M/S Shree Balaji (India) Pvt. Ltd vs Registrar Of Companies Odisha

1

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPEAL (AT) NO.41 OF 2021 (Arising out of the judgement and order dated 28.12.2020 passed by the Ld. Adjudicating Authority in CP(Appeal) No.149/CTB/2020) In the matter of: M/s Shree Balaji (India) Pvt Ltd KK1, Civil Township, Raghunathpalli, Rourkela Orissa 769004 Appellant

Vs

Registrar of Companies, Odisha Plot No.9(P), Sector 1, CDA, Cuttack, Odisha 753014 Respondent

For Appellant:Mr. Rahul Gupta, Advocate. For Respondent:MR. Kamal Kant Jha, Advocate with Mr. Avinash Singh, Mr. Saurabh Jha, Mr. Kanchan Lata Jha, Mr Rahul Jha, Mr Gopal K, Mr Madhukar Kumar Singh, Mr. Harsh Anand, Advocates.

JUDGEMENT

JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL)

The present appeal has been instituted by Shree Balaji India Private

Limited ("Appellant") impugning the order dated 28 December 2020 passed

by the Ld. NCLT, Cuttack Bench in CP (Appeal) No. 149/CTB/2020.

2. The Appellant filed an appeal under Section 252(3) challenging the

Registrar of Companies ("ROC") decision dated 25 August 2018 to strike off

the Appellant from the register of companies, which was purportedly taken

under Section 248(1)(c) of the Act.

3. The Appellant was in the business of screening and crushing iron ore

in Odisha. In 2012-2013, the Departments of Mines & Geology, Government

of Odisha imposed restrictions on setting up or continuing crusher units

within 10km of existing Iron Ore Mineral Concessions if the company does 2

not own a lease in its name. This restriction directly impacted the business of

the Appellant, the Appellant accordingly had to cease its prime business

activity.

4. Given the Appellant's prime business activity came to an end, the

Appellant was unable to ensure regular filing of its returns. Citing the

Appellant's failure to file returns after March 2015, the ROC vide order dated

25 August 2018 struck off the Appellant from the register of companies. The

Appellant thereafter filed CP (Appeal) No. 149/CTB/2020 under Section

252(3) of the Companies Act seeking restoration and it was dismissed by the

Impugned Order.

5. The Learned counsel for the Respondent argued the company was not

filing its Statutory Return i.e. Balance Sheets and annual Returns since the

financial year ended 31.03.2015, hence the Registrar having reasonable cause

to believe that the above named company is not carrying on any business or

in operation for a period immediately preceding last financial years and has

not made any application within such period for obtaining the status of a

Dormant Company under Section 455 of the Companies Act, 2013 and issued

Notice in Form No.STK-I under Section 248(1)(c) of the Companies Act, 2013

to the Companying enquiring whether the said company was carrying on any

business or was in operation, but no reply to the said show cause notice was

received by this office. Subsequently this office published in the official

gazette and newspaper for the information of the general public regarding

strike off the name of the said company. Finally after the expiry of the time

mentioned in the above notice the Registrar struck off the name of aforesaid

company from his register and published the same in Form No.STK-7 in the 3

Official Gazette dated 25.08.2018 and on the publication of such Notice in the

Official Gazette, the company stood dissolved on and from 27.07.2018. Heard.

6. However, the learned counsel for the appellant argued the appellant

company be restored since it holds assets and is carrying on business activity.

It is submitted as on 31.01.2021 the appellant had a bank balance of

Rs.5,04,130.61 with ICICI Bank and in April, 2018 certain business

transactions were carried out in its bank account. Apart from maintaining a

bank balance the appellant also has significant assets. A sale deed dated

July, 2003 shows the appellant's title over certain parcel of land measuring

206 acres bearing Khatiyan serial No.54/8 in Hathisikuli, Odisha. In addition

to this land, the Appellant is also possessed of a parcel of land bearing Khata

No. 54/7 in Hathisikuli Odisha by a lease agreement with the Government of

Odisha dated February 2004. Further evidence of land ownership can be

gathered by the No-Encumbrance certificate dated 01 October 2020 issued by

the Sub-Registrar, Rairangpur

7. In addition to land, the Appellant also owns 5400 - 5700 MT of Iron Ore

which is worth approximately INR 28.16L. The Appellant has made attempts

to get permission to sell Iron Ore as is evident from a letter issued by the

Mining Officer, Baripada to the Director of Mines, Odisha dated 12 February

2021. Permission to sell the stock was granted by the concerned authority on

25 February 2021). In addition to the stock the Appellant also owns crushers

and commercial vehicles as is evident from the pictures. Additionally, the

Appellant also has one debtor Mr BC Dagra whose debt is reflected in the

balance sheet of the Appellant.

8. Ever since the prime business activity of the Appellant was restricted 4

by the Government of Odisha, the Appellant has earned income through other

sources. One such source is renting Excavators / Hywa on Rental or Lease

basis and also its crushing equipment to one M/s Sri Kirshna Enterprises

under the terms of a Rental Agreement dated 20 February 2020. The income

derived by renting its equipment is duly reflected in the Appellant's balance

sheet for FY 15-16, FY 16-17, FY 17-18 and FY 18-19. The Appellant has also

entered into various agreements for the buying and selling of Iron Ore through

registered agreements.

9. The Appellant has been made a party to certain litigation concerning

office rent, while the suit has been decreed against the Appellant, the

appellant has filed an application under Order 9 Rule 13 CPC seeking setting

aside of the decree. The Appellant also has one employee, namely Mr Satya

Narayan Mahkud.

10. The Appellant intends to carry out the business of stone crushing by

using the same equipment to crush stone instead of iron ore, the Appellant

has applied for permission for the same to the Collector Mayurbhanj and

Forest Office and various Clearances have been awarded in its name and is

under process.

11 The documents in support of the above submission have been filed

algonwith the appeal and we have perused the same. It is a well settled that

Ld. NCLT is empowered to restore the company where it thinks it to be just

and equitable to restore it i.e. it is fair and prudent from the commercial point

of view to restore the same.

12. Considering the assets and further that the appellant is inclined to shift

its business from iron ore to crushing stone, it would be appropriate to restore 5

the appellant and it is in the benefit to State Exchequer and would also aid

employment generation.

13. In M/s Durga Builders (P) Ltd Vs ROC; Company Appeal (AT) No.154 of

2021 this Tribunal held:-

"10. After hearing the parties and going through the pleadings made on behalf of the parties, we observe that the Appellant Company is in litigation therefore, the Company has not filed the financial statements and also without giving opportunity of hearing, the Respondent No. 1/Registrar of Companies struck off the name of the Appellant Company's from the Register maintained by him, but in view of the fact and also the Bank Statements of the Appellant Company from 2015 -2018 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 (Court V, New Delhi) as well as Registrar of Companies, NCT Delhi & Haryana is not sustainable in law."

14. In `Dashmesh Impex Pvt. Ltd. & Ors. Vs ROC: Company Appeal

(AT)No.116/2021 this Tribunal held as follows:

"5. After hearing the parties, going through the pleadings made on behalf of the parties and in view of the fact that the financial statements 2016-2017, 2017-2018, 2018-2019, 2019-2020 and 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 NCLT, New Delhi as well as RoC, NCT Delhi & Haryana is not sustainable in law."

15. The appellant further undertakes that it shall be more cautious and

vigilant in future in filing compliances under the applicable Laws and would

adhere to all stipulated timelines designated without fail and shall pay cost 6

imposed as per law. An affidavit in this regard be filed within a week from

today before this Tribunal.

16. For the reasons aforesaid we find it just and equitable to restore the

name of the appellant company to the record of ROC and thus we set aside

the impugned order dated 28.12.2020 passed by the Ld. NCLT, Cuttack

Bench and direct the ROC, Odisha to restore the name of the company to the

Register of Companies subject to the following compliances:

i) Appellant Company shall pay costs of Rs.2,00,000/- (Rupees Two

Lakhs) to the Registrar of Companies, Odisha within eight weeks from

the passing of this Judgement.

ii) the company shall file all its annual returns and balances sheets

within four weeks and shall also pay all requisite charges/fee, as

applicable.

iii) The ROC shall be free to take any other step, punitive or otherwise,

under the companies Act for non-filing/late filing of statutory

returns/documents against the company and its directors.

17. Thus in the circumstances the appeal is allowed to the above extent.

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) Dated:07-08-2024 bm