TaxTMI 
TaxTMI 
2024 (12) TMI 1744
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....Kumar Jhabakh. She submits that, she has filed a memo of pleadings on 05.12.2024, contending thereof that in principle, she would be having any objection as such in case if the Company Appeal is decided on merits. The said memo is taken on record. The brief facts which are to be considered are, that in the instant Appeal, the Appellant puts the Challenge to the Order dated 31.05.2023, as it has been passed by the Ld. NCLT, Chennai Bench in CA No.7/2022. By virtue of the impugned Order, Ld. NCLT has rejected the application preferred by the appellant under Section 252 (3) of the Companies Act, 2013 to be read with Rule 11 of the NCLT Rules of 2016, to permit revival of the Registration of the company M/s. Kumaran Powders Pvt. Ltd of which the Appellant is a shareholder, stood rejected. Before venturing to deal with the factual aspects of the case, a reference to Section 252 of the Companies Act, which will be the subject to be considered by us, needs to be made, particularly because the implications of the same has been extensively argued yesterday by the Ld. Counsel for the Appellant, in the light of the provisions contained under Sub-section (3) of Section 252 of the Companies ....
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....tal, file an application in the prescribed manner to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner: Provided that in the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application. (3) Nothing in sub-section (2) shall apply to a company registered under section 8. (4) A notice issued under sub-section (1) or sub-section (2) shall be published in the prescribed manner and also in the Official Gazette for the information of the general public. (5) At the expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved. (6) The Registrar, before passing an order under s....
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....ery, the plant remained idle in 2006-2008 and that with the consent of Board of Directors he applied to RoC to strike off the name of the Company from the Register of Companies. Accordingly, the Respondent RoC initiated proceedings under Section 560 of Companies Act, 1956 and struck off the name of the said company from the register of Companies. However, this was done prior to transfer of immovable properties lying in the name of the company and on knowing the same, he had proposed to revive the company by utilizing the said properties and to engage in business of manufacture of non-ferrous metal powder to support another group company. He had pleaded that the application to strike off the name of the Company had been preferred by him in good faith and the fact of the company owning substantial immovable property was inadvertently overlooked and that if the company is restored to its original status, the said properties can be utilised to create additional business. To prove his bonafide, he had attached copy of sale deeds of the immovable properties along with certificate of the Auditor. He had also given his undertaking to cause the company to comply with the provisions of the c....
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....ct, before the NCLT Chennai Bench. Therein, he had pleaded that the struck-off company still has immovable assets which he wishes to utilize to restart the company's operations and to prove his bonafide, he had attached 18 number of sale deeds in respect of a total land area of 13.39 acre, owned by the company, the details of payment of property tax and electricity due and the business plan for restarting the business as annexure to the said application. The Appellant further stated that even though Respondent No.1, the RoC in his report to Ld. NCLT has stated that the intention of the Appellant to revive the operation of the Company is not visible in the Application, he had reiterated his intentions of re-starting business in his rejoinder and the same should have been considered as to be an 'honest' undertaking for the purpose of deciding his appeal. He has further contended that despite of there being sufficient materials placed by him before the Ld. NCLT and particularly his reply to the report of RoC that was submitted on 17.04.2023. the Ld. NCLT passed the Impugned Order, without assigning any reasons and without even recording any findings with regards to the assurance an....
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....h requires restoration in the register of companies, he may within a period of three years from the date of passing of the order dissolving the company under Section 248, file an application before the Tribunal seeking restoration of name of such company. (2) A copy of the order passed by the Tribunal shall be filed by the company with the Registrar within thirty days from the date of the order and on receipt of the order, the Registrar shall cause the name of the company to be restored in the register of companies and shall issue a fresh certificate of incorporation. (3) If a company, or any member or creditor or workman 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 ....
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....e the ends of justice. Para 30,31,45 and 46 of the said judgment are extracted hereunder: - "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'. 45. As far as the present case is concerned, even though, the 1 Respondent/Registrar of Companies' has come out with the plea that the 'Company' was incorporated on 25.08.1985 and the last Annual Return and Balance Sheet was submitted by the 'Co....
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....39;s Company' is subject to its filing of all outstanding documents required by Law and completion of all Statutory formalities, including payment of any late fee or any other charges which are leviable by the 1st Respondent for late filing of 'Statutory Returns' and also on payment of cost of Rs. 40,000/- (Rupees Forty Thousand only) to be paid to the 'Prime Minister Relief Fund'. The name of the Appellant Company' shall then, as a resultant effect, shall stand restored to the 'Register of the Registrar of Companies' as if the name of the Company was not 'struck off', in accordance with Section 248(5) of the Companies Act, 2013. All connected pending IA/IA's if any, is/are closed." In yet another Judgment relied on by the Appellant which has been rendered by the principal bench of NCLAT as reported in 2023 SCC Online NCLAT 1893, M/s. Parinda Buildcon Pvt Ltd. Vs. ROC, this Tribunal has ordered that the name of the concerned company should be restored back by the RoC because it has land and other immovable properties and has a business plant to carry out its activities. The Appellant states that his case is similar, that the struck-off....
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....n by the directors to revive the business/operation of the struck-off company should constitute a 'just' cause for restoring the name of the company in the register of companies, "provided it is not a shell company, or a company engaged in siphoning of the Funds, evading tax or, indulging in unlawful activities or not abiding by the statutory compliances" which has been prescribed by the ratio in Alliance Commodities Pvt. Ltd V. Office of Registrar of Companies, NCLAT CA(AT)(CH) No. 20 of 2019. The aforesaid Judgment has been pronounced in DD finance and Holdings Pvt. Ltd., Vs ROC as reported in 2024 (243) Company Cases 546, and the relevant paragraphs being para 12-16, 22 and 23 on which the Appellant has relied upon to support his pleadings are extracted below:- The relevant para 12-16, 22 and 23 are extracted hereunder: - "12. The company holds property and all the four directors are willing to give an undertaking for three years they will not sell the property, should the name of the company be restored on the rolls of the Registrar of Companies. The brothers as directors intend to use this asset by developing it and starting a home-stay business for their dai....
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....concern) and its loan advances were terms as "being violative of section 186 of the Companies Act, meaning thereby that advancing loans for the purpose of siphoning of the funds and for evasion of tax" which is not the situation here. Rather the financial documents from 2011 onwards including balance-sheets, water bills, electricity bills, rent receipt were ready but could not be filed due to the fault of an earlier counsel. 16. Admittedly the impugned order was passed since the appellant had failed to produce documents to show it was still in possession of the asset and it had paid all water bills, electricity bills and rent receipt (s). It is submitted the financial statement could not be filed with the Registrar of Companies inadvertently since father of the present directors was old and ill and it being a joint family set up with an incomplete professional/legal guidance and even their chartered accounts had unfortunately expired. 22. For foregoing reasons, we are of the view that due to exceptional economic growth curve it shall be viable to run the appellant company as an entrepreneurial start up venture since affordable housing options/home-stay business co....
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....prima facie, the court has been persuaded that it is just to restore. In either case it seems to me that, absent special circumstances, restoration should follow. Exercising the discretion against restoration should be the exception, not the rule," (Page 476) Once the court has acquired jurisdiction on the basis that the new applicants interests make restoration just it would be harsh indeed to refuse the relief sought because some other third party may be inconvenienced by it. These considerations lead me to the view that the court should be very wary of refusing restoration so as to penalize a particular applicant or in a possibly futile attempt to safeguard the special interests of a single or limited class of affected persons. It would need a strong case to justify a refusal on these grounds........(Page 477)" The second one is in the matter of Conti V. Uebersee Bank AG, 2000 BCC 172 (Scotland), it is observed as under: "Where a company has been struck off the register at its own request, the officer of the company who had been instrumental in seeking such a striking off had sufficient locus-standi to apply for restoration. Clearly that officer could not cl....
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....eal shall lie under Section 560(6) of the Companies Act, 1956. 19. We also follow the judgment of Hon'ble Gujarat High court in the matter of Pramod Kumar Sharma (Supra) where the scope of Section 560(6) has been expounded which is as follows: "8.2. The sub-section (6) of Section 560 of the act is part of Section 560 as a whole i.e. Section 560(1) to Section 560(9) and it is connected and intertwined with all other sub-sections i.e. sub-section (1) to sub-section (5) and sub-section (7) to (9) and it is not an independent provision. 8.6. Looking to the facts of the present case, it cannot be said that in present case the ROC had, on his own motion, taken the action in question for any reason/s under Section 560(1) to (5) of the Act. 9. According to the provision i.e. Section 560(6) of the act when the action is not taken by RoC on his own motion and for any reason and/or circumstances mentioned under Section 560(1) to (5) of the Act then any application/petition for recalling or setting aside the action whereby the company got struck - off (at its own request) from the register, would not lie under Section 560(6)." 20. On the basis o....
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....the said Judgment, it discusses the observations by the Ld. Company Judge. The relevant para is extracted hereunder: - "[4] The findings recorded by learned Company Judge in paragraph Nos. 6 to 7.16 read as under:- 6. I have heard Mr. Jain, learned Counsel for the petitioner at length and I have also considered the documents placed on record and the decisions relied on by the learned Counsel for the petitioner. 7. From the facts stated by the petitioner one important fact emerges and becomes clear viz. it was the company itself who had, on its own motion and to take benefit of the scheme more particularly the benefit of easy and quick exit without passing through the regular and detailed procedure voluntarily made an application under a scheme launched by the Ministry of Corporate Affairs and requested the ROC that it may be struck-off from the register in accordance with the terms of the scheme and it was in pursuance of the company's request and at the behest of the company that the ROC struck off the company from the register. 7.1 Another important aspect which emerges from the record is that the application was made by the company under a....
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.... the said remedy/said option would be under the scheme, and not under Section 560(6) of the Act inasmuch as even according to the petitioner the scheme does not specifically and expressly provide for an option to subsequently make (if the applicant company so desires) application under Section 560(6) of the Act to recall the action and to restore the company to the register. However, if the scheme, outside and dehors the Section 560 (6) of the Act provides as an inbuilt mechanism such option/remedy then the petitioner can make appropriate application under such provision in the scheme. 7.8 In the aforesaid background and in view of the facts of present case, even if it is assumed, for sakeition examining the petitioner's request, that the application and request by the petitioner falls within the purview of sub-section (6) of Section 560 of the Act then also, the request will have to be tested on the touchstone of the two thiterion mentioned in the said subsection (6) of Section 560 of the Act viz. (a) at the time of striking off whether the company was carrying on business or whether it was in operation; and (b) whether it is just to restore the company to the registe....
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....raph No. 6 of the petition that: "...the company did well for some time and thereafter, the business fell and the company was not in a position to get more business for sustaining despite numerous efforts put by all the directors and hence, the company was not in a position to file its returns etc by with the diraice of the Registrar of Companies since 2006 and the company decided to take the office the Easy Exit Scheme of the Ministry of Corporate Affairs during the year 2011 and applied for being struck off....." 7.15 Thus, since 2006, and particularly when the company made the application in 2011, the company was virtually not in operation and was virtually not carrying on business. Therefore, the first criteria under the said sub-section is not fulfilled. 7.16 Now so far as the exercise of Court's discretion is concerned, the sub-section postulates that the Court should be satisfied that it would be just to restore the company. From the above referred facts i.e. inspite of statutory requirement that the paid up capital of the company should be at least Rs. 1 Lac, the subscribed and paid - up capital of the company was only Rs. 400/- and the fact t....