Chafin Financial Consultants Pvt. Ltd. ... vs The Registrar Of Companies
- CitationCompany Appeal (AT) No. 317 of 2018
Ratio decidendi
The rule this decision rests on
The Tribunal's reasoning rests on the following principles: Where a company's statutory filings (financial statements and annual returns) have not been made for a series of years, and no filing proof is produced, the absence of such filings is not excused by the assertion that returns were prepared by a chartered accountant; the preparation of unfiled documents does not constitute compliance. A company seeking restoration of its name after striking off under Section 248 must establish that it was carrying on business or operations; bank records showing deposits made by a director, without evidence of actual business transactions, and an income tax return reporting nil income, are insufficient to show that the company was carrying on business. A Registrar's conditional submission, that if restoration were granted the company should be directed to make pending compliances, is a proposal made in the alternative to its primary prayer for dismissal and does not amount to an admission in favour of the petitioner.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: 1. Chafin Financial Consultants Pvt. Ltd. ...Appellants Valentine Apartment A wing, Flat no. 704/705 Pimplipada, Gen A.K. Vidya Marg Malad(East), Mumbai Maharashtra-400097
2. Prafulla Kumar Sinha Valentine Apartment A wing, Flat no. 704/705 Pimplipada, Gen A.K. Vidya Marg Malad(East), Mumbai Maharashtra-400097
3. Vidyawati Sinha Valentine Apartment A wing, Flat no. 704/705 Pimplipada, Gen A.K. Vidya Marg Malad(East), Mumbai Maharashtra-400097 Vs The Registrar Of Companies, Mumbai ....Respondent 100, Everest, Marine Drive, Mumbai-400002 Present: For Appellants: Mr. Kumar Anurag Singh, Advocate.
For Respondents: None. Oral Judgement
A.I.S. CHEEMA, J. :
14.09.2018: Heard counsel for Appellant. Perused Impugned Order. The
Impugned Order is a short order and reads as under:-
2 " Order 1. This Company Petition is filed by Chafin Financial
Consultants Pvt. Ltd. seeking relief against the respondent, inter alia among other things, to restore the name of the company in the Registrar of Companies maintained by the Respondent.
2. The grievance of the Petitioner is that the Company was struck off under Section 248 of the Companies Act 2013, due to defaults in statutory compliances, namely, failure to file Financial Statements and Annual Return, for the period ended on March 31, 2010, March 31, 2011, March 31, 2012, March 31, 2013, March 31, 2014, March 31, 2015, March 31, 2016 and March 31, 2017. The company was incorporated on 05/06/2009.
3. The Respondent side filed a detailed report on 28/03/2018 explaining the sequence leading to the striking off of the company. In addition to the publication of the name of the company on web site of the Ministry, the name was also published in official gazette and also another public notice was issued in leading English newspaper (Times of India) and a widely circulated vernacular language newspaper (Maharashtra Times-Marathi) on 03.05.2017. The Respondent side has further submitted that in absence of any representation against the proposed strike off action, the Registrar struck off the name of the company on 16/06/2017 and the dissolution order was published on the website of the Ministry vide STK 7 on 10.07.2017.
4. The Respondent also prayed in the facts and circumstances of the matter that the prayer the petitioner may not be allowed and the reliefs sought may not be granted. The respondent has justified in its report for the struck off the company due to non compliance with the provisions of section 248 of Companies Act 2013. The basis for striking off the name of the company was the continuous non-filing of the statutory returns and company is not carrying on any
Company Appeal (AT) No. 317 of 2018 3
business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455, prior to its Struck Off.
5. The petitioner company submitted that it has been carrying on operations on a small scale, however as per the Income Tax Return acknowledgement submitted for the Assessment Year 2017-18, the gross total income shows was Rs. Nil. The ROC Mumbai, stuck off the name of the company due to defaults in statutory compliances, i.e. failure to file Financial Statements and Annual Returns for the period ended on March 31, 2010, March 31, 2011, March 31, 2012, March 31, 2013, March 31, 2014, March 31, 2015, March 31, 2016 and March 31, 2017.
6. Considering the above facts and circumstances, the report of the ROC, the Bench has not found any reasons to interfere with the action taken by the ROC in striking off the Petitioner Company. Therefore the petition is dismissed."
2. Counsel for Appellant is submitting that the name of the Company run
by the Appellants namely Chafin Financial Consultants Pvt. Ltd. has been
struck off. According to him the Respondents ROC claimed issuance of notice
and public notice and gazette notification of the notice but the Appellants were
not supposed to keep watching the newspaper notices and he claims that the
company was a running company which has been directed to be closed.
3. Copy of Reply of ROC filed in NCLT shows ROC pointed out that the
office had issued STK 1 Notice to Company and its Directors as well as Notice
Company Appeal (AT) No. 317 of 2018 4
in STK 5 form was published on website of Ministry and Notice was published
in Newspapers as stated and still Appellants did not respond and only then
action of striking off/dissolution was taken as per STK 7 on 10.07.2017. If the
Appellants did not respond, it was on their peril.
4. It is admitted that the Company was registered on 05.06.2009 and
Financial Statements and Annual Returns from the period ending 31st March,
2010 till 31st March, 2017 had not been filed. Thus, since establishment no
returns appear to have been filed. The learned counsel is pointing out copies of
Annual Returns which were prepared by CA. However there is no filing proof of
these returns. If over the years Returns and Statements accounts were being
prepared by Chartered Accountant there is no reason why the same were not
filed.
5. Counsel is pointing out Annexure A-6 to show that there were
transactions being done in the bank. However, if the document is perused, it
appears that Prafful Kumar Sinha was depositing the amounts from time to
time. Prafful Kumar Sinha is Appellant No. 2. No document to show actual
business transaction was pointed out in NCLT. The bank accounts appear to
have been more used for channeling the money. Index in Appeal claims
Annexure A-7 to be copies of Income Tax Returns at page 98 to 233. But, Paper
Book shows Annexure A-7 to be Audit Report under section 44 AB of Income
Tax Act got prepared from Auditor. However, no filing proof with Authority is
shown. No copy of Income Tax Returns filed is being shown to us although we
Company Appeal (AT) No. 317 of 2018 5
asked the Counsel to show the same. The impugned order has recorded that
the ITR acknowledgement as filed in NCLT shows the income was Rs. Nil.
6. We find no substance in the argument that, as in Reply ROC stated that
if the name of the Company is restored it should be directed to make all the
pending compliances, shows admission to allow the petition. We find it to be
proposal of ROC in the alternative to its prayer that the petition should
basically be disallowed.
7. Nothing inspiring confidence is pointed out and we are not convinced
that the company had commenced business or was carrying on business or
was in operation and there is no reason to interfere with the impugned order.
The Appeal is dismissed at the stage of admission.
(Justice A.I.S. Cheema) Member (Judicial)
(Balvinder Singh) Member (Technical)
sh/nn
Company Appeal (AT) No. 317 of 2018
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