Hiffco Farming Ltd vs Registrar Of Companies West Bengal

Company Appeal (AT) No. 51 of 2022 (Appeal under Section 421 of the Companies Act, 2013 read with the National Company Law Appellate Tribunal Rules, 2016) (Arising out of the impugned order dated 15.11.2021 passed by the National Company Law Tribunal, Kolkata Bench, Kolkata)

In the matter of: HIFFCO Farming Limited Represented through its Shareholders Mr. Kapil Deo Singh ..... Appellant

V Registrar of Companies, West Bengal, At Nizam Palace, 2nd MSO Building, 2nd Floor, 234/4, A.J.C.B. Road, Kolkata - 700020 ..... Respondent

Present : For Appellant : Mr. Nitesh Kumar Sinha, Advocate For Respondent : No Appearance

JUDGMENT

(Virtual Mode)

Justice M. Venugopal, Member (Judicial):

Company Appeal (AT) No. 51 of 2022 Page 1 of 15 Preamble:

The `Appellant'/`Company' has preferred the instant Company

Appeal (AT) No. 51 of 2022 being dissatisfied with the impugned order

dated 15.11.2021 passed by the `National Company Law Tribunal',

Kolkata Bench, Kolkata in CP/59(KB)/2021, under Section 252 (3) of the

Companies Act, 2013, in dismissing the Petition.

Appellant's Contentions:

According to the `Appellant'/`Company', the Appellant's Company

name was struck off by the `Respondent'/`Registrar of Companies', West

Bengal, based on the notice dated 11.09.2012.

2. It is the version of the `Appellant'/`Company' that the Company had

prepared the `Financial Statements' regularly which was audited, but the

same was not to be filed, in respect of the Financial Years (1) 2006-2007,

(2) 2007-2008, (3) 2008-2009 (4) 2009-2010, (5) 2010-2011 (6) 2011-

2012, (7) 2012-2013 (8) 2013-2014 (9) 2014-2015 (10) 2015-2016 (11)

2016-2017 (12) 2017-2018 (13) 2018-2019 and (14) 2019-2020 with the

`Respondent'/`Registrar of Companies', Kolkata, owing to an acute

financial crisis, lack of coordination and follow up with the Professional

engaged for the same and lack of information about the prevailing

regulations governing the requisite filings by the Company.

Company Appeal (AT) No. 51 of 2022 Page 2 of 15

3. It is the stand of the `Appellant'/`Company' that it was carrying on

the business, since its `incorporation' and the same being reflected in the

`financial statements' of the Company. Moreover, when the `Appellant'/

`Company' approached another `Professional' for filing of the overdue

documents, they came to know about the huge late filing charges and

consequences for the non-filing of the `Annual Forms' with the Registrar

of Companies' via `MCA portal'. But the Appellant / Company's name

was struck off by the Respondent, before filing of any overdue documents.

4. The submission of the Appellant is that the non-filing of `Financial

Statement(s)' and `Annual Return(s)' before the `Registrar of Companies'

is a default, owing to an `inadvertent lapse' to comply with the regulation

and the mistake was a `Bonafide' one. In fact, the `Appellant'/`Company'

is ready to furnish all relevant documents for the defaulted `Financial Year'

with `Delay Fees', as may be applicable.

5. The Learned Counsel for the `Appellant'/`Company' submits that

the Company has a property at Village, Sheetalpur in District East

Champaran, Bihar and shown as a `Tangible Asset' in the `Balance Sheet',

reflecting a balance of Rs.9,51,500/- for the `Financial Year' ending March

2018.

Company Appeal (AT) No. 51 of 2022 Page 3 of 15

6. The plea of the Appellant is that an NGO `Surya Sanitation Social -

Service Organisation' has shown interest and is desirous of erecting a

`School' and `Bathroom Sanitary facility` for the under privileged

community, located nearby in the aforementioned land post the Company

gets revived. Hence, it is in the `just and equitable' interest and in the

interest of justice the Company should be revived.

Report Filed Before `Tribunal':

7. Added further, the `Deputy Registrar of Companies', West Bengal

in its `Report' dated 24.08.2021 before the `National Company Law

Tribunal', Kolkata Bench in CP/59(KB)/2021 had averred that the

Company had not filed their `Balance Sheet(s)' and Annual Return(s)' for

the Financial Year from 31.03.2008 to 31.03.2020 before the Office of the

Respondent. Indeed, as per the available records maintained by the

Respondent's Office, the Company was 'struck off' on 11.09.2012 after

complying with the requirements of the Companies Act, 1956. And that

the Respondent had issued a `Notice' under the Companies Act, 1956, for

removal of the Company's name, from the `Register of Companies' as

there was a reasonable cause to believe that the Company was not carrying

on operation for several years, besides, the `Appellant'/`Petitioner' had

Company Appeal (AT) No. 51 of 2022 Page 4 of 15 failed to file their Statutory Documents i.e., `Annual Return(s)' and

`Balance Sheet(s)' before the Respondent.

Discussions:

8. Section 248 of the Companies Act, 2013, deals with `Removal of

Names of Companies from the Register of Companies'. In fact, Section

248 (1) (c) enjoins that if the Registrar has reasonable cause to believe that

a 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; or] etc., then he shall send a notice to the company and all the

directors of the company, of his intention to remove the name of the

company from the register of companies and requesting them to send their

representations along with copies of the relevant documents, if any, within

a period of thirty days from the date of the notice.

9. Section 248 (1) (6) of the Companies Act, 2013, envisages that the

`Registrar', before passing an order under sub-section (5) shall satisfy

himself that sufficient provision has been made for the realisation of all

amount due to the company and for the payment or discharge of its

liabilities and obligations by the Company within a reasonable time and, if

Company Appeal (AT) No. 51 of 2022 Page 5 of 15 necessary, obtain necessary undertakings from the managing director,

director or other persons in charge of the management of the company:

10. Section 252 of the Companies Act, 2013, provides for preferring an

`Appeal to Tribunal'. Section 252 (3) of the Companies Act, 2013, deals

with the filing of an application before the `Tribunal' 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 to be restored to the `register of

companies', and such directions may be given by the `Tribunal' through

its order and make such provisions as deemed just for placing the company

and all other persons in the same position as nearly as may be as if the

name of the company had not been `struck off' from the `register of

companies'.

Decided Cases:

11. Be it noted, the right to seek restoration is not lost, as long as 20 years have not expired as per decision in Purushottam Dass V Registrar of Companies reported in (1986) 60 CompCas 154 (Bom).

Company Appeal (AT) No. 51 of 2022 Page 6 of 15

12. In the decision POSH Exports Pvt Ltd. V The Registrar of Companies (DEL) CP 207 of 2014 decided on 16.12.2014), it is observed and held that the Petition was allowed subject to payment of costs of Rs.75,000/- and the name of the Petitioner/Company was restored subject to the file of all statutory documents and returns for the outstanding period along with prescribed fees in accordance with law.

13. In Amarpreet Enterprises P Ltd. & Another V Registrar of Companies reported in (2010) 101 SCL 420 (Del), The Hon'ble Delhi High Court had observed that restoration of name of a company struck off by the Registrar of Companies can be made in two situations (1) when the Court is satisfied when the company was in `Business' or in `Operation' at the time when the name was `struck off ' or (2) it is `otherwise just' that the company's name be restored.

14. In the Judgment of this `Tribunal' in `Tweak the Future Innovations Private Limited V Registrar of Companies', Punjab and Chandigarh [vide Comp. App (AT) No.300 of 2019 dated 03.03.2020] [Three Member Bench] at paragraph 16 to 20, it is observed as under:

16. "We have gone through the submissions made by both the parties and perused the documents on record. The Memorandum of Understanding dated 09.04.2015 and 06.05.2015 reveal that the Appellant is operational. The Appellant Company delayed filing of returns but have paid additional Fee of Rs.73,800 also e-form ADT- 1 was filed on 01.10.2018 with additional fee of Rs.3,600/- for the delay caused. Hence, ROC notice dated 03.11.2018 to the company to file its statutory returns for financial year 2017-18 shows that the

Company Appeal (AT) No. 51 of 2022 Page 7 of 15 name of the company was still existing in the records of ROC even after the removal of name of the company. Section 252 (3) of Companies Act, 2013, reads as under:-

"252(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 to be restored to the register of companies, and the Tribunal may, by the order, give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as if the name of the Company had not been struck off from the register of companies."

17. All the above reveals that the Appellant is in operation as they are entering into MOU's. The Directors are professionals and to develop an I.T. platforms also takes considerable time; it is supplementing "Make in India" programme. No doubt, Company's business volume is too low but attempting to enter USA Market through MOU is a good sign. All this reflects that the Appellant is in operation. "Operation" in commercial sense means developing business platform also.

Company Appeal (AT) No. 51 of 2022 Page 8 of 15

18. Hence, we are setting aside National Company Law Tribunal, Chandigarh Bench order and Registrar of Companies is directed to restore the name of the Company to the Register of Company.

19. The Appellant is directed to pay Rs.1,00,000/- (Rupees One Lakh) by way of Bank draft in favour of Pay & Account Officer, Ministry of Corporate Affairs, Chandigarh / New Delhi towards cost for not filing statutory documents as required under Companies Act, 2013.

20. We dispose off the application with above direction. No other prayer is allowed."

15. In the Judgment of this `Tribunal' dated 24.01.2019 in `Basant Kumar Berila, West Bengal & Another V ROC, West Bengal, Kolkata & Another (vide Comp App (AT) No. 171 of 2018), at paragraph 30 and 32, it is observed inter alia as under:

30............"Thereafter, 1st respondent vide notice dated 30.6.2017 (Page 87) struck off the name of the 2nd respondent from the register of companies. Now these appellants had filed petition/appeal before the NCLT stating that the company is going concern and they have valuable assets, long terms loan and advances and filed petition/appeal under Section 252(3) of the Act. If the appellants had pleaded it before the ROC, then the ROC before striking off the name of the company under Section 248(5), would have considered the pleas now taken under Section 248(6) of the Companies Act, 2013. The appellants have now filed with this appeal the Balance Sheets for the years 2014, 2015 and 2016 which they could not file

Company Appeal (AT) No. 51 of 2022 Page 9 of 15 with ROC as the company name was struck off. Seeing the balance sheets and the company's huge investment which the company is having since 2011 and there are large amount of the loan and advances, it is possible that creditors could also be aggrieved persons, feeling aggrieved of company's name being struck off, may file an application for restoration of company's name, if its name is not restored. Thus it would be just and equitable to restore the name of the company to even avoid further legal proceedings.

31.....xxxxxxxxxxx

32. From the above discussions and observations we have come to the conclusion that in the light of huge investment made by the company and above reasons it would be just that the name of the company is directed to be restored. The following orders/directions are passed:-

(i) impugned order is quashed and set aside. The name of the Respondent No.2 company shall be restored to the Register of Companies subject to the following compliances:

(ii) Appellants shall pay costs of Rs.1 lac to the Register of Companies within 30 days.

(iii) Within 30 days' of restoration of the company's name in the register maintained by the Registrar of Companies, the company will file all their annual returns and balance sheets due for the period ending 31.3.2014 to date. The company will also pay requisite charges/fee as well as late fee/charges as applicable.

Company Appeal (AT) No. 51 of 2022 Page 10 of 15

(iv) Inspite of present orders, ROC 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.

16. In the Judgment of this `Tribunal' in M/s. Sai Abacus Education System Pvt. Ltd. V Registrar of Companies, New Delhi [vide Company App (AT) No. 111 of 2020 dt. 27.07.2020] [Three Member Bench], it is observed as under:

"Heard the Learned Counsel for the Appellant. The Learned Counsel for the Appellant says that the Appellant had filed Returns but only Balance-sheet for one year was yet to be filed and the name of the Company came to be struck off. The Impugned Order says that `RoC' had initiated action for non-filing of Annual Returns for the years 2015-2016 and 2016-2017. The Ld. NCLT has granted relief to the Appellant subject to payment of costs of Rs.25,000/- in the Prime Minister Relief Fund along with Rs.50,000/- in the Ministry of Corporate Affairs.

The Learned Counsel for the Appellant states that the Appellant is in the profession of Education and has been suffering losses and thus the costs should not have been imposed.

Respondent is `RoC'. We dispense with Notice to `RoC' matter being only of costs.

Considering the default and the order passed, it appears to us that it will be appropriate considering proportionality to reduce the costs to payment of Rs.25,000/- in the Prime Minister Relief Fund

Company Appeal (AT) No. 51 of 2022 Page 11 of 15 and we set aside the direction of the Ld. NCLT to pay another Rs.50,000/- to the Ministry of Corporate Affairs."

and accordingly, the `Appeal' was disposed of.

Liability:

17. It is significantly pointed out that the `liability' as per the ingredients of Section 92 of the Companies Act, 2013 is that even a defunct company, like every other company is under an obligation to file their `Statutory Annual Returns' till it is wound up or till such time, the Company is struck off by the Registrar under Section 248 of the Companies Act, 2013.

18. It must be borne in mind that in Civil Appeal No. 6803-6805 of 2021 in the matter of R. Narayanasamy V The Registrar of Companies, Tamil Nadu, the Hon'ble Supreme Court of India, on 22.11.2021 had ordered `Issuance of Notice' and the `Civil Appeal' is pending.

19. In the instant case on hand, according to the `Appellant' / `Company', it has property at Village Sheetalpur in District East Champaran, Bihar and further that an NGO `Social Surya Sanitation Social - Service Organisation has evinced interest and it is desirous of erecting a School and Bathroom Sanitation Facility for the under privileged community, located nearby, in the aforementioned land post the company gets revived.

Company Appeal (AT) No. 51 of 2022 Page 12 of 15

20. Continuing further, the `Appellant' / `Company' had placed on record the audited Financial Statements for the Financial Year ending on 31.03.2018, 2019 and 2020. Moreover, in the said financial statements the company has `Current Liabilities' and `Tangible Asset' amounting to Rs.9,51,500/-, a Cash and Cash Equivalent of Rs.2,00,000/-, all these are reflected in the said documents. The copy of Financial Statements in respect of the years 2017-2018, 2018-2019 and 2019-2020 is annexed in the instant `Appeal Memorandum' as `Annexure - C'.

21. This `Tribunal' on a careful consideration of the contentions advanced on behalf of the Appellant and also taking note of the fact that the Appellant / Company although, prepared the Financial Statements and got the same audited, but could not file the same for the Financial Year beginning from 2006-2007 till 2019-2020 (vide paragraph 7.3 of the instant Comp App (AT) No. 51 of 2022), keeping in mind yet another prime fact that the Appellant / Company had admitted its Bonafide mistake on its part, in non-filing of Balance Sheet and Annual Return and added further that the company is ready and willing to furnish all relevant documents for the defaulted financial year(s) before the Respondent/ROC, West Bengal with `Delay Fees' that are applicable and in the teeth of settled legal position that the `right to seek restoration' of the name of the `company' (to be entered in the `Register of Companies') is not wiped out, as long as `twenty years' have not lapsed, etc., is of the considered view that on the basis of facts and circumstances of the entire conspectus of the present case, that it is just and proper to restore the Appellant / Company's name and that the failure / negligence / omissions on the part of the

Company Appeal (AT) No. 51 of 2022 Page 13 of 15 `Appellant'/`Company' in not filing the `Statutory Annual Returns' and `Financial Statements' in time, can be saddled with a levy of costs, to prevent an aberration of justice and to promote substantial cause of justice. Per contra, the conclusion arrived at by the `National Company Law Tribunal, Kolkata Bench, Kolkata in CP/59(KB)/2021 in the impugned order passed on 15.11.2021 in dismissing the main Company Petition `as without any merit' is untenable and not valid in law. Viewed from any angle, the `Appeal' succeeds.

Result:

22. In fine, the instant Comp App (AT) No. 51 of 2022 is allowed. No costs. The Impugned Order dated 15.11.2021 in CP/59(KB)/2021 passed by the `National Company Law Tribunal', Kolkata Bench, Kolkata, is set aside by this `Appellate Tribunal'. The Notice dated 11.09.2012 of the Office of the Respondent in striking off the name of the Appellant Company from the `Register of Companies' and `Dissolution' of the said company is set aside.

Before parting with the instant `Appeal', this `Tribunal' makes it candidly clear that the `Restoration of the Name of the Appellant's company' is subject to its filing of all outstanding relevant documents required by `Law' and fulfilling all the `Statutory Requirements' (including the payment of any late fee or any other charges which are leviable by the Respondent for belated filing of `Statutory Returns' for the periods in question and also on payment of costs of Rs.75,000/- only), to be paid to the "Prime Minister's Relief Fund". The name of the `Appellant'/`Company' shall then, as a consequent effect, shall stand

Company Appeal (AT) No. 51 of 2022 Page 14 of 15 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. IA No. 901 of 2022 is Closed.

[Justice M. Venugopal] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member (Technical)

21/04/2022

SR/NG

Company Appeal (AT) No. 51 of 2022 Page 15 of 15