Case Law Details
Nirendra Nath Kar Vs Gopal Navin Bhai Dave & Ors. (Supreme Court of India)
Conclusion: The Orders of the Registrar of Companies cannot be altered after 16 years of the declaration of the Company as defunct especially when the Complainant has no locus standi as he is neither a Company, nor a member and nor a creditor, hence he cannot be said to be a person aggrieved to question the Order of RoC is striking off the Company’s name under Section 560(5) of the Companies Act, 1956.
Facts: In the present matter, the instant appeal is directed against the judgment and order passed by the Division Bench of the High Court of Calcutta dated 17th October, 2012 while setting aside the finding returned by the learned Single Judge dated 8th August, 2012 in sequel affirmed order of the Registrar of Companies (RoC) striking off the name of the Company from the register of RoC by an Order dated 27th January, 2006 in exercise of power under Section 560(5) of the Companies Act, 1956. In the said case, the initial incorporation of the Company was in the name of Basanti Cotton Mills Private Limited. The name of the Basanti Cotton Mills Private Limited was changed to Basanti Cotton Mills(1998) Private Limited on 3rd March, 2000. The last annual return and audited accounts were filed with the Registrar of Companies for the financial year 2002-2003. The name of the Company in terms of Section 560(5) of the Act, 1956 was struck off by the Registrar of Companies, West Bengal on 27th January, 2006 at the instance of the respondents (Directors of the Company) as the company was not functioning and not carrying out any business and the last annual return was filed of the year 2002-2003.
The dispute arose when Complaint was filed by the appellant claiming to be one of the Directors of the Company in the year 2010 before the High Court under Section 560(6) of the Act 1956. Learned Single Judge allowed the application by judgment and order dated 6th October, 2010 after recording a finding that the procedure as prescribed under Section 560 of the Act, 1956 was not followed before striking off the name of the Company from the register of the RoC. The order of the learned Single Judge was assailed before the Division Bench of the High Court and that came to be set aside by an order dated 22nd March, 2011 and the matter was remitted back to the learned Single Judge to determine the issue afresh in accordance with law. The Company Judge, by judgment and order dated 8th August, 2012, allowed the application and restored the name of the company and that again became the subject matter of challenge in appeal before the High Court which came to be decided by the judgment impugned dated 17th October, 2012 holding that the appellant has no locus standi as he is neither a Company nor a member nor creditor hence he cannot be said to be a person aggrieved to question the order of the Registrar in striking off the name of the Company from the register of RoC as referred to under Section 560(5) of the Act 1956.
The Hon’ble Supreme Court observed that for the year 2002-2003, the paid up share capital of the Company in question was Rs.7,000/ and as per the scheme of Section 3 of the Act 1956, the Company is deemed to be a defunct Company and sixteen years have rolled after the date of striking off the name of the Company in the year 2006, there is hardly any justification to restore the name of the Company at this stage, particularly, when there are no operations of the said Company all throughout. It was also observed that the Division Bench of the High Court under the impugned judgment has proceeded on the basis of the facts referred to in the affidavit in opposition filed by the RoC while recording a finding regarding the locus of the appellant in assailing the order of the Registrar striking of the name of the Company under Section 560(5) of the Act, 2003 and, at this stage, it was held to be difficult to place reliance on the documents placed by the appellant to claim himself to be one of the Directors of the Company.
Please become a Premium member. If you are already a Premium member, login here to access the full content.