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2023 (5) TMI 986 - AT - Companies Law


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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