Case Law Details

Case Name : Ms. Rashmi Rajpal v. Klienz Herbal (P.) Ltd. (National Company Law Tribunal, Hyderabad Bench)
Appeal Number : C.A. No.16/252/HDB/2018
Date of Judgement/Order : 20/02/2018
Related Assessment Year :
Courts : NCLT (10)

Ms. Rashmi Rajpal v. Klienz Herbal (P.) Ltd. (National Company Law Tribunal, Hyderabad Bench)

Where name of a company was struck off because of delay in filing statutory returns, reasons of which was explained, and, company had expressed its willingness to file all returns along with payment of prescribed fee to which ROC had no objection, name of company was to be restored.

FACTS

The respondent-company was engaged in the business as manufactures Distributors and dealers in all kinds of herbal products and proprietary products, hair, skin, nail and other beauty preparations, deodorants, aerosol and pump-spray products, baby products, petroleum and minerals oil products, chemicals, acids and alkalis, all kinds of perfumery and other compounds, etc.

The company had not filed its annual returns for the financial years 2011-12 to 2015-16. Hence, the company was served STK-1 notice, under section 248(1), (4) and (5) for non-filing of annual returns.

ROC had struck off the name of the company which had been displayed in the Master data maintained by the Ministry of Corporate Affairs.

Applicant directors of company submitted that due to administrative reasons, the company could not file the impugned returns from Financial Year 2011-12. The Directors of the company consulted the legal experts and on the opinion it was thought that the Annual Returns and Financial Statements for the years 2011-12, to 2015-16 could be filed with the Registrar of Companies with additional fee as contemplated under sections 92 and 137 read with section 403 during the month of September, 2017 prior to conducting the recent Annual General Meeting.

However, while trying to file the said returns directors came to know that ROC had struck off the name of the company, from the Register of Companies. The Master data available in the Portal of MCA displaying that the name of the company is Struck Off from the register from which only the applicants came to know about the said Strike Off.

The applicant submitted that she would be able to complete filing of pending Annual Returns and Financial Statements, when the name was restored and change its status from ‘Strike Off’ to ‘Active’ in the Register of Companies maintained by the ROC it was also submitted that applicant was ready to file pending returns and income tax returns as required under the Act and thus sought direction to change the status of the company to active from strike off.

It was further submitted that none of the creditors/shareholders or any person/persons or any Body Corporate at large would be prejudiced if the name of the company was restored in the Register of Companies maintained by the Registrar of Companies.

IT WAS HELD THAT:

It is noted that before taking final action to strike off of a company under section 248(5), the Registrar of Companies, is under duty to follow provision 6 of section 248, which mandates the Registrar of Companies to satisfy himself that sufficient provisions has been made for realization of all amounts due to the company and for payment or discharge of its liabilities and obligations etc. Therefore, in the interest of company and its employees and public employment, the case has to be considered favourably. The employees are to be paid their wages for the services rendered. And thus, striking off the name of company would also result in serious repercussions like Debit Freeze accounts of the company with its Bankers etc. Therefore, a lenient view is required to be taken by the Tribunal in the interest of justice. [PARA 8]

As per section 252(3), a company, or any member or creditor workman, if they feel aggrieved by striking off its name can approach the Tribunal by way of application, before expiry of 20 years after date of publication. On being filed an application, the Tribunal can order to restore striking off company on its role, if it is satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that name of a company be restored to the Registrar of Companies.

It is not in dispute that application has been filed by properly authorised person on behalf of the company, it is within limitation and it is carrying on business even at the time of impugned action, and it has suitably explained the reasons for not filing required documents with Registrar of Companies, which ultimately led to impugned action. [PARA 9]

The company is in the business of Herbal/Ayurvedic Products at different places etc. and it is running without any interruption. The Employees are suffering a lot by virtue of impugned action. In terms of section 248(6) said consequences are required to be looked into while passing final order under section 248(5). It is no doubt that the company, on its part, is under statutory obligation to comply with all extant provisions Companies Act, 2013. The company has now satisfactorily explained to the Tribunal, the reasons for the delay in filing statutory returns in question and expressed its willingness to file them along with payment of prescribed fee.

The ROC also did not oppose the application but submitted, it can be considered subject to compliance of statutory provisions and undertaking etc. [PARA 12]

It is not in dispute that the impugned action was taken by the ROC strictly in accordance with law. However, in order to case of doing business, it is necessary to facilitate the company to function its normal business activities in accordance with Articles of Memorandum of Association and it is nobody’s case that by restoring the company, it would render any prejudice to any of the parties. [PARA 14]

In the light of aforesaid facts and circumstances of case and the extant of provisions of the 2013 Act, and rules hereunder, since the company has filed the present application within prescribed time under law, and also shown sufficient reasons to order Restoration of its name in the Register of Companies maintained by the Registrar of Companies, the company application deserves to be allowed, however, subject to filing all pending returns, Annual returns, Balance sheets, statements etc., along with prescribed and additional Fee under law. And also subject to giving undertaking that they would not resort to such type of violations in future. [PARA 15]

Download Judgment/Order

Author Bio

More Under Company Law

Posted Under

Category : Company Law (4142)
Type : Judiciary (12659)
Tags : Companies Act (2600) Companies Act 2013 (2371) nclt (109)

One response to “Restore Company name when company expresses its willingness to file ROC returns with late fee: NCLT”

  1. BHASKARAN CHAKRAPANI WARRIER says:

    Read. Thanks.

Leave a Reply

Your email address will not be published. Required fields are marked *

Featured Posts