Sarada Prasad Rath vs Registrar Of Companies, Odisha

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

Company Appeal (AT) No. 355 of 2019 [Arising out of Order dated 23rd October,2019 passed by the Adjudicating Authority (National Company Law Tribunal) Cuttack Bench, Cuttack in TP No. 68/CTB/2019 in CP(Appeal) No. 02/KB/2018]

IN THE MATTER OF: Sarada Prasad Rath Plot No. 10, Brundaban Garden, Samantarapur, Bhubaneswar-741002, Odisha .....Appellant Vs. Registrar of Companies, 3rd Floor, Corporate Bhawan, Plot No. 9(P), Sector 1, CDA, Cuttack, Odisha ......Respondent

Present :

For Appellant: Mr. Sameer Gupta, Advocate

For Respondents: Mr. Abhishek Kumar Rao, Ms. Bhavya Bharti, Advocates Mr. Kamal Kant Jha, Sr. Panel Counsel, Govt. of India, Advocate for ROC

03.03.2020 - Advocate Shri Kamal Kant Jha, Sr. Panel Counsel,

Government of India, is present for Respondent - 'Registrar of Companies' [ROC].

The Counsel states that the ROC does not want to file a separate reply to the

appeal and is relying only on Annexure (page-342) which is the copy of the report

Company Appeal (AT) No. 355 of 2019 1 which was submitted before the Learned 'National Company Law Tribunal'

[NCLT] when the matter was pending before the 'NCLT'.

2. Heard Advocate Shri Abhishek Kumar Rao for the Appellant and Advocate

Shri Kamal Kant Jha, Sr. Panel Counsel, Government of India, for Respondent -

'Registrar of Companies' [ROC] and perused the record. It is stated that the

Company was incorporated on 20.04.2012. The Company thereafter could not

file any of the balance sheets and Annual returns with the ROC from the date of

its incorporation. Ultimately, the Company was struck off by the Learned ROC

on 21.06.2017. The Appellant Company then moved the Learned 'National

Company Law Tribunal' ['NCLT'], Cuttack Bench, Cuttack in appeal u/s 252 of

the Companies Act, 2013. The prayer of the Appellant made in the appeal was

to restore the name of the Company as if the same had not been struck off from

the rolls of the register and to direct the ROC not to initiate penal action against

the Company and its Directors.

3. Learned 'National Company Law Tribunal' ('NCLT') considered the appeal

filed by the Appellant and also kept in view report of the ROC, copy of which is

at page-342 of the appeal, and rejected the Appeal.

4. The Learned Counsel for the Appellant is submitting that the Appellant

does concede that since incorporation it did not file any returns till the name

was struck off and it has been a default. Learned Counsel states that the

Appellant Company was trying to establish the infrastructure Company and in

the initial stages in order to come up in the business it entered into a partnership

Company Appeal (AT) No. 355 of 2019 2 with M/s. Laxmi Real Infra Pvt. Ltd. for which 'Deed of Partnership' dated

11.04.2013 was executed. The document is at page-126 of the appeal. Learned

Counsel states that the Company itself become partner with another company

which was already established Company. Learned Counsel states that by

becoming a partner in this manner, the Appellant jointly with the other Company

in the name of 'AML Homes' started business and even Auditor's Report is

available of 'AML Homes' at page-137 for year ending 31.03.16 regarding the

business being done by the Appellant Company in partnership in the name of

'AML Homes'.

5. Learned Counsel for ROC has not filed any separate reply and refers to the

report which was filed before ROC which indicated that when the returns were

not filed, the ROC u/s 455 of the Companies Act issue notice in form No. STK-1

u/s 248(1)(c) of the Companies Act, 2013 and as there was no reply, a Show

Cause Notice was issued. There was publication made in newspaper as well as

the Official Gazette regarding striking off the name of the said Company in Form

No. STK-5/5A and finally the name of the Appellant Company along (with the

others) was struck off by official gazette in Form No. STK-7 dated 22.07.2017.

Learned Counsel states that the Appellant Company thus stood dissolved on

21.06.2017.

6. Learned Counsel for Appellant does not want to dispute that the ROC did

follow the procedure though he states that notice issued was not received. It is

further stated that although the Appellant had pointed out the fact that the

Company Appeal (AT) No. 355 of 2019 3 Appellant entering into partnership and was doing business through the

partnership, according to the Learned Counsel 'NCLT' wrongly rejected the

application.

7. Learned Counsel for ROC states that the Learned 'NCLT' found that the

Appellant had filed no returns and there was no stock or employees or record

maintained and no income tax returns were also filed. According to the Learned

Counsel these were the factors required to be considered.

8. Having gone through the material and having heard Learned Counsel for

both sides, we are unable to agree with the learned 'NCLT' that the Appellant

was not justified in referring to the business which it was doing through the

partnership and ignoring the aspect. The Learned Counsel states that the

Company was still trying to settle and come up with the business and committed

errors in not submitting returns but the Company was in operation and may be

given an opportunity.

9. We find that the Appellant Company committed default in not submitting

the returns and not responding to the notice but as it is shown that it was in

operation, it would be appropriate to restore the name of the Appellant Company.

10. The appeal is thus allowed. The impugned order is quashed and set aside.

The ROC is directed to restore the name of the Appellant Company to its Register

subject to (1) payment of costs of Rs. 2,50,000/- to U.O.I through ROC; (2) the

Appellant Company files relevant returns for the years it is found to have been

in default; (3) makes payment of fines and other penalties as may be applicable. Company Appeal (AT) No. 355 of 2019 4 The ROC would be at liberty to take any penal action as may be permissible in

law.

With these directions, the present appeal is disposed of. No costs.

[Justice A.I.S. Cheema] Member (Judicial)

[Justice Anant Bijay Singh] Member (Judicial)

[Kanthi Narahari] Member (Technical)

ss/m

Company Appeal (AT) No. 355 of 2019 5