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TMI Blog2018 (5) TMI 1884X X X X Extracts X X X X X X X X Extracts X X X X ..... uring textile item as well as was holding other properties. The textile unit was located at Kalpy Road, and other properties were located at different location. The company was a running company. The attachment order in the year 1968 of the properties was passed by Income-tax authority. 2.3 Special Act, 98-Lakshmi Rattan and Atherton West Cotton Mills (Take Over of Management) Act, 1976 was passed pursuant to which management of the petitioner-company herein was taken over by the Government of India in terms of the section 3(4) aforesaid Act and thus exclusive control vested with the Government of India through National Textile Corporation. 2.4 On account of attachment order, the rent realised from tenants was being deposited with the Income-tax Department. After satisfaction of the liability of the Income-tax Department, the properties were released by the Income-tax authorities in favour of the National Textile Corporation, U. P. 2.5 In the year 1995, a Special Act came in to existence by which assets of textile undertaking were nationalised by the Textile Undertaking (Nationalization) Act, 1995. The entire textile undertaking was vested with the Government of India. 2.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the company and the notification notifying the dis solution of the company an appeal has been filed before the National Company Law Tribunal, Allahabad. Therefore, the said order is not final. In view of the above the matter is adjourned for the six week to enable counsel for the petitioner to get the appeal decided by the National Company Law Tribunal." The order dated July 3, 2006 relevant paragraph of the order is as fol lows : "Considering the submission and looking after the facts in the mean while it was provided that the respondent shall not alienate encumber and change the nature of the properties which has been released in favour of respondents Nos. 2 and 3 until, the further order of this court. It is further provided that respondents Nos. 2 and 3 shall maintain the separate accounts of the income from the properties which has been released in favour of the vide impugned order." The practising company secretary representing the petitioner con tended that the above order protects the claim of the applicant-company in respect of the properties not belonging to the textile undertaking but other properties of the company as mentioned in clarificatory affidavit Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case to justify a refusal on these grounds. For the reasons set out below, I do not think there are such strong grounds here." He relied upon the judgment of the Bombay High Court in Purushottamdass v. Registrar of Companies, Maharashtra [1986] 60 Comp Cas 154 (Bom) on April 6, 1994 paragraph 24 of the said judgment is reproduced hereinbelow (page 162 of 60 Comp Cas) : "The company on restoration would be entitled to contest the case for release of the property from the custody of the official receiver for the functioning of its business, and it is possible only if the company is restored to the register of the companies and given its legal entity." 3.6 The application is not in nature of appeal as contemplated in section 252(2) but the present application is predominating application under section 560(6) of the Companies Act, 1956 which is replica of section 252(3) of the Companies Act, 2013. Here period is 20 years whereas company filed the petition/application within two years and the said section contains a word, "or otherwise it is just." The Income-tax returns filed by the company for various years as follows : Sl. No Year Annexure of re-joinder 1. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness or was in operation at the time of its struck off date, i. e., May 11, 2010. Further they relied upon Company Petition No. 411 of 2014 Rastogi Enter prises P. Ltd. v. Registrar of Companies, New Delhi, Principal Bench decided on August 7, 2017. 5. We have heard learned counsel/practising company secretary for the both parties and have perused the record. Section 560 of the Companies Act, 1956 reads as under : "560. Power of Registrar to strike defunct company off register.- (1) Where the Registrar has reasonable cause to believe that a company is not carrying on business or in operation, he shall send to the company by post a letter inquiring whether the company is carrying on business or in operation. (2) If the Registrar does not within one month of sending the letter receive any answer thereto, he shall, within fourteen days after the expiry of the month, send to the company by post a registered letter referring to the first letter, and stating that no answer thereto has been received and that, if an answer is not received to the second letter within one month from the date thereof a notice will be published in the Official Gazette with a view to striking the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off." Before exercising discretion under this section, the Court must be (i) satisfied that the company was, at the time of striking of the company, carrying on business or was in operation, (ii) it is otherwise just that the com pany be restored. The first preposition can be answered by report of the Registrar of Companies. 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 stri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bombay. 7. Kohinoor Mills (No. 3), Lady Jamshedji Road, Dadar, Bombay. 8. New City of Bom bay Manufacturing Mills, 63, Tukaram B. Kadam Marg, Bombay. 9. Podar Mills, N.M, Joshi Marg, Bombay. 10. Podar Mills (Process House), Ganpat Rao Kadam Marg, Bombay. 11. Shree Madhusudan Mills, Pandurang Budhkar Marg, Bombay. 12. Shree Sitaram Mills, N. M. Joshi Marg, Bombay. 13. Tata Mills, Dr. Ambedkar Road, Dadar, Bombay. 14. Laxmirattan Cotton Mills, Kalpi Road Kanpur. 15. Ather ton West Cotton Mills, Anwar Ganj, Kanpur . . ." XXXXXXXXXXXXXXXX From the conjoint reading of section 2(m) and Schedule first, it is very clear that "Laxmirattan Cotton Mills, Kalpi Road Kanpur," Is coming under the definition of undertaking as defined in the Textile Undertakings (Nationalization) Act, 1995. Section 3 of the Laxmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976 deals with management of undertakings of two companies to vest in the Central Government. Section 3 of the Laxmirattan and Aterton West Cotton Mills (Taking Over of Management) Act, is stated as under : "3. Management of the undertakings of two companies to vest in the Central Government.-(1) On and from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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