Delhi High Court
Hardicon Ltd. vs Registrar Of Companies on 13 May, 2009
Author: Sanjiv Khanna
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) No. 8889/2009
HARDICON LTD. ..... Petitioner.
Through Mr.Arvind K. Nigam, Sr. Advocate with
Mr.Dinkar Singh, advocate.
versus
REGISTRAR OF COMPANIES ..... Respondent
Through Ms.Maneesha Dhir, Ms.Preeti Dalal,
advocates.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
ORDER
% 13.05.2009
1. Learned counsel for the respondent-Registrar of Companies
appears on advance notice and has been heard.
2. As limited controversy is involved in the present cases, with the
consent of the parties, the present Writ Petitions are heard and are
being disposed of with this common Order.
3. Petitioners herein have challenged the letter/notice dated 23rd
April, 2009 which as per the petitioners is an Order under Section
234(7) of the Companies Act, 1956 (hereinafter referred to as the
Act, for short). By the said document, the respondent-Registrar of
Companies has called for various information from the petitioners-
WPC NO.8889/2009 Page 1
Companies as have been set out therein.
4. Sections 234 (1) and (7) of the Act read as under:-
"234. Power of Registrar to call for
information or explanation.-
(1) Where, on perusing any document
which a company is required to submit to him under
this Act, the Registrar is of opinion that any
information or explanation is necessary with respect
to any matter to which such document purports to
relate, he may, by a written order call on the
company submitting the document to furnish in
writing such information or explanation, within such
time as he may specify in the order.
(2) xxxxx
(3) xxxxx
(4) xxxxx
(5) xxxxx
(6) xxxxx
(7) If it is represented to the Registrar on
materials placed before him by any contributory or
creditor or any other person interested that the
business of a company is being carried on in fraud
of its creditors or of unlawful purpose, he may, after
giving the company an opportunity of being heard
by a written order, call on the company to furnish in
writing any information or explanation on matters
specified in the order, within such time as he may
specify therein; and the provisions of sub-sections
(2), (3), (3A) and (4) and (6) of this section shall
apply to such order.
If upon inquiry the Registrar is satisfied that any
representation on which he took action under this
sub-section was frivolous or vexatious, he shall
disclose the identity of his information to the
company."
5. Document dated 23rd April, 2009 refers to both Sections 234(1)
WPC NO.8889/2009 Page 2
and (7) of the Act. The petitioners, allege that both the Sections
234(1) and (7) of the Act are not applicable and Registrar of
Companies does not have jurisdiction because requisite pre-
conditions are not satisfied. It is also alleged that there should be
material before the Registrar of Companies to form a tentative or
prima facie opinion of fraud on its creditors or otherwise of
fraudulent or unlawful purpose and the said information must come
from the persons stipulated in Sub-section (7).
6. It is stated by the petitioner that before an Order under Section
234(7) of the Act is passed the petitioners-Companies should have
been given opportunity of being heard.
7. The present Writ Petitions will be treated as representations by
the petitioners to the Registrar of Companies who will after giving
hearing to the petitioners-Companies pass a preliminary Order in
terms of Section 234(7) of the Act before the petitioners are called
upon to furnish information. While passing the said Order he shall
also deal with the contention that Section 234(1) of the Act is not
applicable. The petitioners-companies will appear before the
Registrar of Companies on 19th May, 2009 at 2.00 p.m. If required,
subsequent dates for hearing will be fixed by the Registrar of
WPC NO.8889/2009 Page 3
Companies on the said date. This Order is being passed, so as to not
delay the proceedings because of alleged technical flaws and non-
compliance of right to hearing. The Supreme Court in GKN
Driveshafts (India) Ltd. v. ITO, reported in (2003) 1 SCC 72, at
page 73 observed:
"5. We see no justifiable reason to interfere with the
order under challenge. However, we clarify that when a
notice under Section 148 of the Income Tax Act is issued,
the proper course of action for the noticee is to file return
and if he so desires, to seek reasons for issuing notices. The
assessing officer is bound to furnish reasons within a
reasonable time. On receipt of reasons, the noticee is
entitled to file objections to issuance of notice and the
assessing officer is bound to dispose of the same by passing
a speaking order. In the instant case, as the reasons have
been disclosed in these proceedings, the assessing officer
has to dispose of the objections, if filed, by passing a
speaking order, before proceeding with the assessment in
respect of the abovesaid five assessment years."
8. Following this judgment in Jagdish Prasad Gupta versus
Joint Commissioner of Income Tax reported in 205 (122) DLT
178, a writ petition challenging existence of jurisdictional pre-
conditions for issue of reassessment notice under the Income Tax
Act, 1961 was disposed of directing that objections raised will be
considered by the competent authority by passing a speaking Order
before dealing with the merits of the case. The principle and ratio of
the said judgment will equally apply to the present case. Alternative
remedy is not a bar to maintainability of a writ petition but a matter
WPC NO.8889/2009 Page 4
of discretion. The present case is not a fit case in which discretion at
this stage should be exercised to entertain the present Writ Petition
because of alleged technical flaws and non-compliance of right to
hearing. This order ensures hearing and passing of a speaking order,
which takes care of substantial grievance raised by the petitioner.
Other aspects raised shall be crystalised and clarified once the
speaking order is passed.
9. At this stage, learned counsel for the petitioners-Companies
states that they want to file additional documents before the
Registrar of Companies. Learned counsel is granted liberty to do so.
10. It is clarified that this Court has not expressed any opinion on
the merits of the issues raised by the petitioners or the Registrar of
Companies. Petitioners will be at liberty to ventilate their grievance in
case they are aggrieved by any Order passed by the Registrar of
Companies.
Writ Petitions are accordingly disposed of.
DASTI under signature of the Court Master.
SANJIV KHANNA, J.
MAY 13 , 2009.
P
WPC NO.8889/2009 Page 5
