Rahul Rice Mills Pvt. Ltd vs Registrar Of Companies, New Delhi

Rahul Rice Mills Pvt. Ltd. ... Appellant

Versus

Registrar of Companies, New Delhi ... Respondent

Present: For Appellant: - Shri Sarwar Raza and Ms. Ojaswee Gupta, Advocates

For Respondent : Shri Nawal Kishore Jha, Senior Panel Counsel for Union of India! ROC, NCT of Delhi and Haryana

ORDER

18.07.2017 This appeal has been preferred by appellant-Rahul

Rice Mills Pvt. Ltd. against the Judgement dated 21St April, 2017 passed

by the Principal Bench, National Company Law Tribunal (hereinafter

referred to as'Tribunal'), New Delhi in Company Petition No. 171 of 2016,

whereby and whereunder the application preferred by the appellant

under sub-section (6) of Section 560 of the Companies Act, 1956 with a

prayer for issuance of direction to the Registrar of Company (hereinafter

referred to as 'ROC') to restore the appellant company on its register has

been rejected.

2. Learned counsel appearing for the appellant submits that the

company was facing financial crisis and due to uncertain financial

position during the years 2008-09, 2009-10 and 2010-11, in order to a 2

overcome the atmosphere of uncertainty in the business of rice milling

and as huge investment was required, the Board of Directors of the

company decided to apply for 'Fast Track Exit Scheme, 2011' in its

meeting held on 22nd September, 2011. The application was allowed by

ROC, who struck-off the name of the appellant company from the

register. He further submits that as the financial position of the

promoters is better and they are in a position to run the business of the

company and with a view to take advantage of the goodwill of the

company, appellant wants restoration of the company in terms of sub-

section (6) of Section 560 of the Companies Act, 1956. He further

submits that ROC has also not objected to the same.

3. Learned counsel appearing on behalf of ROC, N.C.T. of Delhi and

Haryana opposed the submission made by learned counsel for the

appellant and submits that ROC never gave any clearance for restoration

of the company itself.

4. We have heard learned counsel for the parties and perused the

impugned order.

S. Admittedly, the appellant company was in uncertainty and was not

in a position to promote the business of rice milling and as financial

condition during the years 2008-09, 2009-10 and 2010-11 was not such,

so they applied for 'Fast Track Exit Scheme, 2011'. This was allowed

taking into consideration all the facts including the Annual Returns for

the year 2009-10 and Balance Sheet as on 31st March, 2010. Learned

Tribunal, having noticed the provisions of Section 560 of the Companies 3

Act, 1956, while held that the company could be revived within a period

of 20 years from the date of publication of the order in the Official Gazette,

did not find any ground to restore the company itself on the following

grounds

"8. A perusal of Section 560 of the Act would show

that Registrar of Companies is required to comply with

comprehensive procedural obligations before passing

a final order of striking off the name of a Company

from its Register. In the reply filed by the Registrar, it

has been clarified that a copy of an application dated

18.10.2011 was received in the Office of the ROC

under Section 560 in accordance with the Fast Track

Exit Scheme, which was duly supported by affidavit.

It was also accompanied by an indemnity bond from

the Directors of the Company. A Resolution of the

Board of Directors for striking off the name of the

Company was also placed on record. Accordingly, the

name was struck offfrom the Register of the Registrar

of Companies under Section 560. Learned counsel for

the Petitioner has argued that it is just and proper to

restore the name of the Company on the Register of

the Registrar of Companies. According to the learned

counsel the company has passed through a financial

crisis which the directors can now overcome. Learned

counsel has also filed consent letters of Mr. Rajan Mehta, Mr. Rahul Mehta and Ms. Poonam Mehta. The

aforesaid three Directors were also the directors in the

year, 2011 when the Company was struck off by

deleting its name from the Register of the ROC. All the

three are party to a Resolution passed by them on

27.11.2015 where a decision has been taken to

restore the Company. Learned counsel for the

Petitioner also emphasised that all the three Directors

are prepared to infuse funds in order to restore the

Company.

9. Having heard learned counsel at a considerable

length and after perusal of the record we have

reached the conclusion that no case is made out for

restoring the name of the petitioner company on the

register of the Registrar. Firstly, the petitioner

company has no locus standi to file the instant

Petition as no company of such name exists on the

register of the ROC. Secondly, the Directors

themselves voluntarily passed a Resolution on

22.9.2011 to seek exit of the company under Fast

Track Exit Scheme, 2011. Once the discretion to exit

the company has been exercised, we find no

reasonable cause to conclude that the revival of the

company is supported any of the grounds specified

under Section 560 of the Companies Act. Moreover, 5

there is nothing on record to show that the company

has been transacting any business after its

dissolution or it has any property. Merely because the

Directors are now in a position to infuse funds would

not constitute a sufficient ground for us to accept the

prayer for restoration of the name of the company on

the register of the ROC. It is not the discretion of the

erstwhile Directors of the company to get the company

struck off or revive the company at any time they like

especially when they have exercised the discretion for

getting its name struck off under the Fast Track Exit

Scheme, 2011."

6. We are satisfied with the grounds shown by the Tribunal and find

no reason to differ with such finding. In this background, while we are

not inclined to interfere with the impugned Judgement, dismiss the

appeal. However, there shall be no order as to costs.

[Justice S.J. Mukhopadhaya] Chairperson

[Balvinder Singh] Member (Technical)

/ng/