Bombay High Court
Excellant Asbestos Jointings Ltd And ... vs Official Liquidator on 6 December, 2021
Author: S.J. Kathawalla
Bench: S.J. Kathawalla, Milind N. Jadhav
SWAROOP Digitally signed
by SWAROOP
SHARAD SHARAD PHADKE
Date: 2021.12.06
Kanchan P Dhuri PHADKE 20:50:23 +0530 1 / 8 APPL-23259-2021.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO. 23259 OF 2021
IN
OFFICIAL LIQUIDATOR'S REPORT NO. 1 OF 2020
Excellant Asbestos Jointings Ltd. and another ... Appellants
Versus
The Official Liquidator, High Court, Bombay ... Respondent
.........
Mr. Anirudh Hariani along with Ms. Bhakti Bhanushali and Ms. Shivani Bhate,
Advocates i/b Sonal Doshi & Co., for the Appellant.
Mr. Shanay Shah, Advocate for the Official Liquidator.
Mr. Mahendhar Aithe, Company Prosecutor, present.
.........
CORAM: S.J. KATHAWALLA AND
MILIND N. JADHAV, JJ.
DATE : 6th DECEMBER, 2021
ORAL JUDGMENT (PER: S.J. KATHAWALLA, J):
1. This Appeal arises from the Order dated 3 rd January 2020 (the "Impugned Order") passed by the Company Court in OLR No. 1 of 2020, which was filed inter alia seeking a direction to the Registrar of Companies (ROC) to mark the companies enclosed at Exhibit I to the OLR as 'Active' and permit the Official Liquidator to Kanchan P Dhuri 2 / 8 APPL-23259-2021.odt remove these companies from the register of the voluntary liquidation companies maintained by the Official Liquidator.
2. The Appellants' grievance stems from the fact that despite the Appellants being diligent in following up with various authorities for the purpose of voluntary winding up, the Official Liquidator filed a report and obtained an ex-parte order against the Appellants.
3. Accordingly, on 15th October 2021, this Court requested Ms. Yogini Chauhan, Deputy ROC, Mumbai, to remain present before this Court in order to address the grievances made by the Appellants, at which time this Court was informed that the Appellant No.1 Company had been struck off from the register of companies vide a notice of striking off and dissolution dated 14 th December 2018 issued by the ROC under Section 248(5) of the Companies Act, 2013 (the "Act"). It is the Appellants' case that they were not aware about the status of the company being changed to 'strike off' by the ROC in 2018.
4. This Court accordingly directed the Appellants to attend the office of the ROC, Mumbai, in order to resolve their grievances and the matter was stood over to 21 st October 2021. On 21st October 2021, Ms. Yogini Chauhan, Deputy ROC, Mumbai, on Kanchan P Dhuri 3 / 8 APPL-23259-2021.odt instructions fairly informed this Court that the Appellant had in fact furnished to the ROC the relevant documents, including Form No. 149 and that the status of the Appellant No.1 Company may have been changed to 'strike off', out of inadvertence.
5. At this stage, we inquired with the Learned Advocate for the Appellants that if the status of the company is changed to 'strike off' by the ROC, can this Court even entertain the present Appeal in view of the provisions of the Act.
6. Mr. Hariani, the Learned Advocate for the Appellants, contended that this Court is empowered to order voluntary winding up of a company which has been struck off from the ROC. He relied upon Section 248(8) of the said Act as well as upon Rule 4 of the Companies (Transfer of Pending Proceedings) Rules, 2016, to contend that this Court had exclusive jurisdiction to deal with pending matters relating to voluntary winding up. He submitted that any other reading of Section 248 of the said Act would result in redundancy. He also relied upon Section 518(1)(a) of the Act to contend that this Court on an application from the Official Liquidator or any contributory or creditor, can determine any question arising in the winding up of a company. He further submitted that if the Appellant No.1 Company has to approach the National Company Law Tribunal (NCLT), the Appellant No.1 Company would be severally prejudiced as substantial time of the Appellants would be taken in litigating Kanchan P Dhuri 4 / 8 APPL-23259-2021.odt the aspect of the status of Appellant No.1 Company.
7. On the other hand, Mr. Shah, Learned Advocate for the Official Liquidator, contended that even though the officer of the ROC has stated that the status may have been changed due to inadvertence, the provisions of the Act oust the jurisdiction of this Court since exclusive jurisdiction to determine any issue arising under the Act lies with the NCLT. He drew our attention to Section 252 of the Act, which provides that any person aggrieved by an order of the Registrar, notifying a company as dissolved under Section 248, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar and if the NCLT is of the opinion that the removal of the name of the company from the ROC is not justified then it may order restoration of the name of the company in the register of companies. He further drew our attention to Section 250 of the Act, which sets out the effect of a company dissolved under Section 248 of the Act. The effect of a company, which is dissolved under Section 248 is as if the certificate of incorporation issued to it was deemed to have been cancelled on and from the date mentioned in the notice issued under Section 248(5) of the Act.
8. Mr. Shah further submitted that the Appellant No.1 Company as on date, by virtue of Section 250 of the Act, has no existence and therefore the appropriate Kanchan P Dhuri 5 / 8 APPL-23259-2021.odt remedy for the Appellants is to approach the NCLT under Section 252 of the Act. He also drew our attention to Section 430 of the Act, which expressly bars the jurisdiction of the Civil Court to entertain any suit or proceedings in respect of any matter which the NCLT is empowered to determine under the Act.
9. After hearing the Learned Advocates for the parties, we do not agree with the submissions made by the Learned Advocate for the Appellants for more than one reason.
10. Admittedly, the publication under Section 248(5) of the Act was made on 14 th December 2018 and by virtue of Section 250 of the Act, the Appellant No.1 Company would cease to exist from such date. The provisions of the Act as pointed out by Mr. Shah, clearly contemplate that the appropriate remedy for the Appellants is to approach the NCLT under Section 252 of the Act. This Court would not have the powers to pass orders under Section 252 of the Act since the exclusive jurisdiction lies with the NCLT. It would be apposite to reproduce Sections 250 and 252 of the Act, which read thus:
"250. Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the Kanchan P Dhuri 6 / 8 APPL-23259-2021.odt company and for the payment or discharge of the liabilities or obligations of the company."
"252. (1) Any person aggrieved by an order of the Registrar , notifying a company as dissolved under section 248, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar and if the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies:
Provided that before passing any order under this section, the Tribunal shall give a reasonable opportunity of making representations and of being heard to the Registrar, the company and all the persons concerned :
Provided further that if the Registrar is satisfied, that the name of the company has been struck off from the register of companies either inadvertently or on the basis of incorrect information furnished by the company or its directors, which requires restoration in the register of companies, he may within a period of three years from the date of passing of the order dissolving the company under section 248, file an application before the Tribunal seeking restoration of name of such company.
(2) A copy of the order passed by the Tribunal shall be filed by the company with the Registrar within thirty days from the date of the order and on receipt of the order, the Registrar shall cause the name of the company to be restored in the register of companies and shall issue a fresh certificate of incorporation.
(3) If 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 Kanchan P Dhuri 7 / 8 APPL-23259-2021.odt 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."
[emphasis supplied]
11. In view of Sections 250 and 252 of the Act, the interpretation of Section 248(8) of the Act canvassed by the Learned Advocate for the Appellants would go contrary to the scheme of the Act, which is impermissible. We are of the view that to read into Section 248(8) of the Act so as to confer jurisdiction on this Court would run contrary to the scheme and spirit of the Act and more importantly for the purpose for which the NCLT was constituted. Accordingly, we are not inclined to accept the submissions made by the Learned Advocate for the Appellants.
12. However, we make it clear that once the Appellants obtain necessary orders from the NCLT for restoring the name of the Appellant No.1 Company in the register of companies, the Appellants are at liberty to approach this Court to agitate their grievances raised in the present Appeal.
13. In view of the issue discussed above, we have not considered the Appeal on its merits and accordingly, the rights and contentions of the Appellants and Kanchan P Dhuri 8 / 8 APPL-23259-2021.odt the Official Liquidator are expressly kept open in that regard.
14. We request the NCLT to take into consideration the statement made by the officer of the ROC before us and as recorded above, in order to expeditiously dispose of the Appeal, if filed by the Appellant under Section 252 of the Act.
15. In the aforestated circumstances, this Appeal is disposed of with no order as to costs.
( MILIND N. JADHAV, J. ) ( S.J. KATHAWALLA, J. )