Sita Ram Singhal vs Registrar Of Companies

IN THE MATTER OF: Sita Ram Singhal ...Appellant Versus The Registrar of Companies, NCT of Delhi, New Delhi ...Respondent Present: For Appellant : Mr. Pankaj Agarwal and Mr. Shashwat Srivastava, Advocates.

For Respondent : None.

(ORAL) ORDER

[Per; Justice Rakesh Kumar Jain (JM)]

17.04.2023 This Appeal is directed against the Order dated 22.07.2021

passed by the National Company Law Tribunal, New Delhi Bench, Court II,

by which, the Appeal filed by the Appellant under Section 252(1) of the

Companies Act, 2013 (for short 'The Act'), has been dismissed.

2. Brief facts of the case are that the Appellant is the Director and

Shareholder of 'M/s. Swastik Finbuild India Private Limited', a Company

incorporated under the Companies Act, 1956 ('the Act of 1956'). The name of

the Company, which was registered with the Registrar of Companies was

struck-off by the RoC after publishing a Notice in Form-STK 5A dated

01.09.2017.

3. It is submitted that the Company is doing the business of developing

Real Estate Projects, and has purchased 100 Sq. Yards of land for a sum of

Rs.2 Lakhs/- in Gurgaon in the year 1996. On the basis of this, it is submitted that since the Company has the land, therefore, it is still carry on its business

and therefore the name of the Company be restored to the Register of the

Registrar maintained for this purpose.

4. No one appears on behalf of the Respondent.

5. We have heard Counsel for the Appellant and perused the record with

his able assistance.

6. Before we proceed with the facts of the merits of the case it would be

relevant to refer to certain provisions of the Act. Section 2(20) of the Act

defines the Company which means the Company incorporated under this Act

or under any previous Company law. Section 2(74) of the Act defines "Register

of Companies" means the Register of Companies maintained by the Registrar

on paper or in any electronic mode under the Act. Section 7 of the Act deals

with the incorporation of Company and Section 9 of the Act deals with the

effect of registration which says that "from the date of incorporation mentioned

in the certificate of incorporation, such subscribers to the memorandum and all

other persons, as may, from time to time, become Members of the Company,

shall be a body corporate by the name contained in the memorandum, capable

of exercising all the functions of an incorporated company under this Act and

having perpetual succession and a common seal with power to acquire, hold

and dispose of property, both movable and immovable, tangible and intangible,

to contract and to sue and be sued, by the said name".

7. Chapter XVIII of the Act deals with the removal of the name of the

Company from the Register of the Registrar of Companies in which Section

Comp. App. (AT) No. 157 & 158 of 2021 2 of 5 248 provides four grounds for the purpose of removal of the name which are

reproduced as under:

(a) where the Registrar has reasonable cause to believe that a Company

has failed to commence its business within one year of its incorporation;

or

(c) a 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;

(d) the subscriber to the memorandum has not paid the subscription,

undertaking the plea at the time of incorporation of a Company and a

declaration to this effect has not been filed within 180 days of its

incorporation under sub-Section (1) of Section 10-A or;

(e) the Company is not carrying on any business or operation as reveal

after the physical verification carried out under sub-Section 9 of Section

12.

8. The effect of removal of the name of the Company is in Section 250

which reads as under:

"250. Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company."

Comp. App. (AT) No. 157 & 158 of 2021 3 of 5

9. If any person is aggrieved against the removal of the name of the

Company from the Register of the Registrar, the Appeal is provided under

Section 252(1). In the present case, this Appeal has been filed under Section

252(1). The Sine-Qua-Non for restoration of a Company whose name is struck-

off from the Register of Company is that either the Company is in business or

it is in operation or 'it is otherwise just' to restore the name of Company. It

has come in the Impugned Order that though the Company was incorporated

in the year 1996 but since then it has never filed its Financial Statements and

Annual Returns. The Report of the RoC confirms that only Balance Sheet filed

for the Financial Year 2016-17 which also depicts NIL as revenue from its

operation. The Appellant has also not brought anything on record either

before the Tribunal or before us which could substantiate that it was in

operation or doing any significant business at the time when its name was

struck-off from the Register of the RoC.

10. The only argument thus raised by the Appellant is that since the

Company is having 100 Sq. Yards of land and is doing the business of the

Real Estate Project, therefore, the name of the Company may be restored.

11. In this regard he has relied upon the Sale Deed which is attached as

Annexure A-2.

12. Besides the Sale Deed, no substantial ground has been taken since

either in Appeal or before us during the course of hearing. The ground

"otherwise just" is not meant for this purpose that it could be used in such

type of case. In the case of 'M/s. Alliance Commodities Pvt. Ltd.' Vs. 'Office

Comp. App. (AT) No. 157 & 158 of 2021 4 of 5 of Registrar of Companies - WB', CA No.7258/2019, it has been held that

the Order of Restoration cannot be passed as a matter of routine. Therefore,

in view of the aforesaid facts and circumstances, we find no error in the

approach of the Tribunal in dismissing the Appeal of the Appellant.

13. No other point has been raised.

14. In view of the aforesaid facts and circumstances, the Appeal is found

without any merit and the same is hereby dismissed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

himanshu/kam

Comp. App. (AT) No. 157 & 158 of 2021 5 of 5