In The Matter Of M/S Mayor'S ... vs Registrar Of Companies
2015 Latest Caselaw 5603 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A   F   R
 

 
[RESERVED]
 

 
Case :- COMPANY APPLICATION No. - 6 of 2015
 

 
Applicant :- In The Matter Of M/S Mayor'S Industrial Combine Pvt. Ltd.
 
Opposite Party :- Registrar Of Companies
 
Counsel for Applicant :- Abhay Kumar Singh
 
Counsel for Opposite Party :- A.S.G.I.,Gyan Prakash,Jayant Banerjee,Shahid Kazmi
 

 
Hon. Pankaj Mithal,J. 

The name of the petitioner company M/s. Mayors Industrial Combine Pvt. Limited incorporated under the companies Act 1956 and having its registered office at Saharanpur, U.P., has been ordered to be struck off from the register of the Registrar of the Companies U.P. at Kanpur

The company has moved application under Section 560 (6) of the Act read with Rule 9 of the companies (Court) Rules, 1959 for restoration of its name contending that the company had not stopped carrying on business on the relevant date and that the procedure prescribed for deleting its name as contemplated by Section 560 of the Act was not followed by the Registrar of the Companies.

In response to the averments made in the company application the Registrar of the companies has filed his personal affidavit bringing on record the letters/notice and gazette notifications by which information was communicated to the petitioner company in relation to the proceedings drawn for striking off its name.

Sri Jayant Banerji, learned counsel appearing for the Registrar of the Companies relying upon a decision in the case of U.N. Mandal Estate Private Limited AIR 1959 Calcutta 493 argued that in restoring the name of the company the satisfaction of the Court as to whether the company was carrying on business or was in operation at the at the relevant time is necessary. The name of the company can only be restored if the Court feels that it is just to do so.

Section 560 of the Act prescribes the power of the Registrar to strike off the name of the defunct company from its register. It lays down the procedure for striking off the name. It provides that where the Registrar has reasonable cause to believe that the company is not carrying on business or is not in operation, he should send a letter to the company inquiring whether it is carrying on business or is in operation. If he does receive reply within one month of sending the letter, he shall send another letter within 14 days thereof by registered post. On failure to receive the reply to the second letter within a month he shall publish a notice in the official gazette expressing intention of striking off the name of the company from the register. Simultaneously, he is required to send a notice by registered post to the company that its name would be struck off on the expiry of three months from the date of the notice. On the expiry of the above time mentioned in the notice unless contrary is shown he may strike off the name of the company from the register by publishing a notice thereof in the official gazette whereupon the company shall stand dissolved.

Section 560 (6) of the Act provides for moving application to the Court/Tribunal for restoring the name of the company. The Court has been empowered to restore the name of the company to the register if it is satisfied that the company was at the relevant time carrying on business or was in operation or otherwise feels that it is just to do so.

In the aforesaid backdrop, it is foremost to examine if the prescribed procedure has been followed and then if the case for restoration of the name of the company has been established.

The petitioner has denied receiving any letter/notice alleged to have been sent by the Registrar of the Companies before striking off the name of the company. It has also been stated that even if letters/notices were issued, they were not served upon the petitioner. The Registrar of the Companies has acted in a mechanical manner in striking off the name of the company. Out of the three Directors one of the Directors expired after prolonged illness which obstructed the submission of the annual returns in the past but the company has not stopped carrying on business despite facing financial crisis also.

The reply of the Registrar of the Companies reveals that the first letter dated 18.11.2009 under Section 560 (1) of the Act was dispatched to the petitioner on 10.12.2009 by speed post. Second letter required to be sent by registered post under Section 560 (2) of the Act dated 8.12.2009 was dispatched to the petitioner on 4.1.2010 by speed post. The notice under Section 560 (3) of the Act was issued on 15.2.2010 and was dispatched to the petitioner on 18.2.2010 by speed post. Its notification dated 24.4.2010 was published in the gazette for the period 24th April to 30th April 2010. The final notification dated 11.5.2010 notifying striking off the name of the petitioner under Section 560 (5) was published in the official gazette for the period 22nd May to 28th May 2010.

The date of the first letter is 18.11.2009 and that of the second letter is 8.12.2009. The first letter as stated in paragraph 4 of the counter affidavit was dispatched to the petitioner on 19.12.2009 by speed post. The second letter dated 10.12.2009 was issued before the expiry of the period of one month from the date of the first letter. It is thus clearly within the teeth of Section 560 (2) of the Act and was issued prematurely.

The notification dated 12.4.2010 containing the notice under Section 560 (3) of the Act published in the gazette of 24 to 30th April 2010. The final gazette scoring out the name of the company under Section 560 (5) of the Act dated 11.5.2010 was published in the gazette from 24 to 30th May 2010. The notification dated 11.5.2010 under Section 560 (5) of the Act scoring out the name of the petitioner company was published before expiry of 3 months from the gazette notification dated 12.4.2010 published under section 560 (3) of the Act. Thus, the name of the petitioner company was ordered to be struck off much before the expiry of of mandatory three months period as contemplated under Section 560 (3) of the Act.

Accordingly, it is apparent that the Registrar has not strictly followed the procedure laid down under Section 560 of the Act for striking off the name of the petitioner company and for dissolving it.

In addition to this, the first letter issued under Section 560 (1) of the Act dated 8.11.2009 states that the Registrar has to inquire if the company is carrying on business or is in operation. The second letter issued under Section 560 (2) of the Act dated 8.12.2009 also states that he has to inquire whether the company is in operation. In none of the letters it has been mentioned that he has reason to believe that the company is not carrying on business or is not in operation.

The notice dated 15.2.2010 issued under Section 560 (3) of the Act only states that after expiry of three months from the date of the notice the name of the company would be struck off unless contrary is shown.

Neither the first two letters nor the above notice records that the Registrar has reasonable cause to believe that the company is not carrying on business or is not in operation. The name of the company could be struck of only if the Registrar of companies has reason to believe or believes that the company is defunct as it had stopped carrying business.

The law is settled that if a thing has to be done in a particular manner, it has to be done in that manner alone and not otherwise. The aforesaid legal proposition is based upon a legal maxim "Expressio unins est exclusio alterins" which means if a statute provides for a thing to be done in a particular manner, it has to be done in that manner and no other course is permissible.

The aforesaid maxim has been accepted by the law courts.1 Therefore, the order directing for striking off the name of the petitioner company and dissolving it, is not sustainable in law, as the same has been passed in violation of the procedure prescribed.

The power of the Court to restore the name of the company to the register is discretionary and can be exercised, if the Court is satisfied that the company on the date of striking off the name was carrying on business or was in operation or it is otherwise just to do so.

In U.N. Mandal's case (supra) it has been ruled that the discretion of the Court under Section 560 (6) of the Act must be well reasoned and one of the reasons for exercising the discretion in favour of the company must be to the satisfaction of the Court that the company at the time when its name was ordered to be struck off was carrying on business or was in operation. In restoring the name one of the considerations may be to ensure that the company is able to carry on business and that the restoration may not be a mere ritual and idle ceremony.

The Registrar of Companies has no where returned any finding that he believes that the company is not carrying on business or is not in operation. At the same time he has not followed the procedure prescribed in striking off the name of the petitioner company.

Apart from this, the reason disclosed in the petition regarding prolonged illness of one of the Directors culminating into his death is sufficient to hold that under the facts and circumstances of the case it is just and proper to restore the name of the company. Thus for the above reasons, it is directed that the name of the petitioner company be restored in the register of the Registrar of the Companies, U.P., and the notifications published in the gazettes referred to above with regard to petitioner company would stand modified.

Company Application no. 6 of 2015 is allowed.

SKS

December 21 , 2015.