Jagjit Singh Suri vs Registrar Of Companies Delhi And ...

[Arising out of order dated 03.02.2022 passed by the National Company Law Tribunal (Court-V, New Delhi) in Appeal 85/ND/2021]

IN THE MATTER OF: Jagjit Singh Suri Son of Late Shri Harnam Singh Suri, Flat No. 5-A Raj Hans Building 33, Prithvi Raj Road, New Delhi. ....... Appellant. Versus 1. The Registrar of Companies NCT of Delhi & Haryana, 4th Floor, IFCI Tower, 61, Nehru Place, New Delhi- 110019. ....... Respondent No. 1. 2. Income Tax Authorities DCIT (High Court Cell), Lawyers Chambers, Block No. 1, Room No. 428 & 429, Delhi High Court Delhi-110003. ....... Respondent No. 2. Present: For Appellant: Ms. Anjali Sharma, Ms. Simmi Bhamrah, Advocates. For Respondent:- Mr. Kamal Kant Jha, Sr. Panel Counsel Govt. of India with Ms. Mitika Raja, AROC.

JUDGMENT

(03rd March, 2023)

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 2

03.02.2022 passed by the National Company Law Tribunal (Court-V, New Delhi)

in Appeal 85/ND/2021 whereby and whereunder appeal filed by the Appellant

for restoration of the name of the Company in the Register maintained by the

Registrar of Companies (RoC), NCT of Delhi and Haryana was dismissed by the

Tribunal.

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

i) The company, M/s. Bramec Suri Pvt. Ltd., was incorporated under the

Companies Act, 1956, on 4th May, 1962, as a private company limited by shares

with its CIN No. being U34300DL1962PTC003199. Its authorised share capital

was Rs. 50,00,000/- (Rupees Fifty lakhs only) and paid-up share capital was Rs.

20,00,000/- (Rupees Twenty lakhs only). The affairs of the said company were

being managed mainly by the Appellant when the appeal against the first

Respondent's action under Section 252(3) of the Companies Act, 2013, was filed,

since two of its other directors, Shri Harnam Singh Suri and Sardarni Wiranwali

Suri are deceased. iv. The Respondent No. 1 herein had struck off the name of

the company, Bramec Suri Pvt. Ltd., from the Register of Companies, and it was

the Appellant's contention before the National Company Law Tribunal that the

Respondent No. 1 did not seem to have followed the procedure prescribed in law

before doing so. Notices as required seemed not to have been sent and / or

published in the official Gazette. That in any case, the company, Bramec Suri

Pvt. Ltd., did not receive any show cause notice, nor was it afforded any

opportunity of being heard before the aforesaid action was taken by the

Company Appeal (AT) No. 40 of 2022 3

Respondent No. 1. It was also the contention of the Appellant that notice of

striking off seemed not to have been published in the Official Gazette.

ii) The Appellant had averred before the National Company Law Tribunal that

the company, M/s. Bramec Suri Pvt. Ltd., was active and functional after its

incorporation as a company. It had obtained on lease for a period of 90 (Ninety)

years, a large plot of land having approximate area of 27,822 square yards, from

the U.P.S.I.D.C., being Plot No. 2/l, in Sahibabad Industrial Area, Sahibabad,

Ghaziabad, U.P. The lease deed in question was executed on 15th July, 1972.

After obtaining requisite permissions from the concerned authorities, the said

company had set up a manufacturing plant for clutch lining and tractor parts

on its plot of land at Sahibabad. It was also following all dues processes and

procedures as prescribed under the Companies Act, and other laws, as well as

maintaining the documentation required of it.

iii) The company was carrying on its operations and its factory was fully

functional, a recovery certificate was suddenly issued by the Regional Director,

E.S.I. on 13th December, 1991, to the Collector, Ghaziabad, for the alleged non-

payment of dues by the company, M/s Bramec Suri Pvt. Ltd., under the ESI Act.

A series of unlawful actions on the part of some authorities and some land mafia

had followed, and the plot of land belonging to the company had come to be

grabbed, and then purchased by one Rakesh Kumar Goel in an auction sale held

by the revenue authorities of the state government. It is pertinent that the

company had filed a writ petition, being Writ Petition No.22295 of 1992, before

the Allahabad High Court seeking quashing of the sale proclamation fixing the

Company Appeal (AT) No. 40 of 2022 4

auction sale of the plot of land belonging to the company and vide its order dated

12th June 1992, the Hon'ble High Court was pleased to stay the auction sale of

the property. Considerable further litigation had ensued with respect to the plot

of land owned by the company and eventually, vide order dated 7th September,

2006, passed in another writ petition that had come to be filed, being Civil Misc.

Writ Petition No. 3790 of 2000, the Hon'ble High Court of Allahabad was pleased

to set aside the auction sale of the said plot of land (Annexure-A-3 of the Appeal).

iv) Against the setting aside of the auction sale of the plot of land belonging

to the company, Bramec Suri Pvt. Ltd., the auction purchaser, Mr. Rakesh

Kumar Goel, had filed a Special Leave Petition, being S.L.P. (C) No. 15873 of

2006, before the Hon'ble Supreme Court. Vide a detailed judgment dated 8th

July, 2010, passed in Civil Appeal No. 5177 of 2010 arising out of S.L.P. (C) No.

15873 of 2006, the Hon'ble Supreme Court of India held the auction sale of the

plot of land leased by the U.P.S.I.D.C. to the company, Bramec Suri Pw. Ltd., as

being "thoroughly illegal" and dismissed the appeal of the auction purchaser,

Rakesh Kumar Goel (Annexure A-4 of the Appeal).

v) Further case is that eventually, possession of the plot of land in question,

i.e., Plot No. 2/1, in Sahibabad Industrial Area, Sahibabad, Ghaziabad, reverted

back to the company, Bramec Suri Pvt. Ltd. During the period of illegal

possession, however, the land-grabber, Rakesh Kumar Goel, had dismantled the

factory building on the land leased to the company, and removed all machinery

and equipment therefrom, and started running a marriage hall at the premises.

Company Appeal (AT) No. 40 of 2022 5

All papers are records pertaining to the company which were primarily being

maintained at its office on the said land had been destroyed by him.

vi) Subsequent to its crucial records being destroyed, and illegal possession

being taken of the land leased to it, the company, Bramec Suri Pvt. Ltd., was

unable to strictly adhere to, and comply with, requirements such as the filing of

balance sheets and annual returns. Its employees had largely left, as had other

professionals previously engaged by it for providing various services. The

Appellant hereto was managing its affairs, but focusing principally on the

litigation involving the land leased to it. Moreover, so as to recommence the work

that it had previously been doing, the company, Bramec Suri Pvt. Ltd., would

have had to reconstruct the building for the factory. To be able to do so however,

it was required by the Regional Manager of the U.P.S.I.D.C. to obtain a fresh

sanction, and to obtain a No Objection Certificate. Though it was the contention

of the company that it was fully entitled to reconstruct the factory building again,

in accordance with the previous building plan, it was nevertheless forced to run

from pillar to post to obtain the demanded No Objection.

vii) The execution of an agreement between the Delhi Metro Rail Corporation

Ltd. and the Ghaziabad Development Authority for extension of metro from

Dilshad Garden to New Bus Add a, Ghaziabad, the plot of land leased to M/s

Bramec Suri Pvt. Ltd., being Plot No. 2/l, in Sahibabad Industrial Area,

Sahibabad, Ghaziabad, U.P., was requisitioned by the GDA, since the Delhi

Metro Rail Corporation Ltd. required the same for casting yards. The company,

through the Appellant hereto, had therefore entered into a lease & license

Company Appeal (AT) No. 40 of 2022 6

agreement with the Ghaziabad Development Authority for a two years' tenure

commencing from 27th September, 2014. Since the lease tenure has now lapsed

the land in question has reverted back to the company, as evidenced by the

communication dated 1st January, 2020, addressed by the Appellant on behalf

of the company to the Vice Chairperson of the GDA (Annexure A-9 of the Appeal).

The appellant had also averred in the appeal before the National Company Law

Tribunal, that though he was taking steps in his individual capacity, including

making payments and effecting compliances on behalf of the company, to keep

it active and functional, it was however becoming increasingly difficult for him

to do so. The company had engaged the services of professionals to perform the

task of filing its returns with the office of the Registrar of Companies. However,

in the long years of litigation over its valuable asset, i.e., the land obtained by it

on lease from the U.P.S.I.D.C., most of the employees of the company and other

service-providers engaged by it, had left. Some essential compliances were

therefore neglected as a consequence. In the meantime, interested buyers have

approached the appellant for the transfer of the company's lease hold rights over

the land in question, which is its principal asset. It was therefore contended that

to be able to enter into transactions that may prove beneficial for the company,

and enable it to stand on its feet and recommence business in right earnest, it

is imperative that the name of the company, Bramec Suri Pvt. Ltd., unlawfully

struck off by the Respondent No. 1 from the register of companies from STK-5

dated 13th June, 2017 and from STK-7 dated 1st September, 2017.

Company Appeal (AT) No. 40 of 2022 7

viii) Thereafter, being aggrieved by the notice of the Respondent No. 1 of

"Striking Off", the Appellant approached the Tribunal under Section 252 of the

Companies Act, 2013 for revival of the Appellant Company and after hearing

both the parties, the Tribunal passed the order impugned which led to filing of

this Appeal.

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

grounds mentioned in the memo of appeal, submitted that the Tribunal below

failed to note that both the Form STK - 5 and STK - 7 were issued / published

with respect to a company known as Brames Suri Pvt. Ltd., and not the company

known as Bramec Suri Pvt. Ltd., and hence the company was not in fact put to

notice of the impending action on the part of the Respondent No. l or put to

notice of the fact that its name had been struck off.

4. It is further submitted that the impugned order deserves to be set aside

because it has been held that where immoveable property rights are involved, it

is otherwise just that the name of the company be restored to the register of

companies, and because in any case the Tribunal below has not dealt with or

discuss the judgments of courts and tribunals cited by the Appellant, and also

mentioned in his rejoinder, and the written submissions filed by him. The

impugned order suffers from an error apparent on the face of the record to the

extent that it has held that the company, Bramec Suri Pvt. Ltd., failed to

establish it was carrying on business and in operation at the time of striking off,

when in fact the Appellant had affirmed that it was not carrying on business or

in operation at the time of striking off, but in the facts and circumstances of this

Company Appeal (AT) No. 40 of 2022 8

case otherwise it is just that the name of the said company be restored on the

register of companies. The impugned order has been passed without due

application of mind because the Tribunal failed to appreciate that the company,

Bramec Suri Pvt. Ltd., was constrained to halt operations since its land, and

hence its office and manufacturing facility, was grabbed by land mafia, and only

after twenty years of litigation, culminating with an order of the Hon'ble Supreme

Court on 8th July, 2010, was its most valuable asset, i.e., the large plot of land

having approximate area of 27,822 square yards, at Sahibabad Industrial Area,

restored to its possession.

5. It is further submitted that the impugned order is perverse also because

its fails to appreciate that after its land was restored to the company's possession

in year 2010, it had been making payments with respect to the land, such as

rental and other dues of the U.P.S.I.D.C., in furtherance of its effort to

recommence operations. The Tribunal below failed to appreciate that for no fault

of its own, the company, Bramec Suri Pvt. Ltd., had to halt operations, but after

the wrong done was corrected by the order passed by the Hon'ble Supreme Court,

it was making all efforts to resume the work that it was previously doing. The

Tribunal below also failed to appreciate that in the facts and circumstances, this

is a fit case in which a chance must be given to the company, its members and

creditors to revive the company struck off by the Registrar of Companies. Despite

the submission by the Appellant that in the event of revival of the company and

restoration of its name, it shall file all remaining / outstanding statutory

documents, and pay all pending dues and fees.

Company Appeal (AT) No. 40 of 2022 9

In view of the above submissions, the impugned order is bad in facts and

in law, and passed without due application of mind, and therefore deserves to

be set aside and the instant Appeal be allowed.

6. On the other hand, the Ld. Counsel for the Respondent No. 1/Registrar of

Companies during the course of argument submitted that he does not propose

to file the Reply Affidavit as he has adopted the Reply which was filed before the

NCLT which is annexed in the memo of Appeal. In the Reply (at page 223 to 235

of the Appeal), the Registrar of Companies stated that the Company was

incorporated on 04.05.1962 and the last Annual Return and Balance Sheet

submitted by the company to this Office, before it was considered to be struck

off, pertaining to the financial years ended on 31.03.2002 and since launching

of MCA-21 portal in 2006, no records of the Annual Return & Balance sheet

submitted by this Company to this office as per the records exist. Moreover, no

subsequent documents had been filed by the company with this office to obtain

the status of a "Dormant Company" under Section 455 of the Companies Act,

2103. Hence, this office had reasonable cause to believe that the company was

not in operation and therefore, the name of the company was considered for

striking off from the Register of Companies. Thereafter, the Registrar of

Companies issued the notice in the form of STK-1 in the month of March, 2017

intimating the company and the directors of the company at their registered

office about the aforesaid defaults, providing them a fair opportunity to respond.

Subsequently, this office also issued public notice for the same in the form of

STK-5 dated 24.06.2017 and public notice published in Hindustan Times

Company Appeal (AT) No. 40 of 2022 10

newspaper on 28.06.2017. Thereafter, the name of the company was struck off

as per the provisions of section 248(1)(c) of the Companies Act, 2013 read with

Rule 9 of the Companies (Removal of Names of Companies from the register of

Companies) Rule, 2016 vide notice in the form of STK-7 dated 07.06.2017.

7. It is further stated that the action of striking off of the present Company

was legal and justified and was the result of the operation of the law, as the

company was not carrying on any operations for a period of two immediately

preceding financial years (as indicated by non-filing of the financial statements

of the Company for two or more years). The Company has not attached any

Financial Statements which further fails to support the claim of the company

that it was carrying on any business at the time of strike off.

8. It is further stated that this Tribunal may please issue directions to the

Appellant to file all the pending Annual Returns and Balance Sheets of the

subject company with the Registrar of Companies within such time as specified

by this Tribunal and also may award cost in favour of the Respondent No. 1/

ROC as the Appellant failed to file its Statutory Returns with the Respondents

under the Companies Act, 2013.

9. On the other hand, the Respondent No. 2/Income Tax Department in his

Reply stated that the Company i.e. M/s. Bramec Suri Pvt. Ltd. may not have

registered for PAN with the Income Tax Department and therefore, this Tribunal

may direct the Appellant to provide information as to whether the Company has

registered for PAN or not.

Company Appeal (AT) No. 40 of 2022 11

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

the parties and in view of the fact that the Company is having a large plot of land

approximate area of 27,822 square yards, from the U.P.S.I.D.C., being Plot No.

2/l, in Sahibabad Industrial Area, Sahibabad, Ghaziabad, U.P. vide lease deed

dated 15th July, 1972 shows that the Company is having substantial movable as

well as immovable assets. Therefore, it cannot be said that the 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 (Court-V, New Delhi) as well as

Registrar of Companies, NCT of Delhi & Haryana is not sustainable in law.

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

03.02.2022 passed by the National Company Law Tribunal (Court-V, New Delhi)

in Appeal 85/ND/2021. The name of the Company be restored to the Register of

Companies subject to the following compliances.

i) Appellant shall pay costs of Rs. 11,00,000/- (Rupees Eleven

Lakhs) to the Registrar of Companies, NCT of Delhi & Haryana

within Twelve (12) weeks from the 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 Balance Sheets. The Company

shall also pay requisite charges/fee as well as late fee/charges

as applicable.

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

take any other steps punitive or otherwise under the

Company Appeal (AT) No. 40 of 2022 12 Companies Act, 2013 for non-filing/late filing of statutory

returns/documents against the Company and Directors.

iv) After restoration of the Company's name, the Appellant shall

submit the copy of Company's PAN to the Income Tax

Authorities.

The instant Appeal is allowed to the above extent.

12. 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

(Court-V, New Delhi), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi 03rd March, 2023 Ram Nath.

Company Appeal (AT) No. 40 of 2022