2018 (6) TMI 1263 - AT - Companies Law

Struck off the name of appellant company from the Registrar of Companies - non issue of notice - Held that - Notices were issued to the appellant and two of its directors by speed post and sufficient proof has been submitted. As regards the argument of the appellant that no notice was served on 3rd director who was appointed on 1.3.2017 and duly intimated to ROC on 14.3.2017 is concerned, it is established that the notices has been issued on 17.3.2017 to the appellant company and on 30.3.3017 to two of its directors. The appellant who has appointed third director on 1.3.2017 and intimated ROC on 14.3.2017 that even if the company and its two directors having received the notices did not bother to respond to the notice so as to save the company rather than taking a plea that the third director who has been appointed only on 1.3.2017 and notified on 14.3.2017 had not been given a notice. When company has been served it is Notice to the Directors. Additionally, 2 of the 3 Directors had been served. It is substantial compliance and knowledge can be assumed. A notice on STK-5 under Section 248(1) of Companies Act, 2013 has been issued to 24338 companies including the appellant company intimating them the reasons for striking off/removal of their name from the register of companies and dissolve them unless a cause is shown to the contrary, within thirty days from the date of notice. Appellant company was given thirty days time to file their objection from the date of publication of notice. No objection has been filed by the company. A Public Notice in Form No.STK-5A was published in the English and Telugu newspapers for the information of the general public and concerned companies including the appellant company intimating them the reasons for striking off/removal of their name from the register of companies and dissolve them unless a cause is shown to the contrary, within thirty days from the date of notice. Appellant company was given thirty days time to file their objection from the date of publication of notice. The company having failed to respond to the opportunity which is in the public domain, therefore, the ROC in absence of any explanation received from the company or its directors had no alternative except to take consequent action i.e. to strike off the name of the company from the register of the companies. We find there was substantial and actual Notice. There is no reason to interfere. Appeal dismissed.

Issues Involved:
1. Compliance with Section 248(1) of the Companies Act, 2013 and Rule 3(2) of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
2. Validity of the notice issued and service of notice to all directors.
3. Validity of the striking off the company’s name due to non-filing of statutory returns.
4. Adequacy of the public notice and the company's response to it.
5. Applicability of Section 252(1) vs. Section 252(3) of the Companies Act, 2013.

Issue-Wise Detailed Analysis:

1. Compliance with Section 248(1) and Rule 3(2):
The appellant argued that the Registrar of Companies (ROC) did not follow the procedure laid down in Section 248(1) of the Companies Act, 2013, which mandates sending a notice to the company and all its directors of the intention to remove the company’s name from the register. The appellant also cited Rule 3(2) of the Companies (Removal of Names) Rules, 2016, which requires the notice to be sent in Form STK-1 to all directors by registered post with acknowledgment due or by speed post. The respondent contended that notices were issued to the appellant company and two of its directors by speed post, and sufficient proof of service was submitted.

2. Validity of the Notice Issued and Service to All Directors:
The appellant claimed that no notice was issued to the third director, who was appointed on 1.3.2017 and intimated to the ROC on 14.3.2017. The respondent argued that notices were issued to the appellant company and two directors on 17.3.2017 and 30.3.2017, respectively. The Tribunal held that even if the third director did not receive the notice, the company and its two directors did, which constitutes substantial compliance. The Tribunal noted that when the company is served, it is deemed notice to the directors.

3. Validity of Striking Off Due to Non-Filing of Statutory Returns:
The appellant argued that failure to file statutory returns is not a valid ground under Section 248(1) for striking off the company’s name. The respondent countered that the appellant had not filed statutory returns since incorporation, which is a serious matter as it denies public authorities and stakeholders the right to information. The Tribunal observed that the appellant did not file objections within the stipulated time despite being given opportunities.

4. Adequacy of Public Notice and Company’s Response:
The respondent issued a public notice in Form STK-5A in English and Telugu newspapers, giving the appellant company thirty days to file objections. The Tribunal noted that even if the company or its directors did not receive the individual notices, they failed to respond to the public notice within thirty days. The Tribunal concluded that the ROC had no alternative but to strike off the company’s name due to the absence of any explanation from the company or its directors.

5. Applicability of Section 252(1) vs. Section 252(3):
The appellant argued that the remedies under Section 252(1) and 252(3) of the Companies Act, 2013, are mutually exclusive and that any person, including the company, can approach the Tribunal for restoration of its name. The respondent contended that the appellant should have filed an application under Section 252(3) if it was a working company. The Tribunal held that the appellant’s appeal under Section 252(1) was rightly rejected by the Tribunal and that the appellant should have filed an application under Section 252(3).

Conclusion:
The Tribunal upheld the impugned order dated 19.9.2017 passed by the National Company Law Tribunal, Hyderabad Bench, rejecting the appellant’s application for restoration of its name. The Tribunal found that the ROC had complied with the procedural requirements of issuing notices and publicizing the intended action, and the appellant failed to respond within the stipulated time. The appeal was dismissed with no order as to costs.

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