2021 (1) TMI 193 - HC - Companies Law

Maintainability of application - availability of alternative remedy - Restoration of the name of the petitioner in the Register of the Companies, West Bengal - section 252(3) of the Companies Act, 2013 - HELD THAT - This Court in exercise of power under Article 227 of the Constitution of India can interfere with an order of a Tribunal or Court if there are violation of principles of natural justice, error of jurisdiction or error on the face of the record or violation of fundamental rights. Just because there may be a mistake in the order impugned or a different view was possible could not be good grounds for interference with under Article 227 of the Constitution of India in the existence of an alternative remedy. In this case, exceptions provided in several judicial decisions with regard to interference under Article 227 of the Constitution of India despite existence of an alternative remedy do not exist. In this case the remedy of the petitioner lies in an appeal. Revision application dismissed.

Summary

Issues:
1. Revisional application under Article 227 of the Constitution of India against the order of the National Company Law Tribunal, Kolkata Bench.
2. Dismissal of appeal for restoration of the name of the petitioner in the Register of Companies under section 252(3) of the Companies Act, 2013.
3. Jurisdictional grounds for invoking Article 227 of the Constitution of India.
4. Error in assuming jurisdiction by the Tribunal.
5. Interpretation of Section 421 of the Companies Act, 2013 for filing appeals.
6. Grounds for interference under Article 227 of the Constitution of India.

Analysis:

1. The petitioner filed a revisional application under Article 227 of the Constitution of India challenging the order of the National Company Law Tribunal, Kolkata Bench, dated October 15, 2019. The Tribunal had dismissed the appeal filed by the petitioner under section 252(3) of the Companies Act, 2013, seeking restoration of their name in the Register of Companies.

2. The Tribunal's decision was based on the finding that the Company had not been carrying on any business operations for the past two years. The Tribunal noted that the Company had defaulted in filing annual financial statements and had not applied for the status of a government company. It concluded that there was a risk of fund siphoning, tax evasion, or engaging in unlawful activities due to the Company's inactivity.

3. The petitioner invoked the jurisdiction of the High Court under Article 227 of the Constitution of India, citing reasons such as non-receipt of the certified copy of the Tribunal's order, failure of the Registrar of Companies to record satisfaction under section 248(6) of the Companies Act, 2013, and the contention that the Company was operational based on its balance sheet.

4. The petitioner argued that the Tribunal had erroneously assumed jurisdiction and dismissed the appeal. However, the Court clarified that interference under Article 227 is warranted only in cases of violation of natural justice, jurisdictional error, error on the face of the record, or fundamental rights infringement. The presence of an alternative remedy, such as an appeal, precludes interference under Article 227 unless exceptional circumstances exist.

5. Section 421 of the Companies Act, 2013 allows either party aggrieved by the Tribunal's order to file an appeal to the appellate Tribunal. The Court emphasized that in this case, the petitioner's remedy lies in filing an appeal, and exceptions permitting interference under Article 227 without exhausting alternative remedies do not apply.

6. Consequently, the Court dismissed the revisional application, granting the petitioner the liberty to obtain a certified copy of the Tribunal's order and to file an appeal before the appropriate Bench of the National Company Law Tribunal to seek redressal in accordance with the provisions of the Companies Act, 2013.