Manish Padwal Gopal vs The Registrar Of Companies (Roc) Mumbai

[Arising out of order dated 09.03.2021 passed by the National Company Law Tribunal (Mumbai Bench, Court-II) in CP No. 1055/252(1)/MB/C-II/2020]

IN THE MATTER OF: Manish Padwal Gopal Director of Venice Marketing and Finance Private Limited Having his address at 15/15, Shell Colony Road Saii Baba Nagar, Chembur (East), Mumbai-400071. ....... Appellant.

Versus Registrar of Companies, Mumbai Having its Office at Everest, 5th Floor, 100, Marine Drive, Mumbai-400002. ...... Respondent.

Present: For Appellant: Mr. Arjun D. Singh, Advocate. For Respondent:- Mr. Kamal Kant Jha, Sr. Panel Counsel for GoI. Mr. Avinash Singh, Advocate. JUDGMENT

(09th February, 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

09.03.2021 passed by the National Company Law Tribunal (Mumbai Bench, 2

Court-II) in CP No. 1055/252(1)/MB/C-II/2020 whereby and whereunder

Company Petition 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. By which the Tribunal passed the

following reasons:

"All the above factual details substantiate the criteria that the company is not carrying on any business or operation as defined under Section 248 of the Companies Act 2013, therefore, the action taken by Registrar of Companies, Maharashtra, Mumbai is justified, and the Bench did not find any ground to interfere with the action of striking off the name of the Company by Registrar of Companies, Maharashtra, Mumbai. The Bench is also of the considered view that this type of companies only put the burden on the system, Government/ROC, by way of record keeping, ensuring compliance by these companies and at times these companies may be used for various purposes other than the purpose/object for which the company was originally incorporated. It also puts a burden on the company to comply with various regulatory/statuary compliances.

Considering the above facts and circumstances, practical aspects, the Bench has not found any justifiable/reasonable grounds to interfere with the action taken by the Government of India/ROC in striking off names of Lakhs of companies including the petitioner company."

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

i) The Appellant as a Director of "Venice marketing and Finance Private

Limited" (hereinafter referred to as the "Company") was incorporated on

27.11.1990 and struck off by the Respondent on 12.09.2018. The company has Company Appeal (AT) No. 130 of 2021 3

done its regulatory filing with the Respondent upto 31.03.2015. The Company

had Unsecured Loans amounting to Rs. 1,87,900 and has current liabilities

amounting to Rs. 180,306 as on 31.03.2019. The company has Cash and bank

balance amounting to Rs. 71,330/- as at 31.03.2019 which is reflecting in the

Balance Sheet of the Company for the Financial Year 2018-19. The Company is

having an active business and the company is in the process of achieving its

revenue from operations and also has projects in hand for which Service

Agreement and work order have been executed which showed the prospects of

the Company.

ii) The Company was struck off by the Respondent for non-filing of Balance

Sheets and Annual Returns for the Financial Years 2015-16 and 2016-17. The

company inadvertently could not file the Balance Sheets and the Annual Returns

for the 2 Financial Years as a result of which the Company was struck off by the

Respondent. However, the Company had filed its returns with the Income Tax

Department for the Financial Years 2016-17, 2017-18 and 2018-19 respective.

The said documents were placed before the Tribunal wherein it was brought to

the attention of the Tribunal that the Company is in operations and shall

generate revenue from Financial Year 2019-20.

iii) The Appellant approached before the Tribunal against the struck off order

passed by the Respondent/RoC and after hearing the parties, the Tribunal

passed the order impugned dated 09.03.2021 which led to filing of this Appeal.

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

grounds mentioned in his memo of Appeal submitted that striking off the name

of the Appellant Company done by the Respondent is completely contrary to the Company Appeal (AT) No. 130 of 2021 4

intent of Section 248(1) of the Act. However, the procedure adopted by the

Respondent while doing the same is against the provisions of Section 248(1)

because of which a fully functional company has been struck off against the very

intent and purpose of the Act. The Respondent did not issue any notice under

Section 248(1) of the Act which is mandatory in nature and a condition precedent

before exercising the power of striking off under Section 248(5) of the Act.

4. It is further submitted that despite producing Service and Work Order

availed by the Company, the Tribunal erred in holding that there was no

prospective business of the Company. The Company has availed redevelopment

rights vide agreement dated 05.03.2015 with Jame Jamshed Charity Funds

wherein the Company had availed rights to redevelop. The Tribunal also failed

to allow the Appellant to produce additional documents on record to establish

that the Company is in operations. Further, the Company had also filed its

audited accounts and Income Tax Returns with the Income Tax Department for

the Financial Years 2016-17, 2017-18 and 2018-19 to show that it is actively

involved in the business and operations.

5. It is further submitted that the delay in filing the Balance Sheet and

Annual Returns of the Company for the Financial Year 2016-17 to 2018-19 was

unintentional due to lack of knowledge of the Compliance of the Company. The

annual Returns and Financial Statements could not be filed due to inadvertence

and was not done on time. The Appellant Company is active and is maintaining

all the documents as per the provisions of the Companies Act, 1956/2013.

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

stated that this appeal suffers from laches and non-compliances on part of the Company Appeal (AT) No. 130 of 2021 5

Appellant due to failure in filing of its statutory returns for financial year 2016-

17 to 2018-19, the name of the company has been considered for striking off by

the Registrar of Companies, Mumbai in a suo moto action under the provisions

of Section 248 of the Companies Act, 2013 and also in pursuance of the circulars

issued by the Ministry of Corporate Affairs, Govt. of India, New Delhi from time

to time. The basis for striking off the name of the company was the continuous

non-filing of the statutory returns (which are required to be filed under the Act)

and 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,

prior to it struck off. The aforesaid situation has arisen due to inaction on the

part of the Appellant Company and its Directors/Officers. The appropriate action

taken by Respondent to strike off the company, which is duly prescribed under

Section 248 of the Act.

7. It is further submitted that the Respondent issued STK 1 notice to the

company and its directors informing the intention of the Registrar to strike off

the name of the company and requesting to submit a cause contrary to the said

action within 30 days. Further, as required under Rule 7 of the Companies

(Removal of Name) Rules, the name of the company was published on the web

site maintained by the Ministry vide STK 5. It may be appreciated that the said

notice is issued as public notice to not only the company and the directors of the

company but also to all stakeholders concerned so as to invite/receive their

objections to the said intention of the Registrar to remove the name of the

company. Therefore, in absence of any statutory filing from the Company and its Company Appeal (AT) No. 130 of 2021 6

Directors for more than 3 years, the proposed strike of action taken by the

Registrar struck off the name of the company on 11.09.2018 and the dissolution

order was published on the website of the Ministry vide STK 7.

In view of the above, the Appellant not having any valid submissions,

therefore, the Appeal may be dismissed as the Respondent has duly complied

the law and the Tribunal has passed the appropriate order in public interest.

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

the parties and in view of the fact that the Balance Sheets of the Company for

the Financial Years Year 2015-16, 2016-17, 2017-18 & 2018-19 and Income Tax

Returns of the Company for the Financial Years 2016-17, 2017-18 & 2018-19

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 (Mumbai Bench, Court-II)

as well as Registrar of Companies, Maharashtra, Mumbai is not sustainable in

law.

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

09.03.2021 passed by the National Company Law Tribunal (Mumbai Bench,

Court-II) in CP No. 1055/252(1)/MB/C-II/2020. The name of the Appellant

Company be restored to the Register of Companies subject to the following

compliances:

i) Appellant Company shall pay costs of Rs. 1,00,000/- (Rupees

One Lakh) to the Registrar of Companies, Mumbai within eight

(8) weeks from the passing of this judgment.

Company Appeal (AT) No. 130 of 2021 7

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

maintained by the RoC, the Company shall file all their

Annual Returns and Balances Sheets. The Company shall

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

applicable.

iii) 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.

The instant Appeal is allowed to the above extent.

10. 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

(Mumbai Bench, Court-II), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi 09th February, 2023 R. Nath.

Company Appeal (AT) No. 130 of 2021