Shreekrishna Exim Private Limited vs ROC Delhi

This is an appeal which has been preferred u/s 252 (3) of the Companies Act, 2013 by the Appellant Company in relation to an order of striking off the name of the Appellant Company M/s Shreekrishna Exim Private Limited passed by the Respondent number 1 vide notice number ROC-DEL/248/STK-5/2018/2912 dated 18.06.2018 vide entry no. 25129 and ROC/Delhi/248(5)/STK-7/486 dated 08.08.2018 vide entry number 19504 respectively under the provisions of Section 248 of the Companies Act, 2013. Learned counsel for the Appellant represents that the Appellant Company was incorporated under the provisions of Companies Act, 1956 and has its registered office at B-21, Wazirpur, Industrial Area, Delhi-110052.

The Company carrying on business of buyers, sellers, importers, exporters and distributors of cast-iron, casting, ferrous or non-ferrous item and is still of its kind such as stainless steels, steel forging and steel pipe from melting scrap, pig iron and sponge iron or any other such material with the help of furnances of foundry of all kinds or by any such other method and to deal in iron and steel of all kind and to do business of conversion agents, iron masters in all their respective branches.

Learned counsel for the Appellant represents that due to inadvertent circumstances on the part of office staff and the Directors, the Company was unable to file the financial statements and annual returns with the Registrar of Companies NCT of Delhi and Haryana resulted in striking off of the name of the Appellant company from the register of Companies.

Upon notice to the Registrar of Companies ("RoC"), the RoC has filed on 31.10.2019 its reply. The Learned counsel for the RoC appeared and conveyed RoC's no objections to restoration of the Appellant Company subject to terms.

Notice was duly served to the Income Tax Department. Junior Standing Counsel for Income Tax department was present and submitted that they have no objection to proceed with the proposal of the appellants. Vide order dated 01.11.2021 it has been recorded that appellant has filed an undertaking to pay the tax liabilities if any due which arise in due course of time, under the provisions of the Income Tax Act, 1961.

We have considered the plea of the Appellant and the representations of RoC. It is evident from the plea of the Appellant that it admits the default and questions the due process undertaken by the RoC in striking off the name of the Appellant Company as envisaged under Section 248 of the Companies Act, 2013. 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.  True Copy of Audited Balance Sheet of the Petitioner Company as on 31.03.2016 and 31.03.2017 with details of Reserves and Surplus amounting to Rs. 70,212.44 and fixed tangible assets amounting to Rs 3,303,603.00 as on 31.03.2017.

ii.  Copy of rent agreement and copy of letters issued by the Canara Bank.

iii.  , Copies of Pan card of the company issued by Income Tax Department as Annexure- A-5.

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 Financial 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 annual returns 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 annual return as that would be excessive or inappropriate penalty for that oversight.

Accordingly, the appeal is allowed subject to payment of cost of Rs. 20,000/- to the Registrar of Companies. 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 direction for freezing the bank account(s) of the Appellant Company, if given 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 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.