Taru Projects Private Limited & Anr vs Registrar Of Companies & Anr

[Arising out of order dated 12.11.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) in Appeal 78/252(ND)/2021]

IN THE MATTER OF: 1. Taru Projects Private Limited Having its Registered Office at 79A, 3rd Floor Block J&K, Laxmi Nagar, Delhi- 110092. ....... Appellant No. 1. 2. Shri Pramendra Singh S/O Mehtab Singh, R/O 23-D, Plot No. E- 15, Shatabdi Vihar, NOIDA, Gautam Budh Nagar, U.P.-201301. ....... Appellant No. 2. Versus 1. The Registrar of Companies NCT of Delhi & Haryana, 4th Floor, IFCI Tower, Nehru Place, New Delhi-110019. ....... Respondent No. 1. 2. Ministry of Finance, Dept. Of Revenue Through Income Tax Department, High Court Cell, 428, Lawyers Chamber, Delhi High Court Delhi-110003 ....... Respondent No. 2.

Present: For Appellant: Mr. Varun Jain, Advocate. For Respondent:- Ruchir Bhatia, Sr. Standing Counsel. 2

Mr. Shlok Chandra, Jr. Standing Counsel. Mr. Keshav Garg, Advocate for Income Tax Department.

JUDGMENT

(17th February, 2023)

Justice Anant Bijay Singh;

The present Appeal under Section 421 of the Companies Act, 2013, has

been filed by the Appellants being aggrieved and dissatisfied by the order dated

12.11.2021 passed by the National Company Law Tribunal (New Delhi Bench,

Court-II) in Appeal 78/252(ND)/2021 whereby and whereunder appeal filed by

the Appellants for restoration of the name of the Company in the Register

maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana was

dismissed by the Tribunal.

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

i) The Appellant No. 1 - Trau Projects Private Limited was incorporated under

the provisions of the Companies Act. 1956 ("Act") as a Private Limited Company

with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi on

03.05.2011. The Appellant No. 1 has filed the present appeal through authorized

representative Shri Pramendra Singh/Appellant No. 2. The Appellant Company

has been carrying on the Real Estate Business since its incorporation. The main

objects in the memorandum of association of the Appellant Company are as

hereunder:-

"1. To construct, execute, carry out, the business of infrastructure

development, equip, maintain, improve, develop civil and

Company Appeal (AT) No. 15 of 2022 3

constructional work relating to real estates, roads, electric power,

heat and light supply work, hotels, building, g0downs, pleasure

grounds, parks, gardens, docks, jitries, embankments, bridges,

wharves, canals, dams, flyover, roads, tunnels, blasting,

transportation, irrigation, reclamations, improvement, sewage,

sanitary telegraphic, telephone works, warehouse, markets, public

buildings and all other such civil and related constructional works

and convenience of public utility.

2. To carry on the business as builders, consultants, civil

engineers, architects, surveyor, designers, town planners,

estimators, valuers, interior and exterior decorators, general and

goven1ment civil contractors of immovable properties, all types of

structural and piling engineering work, interior designing, land

Scaping and graphic.

3. To construct, execute, carry out, equip, maintain, improve,

develop civil and constructional work relating to roads, electric

power, heat and light supply work, hotels, building, godowns,

pleasure grounds, pars, gardens, docks, jitries, embankments,

buds, bridges, wharves, canals, irrigation reclamations,

improvement, sewage, sanitary telegraphic, telephone works,

warehouse, markets, public buildings and all other such civil and

related constructional works and convenience of public utility.

Company Appeal (AT) No. 15 of 2022 4

4. To develop the land for Jann houses by providing roads & other

facilities such as water supply and sale the same and to erect and

construct farm houses buildings or work civil and construction of

every description on any land of the company or upon any other

such lands or immovable property and to pull down, rebuild,

enlarge, alter and improve such lands into roads, highways,

streets, squares, gardens and such other convenience related

thereto and deal with and improve the immovable property of the

company or any other immovable property of all types.

To undertake or direct the design development, construction,

supervision and/ or the management of the property, buildings,

lands and estates (of any tenure or kind of any person and

wherever located whether in India or elsewhere)"

ii) That the authorized, issued, subscribed and paid-up capital of the

Applicant Company as on 31.03.2020 is as hereunder:

Authorized Share Capital Rs.

50,000/- Equity Shares of Rs. 10 each 5,00,000

Issued subscribed and Paid-up-Share 1,00,000

Capital:

10,00,000/- Equity shares of Rs. 10 each

fully paid.

Company Appeal (AT) No. 15 of 2022 5

iii) In terms of Section 252 of the Act, the Respondent No. 1 struck off the

name of the Appellant company from the Register of Companies maintained by

the Respondent No. 1 on 30th June, 2017 without any show cause notice. Due

to various factors, such as the illnesses of its directors, paucity of funds, severe

recession, as well as a general slump in the market, the Company's business

was not very successful after incorporation and thereafter it was unable to file

the necessary statutory documents with the Respondent No. 1 since the

accounting year 2013-14.

iv) The aforementioned inadvertence, the Appellant Company has not had the

opportunity to justifying to the Respondent No. 1 that the name of the Appellant

Company should not be struck-off from the Register of Companies maintained

by them. Further, Section 252 of the Act itself provides ample time to a company

to show reasonable cause that the Company is carrying on business or is in

operation, however, that time has not been made available in the present case

for the aforementioned reasons. The Appellant Company has been carrying on

its operations on a going concern basis since its incorporation and hence for the

sole reason that inadvertently the Appellant Company failed to file the statutory

returns in time, striking off of the name of the Appellant Company from the

register of Respondent would result in bringing the working of a running

company to stand still, thereby adversely affecting not only the Appellant

Company but its shareholders, creditors and other stakeholders. Further, the

Appellant Company has been regular in preparing Annal Accounts and also

Company Appeal (AT) No. 15 of 2022 6

holding its Board meetings, General meetings or the Shareholders as and when

required, maintain proper records, registers.

v) Thereafter, being aggrieved by the notice of the Respondent No. 1 of

"Striking Off", the Appellant Company approached the Tribunal under Section

252 of the Companies Act, 2013 for revival of the Appellant Company and after

hearing both the parties, the Tribunal passed the order impugned which led to

filing of this Appeal.

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

grounds mentioned in the memo of appeal, submitted that the Company was in

operation at time of striking off by the Respondent No. 1 vide order dated

30.06.2017 and thereafter has continued in operation till date. The Appellant

Company has been kept operative and has been following essential corporate

procedures and has been conducting its Annual General Meetings. The landed

property (Inventory) which has market value of approximately Rs. 77,25,400/-.

4. It is further submitted that the principles of natural justice and the

curative nature of Section 252 cast an obligation upon the Tribunal not to reject

an application on technical reason but instead to give opportunity upon

petitioner to provide further documents and/or affidavits as required to

substantiate that the company as in operation at time of striking off.

5. It is further submitted that the Appellant company doing real estate project

and also has firm plans to enhance its business. The assets in the form of real

estate and is undertaking real estate project development. In order to corroborate

the submissions, the Appellants have also filed before the Tribunal copies of

Company Appeal (AT) No. 15 of 2022 7

audited financial statements for the financial years from 2013-14 to 2019-20

and Audited balance sheets for the financial years 2015-16, 2016-17 & 2017-18

as also the Copies of acknowledgment Receipt of Income tax Return for the

Assessment Year 2020 reflecting a business loss and particulars of agricultural

land, which the Appellants intend to buy for the projects being carried out at

Gurgaon, though it has admitted that it has yet to execute conveyance deeds

and sale deeds.

6. It is further submitted that the Appellant company will suffer irreparable

loss, injury, damage and will be greatly prejudiced and the livelihood of all the

Directors, Shareholders, Creditors and the employee of the company would be

at stake in case of non-restoration of the status of the Appellant company.

In view of the above submissions, the impugned order fit to be set aside

and the instant Appeal may be allowed.

7. On the other hand, the Respondent No. 1/Registrar of Companies in his

reply stated that as per available records on MCA 21 portal, the last Directors of

the Appellant company were found namely Pramendra Singh, Raj Chaudhary

and Ajay Singh. The Company was incorporated on 03.05.2011 and the last

Annual Return and Balance Sheet submitted by the company to this Office,

before it was considered to be struck off, pertain to the financial years ended on

31.03.2013. Moreover, no subsequent documents had been filed by the company

with this office to obtain the status of a "Dormant Company" under Section 455

of the Companies Act, 1956. Hence, this office had reasonable cause to believe

that the company was not in operation and therefore, the name of the company

Company Appeal (AT) No. 15 of 2022 8

was considered for striking off from the Register of Companies. Thereafter, the

Registrar of Companies issued the notice in the form of STK-1 in March, 2017

intimating the company and the directors of the company at their registered

office about the aforesaid defaults, providing them a fair opportunity to respond.

Subsequently, this office also issued public notice for the same in the form of

STK-5 in May, 2017. Thereafter, the name of the company was struck off as per

the provisions of section 248(1)(c) of the Companies Act, 2013 read with Rule 9

of the Companies (Removal of Names of Companies from the register of

Companies) Rule, 2016 vide notice in the form of STK-7 dated 07.06.2017.

8. It is further stated that the Appellant Company was not carrying out any

operation for a period of 2 immediately preceding financial years. The Company

was unable to produce before the Tribunal any just and equitable grounds for

restoration, therefore, their petition was dismissed. Since the company was

neither able to prove that it was carrying any business before it was struck off

nor produced any just and equitable grounds for restoration before the Tribunal.

In view of the above, the Appeal may be dismissed.

9. On the other hand, the Respondent No. 2/Income Tax Department in his

reply stated that the Income Tax Department has no objection with regards to

revival of the Company-Taru Projects Pvt. Ltd.

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

the parties and in view of the fact that the Audited Financial Statements for the

Financial Years from 2013-14 to 2019-20 and Audited Balance Sheets for the

Financial Years 2015-16, 2016-17 & 2017-18 shows that the Appellant

Company Appeal (AT) No. 15 of 2022 9

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 (New Delhi Bench, Court-II) as well as Registrar of

Companies, NCT of Delhi & Haryana is not sustainable in law.

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

12.11.2021 passed by the National Company Law Tribunal (New Delhi Bench,

Court-II) in Appeal 78/252(ND)/2021. The name of the Appellant Company be

restored to the Register of Companies subject to the following compliances.

i) Appellant Company shall pay costs of Rs. 1,00,000/- (Rupees

One Lakh) to the Registrar of Companies, NCT of Delhi &

Haryana within eight (8) weeks from the passing of this

Judgment.

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.

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.

Company Appeal (AT) No. 15 of 2022 10

12. 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 (New

Delhi Bench, Court-II), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi 17th February, 2023 R. Nath.

Company Appeal (AT) No. 15 of 2022