that he had no objection in restorin....