Vip Farms Private Limited vs Registrar Of Companies

IN THE MATTER OF: VIP Farms Pvt. Ltd. ...Appellant Versus Registrar of Companies NCT of Delhi and Haryana ...Respondent Present: For Appellant : Mr. Himanshu Harbola, Advocate.

For Respondent :

ORDER

(Hybrid Mode)

19.08.2026: The name of the Appellant Company was struck off from

the Register of Registrar of the Companies, that was maintained in Delhi

and Haryana by the Order that was published in the Official Gazette of India

on 23.06.2007 to 29.06.2007. The striking of the name of the Appellant from

the Register of Registrar of Companies was due to non-filing of the statutory

returns, within the restricted time, which chanced because of lack of

professional assistance. The reason, which was argued by the Appellant was

that, owing to the fact that the Company operated in a remote area, the said

default did happen inadvertently.

2. The case of the Appellant is that after having learnt about the aspect

of striking of the name from the Register of Registrar of the Companies, they

had filed an application invoking Section 252(3) of the Companies Act, 2013

praying for restoration of the name of the Company in the Register, on the

basis of the grievances expressed, consequent to the act of striking of the name from the Register of Companies. Upon filing of such application for

restoration of the Appellant Company, the same has been directed to be

restored in the Register, but however, the learned Tribunal had proceeded to

impose the penalty of ₹7,00,000/-. The relevant observations made in the

Order do not disclose the reason or reflect applicability of mind or as to what

modalities were adopted for determination of the penalties. This is the cause

which is being agitated in this Company Appeal.

3. Being aggrieved against this Order of striking of the name, an Appeal

was preferred by the Appellant under Section 252(3) of the Companies Act,

2013, before the NCLT, Delhi. The learned NCLT, Delhi, by the impugned

Order dated 15.10.2025, while considering the Appeal, though had restored

the Company's name but only subject to the payment of cost determined of

the rate of ₹25,000 for every year of default committed by the Appellant

Company. Because of the fact that the Company was incorporated in the

year 1997, the aggregate default was considered and was computed to the

tune of ₹7,00,000/- which was to be paid to the Registrar of Companies,

NCT of Delhi and Haryana, and it was only upon consequence of the

remittance of the cost, the name of the Appellant was directed to be restored

in the Register of the Registrar of Companies, and a direction was issued

that it will not be treated to have been struck off in accordance with Section

248(1) of the Companies Act, 2013.

4. While questioning this part of the Order, the learned counsel for the

Appellant had made reference to the provisions contained under Section

252(3) of the Companies Act, 2013, which is extracted hereunder: -

2 of 6 "252 .(3) If a company, or any member or creditor or workman thereof feels aggrieved by the company having its name struck off from the register of companies, the Tribunal on an application made by the company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under sub-section (5) of section 248 may, if satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order, give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off from the register of companies."

5. He argues, that the power vested of restoration of the Company in the

Register of the Registrar of Companies, the power has been vested with the

Tribunal, enabling it to issue such directions and make such provisions as

deemed just for placing the Company in the same position, as it stood prior

to Section 248(5) of the Companies Act, 2013. What is being argued by the

learned counsel for the Appellant is that, the power vested for passing

appropriate directions, as per the language used under Section 252 (3) of

the Companies Act, 2013, is discretionary, and whenever an Adjudicatory

body exercises a discretion power other than what is contemplated under

the provisions, the exercise of such discretionary power has had to be

exercised with a logical reasoning to justify the determination imposition of

3 of 6 penalty or a condition of imposition of cost, because the same would be

having a punitive effect and an adverse effect on the Company itself.

6. If we scrutinize the Impugned Order, we find that the learned

Tribunal, recorded the justification to restore the Company into the Register

of Companies, but while determining the modalities for imposition of cost of

₹25,000/-, no rationale has been provided by the learned Tribunal in its

Order, which has been multiplied with the number of years it stood struck

off, while ultimately arriving at a cost assessed to ₹7,00,000/-.

7. The imposition of cost, for the purposes of exercising of the powers

under Section 252(3) of the Companies Act, 2013 are regulated by the

parameters prescribed under Rule 87A of the NCLT (Amendment) Rules,

2017. Rule 87A (4) reads as under, and particularly, we would be concerned

with Sub-Clause (c) of Sub-Rule (4) of Rule 87A: -

"87A. (4) Where the Tribunal makes an order restoring the name of a company in the register of companies, the order shall direct that-

(a) the appellant or applicant shall deliver a certified copy to the Registrar of Companies within thirty days from the date of the order;

(b) on such delivery, the Registrar of Companies do, in his official name and seal, publish the order in the Official Gazette;

(c) the appellant or applicant do pay to the Registrar of Companies his costs of, and occasioned by, the appeal or application, unless the Tribunal directs otherwise; and

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(d) the company shall file pending financial statements and annual returns with the Registrar and comply with the requirements of the Companies Act, 2013 and rules made thereunder within such time as may be directed by the Tribunal."

8. If we look into this provision, it uses the word imposition of cost, and

like provision contained under Section 252(3) of the Companies Act, 2013, it

is the discretionary power that is left open under Sub-Rule 4 of Rule 87A of

the NCLT (Amendment) Rules, 2017, and when it is an aspect of imposition

of cost due to dereliction in performance of the statutory duty, it has had to

be followed with a rational approach after subscribing reasons to it because

law prescribed the actual cost that has 'occasioned'. Since the Impugned

Order, there is no reason assigned with regard to as to how the learned

Tribunal has arrived at the benchmark of ₹25 ,000/- per year as there is no

determination of occasioning of cost, to be taken as the basis for imposition

of cost, we feel that this would be an arbitrary exercise of powers by the

Tribunal allegedly invoked under Sub-Clause (c) of Sub-Rule 4 of Rule 87A

of the NCLT (Amendment) Rules, 2017 to be read with Section 252(3) of the

Companies Act, 2013.

9. In elaboration to it, may be, it is not contextual to the subject

concerned, but under normal civil law under Section 35 of the CPC, it lays

down the norms which are normally required to be followed by the Courts,

having regard to the circumstances as given therein, for imposition of cost.

None of the guiding factors given therein as regards satisfying the aspect of

determination", stands satisfied in the Impugned Order, and hence, we feel

5 of 6 that, looking to the facts and circumstances and the grounds taken by the

Appellant, while affirming the dereliction on part of the Appellant, but yet

the balance has to be maintained with regard to the magnitude of

dereliction, and the extent of cost to be imposed was to be determined first

before its imposition, imposition itself means that qualification of cost has to

be justified by reasons and logic, and there cannot be an arbitrary

imposition of cost contrary to what has been intended by the statute. Hence,

we modify the part of the Order of imposition of cost to be paid to the tune of

₹4,00,000/- as a consolidated amount, as directed by the Impugned Order,

we feel that would justify the penalizing of Appellant for his dereliction by

imposition of cost. Hence, the Impugned Order would stand modified to the

said extent.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) rashmi/rr

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