PROVISION – STRIKE OFF COMPANY BY ROC
PROVISION – STRIKE OFF COMPANY BY ROC
Short Summary:
In this flash tabloid, the writer
initiates by speak of the provisions of Section 248 & 242 of Companies Act,
2013 pursuant to power of ROC to struck off name of Companies from its records.
The main drive of the broadsheet, on the other hand, is upon the “Grounds available with ROC for such action, Compliance
requirement by ROC etc.”
In this flash tabloid writer deliberate
the verdicts of Hon’ble National Company Law Tribunal (NCLT), in some cares.
This article contains the Grounds, Statutory compliance of strike off of
Company by ROC suo-moto.
This is article no. 257 of the series of editorials written by the author
on corporate laws
{Including Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008
etc.}.
Introduction:
As ROC has struck off the 100,000 (One
Lakh) Companies from its record. List of Companies struck off from record of
ROC available at [below given link[1]].
After such strike off many professionals, Corporates has questioned the
supremacy of ROC pursuant to which, ROC has remove the name of Company from its
records. Several persons have filed the application in NCLT for revival of
Company on the grounds that ROC has not complied with the provisions of the Act
for strike off of Companies. Lots of further questions have risen in relation
to such strike off of Companies. Let’s study the pointes one by one;
A. Grounds
of Removal of Name of Company:
Statutory
Provision
Pursuant to provisions of Section
248(1) of Companies Act, 2013 ROC has power to removal of the name of Company
on the below mentioned two grounds:
Where the Registrar has reasonable
cause to believe that—
I.
a company has failed to commence its
business within one year of its incorporation; [or]
II.
a company is not carrying on any business
or operation for a period of two immediately preceding financial years and has
not made any application within such period for obtaining the status of a
dormant company under section 455,
Crux;
One can opine that ROC can
remove the name of the Company from its record on the above mentioned 2 (two)
ground. Here the Question Arise:
Whether ROC can remove the
name of Company from its record on the ground other then above mentioned two
grounds?
B. statutory
cOMpliance by roc:
Statutory
Provision
Pursuant
to provisions of Section 248 Roc has to comply with the following below
mentioned Statutory Compliances;
I.
ROC shall send a notice to the company and all
the directors of the company, of his intention to remove the name of the
company from the register of companies; and
II.
ROC requesting them to send their
representations along with copies of the relevant documents, if any, within a
period of thirty days from the date of the notice.
III.
ROC shall publish the notice in following
manner:
i.
Placed on the official website of the Ministry
of Corporate Affairs on a separate link established on such website in this
regard;
ii.
published in the Official Gazette;
iii.
published in English language in a leading
English newspaper and at least once in vernacular language in a leading
vernacular language newspaper, both having wide circulation in the State in
which the registered office of the company is situated
After Expiry of above mentioned 30 days:
IV.
Registrar may, unless cause to the contrary is
shown by the company, strike off its name from the register of companies, and
shall publish notice thereof in the Official Gazette.
V.
ROC before passing above order of strike off, shall
satisfy himself that sufficient provision has been made for the realisation of
all amount due to the company and for the payment or discharge of its
liabilities and obligations by the company within a reasonable time
Crux;
One
can opine that, If ROC suo-motto remove name of any Company from its records
then it has to Comply with above mentioned statutory requirements. Here the Question Arise:
If
ROC struck off the name of Company without complying with above mentioned
requirements e.g. “non-publication of notice in news paper” whether Company can
challenge the order of ROC in NCLT?
YES,
the same has been challenged in case of International
Security Printers Private Limited v/s ROC Delhi.
Case Law Detail:
|
Case Name
|
International Security
Printers Private Limited v/s ROC Delhi
|
|
Bench Name
|
The National Company
Law Tribunal (NCLT),
Principal Bench
|
|
Date of Order
|
08th August,
2017
|
|
Section
|
252(3)
|
Factual Background:
1.
Petition filed by the
International Security Printers Pvt. Ltd and challenges the order of ROC for
strike off the name of the Company. ROC exercises his power for strike off of
Companies.
2.
Petitioner….Roc
has struck off 6000 Companies.
·
No notice was issued to them and
neither did the roc adhere to any legal procedure which required a letter to be
sent to the Company.
·
The gazette notification was
required to be published and the copy of the notification was required to be
sent to the registered office of the Company.
·
It is averred that without
adhering to the aforesaid procedure, the impugned action is vitiated and is in
gross violation of the principles of natural justice as no opportunity for
hearing was given before taking the impugned step
Decision
of the HON’BLE BENCH:
Principle of Natural
Justice: ROC however have failed to prove the allegation that no step were
taken in compliance of the mandatory provisions of Section 252 (4),(5),(6)
which are a pre requisite for striking off the name of Company from the
Registrar. In the absence of impugned action of the Respondent would be
arbitrary, illegal and against the principles of natural justice.
This
Petition Accepted with costs of Rs. 25,000/- to be paid to the prime minister Relief
fund.
C. power
to file application with Nclt:
As
per provision Section 252(1) of Companies Act, 2013
(as mentioned above) “Any Person”
can file application for revival of name of Company with in limitation period
of 3 (Three) years, like:
(i) Company (ii) Member (iii)
Creditor
(iv) Employee (v) Workmen (vi)
ROC
(vii) Any other aggrieved Person
As
per Proviso, if the Registrar is satisfied that the name of the company has
been struck off from the register of companies either inadvertently or on the
basis of incorrect information furnished by the company or its directors, he
may within a period of three years from the date of passing of the order
dissolving the company.
As
per provisions of Section 252(3) If a Company is struck off from the record of
the registrar, then company, or any
member or creditor or workman aggrieved by the company having its name
struck off may file application before NCLT for restoration of the Company with
in limitation period of 20 (Twenty) years.
G. ground
on which roc can file application for revival of comapny:
Registrar
of Companies can itself file the application with National Company Law Tribunal
(NCLT) for restoration of name of company with in limitation period of 3
(Three) years in case of company is strike off by the ROC;
·
Pursuant to inadvertent or
·
On the basis of incorrect information.
Noted:
One
can opine that Companies Act, 2013 provides the authority to the Registrar of
Company to apply for the restoration of Name of Company with NCLT. Earlier ROC
doesn’t have the power pursuant to same under Companies Act, 1956.
Power
of ROC in relation to filing of application for revival of Company has been
discussed in:
|
Case Name
|
Registrar of Companies,
Gujarat V/s. Trans Housing Finance Corporation Ltd.
|
|
Bench Name
|
The National Company
Law Tribunal (NCLT),
Ahmedabad Bench
|
|
Date of Order
|
5th June, 2017
|
|
Section
|
Section 252 of Companies Act,
2013
|
|
Appeal No.
|
6/252/NCLT/AHM/2017
|
Conclusion:
Powers are given under the Act to ROC for removal of name of Company if ROC feels that Company is not in operations. However, to use the powers ROC has to comply with the legal provisions mentioned under the Act. If ROC fails to comply with any of the statutory requirement then the Company or stake holders can challenge the decision of ROC before NCLT under Section 252 of the Act.
Comments
Post a Comment