Mr P Venugopal Shareholder Of Sri Sai ... vs Registrar Of Companies

(Arising out of Order dated 15.06.2022 passed by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench) in CA No.02/252/HDB/2022)

Comp. App (AT) (CH) No. 22/2024 Page 1 of 7 Present: For Appellant : Mr. A.M. Sridharan & Ms. Renuka Parameswari R, Advocates

For Respondents : Mr. Prithvi Raj JS, Advocate for R2 & R3 Mr. B. Dhanaraj, Advocate for Intervenor Mr. S.S. Raghavan, Advocate for Petitioner in IA No. 1789/2025

JUDGMENT

(Hybrid Mode)

Per: Justice N Seshasayee, Member (Judicial) This appeal is preferred challenging the order of the NCLT dated

15.06.2022 in CA 02/2022, by which the Tribunal has confirmed

the proceedings of the Registrar of Companies dated 02.07.2018

passed under Section 248 of the Companies Act, 2013.

2. The minimum facts which are relevant for the current purposes

are:

(a) On 06.04.1994, the company was registered. It was stated

to be engaged in the real estate business. According to the

appellant, the company had acquired vast lands but

beyond that hardly any business took place. At any rate,

right from its inception, it failed to submit annual returns

and balance sheets to the RoC.

Comp. App (AT) (CH) No. 22/2024 Page 2 of 7

(b) Be that as it may, the RoC initiated the proceedings under

Section 248 of the Companies Act, 2013, and eventually

struck the name of the company from the Register vide its

proceedings dated 02.07.2018.

(c) This was challenged by the appellant, one of the promoters

of the company, under Sec.252 of the Companies Act,

2013. The Tribunal, vide its order dated 15.06.2022,

dismissed the appeal essentially on the ground that even

though the audited financial statements were filed from

1994-1995 to 2019-2020, they were not filed with other

supporting documents, in particular, documents to

support the filing of income tax returns or the bank

statements.

3. The 2nd Respondent herein, a shareholder of the company,

supports the appellant. During the pendency of this appeal,

certain Mr. S. Adi Reddy & Mr. K.L. Venkat, both former

directors of the company, have filed applications to implead

themselves vide IA No.1023/2025 and IA No.1789/2025

respectively. And both were not impleaded as such, but were

heard as intervenors.

Comp. App (AT) (CH) No. 22/2024 Page 3 of 7

4. The learned counsel for the appellant submitted that, while the

company has become defunct a few decades ago, if not from

its very inception, the fact remains that the company has a

huge land bank. In the fitness of things, the company may

have to be wound up in the manner known to law, but for it to

happen, the company may have to be restored. In other words,

he submitted that there is just and equitable ground available

for setting aside the order of the RoC as well as that of the

Adjudicating Authority and to restore the name of the

company in the Registrar of Companies.

5. Supporting the submission of the appellant, the learned

counsel for the 2nd Respondent added that while the RoC has

passed its order under Section 248 of the Act, 2013, on

02.07.2018, Shri. S. Aadi Reddy, one of the intervenors, has

been on a selling spree of the lands of the company as

evidenced by sale deeds dated 14.05.2025, and, very

shockingly, in the name of the very same company whose

name has already been struck off from the Register of the

Companies.

6. Per contra, both the intervenors alleged that the appellant has

no locus standi to prefer this appeal. He is not the managing

Comp. App (AT) (CH) No. 22/2024 Page 4 of 7 director of the company as he projected himself to be. Indeed,

the RoC itself has noted that the appellant has stepped down

as a managing director with effect from 16.05.1997 and as a

director on 08.10.2001. Secondly, they alleged that the

appellant has been selling the lands of the company and

appropriating the sale proceeds for himself. Hence, it was

contended that to protect the interest of the company in

preserving its assets, the intervenor Shri Adi Reddy

representing CD has filed OS Nos.120 of 2022, O.S.38 of 2022,

O.S. 97 of 2025 and OS 503 of 2025 for cancellation of

fraudulent sale deeds.

Discussion & Decision

7. We are presented with few undisputed facts: (a) that the

company came into being in 1994; (b) that it acquired certain

stretch of lands as part of its business; (c) except acquisition

of lands, there has hardly been any business; (d) that for non-

filing of returns for two years and more, the RoC, the first

respondent herein had initiated an action under Sec.248 of the

Act, and vide its proceedings dated 02.07.2018, RoC struck off

the name of the company from its register and also ordered

dissolution of the company under Sec.248(5) of the Act that

Comp. App (AT) (CH) No. 22/2024 Page 5 of 7 was affirmed by the Adjudicating Authority; that

notwithstanding the proceedings of the RoC, both sides accuse

each other of unilaterally dealing with the lands of company.

While the Respondent No.2 (who is in support of the appellant)

has produced certain sale deeds executed by one of the

intervenors, but on behalf of the company, the other side has

furnished the details of the suits filed against the appellant

challenging the sales of land belonging to the company that

the appellant herein is alleged to have executed.

8. When the company is shown to have assets, but is defunct

otherwise, it can only be wound up, and it may not be

appropriate to dissolve the company. With the company

having been struck off from the Register, it appears that the

company's properties have been dealt with without anyone

owing accountability to any. Besides, there is also a possibility

of revenue loss to the Government, as there are issues of

capital gains that need to be negotiated. We therefore consider

that there is a compelling need to restore the company to the

Register of the Companies for its eventual winding up. Set in

the context, the allegation that the appellant had stepped

Comp. App (AT) (CH) No. 22/2024 Page 6 of 7 down from the office of Managing Director or director may not

be very significant.

9. Accordingly, this appeal is allowed. All pending interlocutory

applications, if any, would stand closed. No costs.

[Justice N. Seshasayee] Member (Judicial)

[Jatindranath Swain] Member (Technical) VG/MS/AK

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