Registrar of Companies Vs ACDI VOCA Social Development Organisation (NCLT Allahabad)
Summary: The National Company Law Tribunal, Allahabad Bench, Prayagraj, allowed CP No.30/ALD/2023 filed by the Registrar of Companies, Kanpur under the second proviso to Section 252(1) of the Companies Act, 2013, and directed restoration of the name of M/s ACDI VOCA Social Development Organisation in the Register of Companies. The order was pronounced on 16.07.2026. The connected CA No.18/2023 for condonation of delay was also allowed.
The Respondent Company had been incorporated on 28.09.2010 under Section 25 of the Companies Act, 1956, a provision corresponding to Section 8 of the Companies Act, 2013. Its stated objects included promoting broad-based economic growth and development of civil society and working in areas such as enterprise development, community development, agricultural development and food security. The company had an authorised capital of Rs. 10,00,000/-.
The company applied for striking off its name through e-form FTE under the Fast Track Exit mode, filing SRN B76356781 dated 04.06.2013. Its Board had resolved on 10.05.2013 to seek strike-off because the company had remained inoperative from incorporation and did not intend to carry on business. The application was made under Section 560 of the Companies Act, 1956 and the Ministry of Corporate Affairs’ General Circular No. 36/2011 dated 07.06.2011, which prescribed guidelines for striking off defunct companies under the Fast Track Exit mode.
The material defect was that the Circular expressly stated at paragraph 1(e) that the Fast Track Exit mode was not extended to companies incorporated under Section 25 of the Companies Act, 1956. The Respondent Company nevertheless applied under the FTE mode and the ROC proceeded to strike off its name. The ROC later acknowledged that it had inadvertently initiated action under Section 560 and that the notice under Section 560(5), published in the Official Gazette on 25.09.2014, had been wrongly issued because the Respondent Company was a Section 25 company and therefore was outside the permitted FTE route.
The error was subsequently brought to the attention of the Ministry of Corporate Affairs. The Office of the Director General of Corporate Affairs, Ministry of Corporate Affairs, by letter dated 06.05.2022, and the Office of the Regional Director (Northern Region), Ministry of Corporate Affairs, by letter dated 10.05.2022, directed that an application be filed before the Tribunal for restoration of the company.
The restoration application was filed on 09.04.2023, beyond the period referred to in the second proviso to Section 252(1). The ROC therefore filed CA No.18/2023 on 29.04.2023 seeking condonation of delay. The explanation attributed the delay to administrative circumstances following the resignation of the Company Prosecutor on 21.02.2022 and the absence of a timely substitute, with the later officer having a non-legal background and being unable to supervise the filing within time. The Tribunal, applying Section 5 of the Limitation Act, 1963, accepted the explanation and condoned the delay because the filing had been delayed for reasons beyond the control of the Applicant ROC.
The Respondents admitted that they had inadvertently missed paragraph 1(e) of Circular No. 36/2011. They also submitted that the company had remained non-operational since incorporation and that there were no outstanding liabilities or dues payable to creditors or government authorities. They contended that restoration after more than ten years would serve no useful purpose and would cause hardship and prejudice.
The Tribunal rejected that contention. It found that the facts provided by the company had not been correct and had wrongfully resulted in the company being struck off under the Fast Track Exit Scheme, even though a Section 25 company was not eligible to use that mode. The Respondents’ admission that the FTE application had been made without due consideration of paragraph 1(e) did not cure the irregularity. The Tribunal held that the wrongful extension of the Fast Track Exit benefit was in strict violation of the applicable Circular and that the scheme was not applicable to companies incorporated under Section 25 of the Companies Act, 1956.
Consequently, the Tribunal directed the ROC, Uttar Pradesh, Kanpur to restore the name of the Respondent Company to the Register of Companies in the same position as nearly as may be as if its name had not been struck off, change its status from “struck off” to “active”, and take such further action as required under the statutory provisions. The company was directed to file all statutory documents, including Annual Accounts and Annual Returns, with the prescribed fees and additional fees as ordered by the ROC, within 45 days from restoration and to fulfil other relevant statutory compliances.
The Tribunal clarified that the order was confined to the violations which ultimately led to the impugned strike-off and would not prevent the ROC or any other concerned Government Authority from taking appropriate action in accordance with law for any other violations or offences committed by the company before or during the period its name remained struck off. CP No.30/ALD/2023 along with CA No.18/2023 was accordingly allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF NCLT, ALLAHABAD
1. This Application has been filed on 09.04.2023 by the Registrar of Companies, Kanpur (hereinafter referred as “Applicant/ RoC”) under second proviso to Section 252(1) of the Companies Act, 2013 against the Notification/ Order issued by the Registrar of Company whereby the name of the Company i.e. M/s ACDI VOCA Social Development Organisation (hereinafter referred to as “Respondent No. 1/ Respondent Company”) has been struck off from the Register of Companies maintained by the RoC upon an application made by the Respondent Company under the Fast Track Exit Scheme of 2013.
2. The Respondent Company was incorporated on 28.09.2010 under Section 25 of the Companies Act, 1956 (now repealed) which now corresponds to Section 8 of Companies Act, 2013. The Registered office of the Respondent Company is situated at 2/34, Vipul Khand, Gomti Nagar, Lucknow, U.P.- 226010 and therefore the matter will fall within the jurisdiction of this Tribunal. The Respondents No. 2 and 3 are Directors of the Company namely Shri Deo Datt Singh (DIN: 02285246) and Shri Vinay Kumar Tulsi (DIN: 03124940).
3. The Respondent Company was incorporated with the main object of carrying on activities promoting broad based economic growth and development of civil society and to work in areas relating to enterprises development, community development, agricultural development, food security and community development. The Authorized capital of the Respondent Company is Rs. 10,00,000/-.
4. It is stated that the Respondent Company filed an application for striking off the name of the company in e-form FTE vide the SRN- B76356781 dated 04.06.2013 at the MCA-21 Registry. The Respondent Company applied for striking off the name of the company through the filing of e-form under the scheme of Fast Track Exit (FTE) Mode at the MCA-21 Registry. The Board of Directors of the company, in their meeting dated 10.05.2013, requested the RoC to strike off the name of the company under Section 560 of the Companies Act, 1956 (now repealed) under the FTE mode, due to the non-operation of the business of the Company. The reason cited by the Respondent company in the application for striking off was that the company has been inoperative from the date of its incorporation, and the company was not intending to do any business. While the Respondent company itself has applied for striking off the name of the company from the register of companies by filing e-form FTE (Fast Track Exit) under Section 560 of the Companies Act, 1956, in accordance with the Circular No. 36/2011 dated 07.06.2011, the Ministry, vide General Circular No. 36/2011 dated 07.06.2011, issued guidelines for striking off defunct companies under the Fast Track Exit mode u/s 560 of the Companies Act, 1956. The guidelines stated at point No. 1(e) that “The Fast-track exit mode is not being extended to Companies u/s 25 of the Companies Act, 1956”.
5. The ROC subsequently noted that he inadvertently initiated action under Section 560 of the Companies Act, 1956 against the Respondent company, and notice under Section 560(5) of the Companies Act, 1956, was wrongly published in the official gazette dated 25.09.2014 for striking of the name of the Respondent Company. As the Respondent Company has been registered and incorporated under Section 25 of the Companies Act, 1956 (now Section 8 of the Companies Act, 2013), it does not come under the purview of applying for a strikeoff application through e-form FTE. As per the guidelines stated at point no. 1(e) also, the Fast Track exit mode is not extended to Companies u/s 25 of the Companies Act, 1956. Therefore, the respondent company has violated the circular by applying for a strike-off via e-form FTE. Therefore, the Applicant RoC wrongly struck off the name of the Respondent company on account of an application made by the said company under the scheme “Fast Track Exit,” which was launched by the Ministry of Corporate Affairs due to a technical problem.
6. Thereafter, on detection of above error in passing of order by the RoC, the Office of Director General of Corporate Affairs, Ministry of Corporate Affairs vide letter No. F. No. CL-11-03/94/2022-0/0 DGCoA-MCA dated 06.05.2022 and Office of Regional Director (Northern Region), Ministry of Corporate Affairs, New Delhi vide letter No. RDNR/STK-2/2021/1711 dated 10.05.2022, issued direction to file an application before this Tribunal for restoration of the company.
7. In view of the facts and circumstances of the case as explained above, the Applicant RoC has prayed to pass appropriate order to restore the name of the Company in the Register of Companies maintained by the office of the Registrar of Companies.
8. As the present application has been filed after prescribed time limit as provided in second proviso to Section 252(1). The Applicant filed a condonation of delay application on 29.04.2023, bearing CA No. 18/2023, wherein it is submitted that the incumbent officer who was holding the post of Company Prosecutor in the office was responsible for the preparation of cases for prosecution and filing of application under the Companies Act and other related Acts administered by the organization and for ensuring their prosecution as per the decision of the competent authority and the law as per rules and regulations. However, the person working in the post of Company Prosecutor resigned and was relieved w.e.f. 21.02.2022, vide Office Order No PF/254/Estt/3173 dated 21.02.2022. Nevertheless, no substitute was timely made available by the organization for the said post. Later, the official working in the post of Senior Technical Assistant was assigned the post, and due to the said official being from a non-legal background, he could not supervise the filing within time, which led to the inadvertent delay in filing of this application.
9. After considering the above application, notices were issued to the Respondent Company and the Respondents No. 2 and 3.
REPLY FILED ON BEHALF OF RESPONDENT NO. 2 and 3
10. Pursuant to the notices, the Respondents No. 2 and 3 (hereinafter collectively referred as “Respondents”) have filed together a reply affidavit vide diary no 2272 dated 05.11.2024 to submit the following:
a. The Respondents have submitted that the Respondent Company was incorporated on 28.09.2010 and has remained non-operational since its inception.
b. The Respondents admits that they had inadvertently missed Clause 1(e) of the Circular No. 36/2011 dated 07.06.2011 wherein it was mentioned that the Fast Track Exit Mode is not being extended to the company incorporated under Section 25 of the Companies Act, 1956 (now repealed).
c. It is submitted that there are no outstanding liability or dues to creditors, government authorities pending against the Respondent Company and therefore restoring the company after a lapse of over 10 years would serve no purpose other than causing undue hardship and prejudice to the Respondents.
REJOINDER AFFIDAVIT FILED BY THE RoC
11. The RoC has filed a rejoinder affidavit vide diary no 1682 dated 27.08.2024 to submit that the Form FTE filed by the Respondent Company vide SRN B76356781 dated 04.06.2013 is null and void, as it was filed in violations to the guidelines issued by the Ministry.
FINDINGS AND ANALYSIS
12. We have heard the Ld. Counsels representing the parties and perused the materials placed on record.
13. The present application has been filed on 09.04.2023 for restoration of the name of the Respondent company, which was struck off vide order dated 25.09.2014 passed under Section 560 (5) of the Companies Act, 1956 under the Fast Track Exit Scheme. As per the second proviso of Sec 252(1) of the Companies Act, 2013, an application by the RoC may be filed within three years from the date of passing of order striking off the company if he is satisfied the said company was struck off on the basis of incorrect information furnished by the company or its director and thus the present application is not filed within the limitation period. However, considering the submissions made in the CA No. 18/2023 filed for condonation of delay in filing the present application as discussed in para 8 of the present order, we deem it appropriate to allow the condonation of delay under Section 5 of the Limitation Act, 1963 in light of the fact that the filing of this application got delayed because of reasons beyond the control of the Applicant RoC.
14. Therefore, the delay in filing the present application is hereby condoned and the present application is considered on merits.
15. It is evident from the materials placed on record that the facts provided by the company were not correct and therefore, wrongfully resulted in permitting the company to get struck off under Fast Track Exit Scheme, even though the Company, being a Section 25 Company under the Companies Act, 1956, was not permitted to apply for Fast Track Exit as per the Circular of the Ministry of Corporate Affairs. Thus, we find that the said company was struck off in violation of the circular annexed at page no.40 of the appeal.
16. The Respondents, while admitting that application for Fast Track Exit was made without giving due consideration to clause 1(e) of the circular no. 36/2011, have contended that the restoration of the Company would serve no just purpose as the company has remained non-operational since its operation and further has no outstanding liability or dues are pending against the Respondent Company to creditors or government authorities. However, the above facts do not, in any way, cure the irregularity caused due to wrongful extension of benefit of the Fast Track Exit to the company herein, which is in strict violation of the circular annexed at page no.40 of the application and such scheme not being applicable to companies incorporated under section 25 of the Company Act, 1956
17. In light of the findings discussed, we allow the instant application to the extent of directing the ROC, Uttar Pradesh, Kanpur to restore the name of the Respondent Company on the Register of Companies in the same position as nearly as may be as if the name of the company had not been struck off from the Register of Companies, changing the status of the Respondent Company from “struck off” to “active” and take such further action against the Respondent Company in accordance with the statutory provisions.
18. The Company is directed to file all the statutory documents including Annual Accounts and Annual Returns along with the prescribed fees and additional fees as ordered by the ROC, Uttar Pradesh, Kanpur as applicable under the Companies Act, 2013 within 45 days from the date on which its name is restored on the register of companies maintained by the Registrar of Companies, Uttar Pradesh, Kanpur. They shall also fulfill all the other relevant statutory compliances, such as under the Companies Act, 2013 and the Income Tax Act, 2025, etc. This order is confined to the violations, which ultimately led to the impugned action of striking off the name of the Company, and it will not come in the way of the Registrar of the Companies, Uttar Pradesh or any other concerned Government Authority to take appropriate action(s) in accordance with law, for any other violations/offences, if any, committed by the Company prior to or during the period the name of the Company remained struck off.
19. The Registry is directed to send e-mail copies of the order forthwith to all the parties in the matter.
20. Certified copy of the order be issued upon making an application by any concerned party with all requisite formalities.
21. Company Petition No.30/ALD/2023 along with CA No. 18/ 2023 stands allowed accordingly.
