9911796707
TMI Blog2012 (10) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... company had been struck off the register by an order of the Registrar of Companies, West Bengal, on 27th January 2006. The applicant had challenged that decision in 2010. The Central Government filed an affidavit in that application to the effect that the procedure under Section 560 of the Act had not been followed by them. On this admission by them, by an order dated 6th October, 2010 this Court set aside the decision of the Registrar but reserved to him the right to take fresh action in the future in accordance with law. Mr. Gopal Navinhhai Dave, Mr. Nikhil Vasantalal Merchant and Mr. Paresh Vasantalal Merchant made an application for vacation of that order. They claimed themselves to have been the directors, principal shareholders and persons in control of the company before its being declared defunct. It was numbered as C.A. No. 95 of 2011. It came up before me for consideration. On 22nd March, 2011 the application was disposed of. The entire matter was referred to the Registrar for reconsideration. The Company's name would remain to be struck off. But if the Registrar while deciding whether it was doing any business or not found that determination of this question involved su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a public company fails to enhance its paid-up capital in the manner specified in sub-section (3) or subsection (4), meaning of section 560 and its name shall be struck off from the register by the Registrar." The applicants in that affidavit mentioned that the company's paid up capital was Rs. 7,000/-. The Registrar of Companies, West Bengal accepted this assertion and on the basis of these two provisions of the said Act struck off the name of the company. I do not know whether he was made aware of the disputes which have come to surface in this application. Now I will discuss the disputes between the parties. An affidavit was affirmed by Satya Prasanna Sen on 26th August, 2011. There, he describes himself to be the constituted attorney of Mr. Gopal Navin Bhai Dave, Mr. Nikhil Basantalal Merchant and Mr. Paresh Basantalal Merchant. Annexed to this Affidavit-in- Opposition is an annual return of the company filed under Section 159 of the above Act read with its Schedule V Part (II). The annexed return is dated 4th February, 2003. In that document the above three persons were described as the Directors of the company. All of them were said to have been appointed on 12th Augus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18th January, 1982 this Court sanctioned a scheme of amalgamation between Basanti Cotton Mills Ltd. and Swan Mills Ltd. which is a Mumbai company. After amalgamation, Basanti Cotton Mills Ltd. was dissolved. Swan Mills Ltd. is controlled by Mr. Dave, Mr. Nikhil Merchant and Mr. Paresh Merchant. They incorporated Basanti Cotton Mills Pvt. Ltd. (1998) on 12th August, 1998. According to Mr. Narendra Nath Kar the undertaking of Swan Mills Ltd. comprising of Basanti Cotton Mills Ltd. would be transferred to this new company. After transfer of their shares in favour of Nirendra Nath Kar Mr. Dave and the two Merchants cannot seek to be the shareholders or directors of this company according to Mr. Nirendra Nath Kar. As persons in control of Swan mills Ltd., these three persons do not want Basanti Cotton Mills (P) Ltd. to claim the property from Swan. Hence, if this company is struck off the registrar it would be unable to claim the properties from the Swan. Whilst Narendra Nath Kar asserts that he is in control of Basanti Cotton Mills (1998) Pvt. Ltd., Mr. Dave and the two Merchants contend that they were in control when the company was declared defunct. The latter say that the paid up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registrar may, unless cause to the contrary is previously shown by the company, strike its name off the register, and shall publish notice thereof in the Official Gazette; and on the publication in the Official Gazette of this notice, the company shall stand dissolved: Provided that - (a) the liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company, shall continue and may be enforced as if the company had not been dissolved; and (b) nothing in this sub-section shall affect the power of the Court to wind up a company the name of which has been struck off the register. (6) If a company, or any member or creditor thereof, feels aggrieved by the company having been struck off the register, the Tribunal, on an application made by the company, member or creditor before the expiry of twenty years from the publication in the Official Gazette of the notice aforesaid, may, if satisfied that the company was, at the time of the striking off, carrying on business or in operation or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any further act it becomes a defunct company. As a matter of course the Registrar of companies is to strike off its name from the register. This course has been followed by the Registrar by accepting the declaration in the application made before him by way of an affidavit that the paid up share capital of the company was only Rs.7,000/- . In my understanding and interpretation of these two sub-sections the existence of the paid up capital below Rupees one lakh has to be undisputed. It is a question of fact. Therefore, in order to be deemed to be a defunct company the paid up capital must be less that Rs. 1 lakh admittedly or undisputedly. These words have to be read into those sub-sections. Otherwise this section may be misused or work injustice. In this kind of a small company there is often a dispute regarding shareholding, paid up capital, directorship, control of the company and so on. This is not to say that these issues are absent in big companies. Therefore, before striking off the name of a company, in all cases, a proper procedure has to be followed by the Registrar of Companies, by giving notices as contemplated in Section 560 of the Act. Response to the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
