TaxTMI 
TaxTMI 
2022 (4) TMI 1576
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....pellant'/'Applicant' in not collecting the free copy of the order is due to 'COVID-19 Pandemic' and that the 'Applicant'/'Appellant' had filed the Appeal' on 12.03.2021 before the portal of the NCLAT, New Delhi with the delay of 25 days, the 'Limitation' is to be exempted, in the teeth of the order of the Hon'ble Supreme Court's Order dated 08.03.2021 in Suo Motu Writ Petition (Civil) No.2 of 2020 in Re. Cognizance for Extension of Limitation. Viewed in that perspective, this 'Tribunal' by taking a liberal, pragmatic, practical, purposeful, and meaningful view allows the IA/719/2021 in Company Appeal (AT) No. 47 of 2021 and condones the delay in preferring the 'Appeal'. No Cost. INTRODUCTION: 1. The 'Appellant' has focused the instant Company Appeal (AT) No. 47 of 2021 as an 'Aggrieved Person' being dissatisfied with the 'Impugned Order' dated 31.12.2020 in 'Appeal No. 350/252(ND)/2020 passed by the National Company Law Tribunal, New Delhi, Special Bench (Court-II). 2. The National Company Law Tribunal, New Delhi, Special Bench (CourtII) while passing the 'Impugned Order' dated 31.12.2020 in 'Appeal No. 350/252(ND)/2020 (filed under Section 252 of the Companies Act, 2013) ....
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....led the documents to establish that the Appellant had been in business during the defaulting year. Therefore, the Appellant is well- advised to bring all the documents on the records within 3 days from today 10. That the Appellant Company in response to the same has filed its balance sheets from the financial year 2006-07 to 2018-19 which were prepared after the date of striking off. Other than that no additional evidence has been placed on record, which could depict that the company was in operation or carrying out business as per its objects. Also, the Appellant Company failed to produce any document in support of utilization of plot on lease by RIICO Ltd. 11. That the provisions pertaining to restoration of the name of the Company are provided in the Section 252(3) of the Companies Act, 2013, which, inter alia, includes that if a company is carrying out its business or in operation or otherwise it is just that the name of the company be restored, this Tribunal can order the ROC to restore the name of the company in the Register of Companies. 12. There is nothing placed on record pertaining to the period prior to 01.09.2017, which could prove beyond dou....
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....porate persons for siphoning of the funds, evading tax or indulging in unlawful business or not abiding by the statutory compliances cannot be allowed to invoke this expression "or otherwise" which would be a travesty of justice besides defeating the very object of the Company 14. In view of the above, this Bench is not inclined to interfere with the striking off action taken by the ROC against the Appellant Company under Section 248(5) of the Companies Act, 2013." and resultantly 'Dismissed the Appeal'. APPELLANT'S SUBMISSIONS: 3. The Learned Counsel for the 'Appellant' submits that the 'Appellant'/'Company' was duly incorporated on 25.08.1995 under the Companies Act, 2013 an that 'Notice' dated 13.06.2017 was issued to it, by the 1st Respondent/Registrar of Companies, New Delhi and later proceeded in terms of Section 248 of the Companies Act, 2013 for 'striking off' the 'Appellant'/'Company's name from the 'Registrar of Companies'. The 1st Respondent/Registrar of Companies, through Notice dated 01.09.2017, had struck off the 'Appellant's name from the Register. 4. It is represented on behalf of the 'Appellant' that the 1st Respondent/Registrar of Companies had n....
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....he 'Appellant'/'Company' could not file a 'Reply' to the 1st Respondent's Notice dated 13.06.2017, as the same was not served upon the 'Appellant'/'Company' or its 'Directors'/'Shareholders'. Further, when the 'Appellant'/'Company' was about to file the required documents, they came to know that the 'Appellant'/'Company's name was 'struck off' by the 1st Respondent/'Registrar of Companies', Delhi, restraining it to file the Documents. 10. The contention of the 'Appellant' is that the 1st Respondent/'Registrar of Companies' has nowhere prayed that the 'Appellant'/'Company' should remain 'struck off', rather it had prayed that the 'Appellant'/'Company' be directed to file all the pending returns of the 'Appellant'/'Company'. 11. The Learned Counsel for the 'Appellant' submits that as soon as the 'Appellant'/'Company' came to know about the non-filing of 'Statutory Returns', it immediately approach the 'National Company Law Tribunal' to permit them to do the same. 12. The Learned Counsel for the 'Appellant' points out that the 2nd Respondent in its 'Report' dated 10.11.2020 had mentioned that there was no objection on its side, for the 'Restoration' of the 'Appellant'/'Compan....
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.....) v Registrar of Companies, Maharashtra & 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 Registrar 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." 17. In the decision in 'Purushottam Dass' v 'Registrar of Companies', Maharashtra, (1986) 60 Comp. Cas. 154 (Bom) the Hon'ble High Court of Bombay had observed as under: "The object of Section 560(6) of the Companies Act is to give a chance to the company, its members and creditors to revive the company which has been struck off by the Registrar of Companies, within period of 20 years, and give them on the business only after the company judge is satisfied that such restoration is necessary in the interest of j....
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....losure of activities of the company and non-commencement of business no longer exist and there are favourable circumstances under which the main business of the company as financial and investment consultant can be restarted in the best interest of the company, its shareholders and other concerned who may be directly or indirectly associated with the business activities of the company. In the circumstances the shareholders of the company took a joint decision and vide consent letter dated May 30, 2009, have decided to revive the company. In the circumstances, this Petition has been filed under Section 560(6) of the Act seeking a direction to the respondents for restoring the company's name in the Register of Companies. Having considered the contention raised by learned Counsel for the petitioner and having gone through the provisions contained in section 560(6) of the Act and the averments made in the petition I am of the view that it would be just and proper to order restoration of the name of the company in the Registrar of Companies. Accordingly, the petition is allowed. The respondent Registrar is directed to restore the name of the company in the Registrar of....
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....ess or was in operation. For this purpose, the documents subsequent to the date of striking off the name of the Company would not be material for consideration of the first two aspects as mentioned above although those documents may be relevant for considering the question whether it would be just that the name of the Company should be restored. 19. As far as records, the claim that the Company was in operation, there were no such pleadings in the Company Petition that although the Company was not in business since 2002, it continued to be in 'operation' even thereafter till the name of the Company was struck off. The additional documents now being relied on were not filed before NCLT and there were no pleadings on this count also. 20. We have heard Counsels for both the sides. Learned Counsel for the Appellant submitted that in the present matter there are documents to show that on complaint of workmen, authority had initiated action and the company was defending the same. It is stated that documents have been filed to show that the property tax was being paid. Reference is made to one Annexure - A7 (page no. (62) to submit that in the "Charges Registered" there ....
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.... b) Learned NCLT is requested to give opportunity to the Appellant to amend the petition so as to add pleadings with regard to the claim of the Appellant that company was in operation when it was struck off and that there are just reasons as to why the name of the company should be restored. c) The Appellant be given opportunity to file in NCLT copies of additional documents filed by them in this appeal (if not already filed). d) Fresh opportunity of hearing may be given to both sides and the petition may then be disposed of as per law. e) Parties to appear before NCLT on 8th January, 2019." 26. In the Judgment of this 'Tribunal' dated 31.12.2019 in Lakshmi Rattan Cotton Mills Company Ltd. through its Director Sashank Gupta, Kanpur, Uttarpradesh v Union of India, through Secretary, Ministry of Corporate Affairs, (vide Comp. App. (AT) 239 of 2018) wherein at paragraphs 11 and 12 it is observed as under: Para 11. "Looking to the disputes pending in the High Court, according to us, it would be appropriate to restore the name of the Company to the Registrar of Companies leaving all questions open for the Appellant and Respondents to dispute in ....
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....ed so long as 'Twenty Years' had not expired. 'STRIKING OFF' & TRIBUNAL'S POWER: 30. In real sense, the term 'Striking Off' is alternate to 'Winding Up'. The occurring of the words 'or otherwise' in Section 252 (3) of the Companies Act, 2013 connotes that even when the 'Company was not carrying on any Business' or was 'not in Operation' at the time of striking off, the 'Tribunal' yet has the 'option' to order 'restoration of a Company's name' in the 'Register of Companies', if it appears to it, to be 'otherwise 'just'. 31. Added further, the 'Tribunal' can pass an order of 'Restoration of a Company's name' to the 'Register of Companies', if it is that, it is 'Just And Proper' to restore the name of the Company, then, 'declining' to grant relief just because of third person will be inconvenienced by it, will not be a proper one, in the earnest opinion of this 'Appellate Tribunal'. ENGLISH DECISIONS: 32. In Re Priceland Ltd. Waltham Foresh London Borough Council v Registrar of Companies and Ors. (1997) 1 BCLC 467, 476, 477 (Ch. D) (Companies Court) it is observed and held as under: ".....In other words, the exercise of discretion only arises after the court ha....
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....ng at least '3/4th of the Shares in Value'. EFFECT OF DISSOLUTION: 35. To put it precisely, the effect of Dissolution of a 'Company' is that the 'Certificate of Incorporation' granted to the Company is deemed to be Annulled from the date of 'Dissolution'. A company which is dissolved cannot run its business operations keeping in tune with the 'Memorandum of Articles of Association' or with its Objects Clause. EVALUATION: 36. Before the 'National Company Law Tribunal', Delhi Bench, the Appellants in Company Appeal No.350/252(ND)/2020 (filed under Section 252 of the Companies Act, 2013) for Restoration of the name of M/s. AVS Enterprises Pvt. Ltd. on the Register of Companies maintained by the Register of Companies, NCA, Delhi) had averred that the Company is regularly complying with the 'Income Tax Act' and had filed its 'Income Tax Returns', since incorporation and that the Company has 'assets and liabilities' and is continuously carrying out its business operations by following its objects. Furthermore, the 'Financial Statements' of the Company for the year ending 31.03.2017, 31.03.2018 and 31.03.2019 point out that the Company is a Going Concern and is continuously ca....
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....dered for 'striking off' from the 'Register of Companies'. 39. According to the 1st Respondent/Register of Companies, its Office had intimated the 'Company' and its Directors through STK-1 during March 2017 at the Registered Office about the defaults in question, provided them a 'Fair Opportunity' to respond. Later, a 'Public Notice' for the same was issued in the form of STK-5 dated 13.06.2017. In fact, the Company's name was struck off vide 'Notice' in the form of STK-7 dated 21.08.2017. Because of the fact that the Company's was not carrying on any operations for a period of two immediately preceding Financial Years (as indicated by non-filing of the Financial Statements of the Company for two or more years), the 'striking off' of the present Company was legally a 'justifiable' one by means of an 'Operation of Law'. 40. In short, the 1st Respondent in its 'Reply' before the National company Law Tribunal, New Delhi Bench (Court II) came out with the prayer that if the 'Tribunal' considers the 'Application' for Restoring the 'Name of the Company' in the Register of Companies', then the 'Tribunal' may issue directions to the Appellant for filing all the pending documents of t....
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....' under Section 455 of the Companies Act, 2013, this 'Tribunal' taking note of the fact that the 'Company' has 'Assets and Liabilities' and more so, keeping in mind that the 'right to seek restoration' of the name of the 'Company' (to be entered in the 'Register of Companies') is not extinguished/lost as long as 20 years have not expired, and besides these, the 1st Respondent in its 'Reply' before the 'Tribunal' had mentioned that the 'Tribunal' may kindly issue directions to the 'Appellant'/'Petitioner' to file all documents of the 'subject company with it, of course, within the time specified by the 'Tribunal', in all 'Fairness' 'Reasonableness' and 'Equitableness' is of the earnest opinion that it is just and proper to restore the name of the Company and that the omissions/latches/failures on the part of the Management of the Company in not filing the 'Annual Returns' and 'Financial Statements' in time can be fastened with a levy of cause, to secure the 'Ends of Justice'. Otherwise, it will cost 'irreparable hardship' and 'Prejudice' to the 'Company', as opined by this 'Tribunal'. However, the converse view arrived at by the 'National Company Law Tribunal, New Delhi Special Benc....