9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (5) TMI 1884 - Tri - Companies LawRestoration of name of the petitioner-company in the register of the Registrar of Companies - HELD THAT - In the present case report of the Registrar of Companies is against the company. In paragraph 8 of the counter affidavit, it is stated that the petitioner company has not filed statutory balance-sheet and annual returns for the last ten years. Further in paragraph 9 of the affidavit, it is stated that the petitioner-company has admitted that they have failed to file statutory balance-sheet and annual return for the last ten years which led to the affirmation that respondent No. 2 had reasonable cause to believe that the petitioner-company was not carrying business operation. From the fact of the case itself, it is obvious that company is not doing any business at the time of striking off its name. In the year 1995 assets of textile undertaking were nationalised by the Textile Undertaking (Nationalization) Act, 1995. The entire textile undertaking was vested with the Government of India. Special Act, 98 Lakshmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976 was passed pursuant to which management of the petitioner-company was taken over by the Government of India in terms of section 3(4) aforesaid Act and thus exclu sive control vested with the Government of India through National Textile Corporation, so the petitioner in the present matter has no control over the company. It appears that the petitioner has filed this petition for restoration of company to pursue its matter in the hon'ble High Court. The grounds available under section 560(6) for restoring a company name is not fulfilled in this matter as company is not carrying on business or in operation. It is not just and proper to restore the company, as petitioner is seeking restoration to protect its interest so that he can pursue the matter before the hon'ble High Court. No interest of member, creditors or public is involved in it.
Issues Involved:
1. Legality of striking off the company's name under Section 560(5) of the Companies Act, 1956. 2. Validity of the company's claim over properties not related to the textile undertaking. 3. Justification for the restoration of the company's name to the register under Section 560(6) of the Companies Act, 1956. Detailed Analysis: 1. Legality of Striking Off the Company's Name: The petitioner challenged the order dated May 11, 2010, which struck off the company's name from the register under Section 560(5) of the Companies Act, 1956. The company was incorporated on October 1, 1934, and was engaged in manufacturing dosuti yarn and canvass. Due to non-filing of statutory returns and balance sheets for ten years, the Registrar of Companies (RoC) initiated the process to strike off the company's name. The RoC complied with the procedural obligations by sending statutory notices to the company and its directors, inquiring whether the company was carrying on business or in operation. Upon receiving no response, the RoC proceeded with the striking off. 2. Validity of the Company's Claim Over Properties Not Related to the Textile Undertaking: The petitioner argued that only the textile undertaking should have vested with the National Textile Corporation (NTC) under the Textile Undertaking (Nationalization) Act, 1995, and other properties should remain with the company. The petitioner cited U.P. State Sugar Corporation v. Burwal Sugar Mills Co. Ltd., where it was held that acquisition is restricted to the assets of the undertaking and not other company assets. However, the Tribunal found that the entire textile undertaking, including all assets, rights, and properties, was vested with the Government of India through NTC, as per the Laxmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976. Therefore, the claim over other properties was not tenable. 3. Justification for the Restoration of the Company's Name: The petitioner sought restoration of the company's name under Section 560(6) of the Companies Act, 1956, which allows for restoration if the company was carrying on business or in operation or if it is just to do so. The Tribunal noted that the company had not been carrying on any business since 1995 when the assets were nationalized. The company admitted to not filing statutory returns for ten years due to internal disputes among shareholders. The Tribunal referred to various precedents, including the Delhi High Court's ruling in ZTE Corporation v. Sidhharth Garg, which emphasized that restoration should be allowed unless there are strong grounds against it. However, in this case, the Tribunal found no just grounds for restoration as the company was not in operation, and the petitioner's primary motive was to pursue a matter in the High Court, which did not involve the interests of members, creditors, or the public. Order: The Tribunal concluded that the grounds for restoring the company's name under Section 560(6) were not fulfilled, as the company was not carrying on business, was not in operation, and it was not just to revive the company. Consequently, the petition was rejected.
|
