Shailendra Bafna vs Roc Chhattisgarh

[Arising out of order dated 28.12.2020 passed by the National Company Law Tribunal (Cuttack Bench, Cuttack) in CP(Appeal) No.150/CTB/2020]

IN THE MATTER OF: Shailendra Bafna S/o Shri Prem Raj Bafna R/o 172, Subhash Ward No. 09, Main Road, Jagdalpur, Chhattisgarh-494001. Director & Shareholder of M/s Ojus Buildcons Private Limited, Having its Registered Office at: Near Shukla Building, Pratapganj, Jagdalpur, Chhattisgarh-494001. ....... Appellant. Versus The Registrar of Companies, Bilaspur Chhattisgarh 1st Floor, Ashok Pingley Bhawan, Municipal Corporation, Nehru Chowk, Bilaspur-495001, Chhattisgarh. ....... Respondent.

Present: For Appellant: Mr. Pankaj Agarwal, Mr. Shashwat Srivastava, Ms. Pragati Srivastava, Ms. Poonam Agarwal, Advocates.

For Respondent:- Mr. Nitinjya Chaudhry, Sr. Panel Counsel (UOI) for ROC. 2

JUDGMENT

(20th December, 2022)

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

28.12.2020 passed by the National Company Law Tribunal (Cuttack Bench,

Cuttack) in CP(Appeal) No.150/CTB/2020 whereby and whereunder appeal

filed by the Appellant Company for restoration of the name of the Appellant

Company in the Register maintained by the Registrar of Companies (RoC),

Chhattisgarh was dismissed by the Tribunal.

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

i) The Appellant is a Shareholder/Director of a Private Limited Company,

i.e. Ojus Buildcons Private Limited (hereinafter referred to as 'Company') which

is Limited by Shares having its Registered office situated at Jagdalpur (C.G.) -

494001, incorporated in year 2011 and is involved in business of real estate. In

order to do business, in year 2013, the Company, bought 2 separate land

parcels, situated at Jagdalpur, Chhattisgarh, admeasuring 3.90 Acres and 4.66

Acres for the sum of Rs. 84,00,000/- and Rs. 95,56,000/-. The said lands

parcels have fruit bearing trees over them are same are being cultivated as on

date.

ii) Further case is that the Respondent, strike off the company's name from

the Register of Companies due to defaults in statutory compliances, namely,

failure to file Financial Statements & Annual Returns for the period 2011-12 to

Company Appeal (AT) No. 101 of 2021 3

2015-16 by initiating proceedings under Section 248 of the Companies Act,

2013, for the purpose of striking off the name of the company from the Register

maintained by the Registrar of Companies. The Appellant Company realized the

non-compliance of the requirements relating to filing of returns and other

documents with the Registrar only after receiving the notice from the

Respondent. After receiving the said notice under Section 248(1), the Appellant

Company was in the process of filing requisite annual returns and documents

but in the meantime the company was struck off by the Respondent and its

name was published in STK-5A dated 28.04.2017 as mentioned in Sr. No. 733.

iii) The financial statements of the company has been prepared and audited

but due to inadvertence the same could not be filed with the Registrar of

Companies. However, the non-filing was neither wilful nor intentional. Since

the Company is located in a remote area of Bastar region of Chhattisgarh,

therefore, due to lack of professional guidance/help available to the Appellant

Company in the initial years of its incorporation it had escaped the filing of

returns with the concerned Registrar of Companies.

iv) The Appellant being a Shareholder / Director of a Company which is

carrying the agriculture and real estate businesses, it is matter of fact that the

turnover and profits/losses depends on the sales taken place in the relevant

financial year. The Company has taken loans and invested the same in the

agricultural lands for furtherance of the Business. As such it never had an

intention to close the business. However, it was unfortunate that the Company

could not make turnovers in the preceding years. The Company had some

Company Appeal (AT) No. 101 of 2021 4

operations in the year 2013-14, however, it has not filed Income Tax Return

(ITR) up to Financial Year 2017-18. The Company has filed Income Tax Return

for the Financial Year 2018-19 and 2019-20.

v) Further case is that being aggrieved with the step taken by the Registrar

of Companies, the Company had filed a petition before the Tribunal for issuing

directions for restoration of the name of the Company so that the properties of

the company can be utilized and the business of the company can be carried

out by the Company. The Tribunal after hearing the parties, dismissed the said

petition which led to filing of this Appeal.

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

his memo of Appeal submitted that the Tribunal while passing the impugned

order has erred in law and fact by not considering that the Appellant Company

have the land holding in its name and done business in past. Further, the

Tribunal has failed to appreciate the merits of the case, in the present case, the

genesis of the entire matter is non-filing of annual returns which is a

compoundable offence under the provisions of companies law, the Respondent

themselves had issues various amnesty schemes at various occasions for filing

of the annual return, to which the Appellant failed to draw the benefits from

such schemes. It is further submitted that the business income of the Director,

Shareholders, Employees and other People attached to the company either

directly or indirectly would be adversely affected. The Appellant has filed the

copies of sale deeds executed in favour of the Appellant Company which are

Annexure A-2 (Colly) at page 34 to 180 of the Appeal Paper Book. It is further

Company Appeal (AT) No. 101 of 2021 5

submitted that the Appellant Company is ready to abide by all the conditions

as imposed by this Tribunal and also willing to pay the penalties as imposed by

this Tribunal and undertake to be more vigilant and careful about the annual

filings of the company.

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

affidavit it is stated that the Appellant Company has not filed Annual Returns

and Balance Sheet for the year ending 31.03.2012 to 31.03.2019. The

Respondent/RoC, as per Ministry directions vide letter No. 03/53/2017/CL-II

dated 17.02.2017 and letter No. 3/164/2019-CL-II(DGCOA) dated 25.06.2019,

accordingly, pursuant to sub-Section (1) of Section 248 of the Companies Act,

2013 and Rule 3 of the Companies (Removal of Name of Companies from the

Register of Companies) Rule, 2016, the Registrar gave a notice in writing in

Form STK-1 dated 14.03.2017 to the company and all its directors at the

addresses available on record. The notice in Form STK-1 is issued to the

company on the ground that the 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 of the Act. The notice seeks representation, if any

against the proposed action from the company and its Directors within a period

of thirty days from the date of notice. However, no such reply was received by

this office from the Appellant company or its directors in response to the above

said notice in Form STK-1. This office caused notice under sub-section (5) of

Section 248 of striking off the name of the company from the register of

Company Appeal (AT) No. 101 of 2021 6

companies and published in the Official Gazette in Form STK-7 on 12.07.2017

and same had been placed on the official website of the Ministry of Corporate

Affairs on 12.07.2017. It is further stated that the instant Appeal may be

decided on merit subject to filing of Balance Sheet till the year ending

31.03.2020 with additional fees as per the requirement of Companies Act,

2013.

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

the parties and in view of the fact that the sale deeds executed in favour of the

Appellant Company and Audited Balance sheet from Financial Year 2011-12 to

2018-19 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 National

Company Law Tribunal (Cuttack Bench, Cuttack) as well as Registrar of

Companies, Chhattisgarh is not sustainable in law.

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

28.12.2020 passed by the National Company Law Tribunal (Cuttack Bench,

Cuttack) in CP(Appeal) No.150/CTB/2020. The name of the Appellant

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

compliances.

i) Appellant shall pay costs of Rs. 50,000/- (Rupees Fifty Thousand)

to the Registrar of Companies, Chhattisgarh within 08 (Eight)

weeks from passing of this Judgment.

Company Appeal (AT) No. 101 of 2021 7

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

maintained by the Registrar of Companies, 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 within 08 (Eight) weeks thereafter.

iii) Inspite of present orders, Registrar of Companies 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.

7. 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 (Cuttack Bench, Cuttack), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

[Ms. Shreesha Merla] Member (Technical)

New Delhi 20th December, 2022 R. Nath.

Company Appeal (AT) No. 101 of 2021