M/S Red-Brick Impex Private Limited vs Registrar Of Companies

Narender Kumar Bhola , Member (Technical)

This is an appeal filed under section 252(3) of the Companies Act, 2013 by the Appellants against order of striking off the name of the Appellant

No.1 Company passed by the Respondent with effect from 07.06.2017 vide notice no. ROC-Delhi/248(5)/STK-7/2879 under the provisions of Section

248 of the Companies Act, 2013. Learned PCS for the Appellants represent that the Appellant Company was incorporated under the provisions of

Companies Act, 1956 and has its registered office at C-8, East of Kailash Delhi, South Delhi, Delhi-110048.

The Company’s main objects are to carry on the business as buyers, sellers, exports, imports, distributors, processors, agents, stockists,

commission agents, dealers, representative of foreign companies in India or abroad and consultants. Learned counsel for the Appellant represents that

the Appellant Company has been active since incorporation and has also been maintaining all the requisite documentation, as per the provisions of the

Companies Act, 1956/2013, the appellant company has also been continuously filing the income tax return for all the concerned financial/Assessment

year. However, compliance in relation filing of financial statements & Annual Return for the ending 31st March, 2013 to 31st March, 2017 have been

omitted to be made with but the said omission is not mala fide.

Upon notice to the Registrar of Companies (“RoCâ€​), the RoC has filed its affidavit and reply. The Learned Deputy ROC for the RoC appeared

and conveyed that the name of the Appellant Company was struck off as it had not filed its financial statements since financial year ended on

31.03.2013. Hence, prayed that the Appellant Company may be directed to prove that it was carrying on the business or was in operation.

Notice was duly served to the Income Tax Department and learned counsel for the income tax department submitted that there is an amount of Rs.

55,68,790/- outstanding against the appellant company for the Assessment year 2015-16.

We have considered the plea of the Appellant and the representations of RoC and Income Tax Department. It is evident from the plea of the

Appellant that it admits the default. However, the Appellant is seeking restoration of its name in the register as maintained by RoC relying on the

ground that the Appellant as of date is in active business and has been preparing all its financial statements and in the circumstances, it is just that the

name of the Company should be restored on the register of RoC as maintained by the Respondent. In order to sustain the said plea, the Appellant has

placed before us the following documents:

i. Copy of Audited financial Statement since year ending 31st Match, 2014 to 31st March, 2018. Copy of the form 26AS for the Assessment year

2014-15, 2015-16, 2016-17, 2017-18 and 2019-20.

ii. Copy of Bank Statements pertaining to three financial years i.e., financial year ending 31st March, 2016, 31st March, 2017 and 31st March 2018.

iii. The Appellant also filed an affidavit-cum-undertaking and stated that in concern about the demand of Rs. 55,68,790/- by the income tax

department, the Company undertakes to pay and settle all lawful claims, demands as may arise in future for the past acts/deeds of the company by the

statutory authorities like Ministry of Corporate Affairs, Income Tax Department, Municipal Corporation or any other governmental authorities and

statutory body.

A perusal of the documents referred to in the paragraph above, reflects that the appellant has business operations which necessitate restoration of

its name in the Register of Companies. The assumption of RoC that the company was not in operation was merely on grounds of non-filing of the

Statutory Returns by the appellant company. The Act itself provides for redressal of these defaults. A step as stringent as what has been taken at

least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file financial

statements would neither be just nor equitable. As per several decisions of various Courts it should only be in exceptional circumstances that Courts

should refuse restoration where the company has been struck off for its failure to file financial statements as that would be excessive or inappropriate

penalty for that oversight.

Accordingly, the appeal is allowed subject to payment of cost of Rs. 50,000/- to the ROC, with which the appellant is registered for incurring the

expenses for the restoration of the Appellant. The restoration of the Appellant Company’s name in the Register will be subject to their filing all

outstanding documents for the defaulting years as required by law and completion of all formalities, including payment of any late fee or other charges

which are leviable by the Respondent for the late filing of statutory returns. The name of the Appellant Company shall then stand restored in the

Register of the RoC, as if the name of the company had not been struck off. The Income Tax Department is at Liberty to proceed against the

Appellant Company as per the provisions of the law for the time being in force.

The direction for freezing the bank account(s) of the Appellant Company, if on this ground, shall consequently be also set aside immediately to

enable the company to carry out its business operation. Compliance of this order for restoration shall be made by the Respondent 1 with all its

consequential effects within one week of compliance by the Appellant.

The application is disposed of accordingly. Let the copy of the order be served to the parties.