AI Structured Summary
Not yet generated for this judgment
Judgment
M.M. Kumar, CJ
The instant petition filed under Section 560(6) of the Companies Act, 1956 has been placed before us after its transfer from Hon'ble Delhi High Court. The prayer made by the petitioners namely Mr. Dwight Gary Gibbs @ Devarata Dasa and Mrs. Degesree R. Gibbs @ Guruprasad Devi Dasi, being the first directors, promoters and shareholders of the company, are that appropriate orders be passed for revival/restoration of the name of the Respondent No. 2 Chintamani Fashions & Designs Pvt. Ltd. on the register of the Registrar of Companies and place the company and all other persons in the same position as nearly as possible as if the name of the petitioner company has never been struck off.
Brief facts of the case are that respondent No. 2 company was incorporated on 17.02.1999 under the provisions of the Companies Act, 1956 as a private limited company with the Registrar of Companies- Delhi. The registered office of the Respondent No. 2 company was at E-1, Mercantile Building, 2nd Floor, Connaught Place, Delhi -110001. The petitioner has also referred to the detailed objects of the company by placing on record the Memorandum of Association and Articles of Association (Annexure P2). It is sufficed to observe that company-Respondent No. 2 was engaged in the business of manufacturers, importers, exporters, wholesale & retail dealers in clothing, wearing apparel, hosiery goods & linens carpets of all types.
The authorized capital of the respondent No. 2 company used to be Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10/- each and the paid-up capital was Rs. 1,27,520/-.
It is further submitted that the respondent No. 2 company was set up by Mr. Dwight Garry Gibbs (Devrata Dasa) and his wife Mrs. Degesree R. Gibbs (Guruprasad Devi Dasi), both being the petitioners in the instant petition. Both the petitioners changed their birth name i.e. Dwight Gary Gibbs and Degesree R. Gibbs to their devotional names i.e. Devarata Dasa and Guruprasad Devi Dasa respectively in the year 1977 when both got inclined to serve at ISKCON and became a disciple of A. C. Bhakti Vedanta Swami. The copies of affidavit concerning the change of name are placed on record. The petitioners, both US citizens, came to India in the year 1987 and started leading a spiritual and devoted life at ISKCON Vrindavan. The petitioners also purchased land in Vrindavan for devotional and philanthropist purpose and to serve in Sri Vrindavan Dham in their later years.
With the intention of serving the society they also established respondent No. 2 Company with the aim to provide all types of clothing and apparel. In furtherance of their goals they appointed Mr. C.P. Chugh, a taxation advisor, for assistance in the incorporation of the respondent No. 2 company since both of them were US citizens and were unaware of the procedures involved. It is appropriate to mention that the petitioners were the majority shareholders in the respondent No. 2 company since its incorporation. The petitioners invested funds in the respondent No. 2 company and a bank account of the company was opened with the State Bank of India vide board resolution dated 18.02.1999 [Annexure-P5(colly)]. The petitioners advanced unsecured loans to the respondent No. 2 company and the same is evident from the balance sheets of the company which is attached with the petition [Annexure-P8(colly)]. It is further submitted that the petitioners were appointed as the first directors of the respondent No. 2 company. Form-32 filed with the ROC is placed on record [Annexure-P6 (colly)].
It is asserted that in the year 2002 they had gone back to US for the education and marriage of their daughter and came back to India in the year 2005. The stay of the petitioners was short as their Visa had expired and they had to go back to US only to return in 2014. During the period from 2005 to 2014 they were in constant touch with respondent No. 3 & 4 and were assured that the company was working well. The petitioners had put their full trust and faith in the respondent No. 3 & 4 for the smooth functioning of the company in their absence. The petitioner on their return in the year 2014 were shocked to know that the company they had set up did not exist any more as its name was struck off from the register of companies maintained by the ROC.
The petitioners were aghast and taken aback by the acts of respondent No. 3 & 4. The trust and faith that they had reposed in respondent No. 3 & 4 had been completely betrayed and their hopes were shattered. To add to the woes it was also brought to their notice that illegal alterations had been made in the directorship and shareholding of the respondent No. 2 company in their absence and they were no longer directors of the company. The respondent No. 3 & 4 appointed themselves as the directors of the respondent company. It is submitted by the petitioners that no document showing the change in shareholding had been filed with the ROC. The petitioners also came to know that the statutory compliances in respect of the company had not been carried out.
The name of the company was struck off in the year 2011 under the Fast Track Exit mode. A copy of the e-form FTE along with certain documents filed by Respondent No. 3 & 4 have been placed on record [Annexure- P9(colly)].
Under Section 560(6) a remedy for revival of the company has been provided and on the grounds given therein a company could be revived and its name is restored on the register of the Registrar of Companies. The aforesaid provision reads as under:-
"560. Power of Registrar to strike defunct company off register.-
(1) Where the Registrar has reasonable cause to believe that a company is not carrying on business or in operation, he shall send to the company by post a letter inquiring whether the company is carrying on business or in operation.
(2) If the Registrar does not within one month of sending the letter receive any answer thereto, he shall, within fourteen days after the expiry of the month, send to the company by post a registered letter referring to the first letter, and stating that no answer thereto has been received and that, if an answer is not received to the second letter within one month from the date thereof, a notice will be published in the Official Gazette with a view to striking the name of the company off the register.
(3) If the Registrar either receives an answer from the company to the effect that it is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Official Gazette, and send to the company by registered post, a notice that, at the expiration of three months from the date of that notice, the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved.
(4) If, in any case where a company is being wound up, the Registrar has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company have been completely wound up, and any returns required to be made by the liquidator have not been made for a period of six consecutive months, the Registrar shall publish in the Official Gazette and send to the company or the liquidator, if any, a like notice as is provided in sub-section (3).
(5) At the expiry of the time mentioned in the notice referred to in sub-section (3) or (4), the Registrar may, unless cause to the contrary is previously shown by the company, strike its name off the register, and shall publish notice thereof in the Official Gazette; and on the publication in the Official Gazette of this notice, the company shall stand dissolved: Provided that -
(a) the liability, if any, of every director, manager or other officer who was exercising any power or management, and of every member of the company, shall continue and may be enforced as if the company had not been dissolved; and
(b) nothing in this sub-section shall affect the power of the Court to wind up a company the name of which has been struck off the register.
(6) If a company, or any member or creditor thereof, feels aggrieved by the company having been struck off the register, the [Tribunal], on an application made by the company, member or creditor before the expiry of twenty years from the publication in the Official Gazette of the notice aforesaid, may, if satisfied that the company was, at the time of the striking off, carrying on business or in operation or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register; and the [Tribunal] may, by the order, give such directions and make such provisions as seem 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."
A perusal of the above cited provision would show that a company having been struck off the register could be revived on an application made by it, or its member or creditor before the expiry of twenty years from the date of publication in the official gazette striking off its name from the register of the Registrar of Companies. According to the provision the Tribunal needs to be satisfied that the company at the time of striking off had been carrying on business or was in operation or otherwise it is just that the company be restored to the register of the Registrar of Companies.
We have gone through the petition and also the reply filed by the Respondents' No. 3 & 4. The respondents in the said reply have stated that they have no objection if the prayer sought by the petitioners is granted. However upon restoration of the company the respondent No. 3 & 4 do not want to be its director or play any role in the management/affairs of the company. It is also submitted by the respondents that since the company had no assets or liabilities, they weeded out the records of the respondent No. 2 company in the year 2014.
In respect of Section 560(6) of the Act the petitioner has made an attempt to show that the operations by the company has been carried and copies of the annual returns, statement of account and balance sheet for different financial years have been placed on record. A perusal of the aforesaid documents would show that the company-respondent No. 2 had been filing its annual returns and balance sheet since its incorporation. The last annual returns and balance sheet till the year 2010 have been filed. The accounts which have been attached with the petition also inspire confidence and can be accepted as evidence of facts that the company was carrying on its operation or it has property.
As a sequel to the aforesaid discussion it is seen from the documents available on record that the company was carrying on its business and was operative at the time of its name struck off from the register. Besides it is seen that the appeal has been filed within the stipulated period prescribed under Section 560 of the Act and nobody would be prejudiced by the restoration of the company. On the contrary the restoration is clearly in the interest of the company. Since the company is a running enterprise and the petition has also been filed within the stipulated time, the Tribunal has the power to restore the name of the Company. In this factual background and in the interest of justice the petition filed by the Petitioners deserves to be allowed.
Even otherwise there is overwhelming evidence on record to show that the petitioners being US citizens had incorporated the respondent No. 2 company for a noble cause and they were duped and cheated by their own advisors i.e. respondents No. 3 & 4. The Board Resolution placed on record along with the bank account statements from 19.02.1999 onwards [Annexure-P5(Colly)] show that the bank account of the respondent No. 2 company was opened with the State Bank of Patiala under the signature of petitioners and they had invested all the money for setting up the company along with taking care of all the expenses later on. The petitioners have further strengthened their stand by also attaching a copy of Form-32 that shows them, as Directors of the company since its incorporation. The Balance sheets attached for the years ending 2009 and 2010 records that the petitioners had advanced unsecured loan to the company and the amount still remains in the company [Annexure P8 (Colly)]. Further the petitioner has also placed on record a copy of Form-32 which shows that the petitioners had resigned as directors of the company but there is no Board Resolution to that effect placed on record. It is also submitted by the petitioners that when they had returned back to India and came to know about the acts done by the Respondents No. 3 & 4, they filed a police complaint against them before S.P. Mathura (Annexure P10).
Therefore keeping in view these facts we deem it just to restore the company on the register of companies maintained by ROC.
Accordingly, this appeal is allowed. The notice dated 11.02.2012 published in the official gazette in so far as the name of the Appellant Company having been struck off is hereby declared illegal and set aside. The restoration of the company's name to the Register would however be subject to its filing of all outstanding documents with proper filing fees along with additional fees required by law and completion of all formalities, including payment of any late fee or any other charges which are leviable. The name of the Respondent Company shall then stand restored on the Register of the Registrar of Companies, as if the name of the company had not been ever struck off.
The petition is disposed of accordingly.
Let the copy of the order be served to the parties.