Excellant Asbestos Jointings Ltd ... vs Official Liquidator
2021 Latest Caselaw 16911 Bom

                    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. )