Harish Purohit vs The Registrar Of Companies Bilaspur

[Arising out of order dated 28.12.2020 passed by the National Company Law Tribunal (Cuttack Bench, Cuttack) in CP(Appeal) No. 253/CB/2020]

IN THE MATTER OF: Mr. Harish Purohit S/o Shri Madan Mohan Purohit R/o Flat No. 201, B Block, Tirupati Apartment, Pachpedi Naka, Raipur, Chhattisgarh-494001. Director & Shareholder of M/s Live In Homes Private Limited, Having its Registered Office at: 13, Lakhe School Complex, Gandhi Chowk, Raipur, Chhattisgarh-494001. ....... Appellant. Versus Registrar of Companies, Bilaspur Chhattisgarh 1st Floor, Ashok Pingley Bhawan, Municipal Corporation, Nehru Chowk, Bilaspur-495001, Chhattisgarh. ....... Respondent.

Present: For Appellant: Mr. Pankaj Agarwal, Mr. Shashwat Srivastava, Ms. Pragati Srivastava, Ms. Poonam Agarwal, Advocates. For Respondent:- Mr. Vijay Joshi, Sr. Panel Counsel (UOI) for ROC. 2

JUDGMENT

(20th December, 2022)

Justice Anant Bijay Singh;

The present Appeal under Section 421 of the Companies Act, 2013, has

been filed by the Appellant being aggrieved and dissatisfied by the order dated

28.12.2020 passed by the National Company Law Tribunal (Cuttack Bench,

Cuttack) in CP(Appeal) No. 253/CB/2020whereby and whereunder appeal filed

by the Appellant Company for restoration of the name of the Appellant Company

in the Register maintained by the Registrar of Companies (RoC), Chhattisgarh

was dismissed by the Tribunal.

2. The facts giving rise to this Appeal are as follows:

i) The Appellant is a Shareholder/Director of a Private Limited Company, i.e.

M/s Live In Home Builders Private Limited (hereinafter referred to as 'Company')

which is Limited by Shares having its Registered office situated at Raipur-

494001, incorporated in year 2005 and is involved in business of real estate. In

order to expand its business, in the year 2008, the Company, bought 3 separate

land parcels, situated at Raipur, Chhattisgarh, admeasuring 1.149 Acres,

0.4009 Acres and 1.71 Acres for the sum of Rs. 26,97,000/-, Rs. 6,48,000/- and

Rs. 27,68,000/-. The said lands parcels are situated at the prime location of the

capital city and same would be used for the development of the residential

complex and premises.

ii) Further case is that the Respondent, strike off the company's name from

the Register of Companies due to defaults in statutory compliances, namely,

Company Appeal (AT) No. 100 of 2021 3

failure to file Financial Statements & Annual Returns for the period 2016-17 to

2017-18 by initiating proceedings under Section 248 of the Companies Act,

2013, for the purpose of striking off the name of the company from the Register

maintained by the Registrar of Companies. The Appellant Company realized the

non-compliance of the requirements relating to filing of returns and other

documents with the Registrar only after receiving the notice from the

Respondent. After receiving the said notice under Section 248(1), the Appellant

Company was in the process of filing requisite annual returns and documents

but in the meantime the company was struck off by the Respondent and its name

was published in STK-5A dated 05.06.2018 as mentioned in Sr. No. 354.

iii) The financial statements of the company have been prepared and audited

but due to inadvertence the same could not be filed with the Registrar of

Companies. However, the non-filing was neither wilful nor intentional. Since the

Company is located in a remote area of Bastar region of Chhattisgarh, therefore,

due to lack of professional guidance/help available to the Appellant Company in

the initial years of its incorporation it had escaped the filing of returns with the

concerned Registrar of Companies.

iv) The Appellant being a Shareholder / Director of a Company which is

carrying real estate business, it is matter of fact that the turnover and

profits/losses depends on the sales taken place in the relevant financial year.

The Company has taken loans and invested the same in the residential plots for

furtherance of the Business. As such it was unfortunate that the Company could

not make turnovers in the preceding years. The Company had some operations

Company Appeal (AT) No. 100 of 2021 4

till the year 2016, however, it has not filed Income Tax Return (ITR) up to

Financial Year 2016-17 and 2017-18. The Company has filed Income Tax Return

for the Financial Year 2018-19 and 2019-20.

v) Further case is that being aggrieved with the step taken by the Registrar

of Companies, the Company had filed a petition before the Tribunal for issuing

directions for restoration of the name of the Company so that the properties of

the company can be utilized and the business of the company can be carried out

by the Company. The Tribunal after hearing the parties, dismissed the said

petition which led to filing of this Appeal.

3. The Ld. Counsel for the Appellant during the course of argument and in

his memo of Appeal submitted that the Tribunal while passing the impugned

order has erred in law and fact by not considering that the Appellant Company

have the land holding in its name and done business in past. Further, the

Tribunal has failed to appreciate the merits of the case, in the present case, the

genesis of the entire matter is non-filing of annual returns which is a

compoundable offence under the provisions of company's law, the Respondent

themselves had issues various amnesty schemes at various occasions for filing

of the annual return, to which the Appellant failed to draw the benefits from such

schemes. It is further submitted that the working of the company has been

transparent and there were assets and liabilities as on the date of striking off its

name. The Appellant has filed the copies of sale deeds executed in favour of the

Appellant Company which are Annexure A-2 (Colly) at page 33 to 98 of the Appeal

Paper Book. It is further submitted that the Appellant Company is ready to abide

Company Appeal (AT) No. 100 of 2021 5

by all the conditions as imposed by this Tribunal and also willing to pay the

penalties as imposed by this Tribunal and undertake to be more vigilant and

careful about the annual filings of the company.

4. On the other hand, the Respondent/Registrar of Companies in his reply

affidavit it is stated that the Appellant Company has not filed Annual Returns

and Balance Sheet for the year ending 31.03.2016, 31.03.2017, 31.03.2018 and

31.03.2019. The Respondent, as per Ministry directions vide letter No.

03/53/2017/CL-II dated 17.02.2017 and letter No. 3/53/2017-CL-II(DGCOA)

dated 16.04.2018, accordingly, pursuant to sub-Section (1) of Section 248 of the

Companies Act, 2013 and Rule 3 of the Companies (Removal of Name of

Companies from the Register of Companies) Rule, 2016, the Registrar gave a

notice in writing in Form STK-1 dated 10.05.2018 to the company and all its

directors at the addresses available on record. The notice in Form STK-1 is

issued to the company on the ground that the company is not carrying on any

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 of the Act. The notice seeks

representation, if any against the proposed action from the company and its

Directors within a period of thirty days from the date of notice. However, no such

reply was received by this office from the Appellant company or its directors in

response to the above said notice in Form STK-1. This office caused notice under

sub-section (5) of Section 248 of striking off the name of the company from the

register of companies and published in the Official Gazette in Form STK-7 on

Company Appeal (AT) No. 100 of 2021 6

29.08.2018 and same had been placed on the official website of the Ministry of

Corporate Affairs on 29.08.2018. It is further stated that the instant Appeal may

be decided on merit subject to filing of Balance Sheet till the year ending

31.03.2020 with additional fees as per the requirement of Companies Act, 2013.

5. After hearing the parties, going through the pleadings made on behalf of

the parties and in view of the fact that the sale deeds executed in favour of the

Appellant Company and Audited Balance sheet from Financial Year 2015-16 to

2018-19 as also Income Tax Return of the Appellant Company shows that the

Appellant Company is having substantial movable as well as immovable assets.

Therefore, it cannot be said that the Appellant Company is not carrying on any

business or operations. Hence, we are of the view that the order passed by the

National Company Law Tribunal (Cuttack Bench, Cuttack) as well as Registrar

of Companies, Chhattisgarh is not sustainable in law.

6. In view of the aforenoted, we set aside the impugned order dated

28.12.2020 passed by the National Company Law Tribunal (Cuttack Bench,

Cuttack) in CP(Appeal) No. 253/CB/2020. The name of the Appellant Company

be restored to the Register of Companies subject to the following compliances.

i) Appellant shall pay costs of Rs. 50,000/- (Rupees Fifty Thousand)

to the Registrar of Companies, Chhattisgarh within 08 (Eight) weeks

from passing of this Judgment.

ii) After restoration of the Company's name in the Register maintained

by the Registrar of Companies, the Company shall file all their

Annual Returns and Balances Sheets. The Company shall also pay

Company Appeal (AT) No. 100 of 2021 7

requisite charges/fee as well as late fee/charges as applicable within

08 (Eight) weeks thereafter.

iii) Inspite of present orders, Registrar of Companies will be free to take

any other steps punitive or otherwise under the Companies Act,

2013 for non-filing/late filing of statutory returns/documents

against the Company and Directors.

The instant Appeal is allowed to the above extent.

7. Registry to upload the Judgment on the website of this Appellate Tribunal

and send the copy of this Judgment to the National Company Law Tribunal

(Cuttack Bench, Cuttack), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

[Ms. Shreesha Merla] Member (Technical)

New Delhi 20th December, 2022 R. Nath.

Company Appeal (AT) No. 100 of 2021