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2023 (5) TMI 986 - AT - Companies LawSeeking restoration of striken off name of company on the Register of Companies - preceding two years on behalf of the company no financial statement and annual returns were filed before the ROC and the company was non-operational - HELD THAT - Once the appellant was taking a stand that the company was doing business, it was mandatorily required to satisfy the NCLT with, cogent evidence that the company was doing some business or company was operational. The plea of learned counsel for the appellant that company was operational or doing business in absence of any cogent material is not sustainable. It is further seen from the stand taken by the ROC before the NCLT in the application filed by the applicant i.e. Appeal No.150/2020 that the company was not operational and doing no business. The ROC in its reply in para 4,5,6 and 7 has clarified the position and also clarified that before striking off the name, the company was given full opportunity to explain. On examination of the table in para No.7 of the reply, it is evident that the Colum No.1 i.e. Revenue from operation and Column No.4, GST Details, have been shown as blank. Meaning thereby that neither any GST was paid nor revenue from operation was collected. These facts are enough to draw an inference that the company was non-operational nor doing any business. Besides this there is admission of the appellant before NCLT that in the management of the company there was deadlock due to litigation and disputes amongst the directors. On examination of the provision of section 250 of Companies Act, it goes without saying that even a company whose name has been struck off, is competent to realise claim/claims and similarly his liability can also be realised by others. It is evident that while considering the case of Indian Explosives Ltd 2010 (4) TMI 1185 - DELHI HIGH COURT in the year 2010 there was no occasion for the Hon ble High Court to examine the Section 250 of the Companies Act, 2013. Moreover, if a specific procedure has been provided under Section 248 of the Act for taking a decision in special exigency for striking off the name of the company taking lenient view in passing restoration of the name of the company may amount to render a statutory provision i.e. Section 248 of the Act redundant without any plausible explanation. In the present case the facts which have emerged are sufficient to persuade us that the Learned NCLT has committed no error in rejecting the appeal filed by the company under Section 252 of the Act for its restoration. There are no error in the impugned order warranting interference - appeal dismissed.
Issues Involved:
1. Validity of the strike-off order by the Registrar of Companies (ROC) under Section 248 of the Companies Act, 2013. 2. Maintainability of the appeal under Section 252 of the Companies Act, 2013. 3. Whether the company was operational and doing business in the preceding two years. 4. Relevance of internal disputes and deadlock in the management of the company. 5. Applicability of precedents cited by the appellant. Summary: Issue 1: Validity of the Strike-off Order by ROC The ROC struck off the name of M/s Millennium Realtech Pvt Ltd (the Company) under Section 248 of the Companies Act, 2013, due to non-filing of financial statements and annual returns for the preceding two years and the company being non-operational. The ROC issued notices in Form STK-1 and STK-5, and finally struck off the name on 29.10.2019, as per Section 248 and Rule 9 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. Issue 2: Maintainability of the Appeal under Section 252 The company filed an appeal under Section 252 of the Companies Act, 2013, for annulling the strike-off order and restoring the company's name. The NCLT dismissed the appeal on 04.03.2022, as the company was non-operational and did not generate any revenue in the preceding two years. The present appeal was filed by one of the directors against this order. Issue 3: Operational Status of the Company The appellant argued that the company was operational despite not filing financial statements or generating revenue. However, the NCLT found no cogent evidence to support this claim. The ROC's reply indicated that the company was not operational, as evidenced by blank columns for revenue from operations and GST details. Issue 4: Internal Disputes and Management Deadlock The appellant admitted to inter-se litigation and deadlock among the directors, preventing board meetings and approval of financial statements since 31.03.2017. This admission led to the inference that the company was unlikely to be operational or doing business. Issue 5: Applicability of Precedents The appellant cited cases like Alliance Commodities Pvt Ltd and Indian Explosives Ltd. However, the NCLT found these cases inapplicable as the facts differed significantly. The NCLT also noted that Section 250 of the Companies Act allows a struck-off company to realize claims and discharge liabilities, which mitigates the appellant's concerns. Conclusion: The NCLT did not err in rejecting the appeal for restoring the company's name, as the company was non-operational, and there was no plausible explanation to counter the ROC's decision. The appeal was dismissed.
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