REVIVAL – ON THE GROUND OF ASSETS
REVIVAL – ON THE
GROUND OF ASSETS
Short Summary:
In this Flash editorial,
the author begins by referring the provisions of section 252 of Companies Act,
2013 relating to Revival of Companies STRUCK off from the record of the
Registrar.The main thrust of the article, however, is
upon the“Whether NCLT shall allow Revival of
Company in the case struck off Company having assets.”
In this editorial author discuss the decisions of
Hon’ble National Company Law Tribunal (NCLT), New
Delhi Bench in case of International Security Printers Private Limited v/s ROC
Delhi. This article contain the answer of question that is whether a Company
can be revive on the ground that at the time of struck off Company having
assets in its name.
This is article no. 252 of the series of editorials
written by the author on corporate laws {Including Companies Act, 2013, SEBI,
RBI Regulations, IBC, LLP
Act, 2008 etc.}.
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.
Under
Companies Act, 2013 ROC has power to strike off the name of Company on the
below mentioned two grounds:
248. (1) Where the Registrar has
reasonable cause to believe that—
(a) a company has failed to commence
its business within one year of its incorporation; [or]
(b) 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,
2.
Respondent….The
ROC struck off its name from the register on account of default in statutory
compliances vide official Gazette Notification dated 26.06.2007.
3. Petitioner…. There was a
pending case b/w the Company and tenant on the property of the Company.The same
decreed in favour of Company.
4.
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
5.
Petitioner….The
entire record of the Company has been entrusted to their Company Secretary for
filling the required returns with the office of ROC who had let them down.
6.
Respondent…… Proper step has been
taken accordance with the statutory provision before striking off the name of
Company.
· Petitioner
company did not file any financial statement since incorporation which gave
rise to the belief that Company was not in operation
· In
the absence of details of Company Secretary default on the ground of absence of
Company Secretary can not be believed.
Provisions relating Section 252:
Section
252(1):
Statutory
Provisions: Any person aggrieved by an order of the Registrar, notifying a
company as dissolved under section 248, may file an appeal to the Tribunal within a period of three years from the date
of the order of the Registrar and if the Tribunal is of the opinion that the
removal of the name of the company from the register of companies is not
justified in view of the absence of any of the grounds on which the order was
passed by the Registrar, it may order restoration of the name of the company in
the register of companies:
Section
252(3):
A company, or any member or creditor or
workman thereof feels aggrieved by the company having its name struck off from
the register of companies, the Tribunal on an application made by the company, member, creditor or workman before
the expiry of twenty years from the publication in the Official Gazette of the
notice under sub-section (5) of section 248 may, if 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 the name of the company be restored to
the register of companies, order the name of the company to be restored to the
register of companies, and the Tribunal may, by the order, give such other
directions and make such provisions as deemed just for placing the company and
all other persons 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.
Decision of the HON’BLE BENCH:
I.
Hon’ble
NCLT….Purushottamdass and Anr. (BulakidasMohta Co.
P. Ltd.) V. Registrar of Companies, Maharashtra, &Ors., (1986) 60 Comp Cas
154 (Bom), Wherein the Hon’ble Bombay High Court has held inter alia as
hereunder:
“the object of section 560(6) [Corresponding
section under Companies Act, 2013 is Section 252] of the Companies Act, is to
give a chance to the Company, its members and creditors to revive the company
which has been struck off by the Registrar of Companies, within period of 20
years, and give them an opportunity of carrying on the business only after the
company judge is satisfied that such restoration is necessary in the interest
of justice”
II.
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.
III.
Upon considering the facts and
circumstances of the present case and in the light of the settled position of
the law, I am of the view that it would be just and proper to order the
restoration of the petitioner Company in the Register of Companies maintained
by the Respondent.
This
Petition Accepted with costs of Rs. 25,000/- to be paid to the prime minister
relief fund.
Noted:
Liberty
is granted to the ROC to proceed with penal action against the petitioner, if
so advised, on account of the petitioner’s alleged default in compliance with
any other provision of the Companies Act, 2013 and rules.
Conclusion:
In the above case the Hon’ble NCLT has decided that, where an application
for restoration of company was made by petitioners on the ground noncompliance
statutory provision by ROC or Assets in the Company etc. such application can
be accepted and dismissed the petition
As per language of Section 248 “If ROC Strike off
name of any company from its record suo-moto,
it has to comply with the mandatory provision of Section 248 which are pre
requisite for striking off name of Company from the Register. As per Section
248 ROC has to comply with the following provisions u/s 248:
i.
248(1)- it has to 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
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
ii.
Publish the Notice u/s 248(1) in
the Official Gazette for the information of the general public.
iii.
At the expiry of the time
mentioned in the notice, the 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.
Here the Question: Whether ROC can remove the
name of Company from the Register in the case “Company has replied the notice
mentioned the cause to the contrary”
iv.
The Registrar, before passing an
order for strike off, shall satisfy himself that sufficient provision has been
made for the realization 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.
Here the Question:Whether ROC suo-motocan
Struck off the Company, in the situation where Company have Liability?”
v.
The ROC shall published Notice
u/s 248(1) 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
Here the Question: Whether ROC suo-moto can
Struck off the Company, without publishing the Notice u/s 24(1) in English
language in a leading English newspaper?”
Disclaimer:
The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
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THE INFORMATION.
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