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Company Law

A person other than member or creditor can also challenge Company Name striking off

Case Law Details

TaxGuru Citation
2017 taxguru.in 167
Case Name
Rishima SA Investments LLC Vs Registrar of Companies, West Bengal & Ors. (Calcutta High Court)
Date of Judgement/Order
Only available for paid members
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The pleadings and the contentions of the rival parties give rise to the following issues:-

1. Is a person, not being a member or a creditor or the company itself, entitled to challenge the striking off of the name of the company under Section 560 of the Companies Act, 1956?

2. Does the petitioner have the locus standi to file and maintain the present writ petition?

The petitioner seeks relief with regard to an action taken by the Registrar of Companies under the provisions of Section 560 of the Companies Act, 1956. The Registrar of Companies by the impugned writing dated September 10, 2015 had issued a notice to the effect that, the name of Rama Inn (International) Private Limited (Company) has been struck off from the Register of Companies and that, such company is dissolved. The Registrar of Companies has exercised powers under Section 560 of the Act of 1956 in doing so.

At the time of filing of the writ petition, the provisions of the Companies Act, 2013 relating to striking off of a company had not been notified. The maintainability of the writ petition has to be considered on the basis of the law prevailing on the date of filing of the writ petition. Moreover, the action of the Registrar of Companies under Section 560 of the Act of 1956 is under challenge in this writ petition.

Existence of statutory alternative remedy is not a complete bar to the maintainability of a writ petition. Notwithstanding the existence of a statutory alternative remedy, a writ petition is held to be maintainable when a fundamental right is violated or where the authority has acted without jurisdiction or the decision complained of is perverse.

In the present case, the issue of maintainability of the writ petition is on the basis that, Section 560(6) of the Act of 1956 recognizes the categories of persons who are entitled to apply thereunder to question a decision of the Registrar of Companies rendered under Section 560 and since the petitioner is not such a recognized person, the petitioner cannot be allowed to maintain a writ petition to assail an order of the Registrar of Companies under Section 560 which cannot do under Section 560(6) of the Act of 1956.

Basanti Cotton Mills (1998) Private Limited (supra) and Meghdoot Services Limited & Anr. (supra) are of the view that, the company directed to be struck off or a member or a creditor of such company, if aggrieved by the striking off of the name of the company can approach the Company Court for redressal. These two authorities were concerned with the right to approach the Company Court under Section 560(6) of the Act of 1956. Considering Section 560(6) of the Act of 1956 which stipulates the categories of persons who are capable of approaching the Company Court for the purpose of redressal of grievances under Section 560 of the Act of 1956, their Lordships have held that, no other person is entitled to approach the Company Court.

Sections 560(5) and 560(6) of the Companies Act, 1956 are as follows:-

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