Rakesh Kumar Jain Liquidator vs Priyanav Wellness Private Limited

Abni Ranjan Kumar Sinha, Member (Judicial)

 This Appeal has been filed by Mr. Rakesh Kumar Jain invoking the provisions of Section 252 of the Companies Act, 2013 for issuing directions

to respondent no. 2 to restore of the name of the respondent no. 1 Company in the register maintained by the Registrar of Companies, NCT of Delhi

& Haryana in compliance of the order dated 13.01.2021 passed by HonTole National Company law tribunal, New Delhi Bench-II in the case no.

Insolvency Application No. IB 997(ND)/2019 titled Pradyuman Kumar Agarwal 8s others vs. Orchid Saloon Services Private Limited.

 Brief facts of the case are as follows:

i.  That the National Company Law Tribunal, New Delhi Bench â€" II vide Order dated 12.07.2019 admit the Company Petition No. (IB)-

997(ND)/2019 titled as Pradyuman Kumar Agarwal & Others Versus Orchid Saloon Services Private Limited filed under Section 9 of the Insolvency

and Bankruptcy Code, and Mr. Lalit Gandhi having Registration No. IBBI/IPA-001/IP- P01670/2019-20/12642 was appointed as an Interim

Resolution Professional and later confirmed as Resolution Professional. In the third CoC meeting, Resolution for change of Resolution Professional

was passed by the CoC in its meeting and Mr. Mukul Kumar having Registration No. IBBI/IPA-001/IP- P01670/2019-2020/12642 was proposed to

act as Resolution Professional.

ii. Â That vide its Order dated 10.01.2020, the Order for initiation of liquidation of the Corporate Debtor was passed and Mr. Rakesh Kumar Jain, the

Appellant as an Insolvency Professional having Registration No. IBBIMA-002/1P-N00053/2017-18/10105 was appointed as the Liquidator of the

Corporate Debtor.

iii. Â The Respondent No.l, Priyanav Wellness Private Limited is a Private Limited Company (CIN - U74140DL2015PTC283265) promoted by Mr.

Naviin Guptaa (DIN - 03472104) Suspended Director of the Corporate Debtor Orchid Salon Service Private Limited & Priyanka Aggarwal (DIN -

07214948). Later on, Mr. Ajay Aggarwal (DIN - 08112861), the husband of Ms. Priyanka Aggarwal also joined the Company as Director. The

Registrar of Companies, Delhi & Haryana, New Delhi, Respondent No.2 has struck off the name of the Respondent No.l Company i.e. Priyanav

Wellness Private Limited from the register of Companies maintained by them on 09.08.2019 vide Public Notice No. ROC-DEL/248(l)/STK-

5/2019/3789 dated 09.08.2019.

iv. That on 02.02.2016, the Corporate Debtor i.e. Orchid Saloon Services Private Limited had entered into a sub - lease Agreement with Respondent

No. 1 i.e. Priyanav Wellness Private Limited with respect to the property situated at M-32, 1st Floor, Greater Kailash -1, New Delhi -110048

admeasuring 1950 Sq. Feet for 3 years at the rent of Rs.7 lacs per month.

v. That the Corporate Debtor Orchid Salon Service Private Limited was paying the dues of rent of the Respondent No.l Priyanav Wellness Private

Limited to main lessor, Pradyuman Kumar Agarwal & others. The Corporate Debtor Orchid Salon Service Private Limited is entitled to recover the

amount paid to the main lessors on behalf of Respondent No. 1 Priyanav Wellness Private limited. The full dues of the main lessor could not be paid

and Delhi High Court passed a decree dated 15.01.2019.

vi. The above said dues also relate to rent of premises sub-leased to Respondent No. 1 i.e. Priyanav Wellness Private Limited.

vii. As per the books of accounts of the Corporate Debtor i.e. Orchid Salon Services Private Limited, a sum of Rs. 97,12,249/- is due from the

Respondent No.l, Priyanav Wellness Private Limited.

viii. The Appellant Mr. Rakesh Kumar Jain, sent an email dated 17.05.2020 to the Ex â€" Directors namely Mr. Naviin Guptaa (DIN â€" 03472104),

Ms. Priyanka Aggarwal (DIN â€" 072104948), Mr. Ajay Aggarwal (DIN â€" 08112861) of the Respondent No. 1 i. e. Priyanav Wellness Private

Limited and asked them to pay the dues and rent of the Corporate Debtor i.e. Orchid Saloon Services Private Limited and also provided the Account

details also.

ix. Â The Appellant had received a reply through an email dated 26.05.2020 from Naviin Gupptaa, Ex-Director of the Respondent No. 1 i.e. Priyanav

Wellness Private Limited & of the Corporate Debtor i.e. Orchid Saloon Services Private Limited, in which he stated that that he had resigned from

the Respondent No. 1 Company Priyanav Wellness Private Limited even before the initiation of CIRP of the Corporate Debtor but failed to send any

document on behalf of the same. He made allegation against other Directors namely Mrs. Priyanka Aggarwal & her husband Mr. Ajay Aggarwal as

the sole reason of Liquidation of the Corporate Debtor Orchid Salon Services Private Limited. According to him, the dues of rent of Respondent No. 1

Company Priyanav Wellness Private Limited should have been paid by them which the Corporate Debtor Orchid Salon Services Private Limited had

to pay as per directions of Hon’ble High Court. The property in GK1 towards which the rent was due from Respondent No. 1 Company Priyanav

Wellness Private Limited was in illegal possession of Mr. Ajay Aggarwal and Mrs. Priyanka Aggarwal for over a year which the Hon'ble Delhi High

Court has asked the Corporate Debtor Orchid Salon Services Private Limited to pay.

x. Â That the Liquidator has verified from the records of Registrar of Companies on MCA Portal and came to the conclusion that no form DIR-12

has been filed in respect of acceptance of resignation of Mr. Naviin Guptaa. The Company continued to carry on the business without complying the

provisions of the Companies Act, 2013 even after submission of DIR-11 by him.

xi. Ms. Priyanka Aggarwal, Ex-Director in her email dated 21.05.2020 Â mentioned that she is under hospitalization and will revert in 25 days but

failed to produce any medical proof. However, she never replied to the Appellant. The Appellant and Liquidator Mr. Rakesh Kumar Jain has sent

reminders to her on 22.05.2020 Â & 22.06.2020. She also did not reply to the several phone calls of the Appellant and Liquidator Mr. Rakesh Kumar

Jain. It appears that she does not have any justification of her misdeeds.

xii. Mr. Ajay Aggarwal, Ex-Director of the Respondent No. I Company, Priyanav Wellness Private Limited, also did not respond to the email dated

17.05.2020 and the phone call of the Appellant.

xiii. Â The Appellant, who is the Liquidator of the Corporate Debtor Orchid Salon Services Private Limited is aggrieved from the Notice of Striking

Off the name of the Respondent No. 1 Company, Priyanav Wellness Private Limited from the Register of Companies, vide Public Notice No. â€

ROC/ DELHI/248(5)/STK- 7/3789 dated 09/08/2019 from the Office of Registrar of Companies, NCT of Delhi & Haryana, pursuant to which a

notification Under Section 248(5) of the Companies Act, 2013 in which the Company's name was shown at serial No. 6240.

The respondent no. 2 RoC submits in its reply cum affidavit dated 26.08.2021 that:

i. Â On perusal of the petition and other related information provided by the appellant, it was observed that the appellant is the liquidator of a creditor

(namely M/s ORCHID SALON SERVICES PRIVATE LIMITED) of the Respondent No. 1 company namely M/s PRIYANAV WELLNESS

PRIVATE LIMITED. The Respondent No. 1 Company (M/s PRIYANAV WELLNESS PRIVATE LIMITED) was incorporated on 28.07.2015 and

had not filed its financial statements since incorporation. Moreover, no subsequent documents had been filed by the company with the Respondent no.

2 office to obtain the status of a ""Dormant Company"" under Section 455 of the Companies Act, 2013. Hence, the Respondent no. 2 had reasonable

cause to believe that the company was not in operation, and therefore, the name of the company was considered for striking off from the Register of

Companies.

ii. Â The Respondent no. 2 issued the notice in the form STK-1 on 17.07.2019 under section 248(1) of the Companies Act, 2013 intimating the

company and the directors of the company about the aforesaid defaults. The Notice STK-1 were sent to the Respondent No. 1 company (M/s

PRIYANAV WELLNESS PRIVATE LIMITED) along with its Director namely Priyanka Aggarwal on 01.08.2019 respectively through BNPL

(Book Now Pay later) service of Department of Post vide ED23771564IN and ED2379641221N. Thereafter, the name of the Respondent No. 1

company (M/s PRIYANAV WELLNESS PRIVATE LIMITED) was struck off by complying with all procedural requirement as per Section 248(1)

(c) of the Companies Act, 2013 read with Rule 9 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016

vide Notice in the form of STK-7 dated 29.10.2019.

iii. Â The present application has been filed by Mr. RAKESH KUMAR JAIN, LIQUIDATOR, appointed in the matter of Corporate Insolvency

Resolution Process of M/s ORCHID SALON SERVICES PRIVATE LIMITED (being corporate creditor of Respondent No. 1 company (M/s

PRIYANAV WELLNESS PRIVATE LIMITED)}, and an amount of Rs. 97, 12,249/- was outstanding and overdue for payment from Respondent

No. 1 company (M/s PRIYANAV WELLNESS PRIVATE LIMITED) to M/s ORCHID SALON SERVICES PRIVATE LIMITED on account of

premises sub â€"leased to Respondent No.l by M/s ORCHID SALON SERVICES PRIVATE LIMITED. For the same purpose, the applicant has

prayed before the Hon'ble Tribunal to restore the name of Respondent No. 1 Company (M/s PRIYANAV WELLNESS PRIVATE LIMITED).

iv. The Respondent No. 1 Company during its existence between 28.07.2015 (i.e. Date of Incorporation) to 29.10.2019(i.e. Date of Strike off} didn't

file even a single financial statement or Annual Return which indicate that the company didn't do any business as per its Memorandum of Association.

Also, the struck off Respondent No.l (M/S. PRIYANAV WELLNESS PRIVATE LIMITED) didn't come forward either during or after the action of

strike off seeking restoration of the company which clearly indicate their non-willingness to do any business in the further as well.

v. As the Respondent no. 1 Company (M/s PRIYANAV WELLNESS PRIVATE LIMITED) has never filed any financial statements on MCA-21,

the respondent no. 2 cannot comment on the capacity of Respondent no. 1 Company (M/s PRIYANAV WELLNESS PRIVATE LIMITED) to

satisfy the liability as claimed by the appellants.

vi. Â The liability of the directors & management of a company do not cease to exist merely by the virtue of the fact that the company was s truck-

off, if any liability indeed exist so. The creditors are already empowered under Sec 248(7) and Section 250 as to hold the management accountable for

the financial liabilities owed by the company at the time of strike off.

vii. Â As per the provision of Section 248(7) of the Companies Act, 2013 the Applicant can take legal action against every director, manager, or other

officers of the Company, even if the Company is dissolved.

The respondent no. 4 in its reply dated 26.10.2021 submitted that:

i. The petitioner is not an aggrieved person in terms of Section 252 of the Companies Act, 2013.

ii. Admittedly the Registrar of Companies struck off the name of the Respondent No. 1 in year 2019 vide Public Notice No.

ROC/DELHI/248(5)/STK-7/3789 Dated 09.08.2019 for want of non compliance under the Companies Act, 2013 and Respondent No. 1 was inactive.

iii. The Restoration application is merely filed for the purposes of recoveries of rent paid by the Corporate Debtor, allegedly on behalf of the

Respondent No. 1, to one Mr. Pradyuman Kumar Aggarwal, and there is no other purpose of present restoration application except the recoveries to

be effected against Respondent No. 1 upon restoration.

iv.  The said Mr. Pradyuman Kumar Aggarwal was the decree holder awarded by the Hon’ble High Court of Delhi on 15.01.2019 against the

Corporate Debtor and the Respondent no. 1 hereto [jointly and severally) in the CS (COMM) 29/2018, and who had filed section 9 application under

the Insolvency & Bankruptcy Code, against the Corporate Debtor (being the judgment debtor), which was allowed by the Tribunal leading to the

CIRP of the Corporate Debtor in CP No. IB-997 (ND)/2019.

v. Mr. Pradyman Kumar Aggarwal to whom the rent was paid allegedly by the Corporate Debtor, on behalf of the Respondent No. 1, has not been

made a compulsory party and thus present Petition is also liable to be rejected summarily on this ground only.

vi. The Hon'ble High Court of Delhi while awarding the decree against the corporate debtor 8s the Respondent No. 1 hereto (jointly as well as

severally), on 15.01.2019 had held that sub¬lease dated 02.02.2016 executed between the Corporate Debtor and the Respondent No. 1 was illegal

since sub-lease was not allowed under the lease agreement dated 02.02.2016 executed between the Corporate Debtor.

vii. The Liquidator / Petitioner is misusing the funds collected during the liquidation process of Corporate Debtor M/s. Orchid Salon Pvt. Ltd., fully

knowing that no recoveries could ever be made from an entity / Respondent No. 1, which was struck off from ROC records due to defaults in

meeting even regular annual filing compliances and no assets were held by such entity.

viii. The order of the Hon'ble Tribunal for CIRP of CD was based on the order of the Hon’ble High Court of Delhi in CS (COMM)29/20I8 dated

15.01.2019, where it was distinctly held that alleged claims (attempted to be recovered Petitioner / Liquidator upon restoration from Respondent No.

1), were the liabilities of the Corporate Debtor M/s. Orchid Salon Pvt. Ltd. severally as well as jointly with the Respondent No. I and accordingly, the

CD was adjudged as a Judgement Debtor for the very same dues which are subject matter of present Petition of Liquidator.

ix. The petitioner is acting as Liquidator of the corporate debtor w.e.f. 10.01.2020 and never sought restoration of the respondent no. 1 and the present

petition is an afterthought to delay the process of liquidation.

x. The Petitioner / Liquidator is fully aware of the facts that the Respondent No. 4 stood resigned from directorship of Respondent No. 1 w.e.f.

23/11/2017 i.e. much before the Respondent No. 1 was struck off by the Registrar of Companies in the year 2019. Thus, the present petition does not

lie qua the Respondent No. 4. The Petitioner has unlawfully dragged Respondent No. 4 into unnecessary litigation.

xi. The averments made in the present petition are more of a nature of civil recovery from the entity / Respondent no. 1 already struck off.

xii. The respondent no. 4 also referred to the judgment of Hon’ble Supreme Court in the matter of Mobilox Innovations Pvt. Ltd. vs. Kirusa

Software Pvt. Ltd.

The respondent no. 5 and 6 in its reply dated 25.10.2021 submitted that:

i. There is misjoinder of necessary parties, since the respondent no. 6 was made Director after the dispute arose between the respondent no. 1 & 4.

Therefore, the respondent no. 6 has nothing to do with the disputes / differences which arose before the joining of the respondent no. 6 as a Director

on 15.04.2018, when the operational Debtor (Orchid) filed a written statement and took the wrong stand before the Hon'ble High Court in the suit CS

(Comm) No. 29 of 2018 that he already resigned from the M/s Priyanav Wellness Pvt. Ltd. after that the respondent no. 5 joined the M/s Priyanav

Wellness as a one of the Director.

ii. It is further submitted that the respondent no. 6 joined as Director when the Suit No. CS [Comm] No. 29 / 2018 titled as Pradyuman Kumar

Aggarwal & Ors. V. Orchid Salon Services Pvt. Ltd. was filed by the official creditor namely M/s Pradyuman Kumar Aggarwal & Ors. in which M/s

Orchid Salon Services Pvt. Ltd. took the objection that the liability of the payment of rent is on the Priyanav Wellness Pvt. Ltd (Respondent no. 1) and

Respondent no. 5. In the said suit, the Hon'ble High Court vide Order dated 14.09.2018 directed M/s Orchid Salon Services Pvt. Ltd. (Operational

Debtor) to deposit with the Registrar General of Hon'ble Delhi High Court the arrears of rentals w.e.f. June, 2017 till date within four weeks and also

every month till the possession is handed over to the operational creditor.

iii. Â Further, against the said Order, the operational debtor namely M/s Orchid Salon Services Pvt. Ltd. filed a FAQ (OS) [Comm] No. 238 of 2018

before the Division Bench of the Hon'ble Delhi High Court and the Hon'ble Delhi High Court vide Order dated 16.10.2018 whereby dismissing the

appeal of the operational debtor and again directed the operational debtor [Orchid] to clear the dues as directed by the learned Single Judge vide order

dated 16.10.2018. Thereafter, the said suit was disposed off vide Order dated 15.01.2019 and at the time of passing of the final order, Hon'ble Delhi

High Court passed an order in favour of the operational creditor and made the liability jointly and severally against the operational debtor and

Respondent no. 1, in which the answering respondent is one of the Director.

iv. Â The answering respondent no. 5 and 6 has nothing to do with the liability of M/s Orchid Saloon Services Pvt. Ltd. Infact the respondent no. 5

has been duped and cheated by the respondent no. 4.

v. Â It is further submitted that if at all the corporate creditor has to recover any amount, the same can be recovered from the operational debtor i.e.

M/s Orchid Saloon and not from M/s Priyanav Wellness and/or the answering respondent in any way.

We have heard the Ld. Counsel appearing for the appellant as well as the respondents and perused the averments made in the application and the

reply filed by the respective respondents.

Ld. Counsel for the appellant submitted that the appellant is appointed as a Liquidator of the Corporate Debtor or Orchid Saloon Services Pvt Ltd

who is entitled to get Rs. 97,12,249/- from the respondent No. 1 Company namely Priyanav Wellness Pvt Ltd. He further submitted that the name of

the Company was struck off from the Register of the RoC vide STK-7/3789 dated 09.08.2019. He further contended that the appellant is the creditor

and entitled to recover the amount of Rs. 97,12,249/- from the respondent No. 1 Company. Therefore, he is entitled to file an appeal for restoration of

the name of the Company under Section 252 (3) of the Companies Act 2013.

 On the other hand Ld. Counsel for the respondent No. 2 (RoC) submitted that respondent No. 2 had issued a notice in the Form STK-1 dated

17.07.2019 under Section 248(1) of the Companies Act 2013 intimating the Company and the Directors of the Company about the defaults committed

by the Company, which was duly served upon the Company and their directors and when no reply is received then vide notice in the Form STK-7

dated 29.10.2019, the name of the Company was struck off from the Register of the RoC.

 Ld. Counsel for the respondent Nos. 4, 5 and 6 have opposed the restoration on the ground that the appellant is not an aggrieved person and they

have also raised all the averments made in the reply, therefore, it is needless to repeat the same.

 Before considering the submissions, at this juncture, we would like to refer Section 252(3) and the same is quoted below:-

Section 252(31:-

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.

 A bare perusal of the provisions shows that if a Company or any member or creditor or workman feels aggrieved by the Company having its

name struck off from the Register of Companies then they are entitled to file an application for restoration under Section 252(3) of the Companies

Act, 2013.

 At this juncture, at the cost of repetition, we would like to refer to the contention of the Appellant. Ld. Counsel for the appellant has referred to

the order passed by the Hon’ble Delhi High Court in CS (COMM) 29 of 2018 dated 14.09.2018, FAO (OS) (COMM) 238 of 2018 and CM No.

43512 of 2018 dated 16.10.2018 Â and CS (COMM) 29 of 2018 and IA No. 14032 of 2018 dated 15.01.2019 Â and claim that since the amounts are

due as on 10.01.2020 from Priyanav Wellness Pvt Ltd, therefore, the Liquidator of Orchid Saloon Services Pvt Ltd is a Creditor and entitled to file the

present appeal.

 Considering this submission, we are of the considered view that the appellant is the Creditor and therefore, he is also an aggrieved person under

Section 252 (3) of the Companies Act 2013. Hence, the appeal is maintainable under Section 252(3) of the Companies Act 2013. We further notice

that name of the respondent No. 1 is struck off vide STK-7/3789 dated 09.08.2019. Therefore, it is necessary to restore the name of the Company.

 Accordingly, the Appeal is, hereby, Allowed. The RoC is therefore, directed to restore the name of the Respondent Company in their Register

and also proceed to take such other and further penal action against the respondents in accordance with the statutory provisions.

 We however make it clear that this Bench has only directed restoration of the name of the appellant company in the Register of Companies

maintained by the ROC on the basis of averments made in the appeal and in no way endorse or have adjudicated about their entitlement to recover the

same is subject to the laws of limitation governing such recoveries. Charges involved in seeking restoration of the company's name with the office of

the RoC shall be borne by the applicant.

 Compliance be made with the RoC within 30 days.