M/S Sanmati Agrizone Private Limited vs The Registrar Of Companies & Anr

[Arising out of order dated 17.12.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) in Appeal No. 114/252(ND)/2021]

IN THE MATTER OF:

M/s Sanmati Agrizone Private Limited CIN No: U01403DL2011PTC225294 PAN No: AAQCS5813C B-649, G/F Guru Ram Dass Nagar, Near Shiv Dairy, Delhi, East Delhi 110092 ....... Appellant.

Versus

1. Registrar of Companies, NCT of Delhi, 4th Floor, Floor, IFCI Tower, Nehru Place, New Delhi-110019 ....... Respondent No. 1. 2. Assessing Officer, For PAN No. AAQCS5813C Ward No/Circle 10(3) Delhi, Income Tax Office, New Delhi. ....... Respondent No. 2.

Present: For Appellant: Mr. Praveen Mahajan, Advocate. For Respondent:- Mr. Kamal Kant Jha, Sr. Panel Counsel for R-1/RoC Delhi.

Mr. S. Agarwal, Sr. Standing Counsel, Mr. Shivansh B. Pandya, Jr. Standing Counsel and Advocate Utkarsh Tiwari for R-2. 2

JUDGMENT

(01st June, 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

17.12.2021 passed by the National Company Law Tribunal (New Delhi Bench,

Court-II) in Appeal No. 114/252(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), Mumbai was dismissed by the

Tribunal.

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

i) The Appellant-Company M/S Sanmati Agrizone Private Limited was

incorporated on 20.09.2011 vide registration no. 225294 under the Companies

Act, which is having its Registered Office at B-649, G/F Guru Ram Dass Nagar,

Near Shiv Dairy, Delhi East Delhi 110092 is having CIN No

U63040DL1975PTC007701 and as on date the appellant company is having two

directors and two shareholders and entire business of the appellant company is

being run/governed by those two directors.

ii) The main objects to be pursued by the company on its incorporation is

that carry on the business of cultivators, growers, manufacturers, buyers,

sellers, traders, importers, exporters, estate owners, planters, millers, storers,

canners, preservers, processors, rollers, grinders and dealers of food grains and

other agricultural products, horticulture, floriculture, farm housing, sericulture,

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pisciculture, dairy products, seafoods, concentrates, juices, protein health and

instant foods of all kinds including baby and dietetic foods, cereals, beverages,

cordials, tonics, restrative and aerative mineral waters and food stuffs and

consumption and other products, meat and meat products, vegetarian and

nonvegetarian, herbs, honey & ayurvedic medicines, produce the agri or

horticultural products, development of farmhouses to be used for agri business,

to establish poultry farms or goat farms or any kind of farms etc.

iii) Further, to carry on the business independently or as agents,

representatives, collaborators and associates for the promotion and development

of agriculture, plantation, floriculture, horticulture, tissue culture, aquiculture,

aquaculture, pisciculture, sericulture and all other types of farming activities to

cultivate, grow, produce, propagate, raise all kinds and types of crops, plants,

trees, flowers, fruits, vegetables, seeds, herbs, fishes, poultry, cattle and to carry

on all the activities as importers, exporters, manufacturers, processors, millers,

grinders, canners, preservers of all kinds and types of goods in these business

and to make extracts, by products, derivatives and substitutes of these goods or

dispose of and deal either as wholesalers or retailers, in any such produce either

in its raw, prepared and/or manufactured or any other forms. Further, to carry

on the business of planters, cultivators, producers, sellers and dealers in timber,

processed or not and such other products of every description and to

manufacture, dispose of sell and deal in products of natural forest and forest

plantations, agricultural, plantation and horticultural crops and medicinal and

aromatic plants.

Company Appeal (AT) No. 27 of 2022 4

iv) The appellant company is carrying its business and is also maintaining its

bank accounts and holding assets in the name of M/S Sanmati Agrizone Private

Limited as shown in the master data of the appellant company on the website of

Ministry of Corporate Affairs. The appellant company is regularly carrying on its

business in the name and style of M/S Sanmati Agrizone Private Limited and the

appellant company being the running company is regularly filing its Income Tax

Returns with the income tax department for all the assessment years between

2012-2013 to 2019-2020. Due to the financial instability of the Appellant the

management of the Appellant was not able to file its financial statements and

annual returns with Respondent No. l after the financial year ending on

31.03.2016. However, the appellant company being the running company is

having all the financial statements from the financial years 2011-2012 to 2019-

2020 and the same is audited by the Statutory Auditor.

v) The board of meeting of the Appellant company was held on 27.11.2020

and in that meeting it came to the knowledge of management of the Appellant

company that due to oversight and inadvertent reasons there has been a default

in filing the necessary documents with the Respondent no.1 since the work of

filing the necessary returns was entrusted to the part time accountant who to

the reasons best known to him did not filed the necessary return and never

apprised such default to the management of the appellant company, due to

which directors of the appellant company for smooth running of its business

decided to file all the necessary documents with Respondent No. 1but during the

preparation of the documents the appellant company got to know that their name

Company Appeal (AT) No. 27 of 2022 5

has been strike off by the Respondent no. 1 w.e.f. 08.08.2018 under section 248

of the Companies Act 2013.

vi) Due to the circumstances beyond the control and due to oversight the

appellant as explained above the company was not able to file its financial

statements with Respondent No. 1 after the period of financial year ending on

31.03.2016 to 31.03.2020 due to which the name of the appellant company has

been strike off by the Respondent no. l w.e.f 08.08.2018 however the said

decision taken by the Respondent no. l to strike off the name of Appellant

company was also arbitrary and against the principles of natural justice as the

Respondent no. l have not sent any notice under section 248 of The Companies

Act 2013 by the Respondent no. l due to which the Appellant company was not

able to defend itself before the Respondent No.1.

vii) The appellant Company has come to know about the fact of striking of the

name on or around first week of Jul'2020 when the appellant Company was

preparing the necessary documents which are needed to be filed with the

Respondent no. l and on that time only it came to the knowledge of Appellant

Company that they are no longer in existence and its name stands deleted w.e.f.

08.08.2018. Thereafter, The Appellant Company filed the appeal under Section

252(1) read with section 252(3) of the Companies Act, 2013 before the NCLT

against this arbitrary action by the Respondent No. 1 i.e. striking off action taken

by the Respondent No. 1 against the Appellant Company under Section 248(5)

of the Companies Act, 2013 and after hearing the parties, the Tribunal passed

the order impugned dated 17.12.2021 which led to filing of this Appeal.

Company Appeal (AT) No. 27 of 2022 6

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

grounds taken in the memo of Appeal submitted that the Registrar of Companies

acted arbitrary and against the principles of natural justice by strike off the name

of the Appellant Company as the Respondent No. l have not sent any notice

under section 248 of the Companies Act 2013 due to which the Appellant

company was not able to defend itself before the Respondent No. 1. The Registrar

of Companies strike off the name of the company chiefly on account of non-filing

of annual accounts and not on the basis of reasons that the company is not

having the "income from operation" hence the objection of Registrar of

Companies taken in report is beyond the reasons for striking off the company

and the Tribunal have not considered the said ground at all while deciding the

appeal as there is no finding in the order why there was delay in filing the annual

accounts it is obligatory on the part of the NCLT to provide the reasons for the

same while dismissing the appeal.

4. It is further submitted that there is no bar under the companies act and/

or income tax to earn the income from "other than operation" thus not having

"income from operation" itself cannot be grounds to disallow the appeal. The

annual accounts of the appellant company were not qualified by the auditors

that the company is not working and/or otherwise defunct. Further, the NCLT

failed to appreciate that the company was regularly filing the Income Tax Returns

with Income Tax Department hence the company was always interested in

carrying out the business and striking off only account of reasons for not filing

the annual accounts cannot be sole reasons to dismiss the appeal, the company

Company Appeal (AT) No. 27 of 2022 7

was incurring the cost on employee which itself shows that the company was

working company.

5. It is further submitted that the judgment relied upon by the NCLT i.e

Alliance Commodities Private Limited Vs. Office of Registrar of Companies, West

Bengal, Company Appeal (AT) No. 20 of 2019 as quoted in the order is not

applicable to the fact of the present case and the principles stated therein is not

applicable, since there is no allegation on the part of ROC and/or finding by the

NCLT that company has not been carrying on business in consonance with

objects of the Company. It is not observed anywhere in the order that company

was a Shell Company or a Company having assets but advancing loans to sister

concerns or corporate persons for siphoning of the funds, evading tax or

indulging in unlawful business or not abiding by the statutory compliances, the

aforesaid findings are totally missing in the order passed by the NCLT, hence the

order cannot be sustained.

6. It is further submitted that once name of the Appellant Company is

restored, the Appellant Company would be able to continue the work which

would, inter-alia, benefit the State and Union Governments in terms of Income

Tax and other taxes. Therefore, restoration of the name of the Appellant

Company would not only be beneficial to the Shareholders of the Appellant

Company but also to the State and Union Governments and otherwise it is in

public interest. It is further submitted that State Government will also be

benefitted through ROC fees plus additional fees for filing of all pending

documents till date with the Registrar of Companies. Based on above

submissions, the impugned order is fit to be set aside and the Appeal be allowed.

Company Appeal (AT) No. 27 of 2022 8

7. On the other hand, the Learned Counsel for the Respondent No.

1/Registrar of Companies during the course of argument submitted 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).

8. The Learned Counsel for the Respondent No. 2 during the course of

argument and in his reply affidavit submitted that as per the record M/s Sanmati

Agrizone Private Limited has no outstanding Income Tax Demand and there are

no pending assessment or penalty proceedings against the present Company.

The office of the Income Tax Department has no objection if the name of the

present Company is restored by this Tribunal.

9. We have considered the submissions made on behalf of the parties and

perused the record.

10. Learned Counsel for the Appellant in support of the submissions has

placed the copies of the Audited Balance Sheets for the following Financial Years

from 2011-12 to 2019-20. The Audited Balance Sheets of the two immediately

preceding financial years i.e. 2015-16 and 2016-17 and onwards reflect 'NIL'

Revenue from Operations which is hereunder:

Balance Sheet for the Revenue From Financial Year Operations 2015-16 'NIL' 2016-17 'NIL' 2017-18 'NIL' 2018-19 'NIL'

Company Appeal (AT) No. 27 of 2022 9

11. The impugned order dated 17.12.2021, the NCLT has rightly held that the

Audited Financial Statements of the two immediately preceding Financial Years

i.e., 2015-16 and 2016-17 filed by the Appellant Company reflected "Zero

revenue" from its operations and have come to the conclusion that the Appellant

Company was neither in operation nor carrying out its business at the time of

its name was struck off from the register of Registrar of Companies.

12. Keeping in view the aforenoted facts, we do not find any merit in the

instant Appeal to interfere with the order impugned passed by the NCLT. The

impugned order dated 17.12.2021 passed by the National Company Law

Tribunal (New Delhi Bench, Court-II) in Appeal No. 114/252(ND)/2021 is hereby

affirmed. The instant Appeal is hereby dismissed. No order as to costs.

13. 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 (New

Delhi Bench, Court-II), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

New Delhi 01st June, 2023 Ram Nath.

Company Appeal (AT) No. 27 of 2022