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TMI Blog2010 (8) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... n received against the company during the pendency of the present writ petition may pass appropriate orders in accordance with law striking out the name of the first petitioner-company from the register maintained by the second respondent within a period of eight weeks from the date of receipt of a copy of this order. - W.P. NOS. 2964 AND 17120 OF 2003 - - - Dated:- 6-8-2010 - T.S. SIVAGNANAM, J. Aravind P. Datar, K. Ramasamy and Muizz Ali for the Petitioner. Haja Mohideen Gisthi for the Respondent. JUDGMENT 1. Since the issue involved in both these writ petitions are common and both writ petitions have been filed by the same writ petitioners they are taken up together and disposed of by a common order. 2. The prayer in W. P. No. 2464 of 2003 is for issuance of writ of mandamus to direct the second respondent, the Registrar of Companies to strike off the name of the first petitioner-company bearing registration No. 6168 of 1972 from the Register of Companies in terms of section 3(5) of the Companies Act, 1956 (hereinafter referred to as the "Act"). 3. The prayer in W. P. No. 17120 of 2003 is for issuance of writ of declaration to declare Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the meaning of section 560 of the Act and its name shall be struck off by the second respondent. The petitioner-company passed a resolution on 3-5-2001 to get their name struck off from the files of the second respondent and an application to the said effect was made to the second respondent on 8-5-2001, the application was not considered and was pending. Subsequently, the petitioner received a notice dated 9-9-2002 from the office of the second respondent stating that the petitioner ought to have held the annual general meeting in respect of the financial year ended 30-6-2000 and 30-6-2001 on or before 1-12-2000 and 31-12-2001, in terms of section 166 read with section 210 of the Companies Act and the directors ought to have laid the balance sheet and profit and loss account for the said financial years in the annual general meeting. Since, the annual returns and balance sheet have not been filed in the office of the second respondent, the petitioner was called upon to show cause why prosecution should not be launched against them. The petitioner submitted their reply dated 26-9-2002, stating that they have already sent a letter on 8-5-2001 requesting to treat the company as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Companies (Amendment) Act, 2000 with effect from 13-12-2000. Clause ( iii ) of section 3(1) was modified to provide that a private company shall have a paid-up capital of Rs. 1,00,000 or such higher share capital as may be prescribed. Sub-sections (3), (4) and (5) to section 3 have been inserted to provide that the existing public and private companies shall increase their paid-up capital up to the required minimum amount prescribed in either clause ( iii ) or clause ( iv ) within a period of two years from the date of commencing of the Amendment Act, 2000. The period of two years came to an end on 12-12-2002 and the Amending Act, further, provided under sub-section (5) of section 3 that if the company fails to effect increase, it shall be deemed to be a defunct company under section 560 and its name shall be struck off from the register maintained by the Registrar of Companies. Thus in terms of the amended provision an existing company having less than the required minimum paid-up capital must increase their paid-up capital at least to the level prescribed i.e., for a private company to Rs. 1,00,000 and the period was stipulated as two years. If the private company fails ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1996 SC 1963). In an oft-quoted passage, Lord Asquith stated (All ER p. 599 B-D) : If you are bidden to treat an imaginary state of affairs as real: you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had, in fact, existed must inevitably have flowed from or accompanied it... The statute states that you must imagine a certain state of affairs ; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs . ( See East End Dwellings Co. Ltd. v. Finsbury Borough Council [1951] 2 All ER 587 (HL) : [1952] AC 109, at AC pages 132 and 133). 10. The word "deemed" is used a great deal in modern legislation. Sometimes it is used to impose for the purposes of a statute an artificial construction of a word or phrase that would not otherwise prevail. Sometimes it is used to put beyond doubt a particular construction that might otherwise be uncertain. Sometimes it is used to give a comprehensive description that includes what is obvious, what is uncertain and what is, in the ordinary sense, impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of which is filed in the typed set of papers, it is seen that the letter was typed on non-judicial stamp paper and it was stated that since 1979, the company has not carried on any business and the promoters of the company do not visualise any possibility to resume any business in future, therefore requested the Registrar to strike out the name of the company. Along with the letter dated 3-5-2001 an affidavit signed by two directors of the company stating that the company has no assets or liabilities on date and the company has not been carrying on any business from 1979 was enclosed. That apart an indemnity bond from the two directors to the effect that the liabilities of the company if any will be met by them, even if the company is struck off from the register was also enclosed. Further, the balance sheet as at 30-4-2001 and the board resolution dated 3-5-2001 were also enclosed. The copy of the affidavit and the indemnity bond and balance sheet have also been filed in the typed set of papers. 15. Thus, it is to be noted that the petitioners-company has placed all the materials before the second respondent and also executed an indemnity bond against any future claims a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and notarised, the indemnity bond executed by two of its directors in favour of the second respondent as well as the balance sheet as on 30-4-2001 would all cumulatively, satisfy the requirements to safeguard the interest of the Department from any claims against the company in future. As already pointed out even during the pendency of the writ petition no claims have been received and there is no other issue pointed out in the recent counter affidavit filed by the second respondent which is dated 23-7-2010. That apart, the company is also stated to have not carried on any business from the year 1979. Thus taking into consideration all these facts and the documents submitted to the second respondent and in view of the fact that the petitioner-company has not increased its paid-up capital to Rs. 1,00,000 before 12-12-2002, the company shall be deemed to be a defunct company within the meaning of section 560 of the Companies Act and its name shall be required to be struck off from the register of the second respondent. 18. In view of the above reasons, the second respondent shall take into consideration, the petitioner s letter dated 3-5-2001 received in the office of the second ..... X X X X Extracts X X X X X X X X Extracts X X X X
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