TaxTMI 
TaxTMI 
2024 (10) TMI 402
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.... 21.12.2016 and it is brought out that when the matter was pending for recording of the evidence of the petitioners/defendants, an application under Order VII Rule 11 of CPC was moved primarily on the ground that the name of the respondent/plaintiff company had been struck off from the Register of Companies in terms of Section 248(5) of the Companies Act, 2013 (for short 'the Act') vide notification dated 08.08.2018 by the Registrar of Companies, GNCTD [Government of National Capital Territory of Delhi]. 3. The plea of the petitioners/defendants in moving the application was that since the respondent/plaintiff-company was a juristic person which has ceased to have such legal and distinct status, it could not pursue the pending civil proceedings against the petitioners/defendants. At this stage, it would be relevant to reproduce the short and crisp order which was passed by the learned trial court which reads as under:- "CS DJ 11971/16 M/S BHAN TEXTILES PVT LTD Vs. M/S AB CREATIONS 14.12. 2022 Present: Sh. Amit Trikha Adv., Ld. Counsel for plaintiff. Sh. Harsh Vardhan Adv ., Ld . Proxy Counsel for defendant. Arguments....
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.... Act. It is urged by the learned counsel for the petitioners/defendants that the word 'due', as reflected in Section 250 of the Act, is distinct from the word 'claimed' and the word 'due' means that the amount should be such which is crystallized or has become legally recoverable, for which reference is made to Tower Vision India Pvt. Ltd. v. Procall Private Limited 2012 SCC OnLine Del 4396 wherein this Court, while deciphering the meaning of the expression 'admitted debt' in the context of Section 433 (e) of the erstwhile Companies Act, 1956, held as under:- "1. All these three company petitions are referred by the learned Company Judge to the Division Bench for decision. Initially Company Petition No.458/2010 had come up before the Company Judge and was heard on 31.10.2011 when following order was passed: "After hearing the parties at length, this Court is of the view that following question need to be answered by a Division Bench of this Court as the said issue arises in a number of matters and an authoritative pronouncement of the same is required:- i) Whether in a contract for rendering of service/use of site, a stipulation to pay an amount for the "....
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....wing words: " ...Mr. Justice R.V. Raveendran (as the Learned Judge then was) speaking for the Division Bench formulated the propositions of law which emerge from judgments of the Supreme Court and the High Court. The Court held as follows: (i) A "Debt" is a sum of money which is now payable or will become payable in future by reason of a present obligation. The existing obligation to pay a sum of money is the sine qua non of a debt. "Damages" is money claimed by, or ordered to be paid to; a person as compensation for loss or injury. It merely remains a claim till adjudication by a court and becomes a "debt" when a court awards it. (ii) In regard to a claim for damages (whether liquidated or unliquidated), there is no "existing obligation" to pay any amount. No pecuniary liability in regard to a claim for damages, arises till a court adjudicates upon the claim for damages and holds that the defendant has committed breach and has incurred a liability to compensate the plaintiff for the loss and then assesses the quantum of such liability. An alleged default or breach gives rise only to a right to sue for damages and not to claim any "debt". A claim....
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.... and payable by H.N. Explosives Pvt. Ltd. to ICI India Ltd. Consequently, disputes between the petitioner and H.N. Explosives Pvt. Ltd. were referred to arbitration sometime in 2002, and ultimately, a sum of Rs. 81,76,360/- was awarded on 14th March, 2007 against the erstwhile H.N. Explosives Pvt Ltd. and in favour of the petitioner. 8. It is the petitioner's case that since H.N. Explosives Pvt. Ltd. was struck off from the Register of Companies by the respondent on 23.06.2007, therefore, it has become impossible for the petitioner to execute the said award against that company. This stand is also affirmed by the respondent in reply. 9. A petition for restoration of the name of a company to the Register of Companies under Section 560(6) of the Companies Act,1956 can only be made by the company, a member or a creditor. A creditor is entitled to maintain a petition for restoration only if he was a creditor at the time the name of the company was struck off from the Register of Companies. Here, the arbitration award in favour of the petitioner was rendered on 14 March, 2007, i.e. before the date of the Gazette Notification notifying that the name of H.N. Explosiv....
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....imitation as it has been filed after a delay of more than 167 days which has not been explained. Alternatively, on merits, it is submitted that the application under Order VII Rule 11 of CPC has been moved purposely and intentionally to derail the trial and frustrate the outcome of the matter. It is pointed out that the civil suit was filed in the year 2016 much prior to the issuance of the notification by the Registrar of Companies striking off the name of the company vide order dated 08.08.2018. 7. It is urged that the proviso to Section 248 (6) and sub-section (7) to the aforesaid Section besides Section 250 of the Act protect the right of the respondent/plaintiff to continue the civil proceedings despite the name of company having been struck off, which is also a curable defect as the respondent/plaintiff, through its director(s), can apply for restoration within a period of twenty years. Reliance is placed on the decision of the Supreme Court in the cases of Commissioner of Income Tax, Jaipur v. M/s Gopal Shri Scrips Pvt. Ltd. Civil Appeal No.2922/2019 dated 12.03.2019 and Ravinder Kumar Aggarwal v. Income Tax Officer, Ward 20(3) New Delhi W.P.(C) No.7122/2019 dated 17.11.2....
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....of the company. 10. A careful perusal of the aforesaid provisions would show although the company shall stand dissolved and the certificate of incorporation shall stand cancelled from the date its name stands struck off, two distinct exceptions have been carved out; firstly, that the company shall remain alive for realisation of its due from the debtors and secondly, it shall remain alive for payment or discharge of its liabilities. Section 250 of the Act in its plain and simple grammatical manner provides an exception that even after such event happening i.e., the company having dissolved or ceasing to operate, it shall remain alive for the purpose for realising the amount due to the company and also for the payment or discharge of the liabilities or obligations of the company. The words/expression "the amount due" in Section 250 of the Act would only mean a quantified amount of money which is legally recoverable by the company from its debtors. The plea by the learned counsel for the petitioners/defendants that the 'due' should be restricted to 'admitted debt' or a 'crystalised amount due' cannot be sustained, as the term 'due' is unconditional and lacks preconditions. This im....
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....ps (Supra), where in similar circumstances a company had been struck off and, on that basis, the High Court had dismissed the appeal filed by the Income Tax Department on the ground that the appeal is not maintainable since the Company stands dissolved. The Supreme Court reversed the order of the High Court and observed as under: - "10*. In our view, the High Court was wrong in dismissing the appeal as having rendered infructuous. The High Court failed to notice Section 506(5) proviso (a) of the Companies Act and further failed to notice Chapter XV of the Income Tax Act which deals with "liability in special cases" and its Clause (L) which deals with "discontinuance of business or dissolution". The aforementioned two provisions, namely, one under the Companies Act and the other under the Income Tax Act specifically deal with the cases of the companies, whose name has been struck off under Section 506 (5) of the Companies Act. These provisions provide as to how and in what manner the liability against such company arising under the Companies Act and under the Income Tax Act is required to be dealt with. Since the High Court did not decide the appeal keeping in view the afor....