Gauhati High Court
Felpact Private Limited & Anr vs The Registrar Of Companies on 5 June, 2017
Author: Kalyan Rai Surana
Bench: Kalyan Rai Surana
THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM &
ARUNACHAL PRADESH)
Co. Pet. 24 of 2012
1. FELPACT PRIVATE LIMITED
2. ANANDA CHANDRA SHARMA .....Petitioners
-Versus-
1. THE REGISTRAR OF COMPANIES
2. SHRI BHUPENDRA NATH
3. SMTI. SUCHITRA CHAKRABORTY
4. SMTI. HIRAMOTI DEVI
5. SMTI. SUKRITY BHAGWATI
6. SMTI. PRABHATY SARMA
7. SHRI SATYA NATH SARMA
8. SRI SAMBHU CHARAN BARMAN .....Respondents
BEFORE HON'BLE MR. JUSTICE KALYAN RAI SURANA Advocates for the Petitioners : Mr. R. Dubey, Mr. P.K. Garodia, : Mr. S. Agarwal, Mr. A.B. Kayastha.
Advocates for the Respondents : Mr. M.K. Choudhury, Sr. Adv.
: Mrs. P. Gogoi, Mr. A. Goswami, : Mr. N. Baruah.
Date of hearing : 30.05.2017
Date of judgment and order : 05.06.2017
JUDGMENT AND ORDER (CAV)
Heard Mr. Rakesh Dubey, the learned counsel for the petitioner and Mr. Navneet Baruah, the learned counsel for the respondents No.2 to 8.
Co. Pet. 24/2012 Page 1 of 102) The petitioner No.1 i.e. Felpact Pvt. Ltd. is an erstwhile Company, the name of which was struck-off from the register of the Registrar of Companies, Shillong, by virtue of notification No. AS001952of2007 dated 08.08.2007 issued by the Office of the Registrar of Companies, Shillong, whereby in exercise of powers under sub-section (5) of section 560 of the Companies Act, 1956. The petitioner No.2, namely, Ananda Chandra Sharma has claimed himself to be the Director of the Petitioner No.1 Company. The petitioners have filed this application under section 560 of the Companies Act, praying for a direction upon the respondent to restore the name of the petitioner Company in the register of the Registrar of Companies, Shillong.
3) The case of the petitioners is that the Petitioner No.1 Company was incorporated on 3rd June, 1982 with its registered address at Dhaligaon, Bongaigaon, Assam, and it was issued a Certificate of Registration No. 1952 of 1982-83 dated 18th June, 1982 by the Registrar of Companies, Shillong. It was last having authorized share capital of Rs.10.00 Lakh divided into 1.00 lakh equity shares of Rs.10/- each and the issued, subscribed and paid up share capital was Rs.3,33,500/- divided into 33,500 equity shares of Rs.10/- each. The petitioners had projected that sometime in June, 2009, when the representative of the petitioner No.1 went to the office of the respondent No.1, i.e. Registrar of Companies, Shillong, to submit balance sheet, annual returns, etc., the respondent No.1 did not receive the same on the ground that the name of the petitioner No.1 Company had already been struck-off on 08.08.2007 from its register. The said authority was informed that no notice was received by them. The said position was thereafter confirmed from the web-portal of Ministry of Corporate Affairs ('MCA Portal' for short). The stand of the petitioners is that the petitioner No.1 Company is the owner of a piece and parcel of land ad-measuring 10 Bigha- 4 katha- 19 lechas at Bongaigaon (Assam) and therefore, the Company was not defunct and was carrying on business, but the non-filing of annual returns or other documents before the Registrar of Companies, Shillong was not Co. Pet. 24/2012 Page 2 of 10 intentional and that on restoration of the said Company in back in the register, the petitioners would comply with the requirement of law in this regard.
4) The respondents No.2 to 8 have got themselves impleaded in the present proceeding pursuant to the order dated 26.05.2014 passed in M.C. No. 3293/13. The said respondents had filed their affidavit- in- opposition in the matter. It has been stated therein that the Petitioner No.1 Company was formed by 19 promoters, each investing Rs.15,000/- aggregating a sum of Rs.2,85,000/- and not Rs.3,33,500/- as projected by the petitioners. The petitioner No.1 had only two Directors, one being the respondent No.2 and the other being one D.J. Khound (since expired). The said Company could not operate successfully and it was no longer viable and thus, became defunct and the last valid returns was filed in the year 1989 with no Annual General Meeting or Extra-ordinary General Meeting called thereafter. Hence, no one had any authority to file any returns on behalf of the Petitioner No.1 Company in the year 2009 as claimed. There was no reason for keeping alive a defunct Company, citing technical grounds and the sham enterprise is sought to be kept alive merely to facilitate disposal of its assets and, as such, the corporate veil ought to be lifted to ascertain the motives of the petitioner No.2. The said respondents questioned the oblique motive of the petitioners. It was further stated that in the petition of W.P.(C) No. 5371/11, which was filed on 02.11.2011, the respondent No.2 claimed to be a shareholder and power of attorney holder of the Petitioner No.1 Company, whereas in the affidavit sworn on 11.04.2012, in support of the present application, the petitioner No.2 has claimed to be the Director of petitioner No.1 Company, which could not have been done without holding any Board meeting or Annual General Meeting. It was stated that the respondent No.2 remained a shareholder of the Petitioner No.1 Company. It was also stated that the petitioner No.2 was misusing the provisions of law for personal gain and if the Petitioner Company is revived, none will be prejudiced or benefitted.
Co. Pet. 24/2012 Page 3 of 105) The learned Counsel for the petitioners submit that judicial notice may be taken of the sky-rocketing price of real estate throughout the Country and therefore, if the Petitioner No.1 is allowed to survive, all its shareholders would be benefitted and on the contrary, if the Petitioner No.1 Company is not allowed to remain live, then there would be no real owner of 10 Bigha- 4 katha- 19 lechas of prime and valuable land at Bongaigaon. It is also submitted that irrespective of doubts sought to be created in the motive of the petitioner No.2, he being one of the share-holders, has an independent right to maintain the present application and assuming but not admitting that his intentions are questionable, then also if the owner of the land is the Petitioner No.1, he cannot derive any personal benefit out of the Company's land, as the benefit shall only accrue to the owner and not to any particular share-holder and if any benefit comes to the coffers of the Company, all its share-holders may, if any dividend is issued, will be benefitted. It is submitted by the learned Counsel for the petitioners that the intention of the legislature is to prevent a Company from being struck-off, for which the legislature provided that any person aggrieved by the order of striking out of a Company, he may approach the Court within a period of 20 years as provided in section 560 of the Companies Act, 1956. It is urged that from the perusal of the copy of impugned notification/ order dated 08.08.2007 (Annexure-2), it is apparent that the mailing address given was "FELPACT PVT LTD, ASSAM, Assam, INDIA", which cannot be the correct postal address by any stretch of imagination, but from the Company Master Details (Annexure-3) as downloaded from the web-portal of Ministry of Corporate Affairs, the address of the registered office was shown as "H/O DP KHOUND, PO. DHALIGAON, DHALIGAON, ASSAM, INDIA, which is self explanatory that statutory notices which was required to be given to the Petitioner No.1 Company before striking it off was issued in incorrect address, for which, the impugned notification/ order dated 08.08.2007 was not sustainable. In support of his argument and stand taken in the petition, the learned Counsel for the petitioners has placed reliance on the case of (i) Shitiz Metals Limited V. Registrar of Companies & ors., (2013) 202 DLT 289: (2013) 0 Supreme (Del) 777, and (ii) PPI Co. Pet. 24/2012 Page 4 of 10 Enterprises Private Limited & Ors. V. Registrar of Companies, (2015) 0 Supreme (Del) 3445.
6) Per contra, vehemently opposing the present application, the learned Counsel for the respondent has submitted that there is no proof of the Petitioner No.1 ever filing any statutory returns prior to 08.08.2007, the date when the name of the Petitioner No.1 Company was struck-off. It was urged that the revival of the Petitioner No.1 Company would only create liabilities on all share- holders. It is also strenuously argued that unless the petitioner No.2 establishes his locus as well as his bona fides, he ought not to be allowed to represent the Petitioner No.1 Company and the present application was liable to be dismissed forthwith. It was also urged that in the annual return dated 02.09.2011, one A.K. Pandey had signed as Director and, as such, the petitioners have been constantly changing their stand and, as such, the story portrayed in the present petition was liable to be thrown out straightaway. It is also submitted that once an order is passed to restore the Company in the register of the Registrar of Companies, the direction to comply with the connected official formality would be upon the erstwhile management, which does not exist either in the records of the Company or in the records of the Registrar of Companies. Relying on the averments made in their affidavit-in- opposition, the learned counsel for the respondents No.2 to 8 has prayed for dismissal of the present and he had placed reliance on the case of (i) M/s. Kesinga Paper Mills Private Limited V. Ministry of Corporate Affairs through Registrar of Companies, (Co. Pet. 406/2009 decided by Hon'ble Delhi High Court on 04.06.2010, downloaded from website - http://indiankanoon.org), and (ii) Siddhant Garg & Anr. V. Registrar of Companies & Ors., (Co. Pet. 200/2011 decided by Hon'ble Delhi High Court on 08.02.2012, downloaded from website - http://indiankanoon.org).
7) I have considered the rival arguments advanced by the learned counsel for the parties and have perused the materials on record. Before evaluating the submissions made by the learned counsels, it would be appropriate to first refer Co. Pet. 24/2012 Page 5 of 10 to the provisions of sub-section (6) of section 560 of the Companies Act, which reads as follows:-
"560. Power of Registrar to Strike defunct company off register -
(1) xxxx xxxxxxxxxxxxxxxxxxxxxxxxxx (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."
8) Therefore, on the plain reading of the said provisions it is crystal clear that the Company, or any member, or any creditor can present an application within a period of 20 years from the publication made in the official Gazette of the notice to strike out the name of such Company from the register of the Registrar of Companies and that any of the above referred three category of persons can maintain an application to restore the name of the Company in the register of the Registrar of Companies. The said provisions, amongst others, also permit the restoration of a Company not only if it is shown that the said Company was carrying on business, or was in operation, but also if it was otherwise just that the Company be restored to the register.
9) In the present case in hand, as mentioned hereinbefore, the petitioner No.1 Company is the owner of land ad-measuring 10 bigha- 4 kathas - 19 lechas Co. Pet. 24/2012 Page 6 of 10 at Bongaigaon District. Hence, this appears to be a fit case wherein this Court may take judicial notice of the ever rising market value of land. In this regard, I find support from the case of Rattan Arya V. State of Tamil Nadu, AIR 1986 SC 1444: (1986) 3 SCC 385. The ownership of such a big estate is indicative of the fact that if there is no owner of any land, there is every likelihood of the said land will waste away by encroachment or otherwise or it will become a den for anti-social activities. Fraudulent sale of land in our Country is not uncommon, which would be revealed from the perusal of innumerable case reports where land involved in the suit or proceeding was illegally and fraudulently transferred.
10) In my opinion, no one including the respondents No.2 to 8 would suffer any perceivable loss or damage or prejudice if the Petitioner No.1 Company is restored back, because it would then be open for every shareholder to keep himself abreast with the affairs of the Company under the various provisions of the Companies Act, 2013, now in force.
11) As it appears from documents filed with the present application that in the copy of impugned notification/ order dated 08.08.2007 (Annexure-2), the mailing address is "FELPACT PVT LTD, ASSAM, Assam, INDIA", but as per the Company Master Details (Annexure-3) as downloaded from the web-portal of Ministry of Corporate Affairs, the address of the registered office was shown as "H/O DP KHOUND, PO. DHALIGAON, DHALIGAON, ASSAM, INDIA. The respondent has not brought anything on record that the notice as contemplated in sub-section (1) of section 560 of the Companies Act, 1956 was served on its correct address of registered office of the Petitioner No.1 Company. The respondent No.1 i.e. the Registrar of Companies, who has received notice of this application has also not controverter the said specific stand of the petitioners that notice was not served on the registered address of petitioner No.1 Company. Thus, it is entirely possible that the said statutory notice was sent to the Petitioner No.1 in an incorrect address, as reflected in the said notice (Annexure-2) itself, which is different from the entry of address reflected in the Company Master Details Co. Pet. 24/2012 Page 7 of 10 (Annexure-3) as downloaded from the web-portal of Ministry of Corporate Affairs. Hence, the impugned notification dated 08.08.2007, issued by the Registrar of Companies, Shillong in the incorrect address of the Petitioner No.1 is not sustainable either on facts available on record or in law.
12) Moreover, it has not been brought to the notice of this court that the impugned notification dated 08.08.2007 was published in the Official Gazette, which is the starting point of limitation of 20 years within which one is required to approach this Court for restoration of the name of Company in the register of the jurisdictional Registrar of Companies. Thus, even if it is assumed that the notification was published on 08.08.2007, the present application is found to be presented well within the prescribed period of limitation.
13) As regards the challenge to the locus of the petitioner No.2, I am of the considered opinion that irrespective of the fact whether the petitioner No.2 was competent to represent the petitioner No.1, there cannot be any dispute that sub-section (6) of section 560 of the Companies Act, 1956 does permit any share-holder, irrespective of his share-holding, to file such application and, as such, even without venturing to adjudicate on the competency of the petitioner No.2 to represent the petitioner No.1, I find that in his individual capacity also, the present application is maintainable.
14) In so far as the judgment of Siddhant Garg (supra), cited by the learned Counsel for the respondent is concerned. I'm afraid that paragraph 14, on which reliance was placed does not at all help the respondents. Rather, the reading of paragraph 14 shows that it has been laid down therein that the discretion of the court must be applied in favor of allowing the application under section 560(6) of the Act unless there are special circumstances against restoration. Ultimately, in the said case, restoration of Company in register of the jurisdictional Registrar of Companies was allowed. Similarly, in the case of M/s. Kesinga Paper Mills (supra), the Hon'ble Delhi High Court allowed the name of the petitioner Co. Pet. 24/2012 Page 8 of 10 Company to be restored in the application filed under section 560(6). In this case, it was, inter-alia, held that if there was a pending litigation, it would be proper to restore the name of the Company to the register so as to enable the matter to be carried to its logical conclusion. Viewed from this angle, it has been admitted in the affidavit-in- opposition filed by the respondents that W.P.(C) No. 5371/11 involving the Petitioner No.1 Company is pending before this Court, which was separated from this present case by order dated 30.05.2017 passed in the said writ petition. A pin-pointed reading of only a part of one or two paragraphs of the cited judgment does not display the ratio of the point decided by the Court. I do not find anything contained in the said two cited cases, which helps the respondent. Rather, both of the said judgments itself present the grounds on which an application under section 560(6) of the Companies Act, 1956 deserves to be allowed. Therefore, I do not feel it appropriate to burden this judgment by quoting various paragraphs of both the two decisions cited by the learned counsel for the respondent.
15) For all these reasons, I am of the considered opinion that this application deserves to be allowed and consequently, the name of the Petitioner No.1 Company, i.e. Felpact Private Limited is ordered to be restored to its original status, as if the name of the Company had not been struck off.
16) I direct the Company to file all statutory documents with the Registrar of Companies, Shillong, within a period of 45 (forty five) days from the date on which its name is restored in the register of Companies, by the Registrar of Companies. The Petitioner No.2, who claims to be the Director of the Petitioner No.1 Company is directed to personally ensure compliance of this. If any further statutory formalities are required to be done pursuant to restoration of the name of the Petitioner No.1 Company in the Register of the Registrar of Companies, Shillong, the same shall be done within the aforesaid period of 45 (forty five) days from the date on which the name is restored. This includes the formalities Co. Pet. 24/2012 Page 9 of 10 under the Companies Act, 1956 (since repealed) and Companies Act, 2013 and the applicable Rules.
17) The restoration of the Company's name to the Register maintained by the Registrar of Companies, Shillong will be subject to payment of cost of Rs.25,000/- to be paid to the common pool fund of the Official Liquidator, and the completion of all formalities, including the payment of any applicable late fee or other charges or penalty, which are livable by the Registrar of Companies, Shillong for late deposit of statutory documents shall be deposited within a period of 8 (eight) weeks. Liberty is granted to the Respondent No.1 to proceed with penal action against the Company, if so advised, on account of the Company's alleged default in compliance with section 162 of the Companies Act, 1956.
18) The petition is allowed in the above terms.
JUDGE
Mkumar.
Co. Pet. 24/2012 Page 10 of 10