Yoglaxmi Investments And Trading Pvt. ... vs Registrar Of Companies, Mumbai

[Arising out of Order dated 16.07.2018 passed by National Company Law Tribunal, Mumbai Bench, Mumbai in CP No.1148/252/MB/2018]

IN THE MATTER OF: Before NCLT Before NCLAT

Yoglaxmi Investments Original Petitioner Appellant and Trading Pvt. Ltd. 9, Industry House, Plot No.4, Marwah Estate, Off. Saki-Vihar Road, Andheri (East), Mumbai - 400072 Maharashtra

Versus

Registrar of Companies, Original Respondent Respondent Mumbai Everest, 100, Marine Drive, Mumbai - 400002 Maharashtra

For Appellant: Shri Garvesh Kabra and Ms. Maithili Shubhangi Tripathi, Advocates

For Respondent: Shri Anil Yadav, Deputy ROC, Mumbai

JUDGEMENT

(14th February, 2019)

A.I.S. Cheema, J. :

1. This Appeal has been filed by the Appellant Company being

aggrieved by the Impugned Order dated 16.07.2018 passed by the National 2

Company Law Tribunal, Mumbai Bench ('NCLT', in short) in CP

No.1148/252/MB/2018 under Section 252 of the Companies Act, 2013

('Act', in short). The Impugned Order dismissed the Petition filed by the

Appellant for restoration of the name of the Company to the Register of

Companies.

2. Copy of the Petition as was filed in NCLT (on 10.04.2018 - see

Index of the Appeal) claimed that the Company has been struck off vide

STK - 7 dated 18.08.2017. The Petition para - 4(E) stated that the

Company has been "inactively carrying on the business operations since

incorporation". It was stated that due to non-filing of financial statements

and Returns inadvertently for preceding 5 years for periods ending 31st

March, 2013 to 31st March, 2017, the ROC presumed that the Company

had not undertaken any business for the two preceding financial years.

The Petition claimed that audited balance sheets, statement of profits and

loss and schedules for the concerned years were being annexed to show

that the Company was in operation. The Petition stated that because of the

striking off, the Directors had got disqualified under Section 164(2) of the

Act. The Petition claimed that audit reports had been filed with the Income

Tax Department for the years ending 31st March, 2013 to 31st March, 2017

and claimed to have annexed the same as Exhibit 'E'. It claimed that

Income Tax Returns for 2016 - 2017 and 2017 - 2018 were also being filed.

Reliance was placed on Bank Statement also.

Company Appeal (AT) No.336 of 2018 3

3. In the Impugned Order, NCLT found as under:-

"4. On hearing the submissions of the Petitioner and on perusing the Report of the ROC, Mumbai, and upon the documents filed, it is clear that the Company is not carrying on any business or operation as defined u/s 248(1)(c) of the Companies Act, 2013.

5. Upon perusal of the documents, affidavits submitted by the applicant company, it is noted that company had not filed statutory returns with ROC. Further it is also noted that the Fixed assets are Nil, revenue from operations Nil, other income is very very negligible i.e. Rs.378 for Financial Year ending 31.03.2017 and Rs.648 for the Financial Year ending 31.03.2016, employee benefits expenses Nil for the financial years as at 31st March 2012, 2013, 2014, 2015, 2016 & 2017 as per the documents submitted by the petitioner company. Further, as per the Income Tax Returns submitted for the Assessment Years 2016 - 17 and 2017 - 18, the gross total income was shown as Nil.

6. All the above 'Nil' figures and factual details substantiate the criteria that the company is not carrying on any business or operation as defined under section 248 of the Companies Act 2013.

Therefore, the action taken by ROC is justified and the Bench did not find any ground to interfere with action of striking off by ROC. The Bench is also of the considered view that these type of companies only put burden on the system, Government/ROC, by way of record keeping, ensuring compliance by these companies and at times these companies may be used for various purposes other than the purpose/object for which the company was originally incorporated. It also puts burden on the company to comply with various regulatory/statutory compliances.

7. Therefore the petition is dismissed."

Company Appeal (AT) No.336 of 2018 4

We have perused the Appeal and Reply, and heard Counsel for the

Appellant and Deputy ROC for the Respondent. Copy of STK - 7 is at Page

- 196 vide which the Appellant Company was struck off on 18.08.2017.

There were other Companies also whose names were struck off by the same

Order. STK - 7 refers to the issuance of STK - 5 dated 27.06.2017. STK -

5, which is published, naturally gave opportunity to the Appellant to

respond to the proposal to strike off the Company. In fact, at Page - 195 -

Annexure A-9, there is letter from the Appellant Company to the Registrar

of Companies dated 15.04.2017 which was filed with ROC on 24th April,

2017, which shows admission of receipt of Notice - STK -1. The Appellant

admitted that it had received Notice relating to not carrying on business or

operation for two immediately preceding financial years. Appellant claimed

that the Company was operating and was carrying on business and that it

was in the process of annual filings for the years starting 31st March, 2010

to 31st March, 2016 "in due course time". It appears from record that in

spite of such letter being sent by Appellant, no such Returns were filed

with the ROC even till STK - 7 was issued and the Company was struck

off on 18.08.2017. We have seen the Income Tax Returns at Page - 126

and 128 which appear to have been filed subsequent to the striking off, of

the Company showing gross total income as zero and current year loss of

Rs.21,306/- in 2016 - 2017 and Rs.11,622 in 2017 - 2018.

4. Although the Appellant claimed to be investment Company, no

material is pointed out to us other than now prepared Returns. Statements

Company Appeal (AT) No.336 of 2018 5

of accounts from banks are shown, which also have negligible figures. The

learned Deputy ROC rightly submitted that bank statements for the period

when demonetization was in force, have not been filed. When we asked the

learned Counsel for the Appellant to show any document showing actual

business being conducted or Company being in operation, the Counsel

could not show any convincing evidence in that regard.

5. The learned Counsel submitted that the Appellant Company may

be restored so that the Company can apply for voluntary dissolution. The

Appellant in spite of getting STK - 1 Notice, did not respond to ROC and

had not passed any special Resolution as contemplated under Section

248(2) of the Act for getting name of the Company removed. Now after the

ROC has struck off the Company under Section 248(5), such submission

is being made for the first time in Appeal. Looking to the Impugned Order

as reproduced above, we do not think that any such opportunity needs to

be given. The learned Counsel submitted that the Appellant Company be

given benefit of Condonation of Delay Scheme, 2016 (COD Scheme).

Perusal of that Scheme at Annexure - A12 shows that it was for a limited

period and applied to defaulting companies other than companies which

were struck off. Even with or without the Scheme, if NCTL was to be

satisfied reading Section 248 with Section 252 that the name of Company

needs to be restored on the Company showing that at the time when it was

struck off, either it was in business or the Company was in operation or

that there was any other just ground to restore the name of the Company.

Company Appeal (AT) No.336 of 2018 6

No such grounds have been made out or established to the satisfaction of

NCLT nor to us. We do not find any justification for interfering with the

Impugned Order.

The Appeal is dismissed. No Orders as to costs.

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

[Balvinder Singh] Member (Technical) /rs/nn

Company Appeal (AT) No.336 of 2018